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[2017] FCA 1534
Federal Court of Australia
2017-12-19
Collier J
Original judgment source is linked above.
Background 5 Despite the apparent inability of the parties to agree on a joint statement of facts and issues in contention, there is some common ground between the parties as to background facts. 6 The first respondent carries on a business of providing services in the cigarette and gift supply industry by way of franchising. Mr Beynon has been the Managing Director of the first respondent since at least June 2014. He appears to be the public face of the first respondent, and is involved in marketing its business by staging publicity associated with a public persona he has created (I understand that Mr Beynon promotes himself as "The Candyman" and his residence at the Gold Coast as "The Candy Shop Mansion"). 7 Mr Whelan claims that Mr Beynon is the person who exercised full managerial control of the first respondent's business and had the primary responsibility for, and control of, that business. The respondents deny this aspect of Mr Whelan's claim. However the respondents do admit that, at relevant times and for the purposes of s 793(1) of the FW Act, Mr Beynon was the person whose state of mind (in respect of the conduct referred to in Mr Whelan's claim) was the state of mind of the first respondent. In my view this is incontrovertible. 8 Mr Whelan was employed as the National Sales Manager of the first respondent from around 6 June 2013 to 10 November 2013, and General Manager from 11 November 2013 until 24 August 2015. Prior to his employment with the first respondent, Mr Whelan was employed by an entity he described in evidence as British American Tobacco (Aust) (BATA). Mr Whelan met Mr Beynon on a number of occasions, and in May 2013 Mr Beynon, on behalf of the first respondent, offered Mr Whelan the role of National Sales Manager with the first respondent. 9 The parties agree that the salary proposed by Mr Beynon at that time was $205,000 per annum. There is some dispute between the parties about bonuses. Mr Whelan claims that the salary was the sum of $205,000 "plus bonuses" whereas the respondents claim that Mr Beynon offered the sum of $205,000 "with the option of a bonus structure". Mr Whelan also claims that Mr Beynon also offered him $5,000 to assist him to relocate from Sydney to the Gold Coast. This is denied by the respondents, although nothing appears to rest on this issue. 10 Mr Whelan claims that, at a business lunch in Sydney in May 2013, Mr Beynon made various representations to him, upon which Mr Whelan relied and in so doing accepted an offer of employment with the first respondent. The respondents deny that Mr Beynon said words to the effect claimed by Mr Whelan, or that Mr Beynon made the representations claimed by Mr Whelan. 11 It is, however, common ground that Mr Whelan accepted employment with the first respondent on 6 June 2013, and that he signed an employment agreement on or about that date. 12 The terms of Mr Whelan's employment were subsequently amended, in writing. It is common ground that, on or about 12 November 2013, Mr Whelan received a letter from Mr Beynon on behalf of the first respondent, promoting him to "General Manager", and amending his terms and conditions of employment to increase his annual salary to $230,000 (backdated to 6 June 2013) and paying him superannuation at a rate of 9.25% per annum. On 17 January 2014, Mr Whelan's salary was increased to $309,586. 13 So far as concerns his work performance, Mr Whelan claims that his actions resulted in the first respondent's profit increasing from $2.7 million to $6.4 million in the financial year ending 30 June 2014, and that as a result he was paid a bonus of $100,000 in or about September 2014. He further claims that his actions resulted in the first respondent's profit increasing from $6.4 million to $10.4 million in the financial year ending 30 June 2015, but that he was not paid a bonus in respect of this performance, and that the first respondent failed or refused to pay him a bonus. 14 The respondents dispute these allegations. They say that the combined net profits before income tax of the first respondent and Freechoice Vending were approximately $2.75 million for the financial year ending 30 June 2013, and $6.4 million for the financial year ending 30 June 2014. The respondents claim that the increase in the combined net profits of the first respondent and Freechoice Vending was attributable to the first respondent and Freechoice Vending signing a new national supply agreement with United Petroleum Pty Ltd, anagreement neither negotiated nor finalised by Mr Whelan. The respondents admit that Freechoice Vending (on behalf of the first respondent) paid Mr Whelan the sum of $100,000 as a bonus for the financial year ended 30 June 2014, but say that this was because the joint net profit before tax of the first respondent and Freechoice Vending for the financial year ending 30 June 2014 had exceeded $6 million. Mr Whelan disputed this characterisation, claiming that he was responsible for securing this national supply agreement, and in any event the bonus scheme in his employment contract was conditional upon the attainment of budget targets rather than specified events. 15 Mr Whelan's wife, Mrs Tracey Whelan, was employed by the first respondent as a Key Accounts Communications Manager on 19 November 2013. Mrs Whelan resigned in February 2015. 16 The respondents allege that, on 13 November 2014, Mr Whelan requested Mr Beynon to loan him the sum of $70,000 to enable Mr Whelan to purchase a boat. The respondents claim further that Mr Beynon agreed (on behalf of the first respondent) to pay Mr Whelan the sum of $70,000 as an advance on future entitlements payable under the employment contract, and on this basis the first respondent paid the money to Mr Whelan. Mr Whelan denies this allegation - rather he claims that the sum of $70,000 (gross) was a discretionary bonus offered by Mr Beynon in or about the first week of November 2014 and paid to him in December 2014. 17 The respondents allege that on 23 June 2015, Mr Whelan breached cl 10.1 of his employment contract by disclosing confidential information to a third party without the first respondent's consent. Specifically, the respondents allege that Mr Whelan emailed Ms Chanel Stewart (also referred to as "Chanel Spencer") a promotional editorial concerning Mr Beynon which was to appear in a future edition of Zoo Magazine, and not in the public domain at that time. I understand that Ms Stewart was a promotional model who had participated in the photo shoot which was featured in that promotional editorial. Mr Whelan admitted sending Ms Stewart the email, but denied that the information was confidential or that he was not authorised by Mr Beynon to send Ms Stewart the email. 18 Mr Whelan alleges that on or about 24 August 2015 he met with Mr Beynon, and asked why he had not been paid a bonus equivalent to one hundred percent of his annual salary in light of the financial performance of the first respondent. Mr Whelan claims that he also inquired at this time about a plan for the payment of a bonus in respect of the current financial year. Mr Whelan claims that Mr Beynon denied he was entitled to a bonus. The respondents deny that Mr Whelan made this bonus request, say that there was no discussion of bonuses at the meeting, and say further that the first respondent was not liable to pay Mr Whelan the bonus he alleged was his entitlement. 19 Mr Whelan alleges that he received no warning of poor or unacceptable performance of his employment duties, and received no counselling by the respondents in relation to any misconduct during his employment. The respondents disputed this, pleading that: An oral warning was given by Mr Beynon to Mr Whelan in or around late June 2015 concerning Mr Whelan's behaviour and work ethic whilst on a business trip to Europe; An oral warning was given by Mr Beynon to Mr Whelan on 17 July 2015 concerning the failure of Mr Whelan to perform in his role to the standard expected of him by the first respondent, and Mr Whelan acknowledged this warning in an SMS sent by him to Mr Beynon on the same date; and An oral warning was given by Mr Beynon to Mr Whelan on 24 July 2015 concerning Mr Whelan's (alleged) failure to perform in his role to the standard expected of him by the first respondent. 20 It is common ground that on or about 24 August 2015, Mr Whelan met with Ms Suzanne Ozioko, and Ms Ozioko asked Mr Whelan to arrange for his wife to sign a non-disclosure agreement relating to the first respondent's business. Mr Whelan claims he asked if partners of other employees were required to sign a similar agreement, and was informed by Ms Ozioko that they were not. Mr Whelan did not arrange execution of the agreement by Mrs Whelan. The respondents concede that Mr Whelan was not legally obliged to carry out this task. 21 The respondents however dispute Mr Whelan's claim that Mr Beynon subsequently rang him and told him that if Mrs Whelan did not sign the non-disclosure agreement, Mr Whelan's position would be terminated. 22 It is common ground that Mr Whelan's employment was terminated without notice and in writing by the first respondent on 24 August 2015, on the ground of breach of confidentiality. 23 In their further amended defence filed 9 March 2017, the respondents pleaded additional allegations concerning Mr Whelan's work performance. The respondents plead that Mr Whelan's employment was also terminated for, in summary: Lack of fidelity to Mr Beynon about Mr Whelan's involvement in the disclosure of information to Ms Stewart, and having disclosed it; Lack of fidelity to Ms Ozioko about the fact that Mr Whelan had told Mr Beynon, during the course of a business trip to Europe, to "fuck off" when in fact Mr Whelan had not done so, and lying to Mr Beynon about it; A lack of trust on the part of Mr Beynon in Mr Whelan's ability to continue to act as General Manager given Mr Whelan's inability to manage his own financial affairs, which was discussed by them during the course of the of 24 August 2015 meeting; Failure to act with fidelity in his dealings on 24 August 2015 with Mr Beynon; Failure to comply with Mr Beynon's oral instruction given earlier on 24 August 2015 not to leave the office before 5.00 pm that day and to attend a meeting with Mr Beynon that afternoon, by leaving the office before that time, and then failed to answer or return phone calls made to his mobile phone by Mr Beynon; The prospect that Mr Whelan would imminently resign from employment with the first respondent and act contrary to its interests by disclosing confidential information. 24 The respondents also plead at paragraphs 39(c)(iB) and (iC) of the further amended defence that on 24 August 2015, Mr Whelan had already decided he was resigning, had physically removed documents from the first respondent and forwarded documents to his wife by text message, and had downloaded a complete copy of the laptop with which he had been provided by the first respondent. The respondents claim that Mr Whelan's employment was terminable by the first respondent at will pursuant to cl 9.1 of the employment contract and had the first respondent been aware of the matters pleaded in paragraphs 39(c)(iB) and (iC) it would have been entitled to terminate Mr Whelan's employment and would have done so.
Summary of Mr Whelan's claims 25 Mr Whelan's claims as set out in his third further amended statement of claim can be summarised as follows: (1) The first respondent took adverse action against him by: (a) refusing to pay him the bonus to which he was entitled (paragraph 41(a)); (b) requiring his wife to sign a non-disclosure document which partners of other staff were not required to sign (paragraph 41(a)); and (c) dismissing him from his employment (paragraph 41(b)); (2) The reason the first respondent took the adverse action was because: (a) Mr Whelan had a workplace right to make complaints or inquiries concerning his unpaid bonus and/or the plan whereby that bonus would be calculated, and the first respondent's request concerning Mrs Whelan's execution of a confidentiality agreement; and/or (b) Mr Whelan had exercised that workplace right (paragraph 42); (3) Mr Whelan's contract of employment with the first respondent was partly written and partly implied (paragraph 18), namely: (a) It was written to the extent of an employment agreement signed by Mr Whelan on or about 6 June 2013; and (b) It included a term of good faith and reasonableness in the performance of obligations and exercise of rights in the employment contract which was implied by law. This included a reasonable expectation of him receiving a share of the first respondent's profits in accordance with his contract by way of discretionary bonus (paragraph 58); (4) The first respondent breached various clauses of the contract of employment, namely: (a) Clause 2.3 (1.0) - by failing to pay Mr Whelan bonuses and commissions for the financial year ending 30 June 2015 (paragraph 44); (b) Clause 2.3 (2.0) - by failing to pay Mr Whelan an incentive bonus in the financial years ending 30 June 2014 and 30 June 2015 (paragraph 45); (c) Clause 2.3 (3.0) - by failing to set the first respondent's budget prior to the 2014-2015 financial year, which was a deliberate attempt by the first respondent to prevent Mr Whelan from obtaining a bonus (paragraphs 46-48); (d) Clause 2.3 (4.0) - by failing to provide an additional incentive bonus in the financial years ending June 2014 and June 2015 (paragraph 49); (e) Clause 1.5 - by failing to pay Mr Whelan untaken paid annual leave upon termination of his employment (paragraph 51). Mr Whelan claims further that the failure to pay him unused annual leave on termination constituted a breach of s 44(1) of the FW Act by reason of s 90(2) of that legislation; and (f) Clause 9.1 - by failing to provide Mr Whelan with three weeks' notice of termination or payment in lieu of notice (paragraph 52). Mr Whelan claims further that this failure constituted a contravention of s 117(2) of the FW Act; (5) Mr Beynon was involved in the first respondent's adverse action in contravention of ss 340(1), 117(2) and 90(2) of the FW Act (paragraphs 68-71); (6) Mr Beynon's words to him at a business lunch in around May 2013 were representations concerning employment, were relied on by Mr Whelan, and were unwritten terms of his employment. Mr Beynon's conduct was also properly characterised as liable to mislead Mr Whelan as to the nature, terms or conditions of employment (namely his prospects of career advancement and his security of employment) and thus constituted a contravention of ss 4 and 31 of the ACL (paragraphs 60-64); (7) Mr Beynon aided and abetted the first respondent, and/or was directly or indirectly knowingly concerned in the contravention of s 31 of the ACL by the first respondent (paragraph 66); (8) Mr Whelan has suffered future economic loss, non-economic loss and past economic loss (paragraphs 72-78); and (9) Contrary to the cross-claim of the respondents, the $70,000 advanced to Mr Whelan was not a loan, but was an advance on the bonus to which he was entitled. 26 Specifically, Mr Whelan seeks the following relief: (1) Declarations that the first respondent contravened: (a) Section 340(1) of the FW Act by taking adverse action against Mr Whelan; (b) Section 44(1) of the FW Act by failing to provide payment for notice in lieu of termination in accordance with s 117(2) of the FW Act; and (c) Section 44(1) of the FW Act by failing to pay Mr Whelan amounts owing to him on termination with respect to unused paid annual leave in accordance with s 90(2) of the FW Act; (2) A declaration that Mr Beynon was involved in the first respondent's contraventions of the FW Act; (3) An order pursuant to s 545(2)(b) of the FW Act that the respondents pay compensation to Mr Whelan for the contraventions of the FW Act; (4) An order pursuant to s 546 of the FW Act requiring the respondents to pay a pecuniary penalty for breach of the contraventions of the FW Act; (5) An order that any penalties imposed by the Court be paid within 30 days of the order for payment; (6) An order pursuant to s 546(3)(c) of the FW Act requiring any penalty or penalties imposed on the respondents be paid to Mr Whelan; (7) Further or alternatively, the respondents pay Mr Whelan damages for breach of contract (to be assessed); (8) Further or alternatively, the respondents pay Mr Whelan damages to be assessed pursuant to s 236 of the ACL; (9) Further, an order pursuant to s 224 of the ACL that the respondents pay a pecuniary penalty for contravening s 31 of the ACL; (10) Interest pursuant to s 51A(1) of the Federal Court of Australia Act 1976 (Cth) on any judgment for compensation or damages; and (11) Costs. 27 The respondents set out detailed defences to these claims in their further amended defence.
Adverse action claim against the first respondent 28 Section 340(1) of the FW Act provides: (1) A person must not take adverse action against another person: (a) because the other person: (i) has a workplace right; or (ii) has, or has not, exercised a workplace right; or (iii) proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right; or (b) to prevent the exercise of a workplace right by the other person. 29 Recently in Perez v Northern Territory Department of Correctional Services [2016] FCA 476 White J summarised principles relevant to an application for relief referable to s 340(1), in the following terms: 51 As noted, s 340(1) requires that there be a causal link between the taking of the adverse action, on the one hand, and the person's possession, exercise, or proposed exercise, of a workplace right, on the other. Section 361 has the effect of placing the onus of disproving the causal link on the respondent. At the relevant time, s 361(1) provided: (1) If: (a) in an application in relation to a contravention of this Part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and (b) taking that action for that reason or with that intent would constitute a contravention of this Part; it is presumed, in proceedings arising from the application, that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise. 52 Put broadly, an adverse action claim involves three elements: (1) a person has a workplace right, has exercised such a right, or proposes to exercise such a right; (2) the respondent took "adverse action" of the kind defined in s 342 against that person; (3) the respondent took the adverse action because of the possession, exercise or proposed exercise of the workplace right. 53 The onus is on an applicant to establish the first two elements. Section 361 has the effect that the onus is on the respondent to disprove the third element: see Tattsbet Ltd v Morrow [2015] FCAFC 62 at [119]; Construction, Forestry, Mining and Energy Union v Anglo Coal (Dawson Services) Pty Ltd [2015] FCAFC 157 at [27]-[28]; Short v Ambulance Victoria [2015] FCAFC 55 at [54]. 54 The principles bearing upon a respondent's discharge of the s 361 onus were discussed by the High Court in Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32; (2012) 248 CLR 500 and Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2014] HCA 41. They were summarised by Buchanan and Tracey JJ in State of Victoria (Office of Public Prosecutions) v Grant [2014] FCAFC 184; (2014) 246 IR 441 at [32] as follows: • The central question to be determined is one of fact. It is: "Why was the adverse action taken?" • That question is to be answered having regard to all the facts established in the proceeding. • The Court is concerned to determine the actual reason or reasons which motivated the decision-maker. The Court is not required to determine whether some proscribed reason had subconsciously influenced the decision-maker. Nor should such an enquiry be made. • It will be "extremely difficult to displace the statutory presumption in s 361 if no direct testimony is given by the decision-maker acting on behalf of the employer." • Even if the decision-maker gives evidence that he or she acted solely for nonproscribed reasons other evidence (including contradictory evidence given by the decision-maker) may render such assertions unreliable. • If, however, the decision-maker's testimony is accepted as reliable it will be capable of discharging the burden imposed on the employer by s 361. 30 I note that the comments of Buchanan and Tracey JJ in State of Victoria (Office of Public Prosecutions) v Grant [2014] FCAFC 184; (2014) 246 IR 441 (Grant) at [32] referred to comments of the High Court in Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32; (2012) 248 CLR 500 (Barclay) at 517 (French CJ and Crennan J); 542 (Gummow and Hayne JJ); 545-6 (Heydon J) and Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2014] HCA 41; (2014) 253 CLR 243 (CFMEU v BHP Coal) at [19]-[22] (French CJ and Kiefel J); [85]-[89] (Gageler J). 31 Further, I respectfully adopt White J's articulation of principle as relevant to the current proceedings.
Did Mr Whelan have a workplace right, and did he exercise or propose to exercise such a right? 32 Mr Whelan pleads that he exercised a workplace right as defined in section 341 of the FW Act by: Inquiring of Mr Beynon when he would be paid an incentive bonus for the 2014/2015 financial year, or when a plan for the payment of an incentive bonus for the 2015/2016 financial year would be put in place, and Refusing to comply with a direction that he obtain his wife's execution of a non-disclosure agreement.
