State Rail Authority of New South Wales v Transport Appeal Board & anor

Supreme Court of NSW|2004-10-25|Before: Hislop J

CITATION : State Rail Authority of New South Wales v Transport Appeal Board & anor [2004] NSWSC 962 HEARING DATE(S) : 22/07/2004 JUDGMENT DATE : 25 October 2004

JUDGMENT OF : Hislop J DECISION : 1. Summons dismissed; 2. Plaintiff to pay the second defendant's costs; 3. Plaintiff to pay the costs, if any, of the first defendant.

CATCHWORDS : Inferior tribunal reversing dismissal of employee - Perogative relief refused - No error of law. LEGISLATION CITED : Supreme Court Act 1970 - ss 65, 69 Transport Appeal Boards Act 1980 - s 23 Blyth Chemicals Limited v Bushnell (1933) 49 CLR 66 CASES CITED : Ford v Transport Appeal Board (NSW) (1987) 18 IR 163 Wong v The Queen (2001) 207 CLR 584 Plaintiff - State Rail Authority of New South Wales PARTIES : First Defendant - Transport Appeal Board Second Defendant - Anthony Kambouris FILE NUMBER(S) : SC 30019/04 Plaintiff - Ms C Ronalds COUNSEL : First Defendant - Submitting appearance Second Defendant - Mr A Kambouris (in person) Plaintiff - Sparke Helmore SOLICITORS : First Defendant - Crown Solicitor's Office Second Defendant - Mr A Kambouris (in person)

LOWER COURT Transport Appeal Board JURISDICTION : LOWER COURT FILE NUMBER(S) : LOWER COURT JUDICIAL OFFICER :

1 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

30019/04 State Rail Authority of New South Wales v Transport Appeal Board and anor

JUDGMENT 1 This is an application by the plaintiff for declarations and orders in the nature of prerogative relief following the reversal by the first defendant of the plaintiff's decision to dismiss its employee, the second defendant. 2 The second defendant had been employed by the plaintiff for 12 years. He had risen to the rank of Manager, City Rail Ticketing. 3 On 19 February 2003, the plaintiff brought disciplinary proceedings against the second defendant in respect of 14 allegations of disciplinary breaches. The plaintiff concluded each of the allegations against the second defendant had been substantiated. In an undated letter signed by the General Manager, Station Operations, received by the second defendant on 24 June 2003, the second defendant was formally advised that by reason of those breaches he was dismissed effective from 24 June 2003. The decision was made pursuant to regulation 13(1)(e) of the Transport Administration (Staff) Regulation 2000 ("the regulations"). 4 On 25 June 2003 the second defendant appealed by notice in writing to the first defendant against his dismissal. The appeal was pursuant to regulation 17(a) of the regulations. 5 The first defendant was constituted pursuant to the Transport Appeal Boards Act 1980 ("the Act") by three persons, being a chairperson, a member authorised by the plaintiff and a member nominated by the relevant industrial union. The proceedings before the first defendant were formal though the first defendant was not bound by the rules or practice as to evidence. 6 Section 23 of the Act provided: (1) A Board may, in relation to an appeal, decide to allow or disallow the appeal or make such other decision with respect to the appeal as it thinks fit. (2) The decision of a Board in respect of an appeal is final and is to be given effect to by the Authority against whose decision the appeal was made. 7 On 19 November 2003, after a hearing lasting three days and in which witnesses, including the second defendant, were examined and cross-examined and a large volume of documentary material was tendered, the first defendant concluded that 10 of the 14 allegations were proven, the remainder were not. 8 The allegations found proven were (the letters beside each allegation correspond with the letters in the plaintiff's letter of dismissal): (a) Between 2000 and 2002 you as the Manager City Rail Ticketing and a participant in the Integrated Ticketing Project did not act in the best interests of State Rail by allowing your relationship with Mr Tom Walker, Managing Director Cubic Transport Systems Australia Ltd, to develop beyond that of a professional working relationship thereby creating a perception of a possible conflict of interest. (d) In about December 2000 you received a benefit in the form of attending a Christmas Party on a Sydney Harbour cruise including provision of food and drinks paid for by Cubic Transport Systems Australia without advising and seeking approval of an appropriate senior member of staff at the State Rail Authority. (e) In about December 2000 you did not behave honestly and ethically when you failed to disclose to the Integrated Ticketing Project your acceptance of a benefit in the form of attending a Christmas Party on a Sydney Harbour cruise including provision of food and drinks paid for by Cubic Transport Systems Australia. (f) In about December 2001 you received a benefit in the form of a Christmas Party on a Sydney Harbour cruise including provision of food and drinks paid for by Cubic Transport Systems Australia without advising and seeking approval of an appropriate senior member of staff at the State Rail Authority. (g) You did not act in the best interests of State Rail when you breached the confidentiality undertaking which you signed in 1999 by having private discussions with Mr Walker, Managing Director, Cubic Australia Limited concerning the evaluation process of the Integrated Ticketing Project. (h) You did not act in the best interests of State Rail when you had private discussions with Mr Walker, Managing Director, Cubic Australia Limited concerning the evaluation process of the Integrated Ticketing Project. You advised Mr Walker to "get SRA to understand what your issues are". (i) On 1 November 2000, you did not behave honestly and ethically in that when you completed and signed a document titled, "Contact with Proponents" you failed to disclose on this form that you had private discussions with Mr Walker, Managing Director, Cubic Australia Limited, concerning the evaluation process of the Integrated Ticketing Project. (l) On or about 19th April 2000 you did not act ethically and in the best interests of State Rail when you breached the confidentiality undertaking which you signed in 1999 by having private discussions with Mr Walker, Managing Director, Cubic Australia Limited concerning the evaluation of the overseas site visits by team members of the Integrated Ticketing Project in April 2000. (m) On or about 19th April 2000 you did not act ethically and in the best interests of State Rail when you breached the confidentiality undertaking you signed in 1999 by having private discussions with Mr Walker, Managing Director, Cubic Australia Limited concerning you assessment of Cubic's operations in Chicago resulting from the overseas site visits by team members of the Integrated Ticketing Project in April 2000. (n) On 1 November 2000, you did not behave honestly and ethically in that when you completed and signed a document titled, "Contact with Proponents" you failed to disclose on this form that you had private discussions with Mr Walker, Managing Director, Cubic Australia Limited on 19 April 2000 concerning the overseas site visits by team members of the Integrated Ticketing Project."