Inquiry about incentive bonus or plan for incentive bonus for financial year ending 30 June 2015 33 Section 341(c)(ii) defines a workplace right in an employee as being the entitlement of the employee to make a complaint or inquiry in relation to his employment. In such cases as Shea v TRUenergy Services Pty Ltd (No 6) [2014] FCA 271; (2014) 242 IR 1 (Shea), Murrihy v Belezy.com.au Pty Ltd [2013] FCA 908; 238 IR 307 and Walsh v Greater Metropolitan Cemeteries Trust (No 2) [2014] FCA 456; 243 IR 468 (Walsh), s 341(c)(ii) was interpreted broadly. In Walsh [41], Bromberg J observed that the requirement in s 341(c)(ii) that a complaint or inquiry by the employee be "in relation to" his employment means that there must be a relationship between the subject matter of the complaint and the complainant's employment. As Dodds-Streeton J further observed in Shea, a complaint that an employee is able to make in relation to his or her employment is not at large, but must be founded on a source of entitlement, whether instrumental or otherwise. 34 As a general proposition, a complaint or inquiry to the employer by an employee in relation to his or her entitlement to an incentive bonus, or the failure of the employer to prepare an incentive bonus plan, where the terms of employment of that employee make provision for payment of such bonuses or the preparation of such plans, would fall within the scope of s 341(c)(iii) of the FW Act. 35 Turning now to the present circumstances, the following conclusions may be drawn. 36 First, and temporarily placing to one side the parameters of Mr Whelan's contract of employment, it is plain that Mr Whelan's terms of employment contemplated payment of incentive bonuses to him. Clause 2.3 of the written contract of employment annexed to the affidavit of Mr Whelan affirmed 1 July 2016 provided: 2.3 Incentive Bonus Plan 2013-14 Bonus Plan 1.0 The employee will be eligible for an incentive bonus if the company meets budget. The actual bonus amount will be determined by your performance to the defined objectives. A minimum of $25,000 will be set for 2013-2014. 2.0 The employee will be eligible for an additional incentive bonus if the company exceeds budget. This will be a percentage base bonus - the employee will be entitled to a % of the total net amount that exceeds the agreed annual budget. 3.0 Annual Bonus Plans will be ongoing and will be set when the budget is finalised prior to each financial year beginning 2014-2015 Discretionary Bonus 4.0 The employee will be eligible for additional incentive bonuses at the discretion of the Managing Director. (Original emphasis.) 37 It is common ground that the first respondent paid Mr Whelan a bonus of $100,000 in or about September 2014 for the financial year ended 30 June 2014, although the respondents claim that the bonus was referable to the joint net profit of the first respondent and a related entity for that financial year. 38 Second, although the respondents deny that Mr Whelan was entitled to be paid a bonus for the financial year ending 30 June 2015, he had reason to believe that he could be entitled to one. Clause 2.3 (3.0) clearly provided that annual bonus plans (presumably involving him) would be ongoing and beginning that financial year. At the very least the terms of his contract contemplated that there would be a bonus plan for that financial year. 39 Third, even if Mr Whelan was not contractually entitled to a bonus for the financial year ending 30 June 2015 in accordance with cl 2.3 (3.0) of his employment contract, he was eligible for incentive bonuses at the discretion of Mr Beynon in accordance with cl 2.3 (4.0) of the contract. A query by Mr Whelan to Mr Beynon about a bonus could plausibly refer to that clause, irrespective of the financial state of the first respondent. 40 Fourth, there is evidence before me that Mr Whelan made inquiries or complaints concerning his entitlement to be paid a bonus, or the formulation of a bonus plan by the first respondent, both in the months leading up to his summary dismissal and on the day of his dismissal. 41 In his affidavits affirmed 1 July 2016 and 7 October 2016, Mr Whelan gave evidence that he asked Mr Beynon about the prospect of being paid a bonus at least three times between May and August 2015, and that Mr Beynon was either dismissive ("Don't worry, I will look after you.") or angry about being asked ("Cash flow is terrible and it's your fault, targets have not been made for the year so you won't be getting a bonus, I am sick of you asking.") Mr Whelan and Mr Beynon had another conversation where Mr Whelan again raised the issue of bonus, and Mr Bonus responded very aggressively. None of this evidence has been contradicted. 42 In his affidavit of 1 July 2016 at [101], Mr Whelan gave further evidence that, at his meeting with Mr Beynon on 24 August 2015, words to the following effect were said: Me: "Look nothing is going on, we are just having money troubles, I just thought my bonus would be coming and I'd have money to stop worrying about house payments and car payments and be able to spend money on the family, maybe take them to Africa or America." Travers: "Andrew if you have worries and stress then it will affect me and the business, I need to know if anything is wrong, you have made this my problem." Me: "If you take the boat out of my salary and the car I am no better off than I was a [sic] BATA, unless I get a bonus. I secured the Nightowl contract and I've hit the targets we spoke about I should be receiving a 100% of my salary as a bonus." Travers: "You are not on top of vending, yYou [sic] need to do much better on vending. I pay you plenty of money, no one is getting a bonus this year." Me: "Vending is not easy. But I will get on top of it We have much more debt here in Queensland, I was depending on the bonus." Travers: "If you want a fucking bonus, get out and fucking get a bonus." (Emphasis omitted.) 43 More detail in respect of the discussion of 24 August 2015 became available following the tender by the respondents of a transcript of recording of that meeting between Mr Beynon (described in the transcript as Facilitator) and Mr Whelan (described in the transcript as Interviewee), marked as Exhibit 11(R) (meeting transcript). It appears that the discussion was recorded without Mr Whelan's knowledge, however in submissions both parties referred to this document. It appears that the following conversation occurred: Beynon: …Or are you going to say I need the bonus of another $100,000 otherwise - so you're telling me you were getting $400,000 - $340,000 from Barda, because that's what you told me when we first met. Whelan: Yes, it was, Travers. Beynon: You said you got $230,000. Whelan: $230,000 and bonuses, Travers, and on-costs. Beynon: But you weren't going to get… Whelan: Travers, everyone gets a bonus at Barda. You ask Jeff. Beynon: That wasn't what they told me. Shannon and Jeff told me the other day, they didn't. I remember. There was a fucking uproar. People left because of it. You told me last time, last year, and that's why you were lucky you left, because people were so pissed at Barda because they haven't got their bonuses, where every other year they've got it. So what money problem would you have been in then, at $230,000? It would have been the same as you are in now, because you would have had $230,000 with a $500,000 loan. Now you're on $470,000 plus a car, so bring that back to $330,000, with an $800,000 loan. So it's the same thing. It's pineapples. So you're in no worse financial position. So you shouldn't be stressed. Whelan: Okay. Okay, then, mate, okay. 44 Shortly thereafter the conversation continued as follows: Whelan: No, I don't want to argue with you, Travers. Beynon: Well, I need to know so I can fix it. Whelan: I came to you because I wanted to talk about long-term financial goals with Freechoice. That's why I sent you the text, Travers, not about a bonus now, not about anything like that. To set a long-term plan. Would there be a bonus structure this year? Beynon: No, no, this is where you've got to slow down. We're about the job at hand. Whelan: I'm doing the job at hand, Trav. Beynon: I have asked you for years now, for two years, to get vending under control. Even back to the day of Warren Henry, and you don't get that involved. I need vending… Whelan: I'm in there now, Travis. 45 And later: Beynon: You said to me last time we had a conversation, you said you depend on the bonuses. Can you explain to me how? Where is it that you need the bonuses? Whelan: I'll have to get my spreadsheet and show you. … Beynon: … you don't live like we do and the kids aren't - they don't eat like Valentino, and I have four kids, you have two kids. You don't have a house like mine, with electricity and rate, which all amplifies up. You don't have that. So living is plenty there. Where is it that you need the bonus to survive, you count on the bonus to survive? That's what you told me. Whelan: Yeah, I do. I've always counted on a bonus in any company I've gone in because it's part of any package that I've negotiated. Beynon: But where does it… Whelan: Again, I'll have to get you the numbers to have a look at. Beynon: Well, get the numbers, then, and explain to me where you need the bonus. What about the business? Whelan: What do you mean? Beynon: You need a bonus for you. What about the business? Whelan: I'm not talking about this bonus. We've decided that. I'm asking if there's going to be a plan for one this year. Of course I'm going to ask that question. Beynon: See, this is where you don't get it. You've got to get this cleaned up. You've got to explain to me this, and then you've got to start to get ending back on. You've got to prove to me that you're going to get the day-to-day stuff running, starting from right now. I don't know. Where is it that the bonus is a - you will be broke if you don't get the bonus is how you told it to me. You rely on… Whelan: No, I never said that. Beynon: You rely on the bonus to survive. Whelan: I rely on the bonus to do what I want to do, correct, because I have in all the previous companies, Travers, over the last 10 years. Beynon: I don't care what you've done in your previous companies… Whelan: Well, I do. 46 Mr Whelan was cross-examined extensively about bonuses, including calculation of bonuses for him and other staff, and whether he had inquired about a bonus to Mr Beynon. It is clear from his answers to those questions that he placed considerable emphasis on the inclusion of bonuses as part of any salary package, both his own and that of other senior staff at the first respondent during his time there (I note, for example, transcript page 100), and that while working at the first respondent he was focused on the prospect of being paid a bonus at the end of each financial year. Mr Whelan's evidence also indicates that Mr Beynon placed importance on bonuses to staff as part of their packages. I note, for example, Mr Whelan's evidence of working with Mr Beynon to calculate appropriate levels of bonuses for staff (see, for example, transcript page 101 lines 23-40). 47 Mr Whelan's evidence under cross-examination was consistent with his evidence-in-chief. So, for example, I note the following exchange: So the first entry says - it's between 10.08 am and 10.11 am. You say to your wife: I don't want to outside of work. No more. He has crossed the line now. Is that what you were saying to her?---That is, yes. What was that a reference to?---In reference to the fact that I had a bad meeting with him about bonuses in July, and he told me I was disrespectful to him by - for asking for it so close to his mother dying. But what's the reference "I don't want to outside of work" mean?---Didn't want to socialise with him outside of work. (Original emphasis.) (Transcript page 159 lines 19-30) 48 Later: No. I think you're right. So it's true to say, isn't it, that at no time did you approach Mr Beynon and suggest to him that there needed to be a new annual bonus plan developed for the 2015 year?---Completely untrue. I see. You say - - - HER HONOUR: Sorry. So what's completely untrue? That you - - -?---That statement. I did approach Mr Beynon on numerous occasions. MR RONEY: There's not a single email, is there, between you and Mr Beynon which deals with that topic. Do you agree?---I'm not sure. I don't recall if there's an email. I'm putting to you that that's the case?---Well, I don't recall. … MR RONEY: Don't recall whether there was a text or not?---No. I don't recall. I remember there was numerous conversation because it was only four weeks into the financial year '15/16 that we realised that there was a serious issue with the previous financial year's numbers. Well, you're aware, aren't you, that - I will rephrase that. I think the proposition that I put to you was that you had not, in fact, texted or emailed Mr Beynon suggesting or inviting him to produce a new annual bonus plan for the 2015 financial year?---Yes. I don't recall. All right. It may well be that you didn't communicate with him in those ways on that issue. Do you accept that?---No. I did discuss those issues with him. In those ways, I said?---I don't recall. But it may be that you didn't, in fact?---No. I know that I did have a lot of communications within that year because it was a really big issue. Yes. But you're not talking about written communications. I am?---Well, that's a form of communication. Yes. I'm asking you about written communications. You didn't send any written communications to Mr Beynon and, I suggest, to anyone else within FreeChoice inviting or suggesting them to revise the bonus plan for 2015?---I don't recall. You're not even prepared to concede the possibility that you didn't?---No because I don't recall. All right. (Transcript page 129 lines 1-14 34-47, page 130 lines 1-14) 49 And: All right. I'm just referring to the pleaded case that you put in each of those two documents that her Honour has just admitted. And also that which is in the current pleading. And the proposition I'm putting to you is that in the conversation with Mr Beynon on 24 August, which turned out to be the day you were dismissed, you did not ask him why you had not been paid a bonus, first of all?---No, that's right. And he did not say to you that you were not entitled to one, or denied that you were entitled to one?---That's correct. In fact, you didn't have a discussion with him in that conversation of that day, or, I suggest, on any other day in which you were insistent on him in 5 paying you a bonus for that financial year?---That's incorrect. You certainly didn't discuss it on that day, did you?---Not on that day, no. You had a long meeting that day. As you recall it, how long did that go for?---maybe two hours. Covered a lot of topics, yes?---Yes. And, certainly, the issue of bonuses did come up?---Yes, it did. Right?---Yes. Now, it's your case, isn't it, as you understand it, that the reason that Mr Beynon caused his company to terminate your employment that day was that he did it to avoid paying you a bonus?---That's correct. But nothing happened that day which raised the prospect of you demanding that he pay you a bonus; correct?---No, that's incorrect. I asked also about the - the future bonus. That's in that conversation, is it?---It is. Right. Well, we will come to that in a moment. But you didn't, coming back to my question, demand that he pay you a bonus of any particular kind, did you?---No. And he didn't refuse to provide you with a bonus of any particular kind?---Not on 24. Nor, I suggest, on any other occasion?---That's incorrect. But your case remains that he terminated you that day to avoid paying you a bonus?---Yes. And you have no basis, I suggest, for that whatsoever?---I don't agree. He never said to you in that meeting that you were going to be dismissed or imply that you would be dismissed if you insisted on a bonus?---No, he didn't. And on no other occasion when you conversed with him on the topic of bonuses, up till that day, did he suggest or imply that you would be terminated if you insisted on being paid a bonus for that year?---No. He told me I was disrespectful. Right. So will you answer my question. On no occasion did he ever say to you, in conversation or otherwise leading up to your termination, that if you wanted or insisted on a bonus, you stood the risk of being terminated?---No, that's - sorry. That's correct, yes. (Transcript page150 lines 43-47, page 151, page 152 lines 1-4) 50 Fifth, while the respondents plead that Mr Whelan was not entitled to be paid a bonus for the financial year ending 30 June 2015, I consider his entitlement or otherwise is irrelevant to the question whether he actually made a complaint or inquiry in relation to his employment for the purposes of s 341(c)(ii).
Refusing to comply with a direction that he obtain his wife's execution of a non-disclosure agreement 51 Evidence was given in respect of this issue by Mr Whelan and Ms Ozioko. 52 It is not in dispute that, on the afternoon of 24 August 2015, Ms Ozioko asked Mr Whelan to arrange for Mrs Whelan to sign a non-disclosure agreement. In her affidavit, Ms Ozioko gives the following evidence: 92. After my meeting with Travers, I went to Mr Whelan's work area and asked him if he could obtain a signed confidentiality agreement from Mrs Whelan. He said to me words to the effect that Mrs Whelan shouldn't have to sign a confidentiality agreement. He told me that I'd have to speak to Mrs Whelan myself. Mr Whelan then left the office. The time was about 2.50pm. 53 At this point however Ms Ozioko's evidence diverges from that of Mr Whelan. 54 Mr Whelan deposes at [107] of his affidavit affirmed 1 July 2016 that he and Ms Ozioko had the following conversation: Suzie: ''Travers has asked that Tracy need [sic] to sign this non-disclosure agreement because you went to the party at the candy mansion." Me: "Is everyone's partner that attended the party getting this today?" Suzie: "No but Travers has said it must be on his desk by 9am tomorrow" Me: "I don't feel comfortable telling my wife to sign it. Feel free to give Tracy a call and you can discuss it with her. You have been dealing with all NDA's [sic] the models and staff, so I will leave it to you to call Tracy and get it signed." (Emphasis omitted.) 55 In contrast in her affidavit affirmed 6 September 2016 Ms Ozioko deposes: 93. I refer to paragraph 107 of the Whelan Affidavit. Mr Whelan never said words to the effect of "is everyone's partner that attended the party getting this today?", and I did not say words to the effect of "Travers has said it must be on his desk by 9am tomorrow". Mr Whelan did tell me that he did not feel comfortable telling his wife to sign it and that I was free to call her myself. Mr Whelan did not say words to the effect: "You have been dealing with all NDA's for the models and staff". In fact, Mr Whelan and I had both been responsible for arranging for the signing of the new confidentiality agreements, so it would have made no sense for Mr Whelan to have said that to me. 56 Ms Whelan gave further evidence that around 3.10 pm on 24 August 2015 he received a telephone call from Mr Beynon in which Mr Beynon said he had been informed by Ms Ozioko that Mr Whelan refused to ask Mrs Whelan to sign the non-disclosure agreement. Mr Whelan's evidence at [109] of his 1 July affidavit was that his conversation with Mr Beynon continued: Me: "I wanted to keep my work and home life separate. This is an unusual and unnecessary request. Suzie has been dealing with these and I don't want a part of it. I am happy for Suzie and you to meet with Tracy and her Dad and explain to them why she needs to sign it today. I don't understand why all of a sudden she needs to sign by tomorrow." Travers: "It has to be signed by 9.00am tomorrow morning or else." Me: "Is that a threat?" Travers: "Take it as you want, I am now ending this call." (Emphasis omitted.) 57 Mr Whelan pleads this aspect of his case in two ways. The first is as a complaint or inquiry, being a refusal to carry out a task he was not legally obliged to do and conduct by which the first respondent, through Mr Beynon, was purporting to terminate his employment if he did not comply. The second is as a particular of the adverse action, namely that the first respondent discriminated against the applicant in his employment by treating him less favourably than other employees who did not make complaints or inquiries that the first respondent required the applicant's wife to sign a document which other employees' partners were not required to sign. I will deal with each in turn, though note the ambiguous nature of the pleading. 58 Mr Whelan submits that his refusal to comply with this direction was a complaint in relation to his employment for the purposes of s 341(c)(ii) of the FW Act, and relies on Shea [2014] FCA 271; (2014) 314 ALR 346 at [29] where Dodds-Streeton J explained that a "complaint" for the purposes of s 341(c)(ii) was: … a communication which, whether expressly or implicitly, as a matter of substance, irrespective of the words used, conveys a grievance, a finding of fault or accusation. 59 I am unable to identify how Mr Whelan's refusal to accede to the request of Ms Ozioko and Mr Beynon to ask Mrs Whelan to sign a non-disclosure agreement can be described as "a complaint or inquiry" by Mr Whelan such as to fall within the scope of workplace right pursuant to s 341(c)(ii). Most favourably to Mr Whelan, the situation appears to be that Mr Whelan told Ms Ozioko that he was uncomfortable asking his wife to sign the relevant agreement, suggested that Ms Ozioko speak with Mrs Whelan herself, and then received a short and angry telephone call from Mr Beynon about the issue. Even relying on the definition of "complaint" suggested in Shea [2014] FCA 271; (2014) 314 ALR 346, I am not satisfied that anything said or done by Mr Whelan constituted a complaint in the form of a communication conveying a grievance, finding of fault or accusation. Certainly there was no "inquiry" by Mr Whelan about this issue. The terms of s 341(c)(ii) are wide, but not so wide as to include the mere resistance by Mr Whelan to Ms Ozioko's request and his suggestion that Ms Ozioko ask Mrs Whelan about the non-disclosure agreement, and the inconclusive conversation with Mr Beynon later that day. 60 In my view this issue does not give rise to a workplace right in Mr Whelan within the meaning of the FW Act.
Was "adverse action" taken against Mr Whelan? 61 Item 1 in the table to s 342(1) of the FW Act defines adverse action taken by an employer against an employee as including circumstances where the employer: (a) dismisses the employee; or (b) injures the employee in his or her employment; or (c) alters the position of the employee to the employee's prejudice; or (d) discriminates between the employee and other employees of the employer. 62 As I have already noted, Mr Whelan alleges that adverse action was taken against him in three different ways.
First allegation of adverse action: dismissal 63 It is common ground that Mr Whelan was summarily dismissed by the first respondent, at the direction of Mr Beynon, on 24 August 2015. This dismissal of Mr Whelan was clearly "adverse action" against him by the first respondent, as defined by item 1(a) in the table to s 342(1) of the FW Act.
Second allegation of adverse action: refusal to pay bonuses 64 The second form of adverse action pleaded by Mr Whelan was the refusal of the first respondent to pay Mr Whelan bonuses which were owed to him. 65 The evidence before the Court is that, despite Mr Whelan raising with Mr Beynon the prospect of him being paid a bonus or the prospect of the first respondent preparing a bonus plan, the first respondent, through the second respondent, informed Mr Whelan that he would not be paid a bonus. To the extent that this conduct could be "adverse action" it could only fall within s 342(1)(c) or (d) of the FW Act, namely where an employer: (b) injures the employee in his or her employment; or (c) alters the position of the employee to the employee's prejudice; 66 In my view, Mr Whelan was not owed bonuses, such that a refusal by the first respondent to pay him bonuses he has claimed constituted an injury to him in his employment or altered his position to his prejudice. I have formed this view for reasons I will explain later in this judgment in the context of Mr Whelan's claim of breach of contract.
Third allegation of adverse action: requirement that Mrs Whelan sign a non-disclosure agreement 67 The third type of adverse action alleged by Mr Whelan was the requirement of the first respondent that Mrs Whelan sign a document which other employees' partners were not required to sign. 68 It is difficult to identify the basis on which Mr Whelan claims that he was the subject of adverse action in this respect. 69 First, the pleading in paragraph 41(a)(ii) of the third further amended statement of claim refers to conduct of the first respondent in respect of Mrs Whelan, not Mr Whelan. On the basis that Mr Whelan could not dictate Mrs Whelan's decision to execute (or refuse to execute) a non-disclosure agreement, the action of the first respondent as pleaded was directed towards Mrs Whelan, not the applicant. 70 Second, to the extent that Mr Whelan was concerned by the alleged requirement, the evidence shows that Mr Whelan's principal concern was that he was being tasked with arranging this with Mrs Whelan, when in his view it was Ms Ozioko's job to approach Mrs Whelan about it. In particular I note his evidence at [107] of his affidavit noted above. 71 Indeed, in cross-examination Mr Whelan accepted that it was reasonable for the first respondent to approach Mrs Whelan to ask her to sign a non-disclosure agreement, because confidentiality in respect of events at The Candy Shop Mansion was important and Mrs Whelan attended such events. In particular I note the following exchange between Mr Roney QC for the respondents and Mr Whelan: Now, having regard to what I think you've agreed was important about protecting confidentiality associated with what happened at the Candy Store Mansion - Candy Shop Mansion, you would accept, wouldn't you, that it was reasonable to have people like your wife, who were allowed to go to functions there, to sign nondisclosure agreements?---Only in the last couple of months, yes. Yes. But you accept that it was reasonable to expect people who were going to be allowed to come to those to sign up confidentiality agreements which would cover their attendances, whenever that was?---Yes. Yes. And on 24 August, Ms Ozioko came to you, didn't she, and asked you to give effect to some arrangements that she was trying to put in place to get your wife to sign one of those?---Yes, she did. And you didn't feel comfortable about asking your wife to do that?---I didn't, no. And you effectively said to her, look, if that's what you need to do, you do it?---Yes. I asked her firstly who else's partner was signing them that day. Yes?---And I said to her I don't feel comfortable in doing that, because she looked after all the nondisclosure agreements, not me. All right. So was that the only conversation you had with anyone that day, apart from your wife, I mean, about this need to have a confidentiality agreement signed, or a nondisclosure agreement signed?---No. Travers Beynon contacted me as well after that conversation and asked me to do the same thing that Suzie asked me. All right. And do you remember what he said?---Yes. Can you tell us?---He said to get it done tomorrow or else. He asked me prior to that why I did not feel comfortable, everyone should be signing nondisclosure agreements. He has to be done by 9 am tomorrow. I asked him if it was a threat. He said you can take it as you will, but it needs to be on his desk by 9 am tomorrow. I again said to him I don't feel comfortable in doing that. At no time did I say Tracey would not sign it. But what I said is that Tracey would actually speak with her father and look to why she needed to sign that document. But I would prefer Ms Ozioko or himself to contact my wife, because I didn't feel comfortable in doing that. And we know, don't we, that he then did speak to Ms Ozioko about that, and Ms Ozioko did approach your wife?---That's right. (Transcript page 220 lines 6-45) 72 Third, if Mr Whelan had considered the first respondent's requirement in respect of Mrs Whelan inappropriate or discriminatory of him, he could have told Ms Ozioko this.He did not. Instead, Mr Whelan's evidence was that he suggested that Ms Ozioko contact Mrs Whelan directly. Ms Ozioko gave evidence that following her conversation with Mr Whelan she did what Mr Whelan told her, and contacted Mrs Whelan directly. Ms Ozioko's unchallenged affidavit evidence was as follows: 95. At approximately 3:08pm, I sent a text message to Mrs Whelan. The text message read: "Hi Tracy I need to set up a time to have you sign the confidentiality agreement, we are having everyone that has attended and been involved in events and will be in the future sign and you and tori are my last ones. Can we coordinate this? I can come to you if necessary? I need to get this done by tomorrow. Let me know. Regards Suzie" 96. I did not receive a response to my text message. 73 Fourth, I note the unchallenged evidence before the Court that when Mr Whelan told Ms Ozioko that she (rather than he) should contact Mrs Whelan, Ms Ozioko informed Mr Beynon who then rang Mr Whelan and told him to have the signed agreement by Mrs Whelan on his desk the following morning, "or else." The respondents concede that this instruction had an imperative element to it, however, they submit that it was scarcely a demand in relation to an issue of such critical significance that non-compliance with it then and there would have resulted in Mr Whelan's dismissal. I agree. "Or else" potentially covers a range of consequences, including further unpleasant conversations with Mr Beynon. Dismissal of Mr Whelan was not threatened at that stage by Mr Beynon. 74 Fifth, Ms Ozioko gave the following evidence: 93. I refer to paragraph 107 of the Whelan Affidavit. Mr Whelan never said words to the effect of "is everyone's partner that attended the party getting this today?", and I did not say words to the effect of "Travers has said it must be on his desk by 9am tomorrow". 75 Contrary to Ms Ozioko's evidence, I consider it plausible that Mr Whelan did ask whether other employees' partners were receiving non-disclosure agreements that day. I consider this plausible because Mr Whelan had earlier that day been party to a difficult conversation with Mr Beynon, and it is possible that he was feeling defensive in its aftermath. However, it does not follow, even if Mr Whelan understood that only Mrs Whelan was being approached for a non-disclosure agreement, that he objected. Indeed his other evidence suggests he thought it appropriate that Mrs Whelan be asked to sign a non-disclosure agreement, because of her privileged position in being invited to attend functions at The Candy Shop Mansion, and the clear importance of confidentiality to the first respondent. 76 I do however accept Ms Ozioko's evidence that she did not tell Mr Whelan that Mr Beynon had said the agreement must be on his desk by the following morning. Ms Ozioko reported to Mr Whelan, and I consider it unlikely that she would have made this communication to her manager in the form of the ultimatum alleged by Mr Whelan. 77 Sixth, although Mr Whelan does not specifically plead s 342(1)(d), I note that that section defines adverse action as including where an employer discriminates between the employee and other employees of the employer. Mr Whelan pleads at [41(a)(ii)] that the first respondent discriminated against the applicant in his employment by treating him less favourably than other employees who did not make complaints or inquiries in that the first respondent required Mr Whelan's wife to sign a document which other employees' partners were not required to sign. However, I am not satisfied that the facts as pleaded supports a finding of discrimination. To the extent that "discrimination" in s 342(1)(d) of the FW Act bears the ordinary dictionary meaning of "to treat employees differently" (see the discussion in Creighton WB, Creighton and Stewart's Labour Law (6th ed, Federation Press, 2016) at [20.48] (Creighton and Stewart)) there is no evidence that Mr Whelan was treated differently from other employees. Rather, it is apparent that Mrs Whelan was being asked by the first respondent to sign a non-disclosure agreement because she had been allowed to attend functions at The Candy Shop Mansion. I consider it likely that if partners of other executives attended such functions, they would also have been asked to sign non-disclosure agreements. 78 I consider that Mr Whelan's claim of adverse action against him relating to Mrs Whelan being required to sign a non-disclosure agreement has no merit. 79 The next - and key - question is whether the adverse action taken by the first respondent against Mr Whelan in the form of summary dismissal was because Mr Whelan exercised a workplace right.
Was there a causal nexus between the exercise by Mr Whelan of a workplace right and the adverse action taken against him? 80 The evidence before the Court demonstrates that Mr Whelan had made inquiries about either payment of a bonus or the establishment of a bonus plan both in the weeks prior to, and on the day of, his dismissal. These inquiries can properly be characterised as complaints or inquiries in relation to his employment, and therefore the exercise of a workplace right. 81 It follows that not only was adverse action taken, but also a relevant workplace right existed as an objective fact: Tattsbet Limited v Morrow [2015] FCAFC 62; (2015) 233 FCR 46 at [119]; Construction, Forestry, Mining and Energy Union v Anglo Coal (Dawson Services) Pty Ltd [2015] FCAFC 157; (2015) 238 FCR 273 at [76], [132]. There was a causal nexus between the exercise by Mr Whelan of a workplace right and the adverse action taken against him.
Reason for the adverse action taken against Mr Whelan by the first respondent 82 Turning now to this issue, I note the following preliminary points. 83 First, the onus rests with the first respondent to disprove the presumption which the Court now entertains that the adverse action against Mr Whelan was taken for a reason proscribed by the FW Act, namely because Mr Whelan exercised a workplace right. 84 Second, as Buchanan and Tracey JJ observed in Grant at [32] it is extremely difficult for an employer to displace the statutory presumption in s 361 if no direct testimony is given by the decision-maker acting on behalf of the employer. That is precisely the position in this case. The decision-maker in respect of Mr Whelan's summary dismissal was, without doubt, Mr Beynon. That this is so is evident from Mr Whelan's termination letter of 24 August 2015 signed by Mr Beynon on behalf of the first respondent (and marked as annexure AW-15 to Mr Whelan's affidavit affirmed 1 July 2016), evidence of Ms Ozioko that Mr Beynon had told her on 24 August 2015 that he "had no choice but to terminate [Mr Whelan's] employment" (see Ms Ozioko's affidavit affirmed 6 September 2016 at [100]), and the admission of the respondents that Mr Beynon was the managing director of the first respondent at that time and in that role he had oversight of the operation of the first respondent's business activities and managed its senior staff. However, Mr Beynon has not given evidence concerning Mr Whelan's summary dismissal. As Mr Whelan correctly submits, this lacuna in evidence makes it difficult for the Court to determine with absolute clarity the "real" reasons for Mr Whelan's dismissal on 24 August 2015. 85 Third, in the absence of evidence given by Mr Beynon, the respondents relied heavily on the transcript of the recorded meeting between Mr Beynon and Mr Whelan of 24 August 2015. While this transcript is in evidence, I treat it and its contents with caution. Mr Whelan's statements during the course of that meeting either were, or could have been, tested and clarified at the hearing by cross-examination. Mr Beynon's statements were not tested, and could not be tested, given that he gave no evidence in the proceedings.
The respondents' case 86 With the onus resting on the respondents in mind, I now turn to the arguments advanced by the respondents as to why Mr Whelan was dismissed. 87 The respondents submit that "it is unquestionably the case" that Mr Beynon terminated Mr Whelan's employment because Mr Whelan had breached confidentiality associated with the publication of an article and associated photoshoot in Zoo Magazine by giving an advance copy of that article to Ms Chanel Stewart, such conduct being "gross misconduct" on Mr Whelan's part. Relevantly I note that cl 9.1 of Mr Whelan's contract entitles the first respondent to dismiss him without notice in the event of gross misconduct. 88 In written submissions the respondents elaborate: 116. The justifications included those matters, but others that were in the mind of Ms Ozioko and Mr Beynon namely: (a) lying to the Second Respondent about the Applicant's involvement in the disclosure of the Zoo article information above and his having disclosed such information; (b) lying to Ms Suzie Ozioko about the fact that the Applicant had told the Second Respondent during the course of the business trip to Europe to "fuck off" when the Applicant had not in fact done so, and lying to the Second Respondent in relation to that conversation both since and on the day of termination; (c) a lack of trust on the part of the Second Respondent in the Applicant's ability to continue to act as General Manager given the Applicant's inability to manage his own financial affairs, which matter was discussed during the course of the meeting that day; (d) the Applicant failing to act in a truthful way in his dealings on 24 August 2015 with the Second Respondent; (e) the Applicant's failure to comply with the Second Respondent's oral instruction given earlier on 24 August 2015 not to leave the office before 5.00pm that day to attend a meeting with the Second Respondent that afternoon, by leaving the office before that time; (f) in the circumstances the Applicant's intention or failure to either answer or return telephone calls made by the Second Respondent to the Applicant's mobile phone; and (g) the prospect, having regard to the matters pleaded in paragraphs A to F above that the Applicant would imminently resign from his employment with the First Respondent and act contrary to the First Respondent's interests including in disclosing confidential information. 89 As to the allegation that Mr Whelan failed to act in a truthful way in his dealings on 24 August 2015 with Mr Beynon, the respondents particularised the allegation in [117] of their written submissions of 18 May 2017 as follows: (a) Mr Whelan was perceived to be evasive in telling the truth about the reasons he was in such financial circumstances Beynon asked Whelan whether he had purchased a new property and Andrew said no. Mr Whelan had purchased a new property just weeks early. The relevant part of exhibit 11 contains this exchange … (b) Mr Whelan was perceived to be evasive in telling the truth about and Whelan continued to deny that he had told Ms Ozioko that he'd told Travers to "fuck off" on the European trip when Beynon believed he had done so … (c) Mr Whelan was perceived to be evasive in telling the truth about whether he had been absent from work whilst Travers and Suzie were away from the office in July which Mr Beynon did not believe … (d) Mr Whelan was perceived to be evasive in telling the truth about Andrew denied that he had been leaving work before 5pm … 90 Ms Ozioko gave evidence concerning the importance of confidentiality in the business dealings of the first respondent. There was extensive cross-examination of Mr Whelan concerning this issue, during which Mr Whelan accepted that confidentiality in the business practices of the first respondent was of high importance to it. 91 The respondents submit that, reduced to a minimum, Mr Whelan's case is that there was a sham or deceit in relation to the reason for termination, and that he was not really terminated for breach of confidentiality, or for any other reason, but to ensure Mr Whelan was not paid a bonus when he was otherwise entitled to one. They submit further that the cross-examination of Ms Ozioko left the majority of her evidence on the issues which are critical to the determination of this case almost entirely untouched and unchallenged and that her evidence directly explained the process of thinking in the first respondent leading up to Mr Whelan's dismissal. 92 The respondents submit that when Mr Whelan contacted Mr Beynon on 17 August 2015 he said nothing to Mr Beynon about a bonus.
Evidence before the Court 93 I have already referred to evidence of Mr Whelan as to his exchanges with Mr Beynon concerning Mr Whelan's request for a bonus in the financial year ending 30 June 2015, and the transcript of the recording of the meeting between Mr Beynon and Mr Whelan of 24 August 2015 so far as concerned bonuses. I have also noted that Mr Beynon has not given evidence of his reasons for dismissing Mr Whelan. 94 Although initially relying on Mr Whelan's alleged gross misconduct, the case of the respondents expanded to claim that the "real" reasons for Mr Whelan's dismissal were his gross misconduct in breaching confidentiality, his lack of candour, the inability of Mr Beynon to trust him, his failure to follow oral directions, and the belief of Mr Beynon that Mr Whelan was about to resign. In order to understand the respondents' defence it is necessary to have regard to such evidence as is before the Court.
Evidence of Mr Whelan 95 Mr Whelan gave evidence that in about May 2015, Mr Beynon held a "Candyman" photo shoot at his house, attended by senior staff including Mr Whelan, and that Mr Beynon informed them that the photographs were intended to appear on social media to promote the business as well as in Zoo Magazine. In his affidavit affirmed 1 July 2016, he continued: 128 Shortly after the photo event, Travers and I went overseas on a business trip on behalf of Freechoice, but which I understood was really just an opportunity for more photos to promote the "Candyman" image that Travers believed would promote Freechoice. I say this because there was no work done for Freechoice only photo shoots and he bought along his photographer from Australia. Whilst overseas, I received an electronic copy of the article from Zoo Weekly Magazine on my phone, which included some of the photos taken at the photoshoot. I shared this article and photos with Travers whilst staying at a hotel in Spain and we read through the article together. 129. Later that afternoon, one of the models of the photo shoot, Chanel Spencer, sent me a text message and asked if I had a copy of the Zoo Magazine article as the magazine article had sold out in stores at home. I had a conversation with Travers to the following effect: Me: "Chanel has texted me asking if she can get a copy of the Zoo article because she can't get a copy back home as it sold out. Is it ok if I send it to her?" Travers: "No problems how cool is it that it is sold out." 130. I then forwarded the photos and article to Chanel via email. Annexed and marked AW-16 is a copy of the Zoo Magazine article. 131. Following subsequent discussions with Travers' publicist, I learnt that the Zoo Weekly magazine was not due to be published until the next week. I wasn't concerned that I had sent this to Chanel and this was never discussed any further with Travers or the publicist Bruce Nelson. It was never bought to my attention that I had breached any confidential communication provisions of the employment contract as a result of forwarding the Zoo article to Chanel until I received the letter of termination. (Emphasis omitted.) 96 Annexure AW-16 to Mr Whelan's affidavit is an email dated 23 June 2015 from Mr Whelan to Ms Stewart, attaching an article containing numerous photographs of Mr Beynon with women wearing bikinis, and prose under the heading "The Aussie who's living the dream". The email read: Hey Babe Hope you get this Andrew 97 The email also forwarded an earlier email to Mr Whelan from Mr Bruce Nelson of Zakazukha Marketing Communications which read "Hi Andrew, To discuss later today" and attached the article. 98 Mr Whelan was extensively cross-examined by Mr Roney QC for the respondents about events related to the Zoo Magazine article and the trip to Europe. Mr Whelan gave evidence including the following: It was Ms Ozioko's job, not his job, to get non-disclosure agreements signed by participants in the ZOO Magazine photoshoot (transcript page 184 lines 21-27); He had verbal authority from Mr Beynon to send Ms Stewart the Zoo Magazine article. Mr Beynon never expressed any annoyance or anger to Mr Whelan concerning Mr Whelan's action in sending Ms Stewart the Zoo Magazine article (transcript page 185 lines 20-28, page 186 lines 39-47); Mr Beynon accused him of "falling in love" with one of the promotional models, Ms Scarlett Bouvier, on a yacht during the Europe trip (transcript page 196 lines 1-4, page 199 lines 32-45). Mr Whelan gave evidence denying this, and further that he told Mr Beynon to "piss off" (transcript page 196 lines 6-10, page 200 lines 4-6); During the Europe trip in June 2015, Mr Beynon complained that Mr Whelan spent too much time with the promotional models rather than with him (transcript page 199 lines 14-19); On his return to Australia from the trip to Europe in June 2015, he did not tell Ms Ozioko that he had told Mr Beynon to "fuck off" - he told Ms Ozioko that he and Mr Beynon had had an argument (transcript page 193 lines 43-44). Mr Beynon was furious that Mr Whelan had told Ms Ozioko that they had argued during the trip (transcript page 194 line 16); He did not answer Mr Beynon's telephone calls around 4.00 pm on the afternoon of 24 August 2015 because he did not hear or see Mr Beynon's missed calls, being at the time attending a medical appointment because he felt unwell (transcript pages 282-283); He sent the following text message to his wife at 12.16 pm on 24 August 2015 after meeting with Mr Beynon: Terrible. He's a cunt, darling. I can't stand it any more and can't put up with his abuse and shit. No bonus, no bonus structure this year. Said he will give a bonus when he feels like it. I need to leave ASAP. Under cross-examination Mr Whelan said that this did not meant that he intended to resign at that point - rather he was upset at Mr Beynon because of their meeting of earlier that day (transcript page 271 lines 1-18); Mr Beynon had said the following words to Mr Whelan on the morning of 24 August 2015: I have a problem with you not being in the office as much as you should be. That has got to change. If you're going to get a doctor's appointment, it's not in the afternoon, especially a Friday. You be here especially with vending. Make sure you're there. Mr Whelan conceded that Mr Beynon had a perception that Mr Whelan was taking time off when he should have been at the office, however Mr Whelan denied that this was the case (transcript page 267 lines 31-43). Under cross-examination Mr Whelan also gave the following evidence: Did he communicate to you in that meeting that he believed that you spent too much time with your family and not enough at work?---Yes, I believe so. Did you decide that you didn't want to have anything to do with him any more?---I thought that was unfair, what he said. (Transcript page 270 lines 21-25) In relation to whether Mr Whelan and Mr Beynon were to have a meeting later in the day on 24 August 2015: Now, after the meeting that day, you were due to see him later on the day - on that day, weren't you?---No. Incorrect. All right. You would normally, though, liaise with him during the day on a workday, wouldn't you?---During the day, yes, when he was in. So - and he was in that day, was he not?---Only till about 1.30/2 o'clock - - - Right?--- - - - as he normally is. Okay. But in any event, on a normal day as this was apart from the fact that you had this meeting, you would be interacting with him in the course of doing your ordinary duties?---All depends what he's doing as well. Yes?---Yes. But on an ordinary day, that's what would happen?---Well, there was never an ordinary day because he wasn't there very much. (Transcript page 266 lines 5-22) 99 I have already set out in some detail the evidence given by Mr Whelan during cross-examination in relation to whether he had asked Mr Beynon about bonuses, or bonus plans, in the time prior to and on the day of his dismissal.