No party sought to overturn those findings at the hearing before me. The decision as to penalty was reserved. 9 The first defendant made its decision on penalty on 28 November 2003. A minute of that decision, published on 7 January 2004, concluded: The Board found that, in the circumstances, the penalty of dismissal imposed on Mr Kambouris was too harsh. The Board determined that the appropriate penalty was for Mr Kambouris to remain suspended without pay until 31 March 2004. In addition, upon resuming duties, following his period of suspension, he is to be regressed to a position of Management, level 2, then he is to serve a probationary period of 6 months. Also, Mr Kambouris is to undergo appropriate counselling to enable him to adequately perform his duties in a Management level 2 capacity, and he is to work under supervision for however long State Rail deems it necessary. Pursuant to s 23(1) of the Transport Appeal Boards Act 1980 (as amended) the Board modified the penalty accordingly. 10 The circumstances which were referred to in the minute of decision were: In 1999, and again in November 2000, Mr Kambouris had signed the Conflict of Interest Declaration Integrated Ticketing Project document, although, initially, he had advised that, in 2000, it did not apply to him, as he was no longer part of the evaluation process or no longer involved in the evaluation process. The Declarations were specific, in that they had asked to confirm that no communication had taken place outside of that permitted in accordance with section 5.7 of the Plan for Evaluation of Proposals. The Board found that Mr Kambouris knew what was required of him. However, on a number of occasions, and for whatever reasons, he had opted to go outside the guidelines and had got involved in a relationship with Mr Tom Walker, the Managing Director of Cubic Transport Systems Australia Limited, one of the proponents that had been bidding for a $320 million contract with the Government of New South Wales. Mr Kambouris' relationship with Mr Walker had been an inappropriate one or one that could have been perceived to be inappropriate. He had been wrong to do so. Also, the Contact with Proponents document that Mr Kambouris had signed on 1 November 2000 had been completed without Mr Kambouris giving due consideration to its importance. He had failed to mention a number of matters that he should have disclosed. The Board viewed that Mr Kambouris had not attached the importance that he should have to that document. The Board found that, for whatever reason, Mr Kambouris might have been singularly investigated, perhaps in an endeavour to satisfy the ICAC and Supreme Court findings. Others had attended Cubic's Christmas parties, and there had also been the matter of Mr Armstrong and Mr Walker at the Greenwood Hotel. Yet, those involved had never been investigated. The Board also noted that a central figure in those matters, Mr Tom Walker, apparently no longer worked for Cubic, did not reside in Australia any more and had been unavailable to give evidence. As a result, his allegations and statements that had resulted in charges against Mr Kambouris and, ultimately, his dismissal had not been tested. Following submissions from the parties concerning penalty, the Board reserved its decision in this regard and advised that, after consideration of the matters put to it by Mr David Davies, solicitor appearing for State Rail, and Mr George Panigiris of the Rail Tram and Bus Union, representing Mr Kambouris, it would hand down a decision on penalty as soon as practicable. In essence, the substance of all fourteen charges are encapsulated in charge a . It had been unwise on Mr Kambouris' part to have formed a personal friendship with Mr Walker, although that relationship was, in his view, to do his best for State Rail and protect State Rail's interests. In the process, that relationship created a perception of possible conflict of interest. Mr Kambouris had not been the recipient of any bribes, a matter attested to by Mr Walker at the ICAC hearing on 7 March 2002. It was a lack of wisdom on his part which, in the Board's view, is not a dismissible offence. 11 On 18 March 2004 the plaintiff filed a summons in this Court seeking various declarations and orders with the intent that the decision of the first defendant be set aside and either the decision of the plaintiff restored or alternatively the matter remitted to the first defendant for determination in accordance with law. As there was no statutory right of appeal relief was sought pursuant to ss 65 and 69 of the Supreme Court Act 1970 ("SCA"). 12 This Court has jurisdiction. As Rogers J held in Ford v Transport Appeal Board (NSW) (1987) 18 IR 163 at 164: It is of course clear that there is no appeal to this Court from the decision of either the Transport Appeal Board or the State Rail Authority of NSW. It is equally clear that the Supreme Court has a long standing jurisdiction and indeed obligation to exercise supervisory jurisdiction over the acts of administrative and specialist inferior tribunals. In exercising this power the court will be anxious to ensure that it does not trespass into areas of jurisdiction committed to specialist inferior tribunals; at the same time, the Court must be anxious to safeguard the rights of the subject and to ensure that inferior tribunals are kept within the bounds of their jurisdiction and do provide procedural fairness in the exercise of their jurisdiction. 13 The plaintiff accepted that it was necessary for it to establish error of law if it was to succeed on the summons. Its written submissions asserted such error was established as: (a) the first defendant applied an inappropriate test in determining penalty; (b) in applying an inappropriate test the first defendant failed to apply principles consistent with the penalties imposed in other cases; (c) in reaching its decision, the Board applied an erroneous interpretation of the term "conflict of interest"; (d) the first defendant acted beyond its power in imposing an alternate penalty on the second defendant; (e) the decision requires certain action on behalf of the plaintiff which the plaintiff does not have the power to take; (f) the plaintiff was denied procedural fairness in that it was not given the opportunity to be heard in relation to the imposition of certain penalties which placed a burden on it. These submissions are discussed seriatim hereunder.