Evidence of Ms Parnia Marshall 100 Ms Marshall gave evidence that she was at The Candy Shop Mansion on the evening of 24 August 2015 with Mr Beynon and Ms Ozioko when "there was a conversation that was held mainly to do with Andrew's firing - being sacked." Ms Marshall continued: And basically how the conversation started was Travers pretty much said he's gone, he's gone, and Suzie said words to the effect of - to do with the Zoo Magazine article. Did you tell him that you could send it on? Did - like, you know, that was pretty much what was said. And then Suzie - and then Travers said yes, I did, but we were away on holidays. And then Suzie said do you have any, like, text message proof of that or any email proof of that. And then Travers replied no, and then he said - he said I can fire him - I can get rid of him for that, and he goes he won't have the money to fight me in court anyway. And then to finish up the conversation, like, he was sort of smirking at the time after he said that, and then to finish off the conversation he was like, don't pay him - sorry to swear, but - a fucking cent. (Transcript page 358 lines 37-46)
Evidence of Ms Ozioko 101 In her affidavit affirmed 6 August 2016, Ms Ozioko deposes that both she and Mr Whelan worked at The Candy Shop Mansion on the day of the Zoo Magazine photoshoot in early June 2015, to ensure that all of the participating models and photographers signed confidentiality agreements. Ms Ozioko deposes that, on or about 22 June 2015, she received an email from Mr Whelan with a copy of the proposed ZOO Magazine article. She understood from the public relations company that the article would be published in the next edition of Zoo Magazine. Ms Ozioko deposes further: 71. On the morning of 29 June 2015, Travers invited me to his home for a meeting. He told me about some incidents that had occurred on a recent trip to Europe involving Mr Whelan. He was quite upset with Mr Whelan's performance and told me that he had had to reprimand him at the end of the trip. Travers also told me that it had come to his attention that someone had disclosed a copy of the proposed Zoo Magazine article to Ms Chanel Stewart, one of the models that had been working for 'Freechoice Australia' at the photo shoot. Travers asked me to look into who had disclosed the document without permission. 72. Whilst I was at Travers' home that day, Travers received a call from the hospital informing him that his mother had lost consciousness. He left for the hospital immediately. Travers' mother died later that day. He did not return to work for some time after that. 73. Later that day I had a meeting with Mr Whelan during which he told me that he and Travers had got into an argument on their Europe trip and that he had told Travers that he was "done with Freechoice" and that Travers could "go fuck himself' and that he wanted nothing more to do with him. I was shocked to hear that. 74. Because of the death of Travers's mother, I did not see much of Travers around that time; however, we did speak on the phone from time to time. 75. I recall that several days after the conversation with Mr Whelan that I described above, I had a conversation with Travers. I mentioned during that conversation that Mr Whelan had told me there had been an argument during the Europe trip. Travers asked me what Mr Whelan had told me. I repeated what Mr Whelan had told me. Travers told me that Whelan's version of events was a complete fabrication. He said that he was upset about what Mr Whelan had told me but that he would have to deal with it later because of the personal issues he was dealing with at that time. 76. To the best of my recollection, approximately a few days after Travers' mother's funeral, on or about 17 July 2015, Travers called Mr Whelan to a meeting at his house. I understand from a subsequent discussion with Travers that at the meeting Travers spoke to Mr Whelan about his performance generally and about Mr Whelan's version of their argument on their Europe trip. 77. Mr Whelan had met with Travers on 17 July 2015, Mr Whelan returned to the office and called me in to the boardroom. He told me that Travers had given him a dressing down about what I had told Travers that Mr Whelan had said to me (namely that he was "done with Freechoice"). Mr Whelan told me that he'd be more careful what he said around me in the future. I felt he was rude and intimidating toward me. He then stormed of the boardroom and left. 78. In or around the beginning of August 2015, I contacted Ms Chanel Stewart's manager, Ms Jacqueline Armstrong and asked her who had disclosed the Zoo Magazine article to Ms Stewart. Ms Armstrong told me that that Mr Whelan had emailed the article to Ms Stewart. She subsequently provided me with a copy of that email. I reported this back to Travers. 102 The respondents submit that, before the Court, there is unchallenged evidence of Ms Ozioko that Mr Beynon was very angry when he discovered that the publication of the Zoo Magazine article had occurred immediately after his return from a trip to Europe, and that there is independent objective evidence to demonstrate that Mr Beynon had never authorised the publication of photos from the Zoo Magazine photoshoot while he was overseas. The respondents relied heavily on testimony of Ms Ozioko, emphasising that key aspects of her evidence were unchallenged by cross-examination or otherwise. This evidence is summarised at [157] of the respondents' written submissions and includes: Her evidence that Mr Whelan's signed employment agreement and confidentiality agreement were missing; All of her evidence in relation to the circumstances of the bonus scheme; Her evidence about Mr Whelan's work hours and conversation with him about it; The fact that Mr Whelan would, from time to time, yell and swear at employees; What occurred at The Candy Shop Mansion photo shoot in June 2015; The conversation with Mr Beynon on 29 June 2015 that it had come to his attention that the ZOO Magazine article had been leaked; The conversation in which Mr Whelan told her about verbally abusing Mr Beynon and said that he wanted nothing more to do with him; The later conversation with Mr Beynon in which they discussed this alleged abuse by Mr Whelan on the trip and Mr Beynon saying he was upset about that having been a fabrication; Her evidence that after Mr Whelan had been given a dressing down by Mr Beynon on 17 July 2015, Mr Whelan came to her and said he would be more careful about what he said to her in the future in a rude and threatening way; and Her evidence that there was no conversation with Mr Whelan in which he said he was expecting a bonus.
Conclusions 103 The decisions of the High Court in Barclay and CFMEU v BHP Coal, read with relevant provisions of the FW Act, provide guidance on the appropriate approach the Court should take in determining the reason or reasons that the adverse action was taken against Mr Whelan by the first respondent. 104 Ascertaining why, for the purposes of s 361(1) of the FW Act, an employer took adverse action against an employee involves determination of the "particular reason" of the decision-maker for taking that adverse action: Barclay at [42], [43], [45], [127]; CFMEU v BHP Coal at [9], [38]. Identification of the decision-maker is, accordingly, critical. I have already observed that the person who made the decision to dismiss Mr Whelan was Mr Beynon. I do not understand there to be any dispute about this point. 105 Section 360 of the FW Act provides that, for the purposes of that Part of the Act, a person takes action for a particular reason if the reasons for the action include that reason. If a substantial or operative reason for Mr Whelan's dismissal was his complaints or inquiries concerning payment of bonus, the first respondent has contravened the FW Act even if it was only one reason for the first respondent's actions: Barclay at [56], [57], [85], [88], [127]; CFMEU v BHP Coal at [85], [89], [90]. 106 As I have already noted, Mr Beynon did not give evidence of why he decided to dismiss Mr Whelan. In light of my earlier findings that, as an objective fact, Mr Whelan exercised a workplace right and was then the subject of adverse action, s 361 of the FW Act operates such that the onus lies on the respondents to prove, on the balance of probabilities, that the relevant adverse action taken against Mr Whelan was not for his exercise of the workplace right (and therefore not in contravention of the FW Act). The absence of any evidence from Mr Beynon makes much more difficult the task of the Court in determining Mr Beynon's reason or reasons for dismissing Mr Whelan. However, while direct evidence of a decision-maker as to his or her state of mind, intent or purpose will bear upon the question of why adverse action was taken, the central question remains "why was the adverse action taken?": Barclay at [44], CFMEU v BHP Coal at [39]. The Court is required to determine the reason as a question of fact, which must be answered in the light of all the facts established in the proceeding: Barclay at [41], [45]. 107 All relevant facts are identifiable by reference to the evidence before the Court. Examining that evidence, I am not satisfied that the respondents have discharged the onus of proving that Mr Whelan's exercise of a workplace right was not a substantive or operative reason for his dismissal. I take this view for the following reasons. 108 First, I have already found that Mr Whelan asked Mr Beynon about his entitlement to a bonus or the development of a bonus plan on multiple occasions prior to 24 August 2015. Mr Whelan specifically asked Mr Beynon about the development of a bonus plan pursuant to which a bonus would be paid to him on 24 August 2015, when adverse action was taken against Mr Whelan. Relevantly, I am also satisfied that, both prior to 24 August 2015 and on that date, Mr Beynon was angered by Mr Whelan's inquiries because he was concerned about the financial state of the first respondent, and because he considered that Mr Whelan did not deserve a bonus and should not be asking for one. 109 Mr Whelan gave undisputed evidence that Mr Beynon was angered by Mr Whelan raising the issue of bonuses in July 2015 around the time of the death of Mr Beynon's mother, and that Mr Beynon considered that Mr Whelan had been disrespectful to do so (transcript page 159 lines 25-27). I accept that this is plausible. 110 Turning to the transcript of the meeting of 24 August 2015, I note that Mr Whelan explained to Mr Beynon that he had acquired too many debts, was having difficulty paying them, and it was in that context that he had pressed Mr Beynon earlier in the year for a bonus and was continuing to press for a bonus plan to be developed. During the course of the meeting the following exchanges took place between Mr Beynon and Mr Whelan: Beynon: So it's $850,000, but it wouldn't be anything more, so that might go up a couple of grand, but still, where's $93,000 gone? Whelan: I don't know. As I said, I don't know. I've got all my spreadsheet of everything at home that we do on our expenses and everything. Beynon: But where would it be? The point is, I don't... Whelan: When we got the bonus last year, we had a holiday. We put money on our credit cards that we owed. We had to do some things around the house that needed fixing. Beynon: So I understand the holiday. Credit card. If you put money off that, then that would be less. That's based on $30,000. Whelan: Yes, it is. (Meeting transcript page 9) 111 I also note the following: Beynon: …Then I rang you and said whoa, what the fuck is going on? Because if you had come to me, I would have done this same thing. Let me help you. This is how I know. How else do you want me to help you? You're on $470,000, and if it's not that, it's $309,000 plus possible bonuses. Now, that's a fucking lot of money, and I fucking want to get to the bottom of it, because I need to know if you're capable of handling money, one, and two, are you going to pull the pin at some point because you're not going to get your shit worked out? Or are you going to say I need the bonus of another $100,000 otherwise - so you're telling me you were getting $400,000 - $340,000 from Barda, because that's what you told me when we first met. Whelan: Yes, it was, Travers. Beynon: You said you got $230,000. Whelan: $230,000 and bonuses, Travers, and on-costs. Beynon: But you weren't going to get... Whelan: Travers, everyone gets a bonus at Barda. You ask Jeff. Beynon: That wasn't what they told me. Shannon and Jeff told me the other day, they didn't. I remember. There was a fucking uproar. People left because of it. You told me last time, last year, and that's why you were lucky you left, because people were so pissed at Barda because they haven't got their bonuses, where every other year they've got it. So what money problem would you have been in then, at $230,000? It would have been the same as you are in now, because you would have had $230,000 with a $500,000 loan. Now you're on $470,000 plus a car, so bring that back to $330,000, with an $800,000 loan. So it's the same thing. It's pineapples. So you're in no worse financial position. So you shouldn't be stressed. Whelan: Okay. Okay, then, mate, okay. (Meeting transcript pages 15-16) 112 Shortly afterwards in the discussion the following exchange occurred: Whelan: I came to you because I wanted to talk about long-term financial goals with Freechoice. That's why I sent you the text, Travers, not about a bonus now, not about anything like that. To set a long-term plan. Would there be a bonus structure this year? Beynon: No, no, this is where you've got to slow down. We're about the job at hand. Whelan: I'm doing the job at hand, Trav. Beynon: I have asked you for years now, for two years, to get vending under control. Even back to the day of Warren Henry, and you don't get that involved. I need vending ... Whelan: I'm in there now, Travis. Beynon: Yes, but it's not turning around. You said to me the last six weeks have been tough for me, and I know for you. I don't know how this fucking compares with losing your mother. You asked me to come to you on certain things affecting me at the moment and would like to take you up on it. What is that? Money issues, is that right? That's all it is? Is that all it is? Is that all it is, Andrew? Whelan: Yes. Beynon: Okay. So now you don't want to talk about it. Whelan: I don't have the detail with me. You're asking me specifics about the detail and I don't have it with me, Travers. I'm sorry. … Beynon: Well, get the numbers, then, and explain to me where you need the bonus. What about the business? Whelan: What do you mean? Beynon: You need a bonus for you. What about the business? Whelan: I'm not talking about this bonus. We've decided that. I'm asking if there's going to be a plan for one this year. Of course I'm going to ask that question. Beynon: See, this is where you don't get it. You've got to get this cleaned up. You've got to explain to me this, and then you've got to start to get vending back on. You've got to prove to me that you're going to get the day-to-day stuff running, starting from right now. I don't know. Where is it that the bonus is a - you will be broke if you don't get the bonus is how you told it to me. You rely on ... Whelan: No, I never said that. Beynon: You rely on the bonus to survive. Whelan: I rely on the bonus to do what I want to do, correct, because I have in all the previous companies, Travers, over the last 10 years. Beynon: I don't care what you've done in your previous companies ... Whelan: Well, I do . (Meeting transcript page 17) 113 The thread of discussion concerning bonuses culminated in Mr Beynon saying: …So if you've got to concentrate on being here, making sure that everyone's doing their thing, and you've got to do vending, that's the perfect spot. That's the step. There are no promises for the future of bonuses and all that now. The only promise you have is - you never really ask - I never have, because I always knew I was always in control of the bonus. You don't ask for a bonus, you're given it. You take it by working to a point where you deserve it. You're asking me to predict the future without even knowing the future about whether a bonus is going to be available. No. How you get something somewhere - so it's not even a question. If you want a fucking bonus, go and get a fucking bonus. Do you understand what I'm saying? It's not for me to decide. That's for you to decide. It really is. Prove yourself. Can you be the right-hand man? Let's see how tough you really are. (Meeting transcript page 51) 114 To the extent that I can draw inferences from the meeting transcript, I consider that, in light of the repeated and extensive discussion during that meeting of Mr Whelan's financial position and Mr Whelan pressing for a bonus based on his previous employment, the issue of Mr Whelan asking for either a bonus or the development of a bonus plan was on Mr Beynon's mind on 24 August 2015. 115 Second, the respondents submit that it is of critical significance that Ms Ozioko was not cross-examined about the grounds of termination. They also submit that her unchallenged evidence about her communications with Mr Beynon on 24 August 2015 explained the process of thinking, evidenced by the steps that occurred, which lead to Mr Whelan dismissal. I reject this submission. Ms Ozioko reported directly to Mr Whelan (transcript page 440 line 43). She had no authority to dismiss him, and no role in his dismissal except as directed by Mr Beynon. There is no reason for me to conclude that Ms Ozioko was a particular confidant of Mr Beynon such that he reliably and honestly informed her of his motives for taking adverse action against a staff member in the senior role that Mr Whelan occupied. There is no suggestion that Ms Ozioko advised Mr Beynon to dismiss Mr Whelan, or did anything other than what he told her to do to assist him in his dismissal of Mr Whelan. 116 Ms Ozioko's evidence concerning her conversations with Mr Beynon is hearsay and, although I was prepared to admit it for narrative purposes, I give it little weight. It could not be tested by cross-examination of Mr Beynon, whose state of mind in deciding to dismiss Mr Whelan was critical. But in any event, even at its most favourable for the respondents' case, the evidence of Ms Ozioko in relation to Mr Beynon's state of mind on 24 August 2015 concerning Mr Whelan is inconclusive and unhelpful. Ms Ozioko deposed that Mr Beynon told her that his meeting with Mr Whelan "did not go well" and that although he had not terminated Mr Whelan's employment he had impressed on Mr Whelan that he wanted his performance to immediately improve. Even accepting this evidence, one inference which could reasonably be drawn from Ms Ozioko's evidence is that during or immediately after the meeting with Mr Whelan - in which the issues of bonuses for Mr Whelan and bonus plans were clearly a subject of both discussion and annoyance to Mr Beynon - Mr Beynon was considering dismissing Mr Whelan even though he had not terminated his employment at that point. 117 Third, the respondents mounted a detailed attack on Mr Whelan's credibility, submitting (inter alia) that Mr Whelan had planned to resign in any event, that he was disloyal and disrespectful to Mr Beynon and mocked him behind his back, that he removed documentation from the workplace on the date of his dismissal, and that he improperly left work early on that date. In my view these issues bear little on Mr Whelan's evidence so far as concerns his discussions with Mr Beynon concerning bonuses and bonus plans. As I have already observed, I am satisfied that Mr Whelan was anxious to the point of obsession in the months leading up to his dismissal, and on the day of his dismissal, about whether the first respondent would either pay him a bonus or develop a bonus plan. It was clear that Mr Whelan was relying on the payment of a bonus to extricate him from his financial straits. His evidence concerning this anxiety, and his interactions with Mr Beynon both prior to and on 24 August 2015 concerning bonuses, was credible. 118 Fourth, I do not accept the respondents' claim that Mr Whelan was dismissed for gross misconduct because he had, without authorisation, sent a copy of the Zoo Magazine article and photo shoot to Ms Bouvier. I take this view because: Mr Whelan acknowledged the importance to the first respondent's business of confidentiality, however he gave evidence that Mr Beynon had given him permission to send a copy of the Zoo Magazine article to Ms Stewart. This evidence is not contradicted by any substantive evidence, and I consider it plausible that Mr Beynon would not have objected to a copy of the material being sent to Ms Stewart, particularly if there was some confusion about whether the Zoo Magazine article had already been published when Mr Whelan forwarded a copy of the material to Ms Stewart. The only evidence the respondents advanced on this point was that of Ms Ozioko, deposing that Mr Beynon had told her there had been unauthorised disclosure to Ms Stewart, and asking her to investigate. How Mr Beynon had allegedly come by this knowledge is unknown and was not the subject of evidence or testing. Further, Ms Ozioko's evidence concerning this issue is minimal. I consider that Ms Ozioko's evidence on this point is of little value. Mr Whelan's allegedly unauthorised provision of the article to Ms Stewart was apparently known to Ms Ozioko by early August 2015. Ms Ozioko gave evidence that she reported this information to Mr Beynon. Although it is not clear when Ms Ozioko made this report, it is logical that she would have done so immediately if it were as important as she stated in her evidence. I consider that if Mr Beynon had had concerns about Mr Whelan's alleged conduct in respect of the ZOO Magazine article such that it warranted summary dismissal, he would have confronted Mr Whelan about this matter in early August, and certainly prior to 24 August 2015. There is no evidence that such a confrontation occurred. Examination of the transcript of the meeting of 24 August 2015 reveals no discussion of the Zoo Magazine article during the course of that meeting. This is consistent with Mr Whelan's evidence that it was not bought to his attention that he had allegedly breached any confidential communication provisions of his employment contract as a result of forwarding the ZOO Magazine article to Ms Stewart until he received the letter of termination. Although Ms Ozioko disputed Ms Marshall's version of events of the evening of 24 August 2015 (transcript page 384 lines 17-19, 29-34), I consider that Ms Marshall was a credible witness, and prefer her evidence in respect of the events of the evening of 24 August 2015 to that of Ms Ozioko. I take this view because Ms Marshall was an independent witness, with no convincing motive to give untruthful evidence in this respect. It was also apparent from her testimony that the events of that evening made a significant impression on her, such that she was able to recall with those events with clarity. I also consider her version of events plausible. 119 In my view, the allegedly unauthorised provision by Mr Whelan to Ms Stewart of the ZOO Magazine material was irrelevant to Mr Beynon's decision to dismiss Mr Whelan. 120 Fifth, both in [39] of their defence and in submissions the respondents claim that the "real" grounds for terminating Mr Whelan's employment included other matters "in the mind of Ms Ozioko and Mr Beynon" which I set out earlier in this judgment. In relation to these other matters I make the following observations. 121 What was "in the mind of Ms Ozioko" insofar as concerns Mr Whelan's summary dismissal is irrelevant. Ms Ozioko was not the decision-maker, and could only surmise what motivated Mr Beynon to dismiss Mr Whelan. 122 The respondents claim that Mr Whelan had demonstrated lack of fidelity to Ms Ozioko in that Mr Whelan had allegedly told Mr Beynon, during the course of a business trip to Europe, to "fuck off" when in fact Mr Whelan had not done so, and when Mr Whelan subsequently lied to Mr Beynon about it. Ms Ozioko gave evidence that she understood from Mr Whelan that on 17 July 2015, Mr Beynon had remonstrated with Mr Whelan about Mr Whelan's comments to Ms Ozioko, and what Mr Whelan had allegedly said to Mr Beynon during the Europe business trip. This incident took place five weeks before Mr Whelan was dismissed. The respondents submit that the issue of what Mr Whelan had said was raised by Mr Beynon during the meeting of 24 August 2015 and note the following exchange: Beynon: Be very careful with me. You've lost. You've lost my ability. You think you know me. You sat there at my place and argued about what Suzie said, what you didn't say, and you did fucking say it. Whelan: I couldn't remember saying it. I was wrong on that occasion. (Meeting transcript page 27) 123 However, even assuming that this conversation related to the Mr Whelan's alleged comments about Mr Beynon, as reported by Ms Ozioko - and this is not at all certain because it was not put to Mr Whelan during the trial and not tested by cross-examination of Mr Beynon - the matter appears to be of minor importance. At most, the evidence suggests that Mr Beynon took the view that Mr Whelan had been posturing to Ms Ozioko about Mr Whelan's alleged comments to Mr Beynon during their business trip to Europe, that Mr Beynon had called him to account for it and put him in his place for saying it. It was not mentioned again by Mr Beynon during the meeting. Further, whether Ms Ozioko took the view that Mr Whelan had lied to her is not material. I am satisfied that the issue concerning whether Mr Whelan had told Ms Ozioko that he had told Mr Beynon to "fuck off" during their Europe business trip was irrelevant to Mr Beynon's decision to dismiss Mr Whelan on 24 August 2015. 124 The respondents claimed that Mr Beynon did not trust Mr Whelan's ability to continue to act as General Manager given Mr Whelan's inability to manage his own financial affairs. The transcript of the discussion of 24 August 2015 certainly indicates that Mr Beynon considered that Mr Whelan was mismanaging his domestic financial affairs at that time. However the meeting ended with Mr Whelan and Mr Beynon continuing with business as usual, after Mr Beynon had told Mr Whelan to get his financial affairs in order. This suggests that Mr Beynon believed that Mr Whelan could get his financial affairs in order. If Mr Beynon formed a view at that meeting that Mr Whelan was incapable of managing the business of the first respondent and should be dismissed for that reason, it is not evident from the transcript of the meeting. 125 The respondents claimed that Mr Whelan had failed to act in a truthful way in his dealings on 24 August 2015. In addition to Mr Whelan's alleged evasiveness concerning his having told Mr Beynon to "fuck off" while in Europe - which I have already found irrelevant in the circumstances of this case - the respondents referred to: Mr Whelan's evasiveness about the reasons he was in such financial circumstances (including whether Mr Whelan had purchased a new property); and Mr Whelan's evasiveness about being absent from work in July 2015 and on other days before 5.00 pm. 126 In relation to the Mr Whelan's alleged evasiveness concerning his financial circumstances, the transcript shows that Mr Beynon pressed Mr Whelan for an explanation of why Mr Whelan was in financial straits. However, there is no evidence before me to indicate that Mr Beynon considered that Mr Whelan should be dismissed because of it - rather Mr Beynon appeared merely impatient and exasperated with Mr Whelan, and required him to get his financial affairs in order to remove the external stress on him which might affect his performance at work. 127 In relation to Mr Whelan's alleged evasiveness concerning his alleged absences from work, from the meeting transcript Mr Beynon appeared to believe (and further appeared to be angry) that Mr Whelan had been absent from work before 5.00 pm on business days, and had been away from the office during July 2015 when both Mr Beynon and Ms Ozioko were away. In particular the respondents rely on the following exchange in the meeting transcript of 24 August 2015: Beynon: The only time you were out, beside the bad memory, you think that the only time you were out when my mum died that week was because of Night Owl. So I'll find out the Night Owl appointment. If you can give me the Night Owl appointment, and I know the week my mum ... Whelan: Yes. Beynon: And you were only out for one day. I got the call, and it wasn't - you got the Night Owl later in the week. I know the day you went to Night Owl, and that was fine, but it was prior to that that I got the shits, Andrew. I got the shits, but I was dealing with my mum, so I wasn't going to fucking even bother about it, but I got and heard prior to that Night Owl meeting, which was another occasion. That was prior to that. Whelan: Travers, I don't leave here and go and sit on a beach. Beynon: I don't care. I don't care where you go. Whelan: But you should, because you're talking to me about that I was out, so there's an issue ... Beynon: Andrew ... Whelan: ... of trust. Beynon: The Night Owl is one thing, but again, I shouldn't be talking to a general manager ... Whelan: Correct, exactly. Beynon I haven't finished. I'm dealing with my mum. I'm away. Suzie's on holiday. Sorry, Night Owl, can I postpone it next week, there's no one at the office. The managing director is gone, the HR operations manager is gone and I'm the only one there. I can't leave the business. So you sitting there making fucking excuses is worse. Don't defend yourself with something like that. It's irresponsible because you should have gone well, I can't leave the fucking business. The fucking cats go, the mice will fucking play. Do you think it's fair that Suzie gets called on holidays? Would you be okay? Would you be okay if you got the calls when you were on holiday? I know what you're like. You'd lose your shit if Suzie turned to you and said well, I was fucking meeting with somebody. I was away. Or should I be here? Should I be managing people? Should I be here making sure that fucking the business is run properly? I don't think so. Because you don't see the work I do. You think because I'm away, I don't know what's going on? Whelan: I never said that. You're making assumptions about me. Beynon: I'm actually setting a point up, Andrew. You take a very long time to work me out, still. The point is you're right, I am still fucking very much owner of the business. It doesn't mean I have to be here. So I'm not here. Suzie's on fucking holiday. You know that. As general manager, you should have enough fucking wits to say well, I'm not leaving. Sorry, Night Owl, can I come next week? Our major staff is away for the week. It's just this week; she's back next week, I can come on Monday. There are no excuses. Do you think that's reasonable? You did. It happened a couple of times in the week. It wasn't just Night Owl. Like I said. At what point are you going to say shit, I'm responsible? I don't want Suzie bothered, because that's not fair, because you know when I go on holidays, I expect people to fucking be responsible enough to sort the fucking shit out and have somebody there looking after the team. I don't fucking care who, how, or why, just make sure no one fucking rings me on holidays. Would that be fair from you? Whelan: No, it wouldn't. Beynon: That's you speaking. Whelan: No, I never say that. Beynon: For you to believe that. Okay. Because you never speak like that. Guys, can you just make sure someone's there, please? While I'm on holidays, I don't want to be bothered because someone at the senior level can't be responsible for making sure the team is under control. You would have sworn your head off, Andrew, if someone had called you on holidays because Suzie was fucking somewhere and they couldn't get her so they had to ring you on holidays. How would you react? Whelan: I always get called on holidays. Beynon: How would you react if it was called - yeah, for particular things, but if someone called you because they couldn't get Suzie, because she's just left for something. I need to get this, but there's no one around. Would you lose your shit? Maybe get a call for a big deal, for a price snap. Okay, fine, done, but to be called just for fucking no other reason than Suzie's just fucking left and gone somewhere. She can defend oh, but I was there. I wasn't down the beach, I was at a customer, or R&G tech, or I was there. Well, hang on, why didn't you get R&G there or told Night Owl to fucking come here or can we do it next week because I cannot be another fucking person down? (Meeting transcript page 27-30) 128 In the absence of cross-examination of Mr Beynon, however, this material is of little assistance to the respondents' case. I am unable to form a view whether Mr Beynon was simply delivering a tirade at Mr Whelan, or whether Mr Beynon believed Mr Whelan was being evasive, or the extent to which Mr Beynon considered that Mr Whelan's alleged conduct meant he should be dismissed. I am also not persuaded that Mr Whelan was being evasive as the respondents claim. Rather it appeared from the transcript that he was endeavouring to placate Mr Beynon. Significantly, this material was not put to Mr Whelan in cross-examination. 129 The respondents claim that Mr Whelan was dismissed because there was a prospect that Mr Whelan would imminently resign from employment with the first respondent and act contrary to its interests by disclosing confidential information. In my view this claim has no merit. There is no evidence before the Court that, when he dismissed him, Mr Beynon considered that Mr Whelan was about to resign and act to the detriment of the first respondent. Mr Whelan's evidence was that he was prepared to continue to endure working for the first respondent because he needed the money. In my view, the evidence supports a finding to that effect. 130 The respondents claim that Mr Whelan was dismissed because he failed to comply with Mr Beynon's oral instruction given earlier on 24 August 2015 by leaving the office before 5.00 pm, and then failing to answer or return phone calls made to his mobile phone by Mr Beynon. It is not in dispute that Mr Whelan left the office before 5.00 pm on 24 August 2015. His evidence was that he was unwell, and indeed he attended a medical clinic around 4.00 pm that day where he received a medical certificate as being unwell. As I noted earlier in this judgment, Mr Whelan gave evidence that he did not answer or return Mr Beynon's phone calls because he was unaware of them while in the medical clinic. 131 Notwithstanding Mr Whelan's explanation in his evidence, it does appear likely that Mr Beynon's decision to summarily dismiss him was at least partially due to his anger at Mr Whelan's early departure from the office on a day when Mr Beynon had specifically told him not to leave early, whether for medical consultations or otherwise. I make this observation, placing to one side the question whether dismissal of Mr Whelan for attending a medical consultation because of illness would not itself be a contravention of s 352 of the FW Act. I also consider it likely that Mr Beynon would have been angered by Mr Whelan's failure to answer his telephone calls. This is consistent with Ms Ozioko's evidence concerning Mr Beynon's response when she informed him that Mr Whelan had left the office. 132 However, this conclusion does not mean that Mr Beynon's views of Mr Whelan repeatedly inquiring about a bonus was not a substantive or operative factor in his decision. 133 The onus was on the respondents to prove that Mr Whelan's inquiries about payment of a bonus or establishment of a bonus plan were not a substantive or operative reason for his dismissal, and I do not consider that they have discharged that onus. Taking into account the material before the Court I consider that Mr Beynon dismissed Mr Whelan because he considered Mr Whelan unreliable and his performance poor, exacerbated by repeated requests by Mr Whelan for more money by way of bonus payments or the development of a bonus plan. At the meeting on 24 August 2015, Mr Beynon had derisively dismissed Mr Whelan's applications for bonus or a bonus plan as undeserving, and was clearly annoyed by Mr Whelan's supplications in light of his unfavourable view of Mr Whelan's conduct in the workplace and his perception of Mr Whelan's mismanagement of his personal financial affairs. The meeting between Mr Beynon and Mr Whelan on 24 August 2015, where Mr Whelan again sought a bonus plan and Mr Beynon's dismissal of Mr Whelan's inquiries discussed in some detail, set the scene for Mr Whelan's dismissal later that day. I consider it likely that, as far as Mr Beynon was concerned, Mr Whelan's conduct on the afternoon of 24 August 2015 - specifically leaving early on the very day when Mr Beynon had stridently criticised Mr Whelan's workplace performance and his allegedly frequent early departures from the workplace, and then failing to answer Mr Beynon's telephone calls - was "the last straw" for Mr Beynon. 134 In my view, Mr Whelan has substantiated his claim against the first respondent for contravention of s 340 of the FW Act.
Was Mr Beynon involved in the contravention of s 340(1) of the FW Act? 135 Section 550 of the FW Act provides: Involvement in contravention treated in same way as actual contravention (1) A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision. Note: If a person (the involved person) is taken under this subsection to have contravened a civil remedy provision, the involved person's contravention may be a serious contravention (see subsection 557A(5A)). Serious contraventions attract higher maximum penalties (see subsection 539(2)). (2) A person is involved in a contravention of a civil remedy provision if, and only if, the person: (a) has aided, abetted, counselled or procured the contravention; or (b) has induced the contravention, whether by threats or promises or otherwise; or (c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or (d) has conspired with others to effect the contravention. 136 Section 340 of the FW Act is a civil remedy provision. 137 As the Full Court explained in Construction, Forestry, Mining and Energy Union v Director of the Fair Work Building Industry Inspectorate [2012] FCAFC 178; (2012) 209 FCR 448 at [38]: The relevant principle to be derived from Giorgianni, Yorke v Lucas (1985) 158 CLR 661, Handlen v The Queen (2011) 245 CLR 282 at [6] and Rafferty v Madgwicks (2012) 203 FCR 1 is that the putative accessory must intentionally participate in the contravention and to form the requisite intent he must have knowledge of the essential matters which go to make up the contravention, whether or not he knows that those matters amount to a contravention. The necessary intent is absent if the person alleged to be the accessory does not know or believe that what he is assisting or encouraging is something which goes to make up the facts which constitute the contravention. 138 In Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365, White J set out the following principles relevant to claims of accessorial liability under s 550(1) of the FW Act: 176 Although the general principles relating to accessorial liability are settled, their application in a case such as the present is not without difficulty. In order to aid, abet, counsel or procure the relevant contravention, the person must intentionally participate in the contravention with the requisite intention: Yorke v Lucas (1984) 158 CLR 661 at 667. In order to have the requisite intention, the person must have knowledge of "the essential matters" which go to make up the events, whether or not the person knows that those matters amount to a crime: Yorke v Lucas at 667. Although it is necessary for the person to be an intentional participant and to have knowledge of the matters or things constituting the contravention, it is not necessary for the person to know those matters or things do constitute a contravention: Rural Press Ltd v Australian Competition and Consumer Commission [2002] FCAFC 213; (2002) 118 FCR 236 at [159]-[160]. That is to say, it is not necessary that the accessory should appreciate that the conduct in question is unlawful. The Full Court in Rafferty v Madgwicks [2012] FCAFC 37; (2012) 287 ALR 437 summarised the position in this respect at [254]: [W]hile the identification of the elements of a contravention requires careful legal analysis, "[i]n order to know the essential facts, and thus satisfy s 75B(1) ... and like provisions, it is not necessary to know those facts are capable of characterisation in the language of the statute" ... This is another aspect of the longstanding principle that it is not necessary for a person to "recognise" the contravention as such, or explicitly to think about the relevant legislation that their actions may contravene ... 177 Actual, rather than imputed, knowledge is required. So much was made clear in Giorgianni v The Queen (1985) 156 CLR 473 at 506-7 by Wilson, Deane and Dawson JJ: ... [Offences of aiding and abetting and counselling and procuring] require intentional participation in a crime by lending assistance or encouragement. They do not, of course, require knowledge of the law and it is necessary to distinguish between knowledge of or belief in the existence of facts which constitute a criminal offence and knowledge or belief that those facts are made a criminal offence under the law. The necessary intent is absent if the person alleged to be a secondary participant does not know or believe that what he is assisting or encouraging is something which goes to make up the facts which constitute the commission of the relevant criminal offence. He need not recognize the criminal offence as such, but his participation must be intentionally aimed at the commission of the acts which constitute it. It is not sufficient if his knowledge or belief extends only to the possibility or even probability that the acts which he is assisting or encouraging are such, whether he realizes it or not, as to constitute the factual ingredients of a crime. If that were sufficient, a person might be guilty of aiding, abetting, counselling or procuring the commission of an offence which formed no part of his design. Intent is required and it is an intent which must be based upon knowledge or belief of the necessary facts. ... 178 The notion of being "knowingly concerned" in a contravention has a different emphasis from that of aiding, abetting, counselling or procuring" a contravention. To be knowingly concerned in a contravention, the person must have engaged in some act or conduct which "implicates or involves him or her" in the contravention so that there be a "practical connection between" the person and the contravention: Construction, Forestry, Mining and Energy Union v Clarke [2007] FCAFC 87; (2007) 164 IR 299 at [26]; Qantas Airways Ltd v Transport Workers' Union of Australia [2011] FCA 470; (2011) 280 ALR 503 at [324]-[325]. 139 The respondents rely on the following observations of Cameron FM in Fair Work Ombudsman v Centennial Financial Services Pty Ltd [2010] FMCA 863; (2010) 245 FLR 242 at [151]: Involvement in a contravention under s.728 can only be made out if it is proved that a person has engaged in conduct specified in s.728(2). Thus, to make out involvement it is necessary to allege that a person has engaged in such conduct. In the present proceedings, the further amended statement of claim made no reference to conduct specified in s.728(2). It is also necessary to particularise which acts or set of acts constituted conduct amounting to involvement but the further amended statement of claim did not do this. Further, to form the requisite intent the respondent must have had knowledge of the essential matters which have gone to make up the contravention in question: Yorke v Lucas (1985) 158 CLR 661. Consequently, an allegation of accessorial liability requires a pleading that the accessory had actual knowledge of each and every element of the principal's contravening conduct and an election to engage in the relevant conduct; the pleading must assert as material facts that the accessory was sufficiently aware of all the relevant facts going to the contravention: Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union (AMWU) v John Holland Pty Ltd (2009) 180 IR 350 at 359-360 [44], [45]. The further amended statement of claim did not make such allegations. 140 The respondents submit that that the third further amended statement of claim did not make relevant allegations and Mr Beynon was not called upon to answer them, as a result of which the claim must fail. They further submit that there is no evidentiary support for the proposition that Mr Beynon was liable in this category of claim. 141 I do not demur from the principles explained by the learned Federal Magistrate. It is instructive, however, to examine his Honour's judgment further - at [152] his Honour continued: However, as will be discussed below, in some respects this case proceeded beyond what was pleaded. Consequently, the fact that the Ombudsman's further amended statement of claim was not pleaded or particularised as it should have been need not necessarily deprive the Court of jurisdiction or necessarily lead to a denial of procedural fairness. There is an important difference between these proceedings and Kirk v Industrial Court of New South Wales. In this case it cannot be said that all relevant alleged acts or omissions have not been identified at any point in the proceedings … 142 Mr Whelan pleads at [67] of the third further amended statement of claim that Mr Beynon was involved in the first respondent's adverse action in contravention of s 340(1) within the meaning of s 550(2). Mr Beynon made the decision to dismiss Mr Whelan and as a result Mr Whelan was dismissed by the first respondent. Ms Ozioko gave evidence to that effect, and there is no dispute that he was the relevant decision-maker. The action of the first respondent followed the direction of Mr Beynon. 143 To paraphrase the comment of Cameron FM, it cannot be said that all relevant alleged acts or omissions have not been identified in these proceedings. Mr Beynon was an intentional participant in the factual matters which comprise the adverse action alleged against the first respondent. It must follow that, as a contravention of the Act by the first respondent has been established, Mr Beynon was directly or indirectly, knowingly concerned in, or party to, that contravention.
Claimed failure of the first respondent to pay Mr Whelan's statutory entitlements on termination 144 Clause 1.5 of Mr Whelan's contract of employment provides: This contract is subject to the relevant terms of the Fair Work Act 2009 and the National Employment Standards (NES). 145 In any event, s 44(1) of the FW Act provides: (1) An employer must not contravene a provision of the National Employment Standards. Note: This subsection is a civil remedy provision (see Part 4-1). 146 The National Employment Standards (NES) are set out in Pt 2-2 of the FW Act, being minimum standards that apply to the employment of national system employees which cannot be displaced (ss 59 and 61 of the FW Act). 147 Relevant to Mr Whelan's claim for unpaid annual leave is s 90 of the FW Act which provides: Payment for annual leave … (2) If, when the employment of an employee ends, the employee has a period of untaken paid annual leave, the employer must pay the employee the amount that would have been payable to the employee had the employee taken that period of leave. 148 In respect of his claim for salary in lieu of notice, cl 9.1 of his contract and s 117 of the FW Act are relevant. Clause 9.1 of the contract provides: 9.1 Termination by Employer (a) The Employer may dismiss the Employee only if the Employee has been given the following notice: Period of Continuous Service Period of Notice Not more than 1 year 2 weeks More than 1 year but not more than 3 years 3 weeks More than 3 years but not more than 5 years 4 weeks More than 5 years 5 weeks
(b) In addition to the notice in (a) above, if the Employee is 45 years old or over and has completed at least 2 years' continuous service with the Employer, the Employee shall be entitled to an additional week's notice. (c) Payment in lieu of notice shall be made in accordance with the table above when appropriate notice is not given. Provision that employment may be terminated by part of the period of notice specified and part payment in lieu thereof. (d) The period of notice in this clause shall not apply in the case of dismissal for gross misconduct or other grounds that justify instant dismissal. (Original emphasis.) 149 Section 117(2) of the FW Act provides: Amount of notice or payment in lieu of notice (2) The employer must not terminate the employee's employment unless: (a) the time between giving the notice and the day of the termination is at least the period (the minimum period of notice) worked out under subsection (3); or (b) the employer has paid to the employee (or to another person on the employee's behalf) payment in lieu of notice of at least the amount the employer would have been liable to pay to the employee (or to another person on the employee's behalf) at the full rate of pay for the hours the employee would have worked had the employment continued until the end of the minimum period of notice. 150 Mr Whelan claims: Payment in lieu of notice in the sum of $17,625.72 (calculated as three weeks being 112.5 hours at an hourly rate of $156.6731); and Payment for untaken but accrued annual leave in the sum of $17,160.40 (calculated as 109.53 hours at an hourly rate of $156.6731). 151 It is not in dispute that the first respondent did not pay Mr Whelan the amounts he has claimed. 152 Ms Ozioko gave the following evidence during cross-examination: All right. Can I ask you about - as the HR manager for FreeChoice what you understood the entitlements that ought to be paid to an employee whose employment is terminated?---They were to be paid outstanding entitlements of annual leave and notice period, if they were entitled to it. And any long service leave, if that was appropriate?---If appropriate. Yes. And you were asked on a number of occasions, weren't you, by Mr Whelan to work out what his statutory entitlements were. Correct?---No. Incorrect. Can I show you a document. You recognise that document?---Yes. That's a document dated 26 August, two days after Mr Whelan was terminated, and he or his wife have asked you to provide the payout figure with days worked, annual leave, etcetera, broken down and what date this will be paid. Correct?---Yes. So is it - - -?---It's a request from his wife, yes. You distinguished the request from his wife from a request from the employee, do you?---Yes, I do. I see. So - all right. Do you agree with me that there was a request made by Mr Whelan's wife for you to calculate the payout figure and the annual leave that he was entitled to?---Yes. And he also asks there for you to arrange for his personal belongings to be returned?---Yes. Did you ever work out his annual leave?---It was worked out at some point, yes. Did you ever advise Mr Whelan what that annual leave entitlement was?---No, I did not. All right. So you worked it out but you didn't tell him?---No. That's correct. And you've not paid it to him?---That's correct. And you understand that any accrued leave - I will rephrase that. What amount did you work out that Mr Whelan would be entitled to regarding his annual leave?---I can't recall the exact figure off the top of my head, but it was the annual leave amount owing to him. I believe it was a few weeks. Around about $17,000?---Yes. Does that ring a bell?---Give or take, yes. And you say you calculated that amount but you haven't paid it?---That's correct. Why is that?---We withheld it on the basis that Mr Whelan had our company documents and at that time we were going through the process of obtaining an Anton Piller in order to retain our company documents. Well, that all finished on about 8 September 2015, didn't it?---The actual execution of the order finished at that time, yes. And all the documents were returned and there were no more outstanding documents. Correct?---They were returned to the courts, yes. Yes. Well, Mr Whelan doesn't have them, does he?---Not that I'm aware of, no. FreeChoice hasn't gone out of business as a result of that, have they?---No. No. So why wasn't the accrued leave paid when it was - when it ought to have been paid upon his termination?---We did not pay them. No, you didn't, and I'm asking you why you didn't?---Well, we withheld them on the basis of the confidential documents being withheld, and they were not - they were not paid after that time either. That - - -?---We don't have a further reason. I beg your pardon? You don't have a further reason?---We don't have a further reason. So the fact that any documents, confidential or otherwise, that were all returned back in early September 2015, that's the only reason you say is you didn't pay Mr Whelan his accrued leave entitlements?---That's correct. (Transcript pages 453-455) 153 Notwithstanding Ms Ozioko's evidence that Mr Whelan had accrued statutory entitlements, it appears that the respondents originally considered that they were entitled to retain Mr Whelan's termination entitlements because he had retained confidential documents of the first respondent (evidence of Ms Ozioko transcript page 454), and further because the first respondent had a cross-claim against him and considered that any amounts Mr Whelan was owed should properly be set off against the amount owing by him under the cross-claim (see, for example, submission of Mr Roney QC for the respondents at transcript page 455 lines 15-18). 154 The position of the first respondent has no merit. 155 First, s 323(1) provides that an employer must pay an employee amounts payable to the employee in relation to the performance of work in full (except as provided by s 324). Section 324(1) in turn provides: (1) An employer may deduct an amount from an amount payable to an employee in accordance with subsection 323(1) if: (a) the deduction is authorised in writing by the employee and is principally for the employee's benefit; or (b) the deduction is authorised by the employee in accordance with an enterprise agreement; or (c) the deduction is authorised by or under a modern award or an FWC order; or (d) the deduction is authorised by or under a law of the Commonwealth, a State or a Territory, or an order of a court. 156 The withholding of Mr Whelan's entitlements on the termination of his employment was not authorised under s 324(1). 157 Second, as Ms Ozioko conceded during cross-examination, issues between Mr Whelan and the first respondent concerning confidential documents have long been resolved but the first respondent continues to hold back Mr Whelan's entitlements. I note the following evidence of Ms Ozioko: And you say you calculated that amount but you haven't paid it?---That's correct. Why is that?---We withheld it on the basis that Mr Whelan had our company documents and at that time we were going through the process of obtaining an Anton Piller in order to retain our company documents. Well, that all finished on about 8 September 2015, didn't it?---The actual execution of the order finished at that time, yes. And all the documents were returned and there were no more outstanding documents. Correct?---They were returned to the courts, yes. Yes. Well, Mr Whelan doesn't have them, does he?---Not that I'm aware of, no. FreeChoice hasn't gone out of business as a result of that, have they?---No. No. So why wasn't the accrued leave paid when it was - when it ought to have been paid upon his termination?---We did not pay them. (Transcript page 454 lines 22-39) 158 Third, I have already found that Mr Whelan was not dismissed for "gross misconduct" as the first respondent claimed. To that extent the provison in cl 9.1(d) of his contract of employment does not apply to entitle the first respondent to dismiss Mr Whelan without notice. 159 Fourth, I will examine the first respondent's cross-claim later in this judgment. However the FW Act does not permit an employer to withhold statutory entitlements of this type in circumstances other than contemplated by s 324(1) of the FW Act. At the hearing the respondents submitted, in summary, that s 324(1) of the FW Act includes an entitlement to withhold where it is authorised by or under any law of the Commonwealth, a State or a Territory, amongst other things, and the respondents claim the right to withhold the payments because of a right under the general law to set off. By email dated 25 May 2017, however, Counsel for the respondents informed both the Court and the applicant that the respondents no longer pressed the submission that a set off is permitted under s 324. 160 In my view the decision to not press an allegation of a set off is appropriate, because the argument has no merit. 161 I am satisfied that Mr Whelan is entitled to these amounts claimed by him. 162 The failure of the first respondent to pay Mr Whelan his unpaid leave and salary in lieu of notice means that the first respondent has contravened s 44(1).