The first defendant applied an inappropriate test in determining penalty 14 The plaintiff's primary submission was that the first defendant applied a test that bribery needed to be established for the termination of employment to be justified. The plaintiff highlighted the first defendant's comment in its minute of decision that, "Mr Kambouris had not been the recipient of any bribes… It was a lack of wisdom on his part which, in the Board's view, is not a dismissible offence" as evidencing the narrow test applied by the first defendant. 15 Whilst I would accept that if the first defendant had determined the appeal solely by reference to the question of whether the second defendant had taken a bribe or not, it would have erred in law, that is not, in my opinion, what occurred. A fair reading of the minute of decision indicates the first defendant had regard to objective and subjective matters relevant to the question of penalty and that, on the basis of those matters, concluded the appropriate penalty was not dismissal but something less. The fact that the second defendant had not taken a bribe was, to my mind, a relevant factor and was properly taken into account on the overall question of penalty. 16 The subtext of the plaintiff's complaint was that the penalty imposed by the first defendant was too light, and that the factual findings mandated dismissal. Reference was made to the principles expounded by Dixon and McTiernan JJ in Blyth Chemicals Limited v Bushnell (1933) 49 CLR 66 at 81 that: Conduct which in respect of important matters is incompatible with the fulfilment of an employee's duty, or involves an opposition, or conflict between his interest and his duty to his employer, or impedes the faithful performance of his obligations, or is destructive of the necessary confidence between employer and employee, is a ground of dismissal. But the conduct of the employee must itself involve the incompatibility, conflict, or impediment, or be destructive of confidence. An actual repugnance between his acts and his relationship must be found. It is not enough that ground for uneasiness as to its future conduct arises. 17 It is a matter of considerable significance that allegation (a), which encapsulated the substance of all the plaintiff's charges, was not that the second defendant's behaviour demonstrated a complete breach of the employment relationship in that the essential element of trust and confidence had been destroyed (as the plaintiff submitted) but rather that his behaviour "created a perception of possible conflict of interest". It was this allegation that the first defendant found proven. 18 The essential question for the first defendant was whether the degree of misconduct justified dismissal. Such a question is usually a question of fact - Blyth at p 72 per Starke and Evatt JJ. 19 In the present case the issue of whether the degree of misconduct found justified dismissal was a question of fact. It involved an element of discretion. That issue, by statute, was to be determined by a specialist tribunal established for the purpose of determining disciplinary and promotional appeals in relation to officers and employees of state government transport undertakings. The characterisation by the first defendant of the second defendant's behaviour as not meriting dismissal was a finding based upon its consideration of the whole of the evidence before it. It is not for this Court to trespass into areas of jurisdiction committed to specialist inferior tribunals. In my opinion, the issue was peculiarly a matter for the determination of the specialist tribunal. It did not apply an inappropriate test. No error of law has been demonstrated.