Was Mr Beynon involved in the first respondent's contravention of s 44(1) of the FW Act? 163 Earlier in this judgment I set out principles relevant to accessorial liability under s 550(1) of the FW Act. 164 Mr Beynon gave no evidence concerning the first respondent's failure to pay Mr Whelan his statutory entitlements. 165 Evidence was however given by Ms Ozioko and Ms Marshall concerning this issue during the hearing. 166 Relevantly Ms Ozioko said: Well, we withheld them on the basis of the confidential documents being withheld, and they were not - they were not paid after that time either. (Transcript page 454 lines 41-43) … MR WHITE: Yes. Was it your decision, though, Ms Ozioko, to not pay it?---Was it my decision? Yes. I was the person responsible for it. (Transcript page 455 lines 40-41) 167 Ms Marshall gave evidence of witnessing a conversation between Mr Beynon and Ms Ozioko on the evening of 24 August 2015 after Mr Whelan had been dismissed, as follows: And then to finish up the conversation, like, he was sort of smirking at the time after he said that, and then to finish off the conversation he was like, don't pay him - sorry to swear, but - a fucking cent. 168 Although Ms Ozioko claims that it was her decision not to pay Mr Whelan his statutory entitlements, on the material before me I consider that Mr Beynon was knowingly involved in that conduct. Ms Ozioko referred to "we" withholding Mr Whelan's money - I consider it implausible that Ms Ozioko would have done so in the absence of approval or indeed direction by Mr Beynon. He was the mind and will of the first respondent, and Mr Whelan was a senior officer of the first respondent. I consider it very likely that Mr Beynon would have taken the angry and vengeful approach to Mr Whelan described by Ms Marshall. 169 I find that Mr Beynon has also contravened s 44 of the FW Act.
Section 31 of the ACL: alleged misleading representations by the first respondent, and accessorial liability of Mr Beynon 170 At [9] of the third further amended statement of claim Mr Whelan pleads that, at a business lunch in Sydney in May 2013, Mr Beynon made representations to him on behalf of the first respondent regarding Mr Whelan's benefits in an attempt to induce Mr Whelan to accept the first respondent's offer of employment. These statements, referred to by Mr Whelan as "the Representations" were to the following effect: i. "You will earn more with our company than you ever would with British American Tobacco"; ii. "You should buy a house at 'Sovereign Islands' on the Gold Coast because you will be making that much money"; iii. "Within three (3) years of working for us I will buy you a new Lamborghini"; iv. "By working for me all your financial dreams will come true as I have big plans for the company and you"; v. This is a long term commitment from me, we will work together on this and there's no limit, we get things done and you can be part of the business"; vi. "You will share in the profits of the company"; vii. "In the future you will be given a position on the company's board of directors"; viii. "You will receive a percentage of ownership in the company, which your sons will be able to inherit"; ix. "If the company is ever floated onto the stock market, you will receive a number of shares in the company"; and x. "Dividends will be paid to you monthly based on the earnings of the company, which will also be paid in addition to your salary". 171 In summary, in the third further amended statement of claim, Mr Whelan pleads that: He relied upon the Representations and in so doing accepted the offer of employment with the first respondent in writing on or about 6 June 2013 ([10]); Mr Beynon made the Representations as the first respondent's agent ([11]); The Representations were liable to mislead Mr Whelan, and were a primary reason he accepted the first respondent's offer of employment ([12]); The Representations were representations as to future matters concerning the employment of Mr Whelan ([13]); Contrary to the Representations Mr Whelan's employment was terminated on 24 August 2015 ([14]); At the time the Representations were made they were misleading or deceptive, or liable to mislead, because: At the time the respondents did not have reasonable grounds for making the Representations; and/or They conveyed the impression that if he commenced employment with the first respondent he would be issued shares, dividends and other property in consideration for the work he would perform for the first respondent ([15]); In reliance on the Representations and induced by them Mr Whelan resigned from his position at BATA and relocated his family from Sydney to the Gold Coast ([17]). In making the Representations the first respondent contravened s 31 of the ACL ([16]); Mr Beynon aided and abetted and/or was directly or indirectly knowingly concerned in that contravention ([66]); and 172 Later in the third further amended statement of claim Mr Whelan pleaded: 61. The conduct pleaded in paragraphs 4 to 9 was, in relation to the employment of the Applicant with Freechoice as National Sales Manager liable to mislead the Applicant as to the nature, terms or conditions of employment, namely, his prospects of career advancement and his security of employment, or any other matter relating to the employment at the time that the Representations were made. 62. The Applicant relies on section 4 of the Australian Consumer Law at Schedule 2, Competition and Consumer Act 2010 (Cth). 63. In reliance on the Representations, and induced by the Representations, the Applicant: (a) accepted the First Respondent's Offer of Employment; (b) Resigned from his employment with British and American Tobacco; (c) took up the role of National Sales Manager; (d) Relocated his family from New South Wales to the Gold Coast Queensland; (e) sold the family home in New South Wales; (f) Purchased a home in Queensland (g) Did not, in the period from May 2012, seek alternative employment with another employer. 64. In the premises pleaded paragraphs 4 to 10 [sic], the First Respondent engaged in conduct in contravention of section 31 of the Australian Consumer Law at Schedule 2, Competition and Consumer Act 2010 (Cth). 173 At [65]-[67] of the third further amended statement of claim, Mr Whelan pleaded, in summary, that Mr Beynon had aided and abetted and/or been directly or indirectly knowingly concerned in the contravention of s 31 of the ACL by the first respondent, and that Mr Beynon knew that the first respondent did not have reasonable grounds for making the Representations. 174 The respondents deny that Mr Beynon said words to this effect, or that Mr Beynon made the Representations to Mr Whelan. Alternatively they submit that if Mr Beynon did make the Representations, the respondents did not contravene s 31 of the ACL. 175 I note that Mr Whelan accepted employment with the first respondent on 6 June 2013, and signed an employment agreement on or about that date. 176 Section 31 of the ACL provides: Misleading conduct relating to employment A person must not, in relation to employment that is to be, or may be, offered by the person or by another person, engage in conduct that is liable to mislead persons seeking the employment as to: (a) the availability, nature, terms or conditions of the employment; or (b) any other matter relating to the employment. 177 Section 4 of the ACL sets out a definition of "misleading" in relation to representations of future matters and facilitates proof of misleading conduct in such circumstances. It provides: Misleading representations with respect to future matters (1) If: (a) a person makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act); and (b) the person does not have reasonable grounds for making the representation; the representation is taken, for the purposes of this Schedule, to be misleading. (2) For the purposes of applying subsection (1) in relation to a proceeding concerning a representation made with respect to a future matter by: (a) a party to the proceeding; or (b) any other person; the party or other person is taken not to have had reasonable grounds for making the representation, unless evidence is adduced to the contrary. (3) To avoid doubt, subsection (2) does not: (a) have the effect that, merely because such evidence to the contrary is adduced, the person who made the representation is taken to have had reasonable grounds for making the representation; or (b) have the effect of placing on any person an onus of proving that the person who made the representation had reasonable grounds for making the representation. (4) Subsection (1) does not limit by implication the meaning of a reference in this Schedule to: (a) a misleading representation; or (b) a representation that is misleading in a material particular; or (c) conduct that is misleading or is likely or liable to mislead; and, in particular, does not imply that a representation that a person makes with respect to any future matter is not misleading merely because the person has reasonable grounds for making the representation. 178 Whether a representation was made on reasonable grounds must be assessed as at the date of the representation, by reference to the information that was available at the time the statement was made and relied on by the speaker: see discussion in Lockhart C, The Law of Misleading or Deceptive Conduct (4th ed, LexisNexis, 2014) at [4.33] and cases cited by the learned author including Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd [2014] NSWCA 158 at [190] (Doppstadt), McGrath; in the matter of Pan Pharmaceuticals Ltd (in liq) v Australian Naturalcare Products Pty Ltd [2008] FCAFC 2; (2008) 165 FCR 230 at [148], [198] and Sykes v Reserve Bank of Australia [1998] FCA 1405; (1998) 88 FCR 511 at 513. 179 Section 31 of the ACL is in similar terms to s 53B of the now-repealed Trade Practices Act 1974 (Cth) (the TPA), and jurisprudence relating to the concepts under that section is relevant to the interpretation of s 31 of the ACL: Trade Practices Amendment (Australian Consumer Law) Bill (No. 2) 2010 Explanatory Memorandum at [422]. Section 53B of the TPA required the employee to establish (1) that each representation was made; (2) that, viewed objectively, the representation was liable to mislead the employee as to the availability, nature, terms or conditions, or another matter relating to the employment; and (3) that the employee relied on the representation: David Walker v Salomon Smith Barney Securities Pty Limited [2003] FCA 1099; (2003) 140 IR 433 at [186]. 180 The only evidence available to the Court in respect of alleged statements by Mr Beynon to Mr Whelan at the Sydney business lunch in May 2013 is that of Mr Whelan. In his affidavit affirmed 1 July 2016, Mr Whelan deposes as follows: 20. In about May 2013, I had another routine BATA meeting with Freechoice where Travers and I met for lunch. Following the business meeting, we had a conversation to the following effect: Travers: "Have you thought about the offer I made to you on the last occasion? I want you in the business in the role of National Sales Manager with Freechoice." Me: "Now that you are offering me this I need to know a little bit more about the company and what would be my long term career prospects." Travers: "Our National Sales Manager Anthony Kirkem has moved on. Our National Operations Manager is going to leave so you would assume the role of National Sales Manager and I am going to make some other internal moves. We need to increase the profit and put structure in the company. I need a Second in Charge. I am looking for someone to move into a general manager type role in the future. "I'm sure you will be successful and have a long term career with me. You will earn more money than with BATA. Your work life balance will be better living on the Gold Coast than in Sydney. It will be a major impact working for and under an owner and not just a company. I can make things happen as I am the owner in terms of bonus and salary, and reward people often and they don't need to wait for a yearly bonus and wage reviews. While you will start on $205,000, if you hit certain goals within 6 months, I will move your salary up and back pay you to when you started with us." Me: "One of my concerns is the turnover of staff in the business. I know many people have left suddenly, like Phil Bradley, and now you are telling me Anthony and Shane will also be leaving." Travers "Those people were not performing so I had to move them on, and our results had not been improving over the years as they didn't want to put in the hard yards to get the work done, and no one was working on long term strategy, we just seem to be fixing problems day to day." Me: "I will discuss it with my wife and get back you on this." Travers: "You should look at buying a house on Sovereign Islands as you will be making that much money with Freechoice. What would your dream car be?" Me: "A Bentley or a Lamborghini." Travers: "Well within three years of working for me you will have a Lamborghini. I am confident of that. I have got big plans for the company and for you if you join the company. There is going to be a lot happening. "I am very generous. You would have shares within the company that you can have for your sons' future. You can also share in the dividends and profit share from the company." Me: "What do your profits look like?" Travers: "We average around $2,500,000 to $3,000,000 profit per year, for the past 3 to 5 years." Me: "In our negotiations you admitted your stores are losing money. The rumours in the trade are that you have some cash flow problems. Rumour is also that your vending operations are not good with many customer complaints coming to me at BATA, which I have spoken with you about. Is it true?" Travers: "No that's not true. It is correct the stores are making a loss however I am confident that will be turned around soon. Yes, we have had issues with the vending operation as we had to employ so many staff at one time and didn't plan the operations and routes out well enough, which has caused problems. That will be one of your challenges. I am also going to give our HR Manager Suzie Ozioko an operations title to review vending, and Charles has been promoted to Commercial Manager to also assist with vending, as he helped me plan the integration. But the cash is solid. We always cry a little bit poor to get funding, look at the cars dad and I drive, we are doing well." Me: "I really need some time to think about it and I will need to speak to my wife." 21. From my conversations with Travers I was persuaded that I would earn much more money at Freechoice and enjoy many more benefits, such as a lifestyle that included living at Sovereign Islands and having one of my dream cars which made clear that I would receive if it worked out. I found his offer extremely enticing, and subsequently accepted his offer about 1 week later. (Emphasis omitted.) 181 Mr Whelan was cross-examined about this evidence during the course of the hearing. Mr Whelan conceded that he has no contemporaneous diary notes recording the conversation, or any communications to or from Mr Beynon (transcript page 70), and that he had recalled the conversation without the aid of any memoire. Mr Whelan's explanation was that he had an excellent memory for key points (transcript page 71). 182 It is improbable that Mr Whelan would be able to remember with specificity a conversation with Mr Beynon which occurred more than three years before he affirmed an affidavit , particularly in light of the modifications to the positions of both parties introduced by the employment contract and its variations. It is not in dispute that Mr Whelan kept no contemporaneous record of his discussion with Mr Beynon, and there was no communication between Mr Whelan and either of the respondents referring to or recording the Representations. Even were I to give credence to Mr Whelan's evidence, on the basis that the conversation was clearly important to him such that he would recall at least the essence of what Mr Beynon may have said to him at that luncheon meeting, I nonetheless treat Mr Whelan's evidence with caution. I consider it appropriate to do so in light of subsequent events and the clear and, in my view, strong, risk that Mr Whelan's recall of what was said by Mr Beynon inevitably must be self-interested, and influenced by his perspective of the respondents as well as this litigation. I also consider that claims by Mr Whelan of reliance on such statements must be regarded as self-serving: Hanave Pty Ltd v LFOT Pty Ltd [1999] FCA 357; (1999) 43 IPR 545 at [50], Razdan v Westpac Banking Corporation [2014] NSWCA 126 at [15]. 183 Each of the statements alleged to have been made by Mr Beynon related to future matters. The respondents submit, however, that at all material times, Mr Whelan understood that the terms of his employment with the first respondent would be as set out in his employment contract. I agree. Mr Whelan accepted that the written agreement presented to him for his execution prior to commencing with the first respondent, and which agreement he signed, reflected the arrangements he understood would apply to him when working with the first respondent (transcript page 69 lines 1-3). In his management positions with both the first respondent and previous employers he had been careful to ensure that when he engaged staff or when he was involved in the engagement of staff that the employment agreements which were entered into with them truly reflected the arrangements that had been reached with them (transcript page 67 lines 12-16). Mr Whelan had had the opportunity to take professional (including legal) advice concerning his employment contract with the first respondent prior to executing it, but chose not to (transcript page 81 lines 23-34). He certainly did not insist that the Representations be incorporated into the contract. Mr Whelan entered into an employment contract with the first respondent which included none of the Representations, which contract was subsequently modified by variations including as to the very nature of Mr Whelan's position with the first respondent. Assuming that Mr Beynon made the Representations (or words to that effect) during his business luncheon with Mr Whelan, I consider that Mr Whelan did not rely on them as a basis for his employment with the first respondent. 184 The objective fact that the parties entered into a formal written contract setting out the terms of Mr Whelan's employment strongly indicates that it superseded any prior and general discussions between Mr Whelan and Mr Beynon. To that extent I consider that Mr Whelan's evidence in this respect has little probative value (see Chappel v Hart [1998] HCA 55; (1998) 195 CLR 232 at [32], [93] and Rosenberg v Percival [2001] HCA 18; (2001) 205 CLR 434 at [24]. 185 Overall, I do not consider that Mr Whelan has made out his claim for breach of s 31 of the ACL in relation to the Representations, and it follows that I do not consider that Mr Beynon was accessorially liable for contravention of that section in respect of the Representations. 186 Further, as has been observed in other cases, the mere fact that representations as to future conduct or events do not come to pass does not necessarily make them misleading or deceptive: Mason P in Concrete Constructions Group v Litevale Pty Ltd [2002] NSWSC 670; (2002) 170 FLR 290 at 343-344. Even on the best case advanced by Mr Whelan - namely assuming that the first respondent made the Representations to Mr Whelan and that Mr Whelan relied on them - I am not persuaded that the first respondent engaged in conduct which contravened s 31 of the ACL (or that Mr Beynon was accessorially liable in respect of a contravention). Examining each Representation I make the following observations.
(i) "You will earn more with our company than you ever would with British American Tobacco" 187 Mr Whelan submits that this amounted to a representation to him that his future earning capacity at the first respondent would exceed his future earning capacity at BATA, and Mr Beynon had no reasonable grounds for making that representation in May 2013 because: Viewed objectively, at that time the first respondent did not pay bonuses; The then highest salary in the first respondent was $174,000 per annum; and This suggested that Mr Whelan would be going into a position with very little room for progression, unlike at BATA which was a subsidiary of a multinational tobacco giant. 188 Mr Whelan deposed that, before he left BATA, he was earning a base salary of $210,000 per annum plus bonuses and benefits of about $80,000 per annum. 189 I am not persuaded, on the basis submitted by Mr Whelan, that Mr Beynon had no reasonable grounds for making the representation as to the future earning potential of Mr Whelan, and that the statement was misleading. Rather, there was a reasonable basis for such representation. 190 Mr Whelan's evidence was that Mr Beynon had said to him words to the following effect: I will move the salary to $205,000 with assistance to move house of $5,000 and within a short period of time, once you demonstrate your capability I will look to appoint you to a GM position. You will be earning more money than you ever would be at BATA. I am the owner and make the decisions and will move your salary quickly to levels a lot higher than ever at BATA. 191 It is not in dispute that Mr Beynon was the directing mind and will of the first respondent, and was in a position to move Mr Whelan's salary "to levels a lot higher than ever at BATA" should he choose to. There is no evidence to suggest that, at the time Mr Beynon made this statement, he would be unable to give effect to that assertion, or that Mr Beynon had reason to believe he would be unable to do so. 192 Mr Whelan gave evidence that his salary was increased in November 2013 to $230,000 per annum, which was higher than he had been paid at BATA. Mr Whelan also gave evidence that in January 2014 Mr Beynon offered to purchase him a 2013 Mercedes C63 Coupe, in Mr Whelan's name, and informed Mr Whelan that the first respondent would increase his annual salary by $79,586 to cover those repayments. Mr Whelan gave evidence that he received a letter on 17 January 2014 to the effect that his salary would be increased to $309,586 per annum (which included the increase of $79,586). In September 2014, Mr Whelan received a $100,000 gross bonus from the first respondent, which represented a net of $64,000 after tax. 193 While the increases in salary and bonus payment to Mr Whelan after he commenced employment are not directly relevant to the position at the time Mr Beynon made the first representation, those events throw light on the question (see Doppstadt at [190]) whether Mr Beynon had reasonable grounds at the time of making the representation in May 2013 that Mr Whelan would make more money working for the first respondent that BATA. The first respondent was sufficiently profitable in the immediate aftermath of Mr Whelan commencing employment to provide him several salary increases; and his salary with the first respondent quickly outstripped that which he had earned with BATA. 194 Further, I consider that there is an aspirational element to this statement. In their submissions the respondents referred to "puff" in the ordinary course of commercial dealings (see, for example, comments of Davies and Einfeld JJ in General Newspapers Pty Ltd v Telstra Corporation (1993) 45 FCR 164 at 178). In light of evidence before the Court of what can only be described as a narcissistic lifestyle promoted by Mr Beynon in his persona as The Candyman (as reflected in the alleged "personal goals" of Mr Beynon and Mr Whelan set out in a document created by Mr Whelan on or about 13 July 2015, included in annexure SO-7 to Ms Ozioko's affidavit of 8 September 2016), the fact that Mr Whelan was acquainted with Mr Beynon before commencing employment and must have been aware of the strategies Mr Beynon was employing, and Mr Whelan's evidence indicating that Mr Beynon had big plans for the first respondent (as well as himself and Mr Whelan), it would have been reasonable for Mr Whelan to treat representations such as this as ambitious and aspirational. In any event, practically, neither Mr Beynon nor Mr Whelan could foresee how Mr Whelan's career with BATA would have developed had he remained with BATA. To say that Mr Whelan would earn more working for the first respondent than he "ever" could working for BATA must, in my view, be aspirational rather than a statement of fact and a representation: see comments in Shahid v The Australasian College of Dermatologists [2007] FCA 693; (2007) 72 IPR 555 at [150].
(ii) "You should buy a house at 'Sovereign Islands' on the Gold Coast because you will be making that much money" 195 It is undisputed that Mr Whelan did buy a house at Sovereign Islands, presumably at least in part because his income from his position with the first respondent enabled that purchase. To the extent that this statement by Mr Beynon was meant to convey that Mr Whelan would be earning a significant salary if Mr Whelan worked for the first respondent such that he could afford to purchase a house at Sovereign Islands, the statement was accurate. I also consider that matters I have discussed in relation to the first representation concerning Mr Whelan's income are relevant. 196 In any event, Mr Beynon's comment concerning Sovereign Islands was in the nature of a suggestion to Mr Whelan, which he was at liberty to accept or disregard.
(iii) "Within three (3) years of working for us I will buy you a new Lamborghini" 197 It is common ground that the first respondent did not purchase Mr Whelan a Lamborghini motor vehicle during his period of employment. It is also common ground however that Mr Whelan was not employed by the first respondent for a period of three years. 198 I am not persuaded that, as at May 2013, Mr Beynon had no reasonable grounds for making this statement. Within months of commencing employment the first respondent had arranged for the purchase of a Mercedes coupe vehicle for Mr Whelan. While the car was not a Lamborghini, it was an expensive motor vehicle. The first respondent was clearly in a position to do so at that time. It is reasonable to infer that, at the time Mr Beynon made the statement, the first respondent and/or Mr Beynon was in a position to confidently offer Mr Whelan the prospect of a Lamborghini within three years of commencing employment. 199 In any event, and more likely, I consider that this comment is another example of "puffery" as I have previously discussed.
(v) "This is a long term commitment from me, we will work together on this and there's no limit, we get things done and you can be part of the business" 200 Mr Whelan submits that this statement was a guarantee by Mr Beynon that Mr Whelan would be secure in his position with the first respondent for a long-term period. He submits further that there was no reasonable basis on which Mr Beynon could have made that statement in light of the high turnover of staff at the first respondent, including the fact that: Three senior staff members of the first respondent were in the process of leaving at the time Mr Whelan was employed; Five different financial controllers were employed by the first respondent over a short period of time; and The first respondent employed nine different individuals to be personal assistants of Mr Beynon. 201 Although evidence before the Court indicated that staff turnover at the first respondent was high, this of itself does not support a finding that Mr Beynon did not Mr Whelan to remain in his position for the long term. Mr Whelan's evidence was that Mr Beynon had personally recruited him to work for the first respondent as a "second in charge", and wanted Mr Whelan for the position of "a general manager type role". Mr Whelan also gave evidence that he had pointed out to Mr Beynon the staff turnover and Mr Beynon's response was: "Those people were not performing so I had to move them on, and our results had not been improving over the years as they didn't want to put in the hard yards to get the work done, and no one was working on long term strategy, we just seem to be fixing problems day to day." 202 In my view this evidence is plausible. It is equally plausible that Mr Beynon had handpicked Mr Whelan as his "right hand man", that Mr Beynon had faith that Mr Whelan could develop a corporate strategy for the first respondent which would increase its profits, and that he genuinely saw Mr Whelan as having a long term future with the first respondent from which Mr Whelan could also benefit. 203 This representation was also made in the context where, according to Mr Whelan's evidence, Mr Beynon was planning to reorganise the management team of the first respondent insofar as it involved Ms Ozioko and others (see Mr Whelan's affidavit affirmed 1 July 2016 at [20]). I note that, at the time of these proceedings, Ms Ozioko remained employed by the first respondent. To that extent there is evidence before the Court that at least one senior employee of the first respondent has remained with it on a relatively long-term basis. 204 Finally, I do not accept as feasible the prospect that Mr Beynon or the first respondent was guaranteeing Mr Whelan indefinite employment, which appears to be the tenor of Mr Whelan's argument. Clause 9.1 of Mr Whelan's written contract of employment contemplated that he could be dismissed for any reason provided he was given the notice specified in that clause. This clause is certainly not compatible with indefinite employment by the first respondent. In any event, in the ordinary course of commerce, guaranteed indefinite employment is neither realistic nor practical.
(vi) "You will share in the profits of the company" 205 Mr Whelan submitted that this representation amounted to a guarantee by Mr Beynon that Mr Whelan would be in a position of ownership and would share in the profits of the first respondent. He submitted further that Mr Beynon made that representation unreasonably because he had no intention of carrying through with it. 206 The respondents submit that Mr Whelan did share in the profits of the first respondent because he was paid two years' of bonuses based on profit. 207 Precisely what Mr Beynon meant by "you will share in the profits of the company", as reported by Mr Whelan, is unclear. However, I accept the point made by the respondents that, if the statement meant anything, it contemplated that Mr Whelan could receive bonuses in the future referable to the profits of the first respondent (although Mr Whelan conceded that there was no discussion of bonuses at the May 2013 meeting: transcript page 80 lines 21-22). I am not persuaded that Mr Beynon made this statement without the intention of carrying it through, particularly as cl 2.3 of Mr Whelan's employment contract specifically contemplated receipt of bonuses where the company exceeded budget (and where, therefore, there would be "profits of the company"). 208 Mr Whelan further submits that because the respondents denied that Mr Beynon made this this statement, Mr Beynon never had the intention to carry it out. In my view this conclusion does not necessarily follow. Mr Beynon could plausibly have denied making this statement because he could not remember making it, and considered that he would not have made it. This does not mean that Mr Beynon did not say it, or that there were no reasonable grounds for him making this statement at the time.
(viii) "You will receive a percentage of ownership in the company, which your sons will be able to inherit" 209 Mr Whelan again submits that because Mr Beynon denied making this statement, Mr Beynon never had the intention to carry it out. Again, in my view this conclusion does not necessarily follow. 210 Further simply because Mr Whelan did not receive a percentage of ownership in the company during the two and a half years he was employed by the first respondent does not mean that Mr Beynon never had the intention of delivering on that statement. Clause 2.2.1 of the employment contract contemplated that Mr Whelan would receive Direct Access shares in year three or earlier if agreed by the first respondent. Mr Whelan's employment was terminated before he had been with the first respondent for three years. On the material before me I do not accept that Mr Beynon dismissed Mr Whelan to enable Mr Beynon to renege on this representation, or that there were no reasonable grounds on which Mr Beynon made this statement. 211 I also consider that there is a "puffery" quality to this statement. For Mr Whelan's sons (who, according to the evidence, were children at the time) to inherit any interest Mr Whelan acquired in the first respondent would require the assumption that the business of the first respondent would continue to exist many years in the future beyond Mr Whelan's working life and, presumably, death. That involves a forecast which could not have been made with certainty, and one on which Mr Whelan could not reasonably have relied.
(x) "Dividends will be paid to you monthly based on the earnings of the company, which will also be paid in addition to your salary" 212 As I have already noted, Mr Whelan did not acquire shares in the company. For that reason he was not paid dividends. I repeat my comments in this respect in relation to representation (viii). Mr Whelan submits that because the respondents deny that Mr Beynon had made that statement, the respondents never had the intention of carrying it through - I repeat my earlier comments that this is not a necessary conclusion.
Breach of contract 213 Mr Whelan pleaded that his contract of employment was partly written and partly implied, and to the extent that it was implied, it included a term of good faith and reasonableness in the performance of obligations and exercise of rights in the employment contract This implication arose by law ([18] of the third further amended statement of claim). He pleaded further that his written contract was varied by increases in salary, promotion to the title of "General Manager", addition of superannuation benefits and a lump sum back payment. In particular, he pleaded at [26]-[29] that his services had resulted in a substantial increase in the profitability of the first respondent, but that: He made an inquiry about the payment of a bonus for the financial year ending 30 June 2015 and a plan for the payment of a bonus in respect of the next financial year; The first respondent had failed or refused to pay Mr Whelan bonuses; and Mr Whelan had received no warning about poor or unacceptable performance and had not been counselled regarding misconduct. 214 Materially, in the third further amended statement of claim Mr Whelan claims: The first respondent breached cl 2.3 (1.0) of the contract by failing to pay Mr Whelan bonuses and commissions for the financial year ending 30 June 2014 (paragraph 44); The first respondent breached cl 2.3 (2.0) of the contract by failing to pay Mr Whelan an incentive bonus in the financial years ending 30 June 2014 and 30 June 2015 (paragraph 45) (I note that this is no longer pressed by Mr Whelan so far as concerns the financial year ended 30 June 2014); The first respondent breached cl 2.3 (3.0) of the contract by failing to set the first respondent's budget prior to the 2014-2015 financial year. In particulars Mr Whelan pleaded that the first respondent set the 2014-2015 financial year bonus targets in about July 2014 based on a forecast of $10.4 million profit in the 2013-2014 financial year, by reference to certain criteria, however that forecast profit was incorrect and was ultimately determined to be $6.4 million in March 2015. Mr Whelan pleads that the failure of the first respondent to re-set the bonus targets for the 2014-2015 financial year based on the actual profit of $6.4 million was a deliberate attempt by the first respondent to prevent Mr Whelan from obtaining a bonus (paragraphs 46, 47 and 48); The first respondent breached cl 2.3 (4.0) of the contract by failing to provide an additional incentive bonus in the financial years ending June 2014 and June 2015. (paragraph 49); The first respondent, through Mr Beynon, acted unreasonably when assessing whether an additional incentive bonus should have been paid to Mr Whelan (paragraph 50); and Mr Whelan had a reasonable expectation of receiving a share of the first respondent's profits in accordance with his contract and, in failing to do so, the first respondent had breached a term of good faith and reasonableness in relation to the payment of discretionary bonuses (paragraph 58). 215 Mr Whelan submits that his claim for breach of contract is based on the propositions set out in [18] and [48] of the third further amended statement of claim, namely: That the contract included an implied term of good faith and reasonableness; and The basis on which the bonus targets for the 2014-2015 financial year were set were based on an error (that is, the inaccurate computation of the first respondent's 2013/2014 profit result as being $10.4 million when it was only $6.4 million), as a result Mr Whelan lost the opportunity to earn a bonus pursuant to cl 2.3 of the employment contract, and it would be unreasonable to rely on that error to deny the payment of the bonus. 216 In my view, Mr Whelan's claims of breach of contract have no merit. I have formed this view for the following reasons.
Breach of contract and duty of good faith 217 First, despite Mr Whelan's claim that there is implied by law, a duty of good faith and reasonableness on the part of employers, I do not consider that Australian law implies such duty into contracts of employment. 218 In stating this view I note comments of the High Court in Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 (Barker). The key question before the Court there was whether, under the common law of Australia, employment contracts contain a term that neither party will, without reasonable cause, conduct itself in a manner likely to destroy or seriously damage the relationship of trust and confidence between them (see Barker at [15]). As French CJ, Bell and Keane JJ observed: 28 … The present case concerns an implied term in law where broad considerations are in play, which are not at large but are not constrained by a search for what "the contract actually means." 29 In Byrne v Australian Airlines Ltd, McHugh and Gummow JJ emphasised that the "necessity" which will support an implied term in law is demonstrated where, absent the implication, "the enjoyment of the rights conferred by the contract would or could be rendered nugatory, worthless, or, perhaps, be seriously undermined" or the contract would be "deprived of its substance, seriously undermined or drastically devalued". The criterion of "necessity" in this context has been described as "elusive" and the suggestion made that "there is much to be said for abandoning" the concept. Necessity does, however, remind courts that implications in law must be kept within the limits of the judicial function. They are a species of judicial law-making and are not to be made lightly. It is a necessary condition that they are justified functionally by reference to the effective performance of the class of contract to which they apply, or of contracts generally in cases of universal implications, such as the duty to cooperate. Implications which might be thought reasonable are not, on that account only, necessary. The same constraints apply whether or not such implications are characterised as rules of construction. (Emphasis added. Footnotes omitted.) 219 (See also comments of Kiefel J at [60] and Gageler J at [114].) 220 The majority in Barker concluded that a term of mutual trust and confidence in contracts of employment, now implied in law in the United Kingdom, ought not to be imported into the common law of Australia. Kiefel J concluded that contracts of employment are not rendered futile because of the absence of a term to this effect (at [108]-[109]). 221 The question whether a duty of good faith and reasonableness can, or should, be implied into contracts of employment was left open by the High Court in Barker (see, for example, [42] and [107]). 222 A helpful summary of the position in Australia relating to the implication of a duty of good faith into contracts of employment can be found in Creighton and Stewart [17.53]-[17.59]. The learned authors observe that Australian courts have not reached consensus about whether there is a duty of good faith, what is the nature of that duty, what is the content of the duty, and when it is excluded or modified (at [17.53]). They write that there are three views of how a standard of good faith might be embraced in Australia: [17.54] The first and most expansive view is that a term requiring good faith and fair dealing is implied by law in all contracts, or at least all commercial contracts. Whether an employment contract should be treated as a 'commercial' contract is not clear. 'Good faith' for this purpose is generally regarded as requiring 'adherence to standards of conduct which are honest, as well as being reasonable having regard to the parties' interests.' But unlike a fiduciary duty, it does not require one party to subordinate their own legitimate interests and act in the interests of the other party. The second view rejects the existence of any general duty of good faith, on the basis of a lack of necessity for its implication, a lack of clarity about the class of contract into which it would be implied, uncertainty about its content, or the lack of coherence between a judicial imposition of such a broad normative standard and the statutory imposition of more limited obligations. However, those that adopt this view appear to accept that, in some cases at least, a duty of good faith may be a term implied in fact. Judges who have rejected what they call the 'indiscriminate' implication of a good faith term have suggested it is more likely to be recognised when there is a significant disparity of power between the parties, or where one party is particularly vulnerable to exploitation. On that basis, there have been recent cases accepting that franchisors are under an implied duty of good faith and fair dealing in relation to their franchisees, - although apparently as a term implied in law, rather than fact. If franchisees are seen as needing such protection, however, it is hard to see why that should not also be true of employees. The third view is that good faith is a rule of construction; that is, a principle or value that informs the meaning and applications of express terms in the contract, or at least express written terms. On this view, 'the duty is not an independent term of the contract the breach of which would give rise to a remedy'; rather, 'it operates as a fetter upon the exercise of the discretions and powers created by the contract.' (Footnotes omitted.) 223 The learned authors further opine that: [17.56] If an obligation of good faith is recognised, it will most likely apply to the exercise of powers and discretions conferred by the contract. Clearly, the requirements of any good faith obligation will depend on the exact terms of the contract and the circumstances of the parties, with the result that some powers and discretions must be exercised in good faith, whereas others need not. (Footnotes omitted.) 224 For the same reason that a duty of mutual trust and confidence was rejected by the High Court in Barker, I reject the argument that a duty of good faith ought be implied as a matter of law. In short, I adopt the second of the views summarised by Creighton and Stewart, in particular that necessity does not demand its implication into contracts of employment, but also because of a lack of certainty about the content of such a duty in the employment context. 225 That is not to say that a duty of good faith should not be implied in fact where appropriate. However I note that a claim to this effect was not pleaded. In paragraph [18] of the third further amended statement of claim Mr Whelan specifically pleads that a term of good faith and reasonableness in the performance of obligations and exercise of rights in the employment contract was implied as a matter of law. In any event, it is plain in the circumstances (including where Mr Whelan had received several bonus payments by the first respondents during his period of employment) that Mr Whelan's contract of employment was not rendered futile in respect of the payment of bonuses because of the absence of a term of good faith and reasonableness in the performance of obligations on the part of the first respondent, such that a term of good faith and reasonableness must be implied as a matter of fact to give the contract efficacy: see BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283. 226 In any event, to the extent that a duty of good faith may be more readily implied as a matter of fact in circumstances involving a significant disparity of power between the parties (see, for example, Esso Australia Resources Pty Ltd v Southern Pacific Petroleum NL [2005] VSCA 228 (Esso) per Warren CJ at [4] and Buchanan JA at [25]), such was not the case here. Mr Whelan had an executive role at BATA, and was recruited to work for the first respondent in a senior role at high salary. This was not a case where, in the words of Warren CJ in Esso at [4], the relationship between the parties was unbalanced, and one party was at a substantial disadvantage or particularly vulnerable.