In applying an inappropriate test the first defendant failed to apply principles consistent with the penalties imposed in other cases 20 The plaintiff submitted that the penalty imposed was less than one might have expected by reason of penalties imposed in other cases determined by the first defendant and that the failure by the first defendant to apply consistent principles constituted an error of law. 21 The plaintiff relied upon the comments of Kirby J in Wong v The Queen (2001) 207 CLR 584 at 617 where his Honour, referring to Lowe v The Queen said: Mason J explained that consistency in criminal punishment is 'a fundamental element in any rational and fair system of criminal justice'. Inconsistency, he declared, 'is calculated to lead to an erosion of public confidence in the integrity of the administration of justice' and is 'regarded as a badge of unfairness and unequal treatment under the law'. He was there speaking of disparity between the sentences imposed on co-offenders. However the principle is one of general application. 22 It can be readily accepted that consistency of sentence is desirable. However in order to achieve consistency an appropriate bench mark or range usually must first be established by reference to a series of like cases. 23 The plaintiff referred to a number of cases where the first defendant had upheld the dismissal of employees of the plaintiff in circumstances where the breach of discipline was said to be less than in the present case. The cases were factually dissimilar to the present. Indeed, counsel for the plaintiff was unable to point to any case in New South Wales or throughout Australia which was similar to this case. The second defendant referred to a case of Nader (Board Appeal No. T236 of 2002) where the dismissal of a manager by the plaintiff was reduced by the first defendant to a period of suspension (with recommended conditions). However the facts of that case were dissimilar to the present. The cases to which reference was made, in my opinion provided little, if any, assistance. 24 Moreover, as was pointed out in Wong (at p 605), in the absence of specific error of principle: Appellate intervention is not justified simply because the result arrived at below is markedly different from other sentences that have been imposed in other cases. Intervention is warranted only where the difference is such that, in all the circumstances, the appellate court concludes that there must have been some misapplication of principle, even though where and how is not apparent from the statement of reasons.

In my opinion the penalty imposed by the first defendant in this case was not such as to lead to the conclusion an error of law had occurred.

In reaching its decision, the Board applied an erroneous interpretation of the term "conflict of interest" 25 The plaintiff initially submitted the first defendant created for itself the test of whether "a perception of a possible conflict of interest" existed and in so doing erred in law in formulating the wrong question. However the words "a perception of a possible conflict of interest" were based upon the terms of the plaintiff's allegation (a), which allegation encapsulated in essence all of the charges made against the second defendant. In the circumstances the submission was not pressed.

The first defendant acted beyond its power in imposing an alternate penalty on the second defendant. The decision requires certain action on behalf of the plaintiff which the plaintiff does not have the power to take 26 The plaintiff submitted that what the Board did was find that the penalty was too harsh. It, in essence, allowed the appeal. Having done that, it did not have power to make any further order. Section 23(1) of the Act is to be read disjunctively. The Board may allow an appeal, disallow an appeal, or make such other decision as it thinks fit but it cannot allow an appeal by an employee and make such "other decision". If it allows an appeal its power to impose conditions is limited to the matters referred to in s 24(1) of the Act. 27 The plaintiff accordingly submitted that the conditions of the "appropriate penalty" determined by the first defendant were beyond power and were mere surplusage. It accepted that the effect of its submission, if upheld, would be that the first defendant had allowed the appeal unconditionally.

28 I do not accept the construction advanced by the plaintiff. In my opinion, the first defendant had power to set aside the order dismissing the second defendant and to impose conditions. This is because the decision of the first defendant may be categorised, as it was by the first defendant, as a modification of the penalty and thus was "such other decision with respect to the appeal" within s 23(1). Alternatively, if the decision be categorised as a decision to allow the appeal, there is, in my opinion, an implicit power to impose conditions. The implicit power is consistent both with a purposive construction of the section and the inference arising from s 24 which permits the imposition of certain specified conditions and specifically does so without limiting s 23. 29 The construction which I favour provides the first defendant with what I would regard as appropriate flexibility and accords with its practice. 30 The additional submission advanced by plaintiff's counsel was that if there was a power to impose conditions, such power was limited to those which the plaintiff had in respect of the discipline of its employees and did not include a power to impose a period of probation. It is arguable that the first defendant's power to impose conditions should not extend beyond the powers of the plaintiff, and that there is no power in the plaintiff to impose a period of probation, save upon the appointment of an employee. However, it is unnecessary to determine these questions as plaintiff's counsel indicated that if the submission was upheld I should simply delete the condition relating to probation.

The plaintiff was denied procedural fairness in that it was not given the opportunity to be heard in relation to the imposition of certain penalties which placed a burden on it 31 The plaintiff submitted that it was denied procedural fairness because the conditions attached by the first defendant were not raised during argument as possibilities so there was no opportunity for it to address the first defendant thereon. 32 However, as was properly conceded by counsel for the plaintiff, there was nothing novel about the first defendant imposing conditions should it set aside the order for dismissal. 33 The possibility that something other than merely setting aside the dismissal may have been favoured by the first defendant was recognised by counsel for the plaintiff who, in his oral submissions to the first defendant, referred to some alternative punishments, but submitted the only option was dismissal. Similarly the second defendant also addressed the question of punishment other than dismissal. 34 In those circumstances I would not have concluded there was a denial of procedural fairness. However it is unnecessary for me to finally determine the issue as plaintiff's counsel indicated that the plaintiff would not require the matter be remitted to the first defendant if this was the only ground upon which it was to succeed.

Conclusion 35 In my opinion it has not been demonstrated that this is a case where the Court should intervene to quash the decision of the first respondent. No error of law has been demonstrated. 36 Accordingly, the Orders of the Court are:

The plaintiff is to pay the second defendant's costs

The plaintiff is to pay the costs, if any, of the first defendant. **********

Last Modified: 11/01/2004 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

At a glance

Court

Decision date

Before

Source

Judgment (19 paragraphs)

Parties

Cases Cited (3)