Breach of contract and payment of bonuses 227 A significant portion of Mr Whelan's case was taken up by his claims of rights to payment of bonuses. As I have already noted, Mr Whelan conceded that there was no discussion of bonuses at his business lunch with Mr Beynon prior to execution of the written contract of employment. Having regard to the terms of Mr Whelan's written contract, it is useful to re-state cl 2.3 of the contract which deals with bonuses: 2.3 Incentive Bonus Plan 2013-14 Bonus Plan 1.0 The employee will be eligible for an incentive bonus if the company meets budget. The actual bonus amount will be determined by your performance to the defined objectives. A minimum of $25,000 will be set for 2013-2014. 2.0 The employee will be eligible for an additional incentive bonus if the company exceeds budget. This will be a percentage base bonus - the employee will be entitled to a % of the total net amount that exceeds the agreed annual budget. 3.0 Annual Bonus Plans will be ongoing and will be set when the budget is finalised prior to each financial year beginning 2014-2015 Discretionary Bonus 4.0 The employee will be eligible for additional incentive bonuses at the discretion of the Managing Director. (Original emphasis.) 228 Sub-clauses 1.0, 2.0 and 3.0 provide that Mr Whelan will be eligible for a bonus if the company meets budget (in 1.0), exceeds budget (in 2.0) or at the discretion of the Managing Director (in 4.0). The Macquarie Dictionary defines "eligible" as "fit or proper to be chosen; worthy of choice; desirable". However, and contrary to Mr Whelan's claim that the first respondent "owed" him bonuses, eligibility to receive a bonus does not necessarily equate with obligation to pay one. As a general proposition, the task of the Court is to identify and characterise what, in substance, was promised by the first respondent. 229 Mr Whelan pleads at [44] and following in the third further amended statement of claim that the first respondent breached the employment contract by failing to pay him an incentive bonus based on the company's performance in the 2014/2015 financial year commencing 1 July 2014. In addition to claiming that the contract included an implied term of good faith and reasonableness, Mr Whelan claims that the basis upon which the bonus targets for the 2014/2015 financial year were set was based on an error, so that it would be unreasonable to rely on that error to deny him the payment of a bonus. 230 In this case, while the prospect of a bonus was contemplated by the written contract, the amount payable (if any), the timing of payment and the form of payment were ultimately at the discretion of the first respondent, although guided by contractual restraints. In subcl 1.0, the actual bonus amount was referable to Mr Whelan's "performance to the defined objectives"; in subcl 2.0 it would be "a % of the total net amount that exceeds the agreed annual budget". Other than this there was a complete absence of detailed agreement between the parties as to what the bonus would be or how it would be calculated. This is not surprising, given the usually discretionary nature of bonuses in employment relationships. In the circumstances, the contract did not provide for the payment of identifiable bonuses which could be enforced by Mr Whelan, other than the amount of $25,000 contemplated in sub-cl 1.0. 231 Mr Whelan, however, relies on the decision of the New South Wales Court of Appeal in Silverbrook Research Pty Ltd v Lindley [2010] NSWCA 357 (Silverbrook) as authority for the proposition that an employer cannot withhold a bonus unreasonably and refuse to pay a bonus arbitrarily. In particular he refers to: The company meeting - and exceeding - budget; His performance to defined objectives; and The absence of a set Annual Bonus Plans for the financial year ending 30 June 2015. 232 He also relies on a conversation he alleged took place between himself and Mr Beynon to which he deposed at [80] in his affidavit affirmed 1 July 2016 as follows: In about May of 2015, Travers asked me to organise a trip to Melbourne after I showed him a photo of a Lamborghini Huracan. Travers and I travelled to Melbourne where we saw the car. On this trip Travers said to me in words to the following effect: "You are about to receive a bonus of 100% of your salary for this year's results and you have always wanted one, why don't you buy it?" Travers bought himself a Harley Davidson motorcycle and as we left the showroom Travers said words to the effect: "Ask Nick what he can do on price and Jet's look at getting this (referring to the Lamborghini Huracan) for you, Jet me know when you find out." 233 Mr Whelan relied on text messages in annexure AW-12 to this affidavit on this point, apparently being communications between himself and Mr Beynon on 12-13 June 2015 as follows: Whelan: Ha ha to get in the spirit Fri 12 June 8:05 pm Whelan: Tried to get a better price from Nick don't think he will budge. Sat 13 June 5:58 am Beynon: Leave it with me bro. T Whelan: Ha ha it's all good ma nigga. It will come. See you today. Can't wait for our trip brother. Beynon: Yes, that's one thing we do… makes shit happen!!! Our trip is going to be EPIC. T 234 Mr Whelan included a photograph of cars after the first of his text messages sent at 8.05 pm. 235 Mr Whelan submits that his evidence at [80] of his affidavit was unchallenged and should be accepted by the Court as a promise by the first respondent to pay him a bonus of 100% of his salary. I do not accept this submission, or that Mr Beynon had promised to pay Mr Whelan a bonus in that amount. This is because: There is nothing in writing from either the first respondent or Mr Beynon which supports this allegation; I consider it unlikely, in light of what would at that point have been the recent discovery (in March 2015) of the errors in the accounts and the realisation of the reduced profitability of the first respondent, that Mr Beynon would have promised in May 2017 to pay a bonus of more than $300,000 to Mr Whelan. As was clear from other evidence in this case, the first respondent was under some financial pressure at that time; and The text messages included in annexure AW-12 to Mr Whelan's affidavit do not support his allegation of a promise by Mr Beynon or the first respondent to pay Mr Whelan a bonus of 100% of his salary. Rather those text messages appear to be banter between Mr Whelan and Mr Beynon, as indicated by the language used by Mr Whelan wherein he appeared to treat the exchange as a joke. I also note Mr Whelan's comment that "It will come" which suggests that any ambition he harboured to purchase the vehicle in the photograph was in the future and not an imminent likelihood (as would be the case if he had a genuine expectation of the impending receipt of a bonus of more than $300,000). 236 Further, Silverbrook does not assist Mr Whelan in his claim that he was owed a bonus or bonuses. As was clear in that case, like in the current proceedings, there was no promise by the employer to pay the employee a bonus (see, for example, Silverbrook at [3]). Instead, like in Silverbrook, a more pertinent question is whether Mr Whelan had been deprived of the promised opportunity to receive a bonus. Mr Whelan submits that a reason he was not paid a bonus (and therefore the first respondent breached the contract) was that budgetary figures were recorded incorrectly for the 2014/2015 financial year, and not corrected until the first respondent had its accounts audited in March 2015. This, however, again is an issue which goes to process rather than his alleged contractual right to be paid a bonus. 237 Finally, and in any event, I have difficulty reconciling Mr Whelan's claim that he was entitled to, but not paid, any bonus in the 2014/2015 financial year, when he pleads in his reply dated 1 July 2016 that the first respondent paid him a discretionary bonus of $70,000 (gross) in about December 2014. I understand that Mr Whelan wanted, and used, this money to purchase a boat. However for reasons I will come to later in this judgment, I consider that this payment was by way of a discretionary bonus, rather than an incentive bonus linked to budgetary performance. It was not a loan by the first respondent or a payment conditional on Mr Whelan later becoming entitled to a bonus as claimed by the respondents.
Was Mr Whelan deprived of an opportunity to receive a bonus, in breach of contract? 238 Before turning to Mr Whelan's case in relation in respect of loss of opportunity to receive a bonus, it is helpful to examine Silverbrook and the principles discussed by the Court there. I make this observation in circumstances where the complaint of the plaintiff in Silverbrook is similar to that of Mr Whelan before me in respect of the alleged failure of the employer to engage in a process contemplated by the employment contract to assess and set bonus entitlements. 239 The background facts of Silverbrook can helpfully be drawn from the headnote to the case. The respondent Dr Lindley was employed by Silverbrook Research Pty Ltd (Silverbrook) as a business development strategist under a written service contract in September 2003. The contract required Silverbrook to pay Dr Lindley her annual salary of $210,000 on a fortnightly basis. Clause 3.2 of the contract provided that Dr Lindley's salary would be reviewed annually, but that Silverbrook was not obliged to increase her rate of remuneration at any time. Under cl 4.1 of the agreement, Dr Lindley was eligible to receive an "Annual Performance Bonus" ($40,000) subject to cll 4.2 and 4.3. Clause 4.2 provided that Silverbrook would assess Dr Lindley's performance against set objectives at the end of each quarter, and, provided her performance satisfied the set objectives and subject to cl 4.3, one quarter of the bonus would be paid to Lindley within 21 days of the end of each quarter. Clause 4.3 provided that the decision whether Lindley should receive a bonus was entirely within the discretion of Silverbrook. 240 During the life of the agreement, Dr Lindley's salary was never increased. In 2007, Dr Lindley had requested a salary increase, but none was given. At no time did Silverbrook set objectives for Dr Lindley as contemplated by cl 4.2. As such, there was never an assessment of Dr Lindley's performance and no bonus was ever paid to her. 241 Dr Lindley commenced proceedings for damages in the District Court of NSW claiming that Silverbrook had breached the service agreement by: (1) failing to review her remuneration annually or at all, which resulted in her losing the opportunity to increase her remuneration; (2) failing to formulate a set of objectives relevant to her ability to receive the bonus; and (3) failing to review her performance against those objectives at the end of each quarter for the purpose of determining her entitlement to the bonus. 242 At first instance, the primary Judge found that Silverbrook had breached the agreement in the respects alleged, and awarded damages for the loss of the opportunity to be paid bonuses, on the basis that had Silverbrook set objectives as contemplated by the agreement, Dr Lindley would have met them for the whole of the period of the agreement. 243 Relevantly, Silverbrook appealed against the decision on grounds including: (1) the primary judge had erroneously characterised Dr Lindley's claim as one representing loss of a commercial opportunity; and (2) Dr Lindley had not proved damage because under cl 4.3 of the agreement, the decision to pay the Bonus was entirely in the discretion of Silverbrook. 244 In relation to the issue concerning loss of commercial opportunity, the majority found in summary that: (1) The primary judge did not err in approaching the matter as the loss of a valuable commercial opportunity. Damages for loss of a commercial chance will be recoverable in contract when the contract as a whole (or a particular provision of the contract) promises an opportunity to obtain a benefit, and where the loss of a commercial opportunity is the consequence of a breach of contract and the loss of the chance is not too remote; and (2) In assessing the value of the lost opportunity, the task is to identify and characterise what was promised and what has been denied by the breach of contract. This requires a proper understanding of the contractual content of the obligations and entitlements. 245 Materially, Allsop P (as his Honour then was) explained applicable general principles as follows: 2 … As a matter of general principle, damages for loss of a commercial chance or opportunity will be recoverable in contract when the contract as a whole (see Chaplin v Hicks [1911] 2 KB 786) or a particular provision of a contract (see Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; 174 CLR 64) is such as to promise an opportunity or chance to obtain a benefit and, in other cases, where the loss of a business or commercial opportunity is the consequence of a breach of contract and the loss of the opportunity or chance falls within the rules of remoteness in contract. See generally J W Carter, E Peden and G J Tolhurst, Contract Law in Australia (2007, 5th Ed, LexisNexis Butterworths) at 856-858. The task is to identify and characterise what, in substance, was promised and what has been lost or denied by the breach of contract. 246 His Honour continued: 3 Here, the appellant promised, by item 4 of the terms sheet and cl 4.2 of the contract, that it would establish set objectives at the end of each quarter, assess the respondent's performance against those objectives and, subject to the appellant's discretion in cl 4.3, if the set objectives were satisfied a bonus would be paid. This was not a promise to pay the bonus. Clause 4.3 makes that clear. The respondent was promised the setting up and undertaking of a process of assessment of performance with the contractual opportunity or chance of obtaining bonuses should the results of the process be favourable and subject to the exercise of any discretion in cl 4.3. 4 It was common ground that that opportunity or clause was denied to the respondent. There is no call to assess whether, on the balance of probabilities, the respondent would have taken some step to obtain the chance: cf Daniels v Anderson (1995) 37 NSWLR 438 at 529-530 especially 530G. The opportunity or chance that was agreed and to which the respondent was entitled, without more, was denied to her. 247 Beazley JA agreed. 248 Hammerschlag JA dissented, however his Honour observed - correctly in my view: 50 An opportunity may be lost because a party fails, in breach of its contractual obligations, to take steps which it is obliged to take. In such a case, in order to discharge its onus on the issue of causation, the plaintiff must establish (on the probabilities) that had there been no breach, the steps concerned would have been taken and it must also establish that the opportunity to gain a financial benefit (or avoid a financial detriment) was thereby lost: Daniels v Anderson (1995) 37 NSWLR 438 at 529. 249 In relation to the second issue, Allsop P and Beazley JA found: (1) The relevant discretion should be understood against the proper scope and content of the contract and exercised honestly and conformably with the purpose of the contract; (2) A bargained-for bonus to be assessed against set objectives should receive a reasonable construction and not permit Silverbrook to choose arbitrarily or capriciously that it need not pay money, the set objectives having been satisfied; and (3) The opportunity or chance was not so dependent upon Silverbrook's unrestrained discretion as to be impossible to say that the opportunity had a value. 250 In light of the principles explained in Silverbrook, I am satisfied that, unlike in respect of the bonus amount payable to Mr Whelan, the scheme to pay him a bonus was not entirely within the discretion of the first respondent. Clause 2.3 (3.0) provided that Annual Bonus Plans would be ongoing and would be set when the budget was finalised prior to each financial year beginning 2014-2015. 251 Against the background of these principles, Mr Whelan claims that: The first respondent breached the contract by failing to set the first respondent's budget prior to 1 July 2014 ([46] of the third further amended statement of claim); The basis on which the bonus targets for the 2014/2015 financial year were set was based on error, so that it would be unreasonable for the first respondent to rely on that error to deny Mr Whelan the payment of the bonus ([47] and [48] of the third further amended statement of claim). Specifically, the first respondent computed the 2013/2014 profit result as being $10.4 million when in fact it was only $6.4 million; The first respondent could have reasonably reset the "company goals" in accordance with the pleaded implied term of good faith and reasonableness, or alternatively not attempted to strictly enforce the terms of the bonus clause under the contract in a capricious manner and therefore rely on its error in determining the profit of the first respondent in 2013/2014; The "Budget" figure should have been reset at $7,384,320; the "Target" figure reset at $8,307,840 and the "Stretch Target" figure reset at $9,230,720, using the same percentage increase used by the first respondent to set the company goals document; On that basis, and the fact that the 2014/2015 profit was $8.3 million, Mr Whelan ought to have been taken to have met the "Target Bonus" of the first company goals document and been paid a bonus of $37,200; Given that there is no evidence of a "Cashflow Target" having been set there is a reasonable expectation that Mr Whelan should receive the bonus associated with that target, because the first respondent failed to properly set a target that he could reasonably achieve had there been certainty and had the first respondent complied with its obligations under the contract; and There was evidence before the Court that the first respondent incurred unbudgeted expenses of $2,714,913 in relation to personal expenditure of Mr Beynon and "The Candyman project", and if this unbudgeted expenditure was added back into the "net profit" of the first respondent or the Freechoice business the readjusted "Stretch Target" of $9,230,720 would have been exceeded and Mr Whelan could reasonably be expected to have been paid the bonus of $93,000 as per the Company Goals document. 252 In respect of these points I make the following observations. 253 First, the evidence before the Court is that the requirements to set the budget targets for the 2014/2015 financial year were completed prior to 1 July 2014. Indeed Mr Whelan, as general manager of the first respondent, was "involved on a day-to-day basis with those who were doing these budgets to see where it was all going" (transcript page 88 lines 9-10). 254 Second, it appears that there was error in the budgetary targets for the 2014/2015 financial year and this was not realised by the first respondent until March 2015 after the 2013/2014 financial year accounts were audited. Mr Whelan submits that he cannot be responsible for the first respondent's error, although I find this submission somewhat surprising given that Mr Whelan had been with the first respondent from 27 May 2013 (and general manager from 11 November 2013), and he had an active and informed role in budgetary matters involving the first respondent. 255 Third, I am unable to identify a term in the employment contract whereby the first respondent was required to adequately record financial results, or adequately set a budget and bonus targets, or re-set bonus targets if targets were later found to be incorrect. Mr Whelan's submission that the first respondent ought not to have attempted to strictly enforce the terms of the bonus clause under the contract in a capricious manner, and therefore unconsciously rely on its error in determining the profit of the first respondent in 2013/2014, is not compatible with any obligation of the first respondent under the contract of employment. 256 Fourth, Mr Whelan's claim in [48] that the failure of the first respondent to re-set bonus targets for the 2014-2015 financial year (based on the actual profit of $6.4 million) was a deliberate attempt to deprive Mr Whelan of a bonus is, in my view, fanciful. I agree with the submission of the first respondent that [48] in effect pleads dishonesty and deceit, however I do not consider that Mr Whelan's case comes up to proof on this point. 257 Fifth, the facts in this case are not analogous to those in Silverbrook. Mr Whelan's evidence, in summary, is that budgetary figures of the first respondent for the 2014-2015 financial year originally indicated that little profit had been made with the result that a bonus was not payable for that year, those budgetary figures were inaccurate, this inaccuracy was discovered in March 2015 and the figures were subsequently revised, he had discussed bonuses several times with Mr Beynon, and he had received a discretionary bonus of $70,000 but that Mr Beynon had angrily rejected the prospect of further bonuses. This is in no way similar to Silverbrook where the employer was found to have declined, over a period of five years, to take steps it was obliged to take in assessing whether a bonus was payable to Dr Lindley. In the case before me bonus targets were set, but not met. The first respondent complied with its obligations under its contract with Mr Whelan. That the bonus targets were incorrect because of accounting errors, subsequently addressed, does not mean that the first respondent was (or became) in breach of the contract. I take the same view in respect of any errors in the accounts which may exist (but certainly were not proved to exist) in respect of unbudgeted expenditure by Mr Beynon.
Conclusion 258 Mr Whelan's claim against the first respondent for breach of contract is not substantiated.
Cross-claim 259 A notice of cross-claim was filed by the first respondent against Mr Whelan on 31 March 2016. An amended notice of cross-claim against Mr Whelan was filed on 11 October 2016. In that amended notice the first respondent sought the following relief: 1. The sum of $70,000 as a debt due and owing; 2. In the alternative, restitution in the sum of $70,000; 3. Interest pursuant to section 51A(1)(a) of the Federal Court of Australia Act 1976 (Cth) 4. Costs; and 5. Such further or other order the Court deems appropriate. 260 The first respondent's claim is set out in its amended statement of cross-claim, also filed on 11 October 2016, in which it pleads materially as follows: 1. … 2. On or about 13 November 2014, the Cross-respondent ("Whelan") requested the Second Respondent to loan him $70,000.00 so that Whelan could buy a boat ("Request") Particulars A. The request was made orally on or about 13 November 2014. B. The request is evidenced by a mobile phone message sent by Whelan to the Second Respondent at approximately 5.16pm on 13 November 2014. 3. In response to the Request, the Second Respondent stated, for and on behalf of the Cross-claimant ("CGW"), that CGW would pay to Whelan the sum of $70,000.00 ("Advance") as an advance on anticipated future bonuses and commissions Whelan would be entitled to be paid pursuant to the terms of a written contract of employment entered into between CGW and Whelan on or about June 2013 ("Contract"). 4. On or about 2 December 2014, in performance of the promise of CGW made as pleaded in paragraph 3 above, CGW (by the Second Respondent) caused Whelan to be paid the sum of $70,000.00. Particulars CGW caused the payment to be made by the Second Respondent (for and on behalf of CGW) requesting Freechoice Vending Australia Pty Ltd pay to Whelan on behalf of CGW an amount of $70,000.00. 5. As at 30 June 2015, Whelan was not entitled to be paid any bonus or commission pursuant to the terms of the Contract because none of the preconditions for the payment of any bonus or commission had been met. 6. On 24 August 2015, Whelan's employment with CGW was terminated. 7. As at 24 August 2015, Whelan was not entitled to be paid any bonus or commission pursuant to the terms of the Contract because none of the preconditions for the payment of any bonus had been met. 8. Despite demand, Whelan has failed, refused and/or neglected to repay the Advance to CGW. 9. By reason of the matters pleaded above, Whelan is indebted to CGW in the amount of $70,000.00. 261 Mr Whelan contests this claim. In a defence to the statement of cross-claim filed on 18 April 2016 Mr Whelan pleads, materially: 1. … 2. The Cross-respondent denies paragraph 2 of the cross claim and says: a. The Cross-respondent approached Travers Beynon (the Second Respondent) in early November 2013 and said words to the effect that he had seen a boat he would like to buy but that his bank would only lend him half the money; b. The Second Respondent responded with words to the effect that he did not like it when people said no to him, so I will give you the money because you have been doing so well lately and we'll call it a discretionary bonus; and c. On or about 2 December 2014, the Cross-claimant paid to the Cross-respondent the sum of $38,001.28, which represented the sum of $70,000.00 less applicable income taxation. 3 … 4. … 5. The Cross-respondent denies paragraph 5 of the cross claim and says: a. The payment of the gross sum of $70,000.00 was not dependent upon the Cross-respondent achieving a turnover or profitability target, but was rather paid on the basis of what the Cross-respondent had already achieved for the Cross-claimant and within the discretion of the Second Respondent tin accordance with clause 2.3 (4.0) of the Incentive Bonus Plan as provided for in the Cross-respondent's Contract of Employment with the Cross-claimant (the Incentive Bonus Plan). b. Alternatively, the payment of the gross sum of $70,000.00 was a payment made under the Incentive Bonus Plan calculated by the Second Respondent based on the Cross-respondent's performance in the 2013/2014 Year, and the 2015 Year to date, and reasonably projected against the 2015 budget; c. As pleaded in the Further Amended Statement of Claim, the Cross-claimant breached the Incentive Bonus Plan by failing to finalise the budget prior to the beginning of the 2014/15 Financial Year as required in Clause 3.0 of the Contract of Employment. 6. … 262 No evidence was given by Mr Beynon in respect of this issue at the trial. However annexed to Ms Ozioko's affidavit affirmed 7 May 2017 in annexure SO3 are a number of text messages which relevantly are as follows: (Mr Whelan to Mr Beynon 11 November 2014) Hey mate. ANZ are now saying they cannot approve $70k only $32k due to the lack of equity in our properties as it is over the threshold of mortgage insurance. They would need to value my other 2 but I know they won't value them enough needed. I have asked if a letter stating my bonus will help and if I agree to pay it off next year when paid. Not sure if it will work. Will let you know. We found a boat that a neighbour of Tracy's Mum and Dad are selling that is very nice and we are viewing on Thursday. Fken banks! (Mr Beynon to Mr Whelan 12 November 2014) Hey mate, as I said its's important at this time for the family, especially the boys to have the enjoyment of a boat. I will take care of the $38k balance by way of advance or something, enjoy your holiday. T (Mr Whelan to Mr Beynon 12 November 2014) Hey Buddy. Thanks mate I appreciate it but cannot accept that. You know me I won't take a no for an answer and will find a way to get it somehow. Makes me more determined to get ahead financially so I won't have these issues in the future. (Mr Beynon to Mr Whelan 12 November 2014) Buddy, I know you don't take no for an answer… that's the "never give up" attitude, but the offer is there if necessary, I don't like someone saying "no" to you either. Regards T (Mr Whelan to Mr Beynon 12 November 2014) Thanks buddy appreciate it so much. It embarrassing actually so thank you. I am looking at options but geez they are not budging!... … (Mr Whelan to Mr Beynon 13 November 2014) Hey mate. Here is the boat we looked at today. Bank won't budge due to everything we have on loan. The boat is $70k incl the seabed. Are you sure you are ok to advance me? (Mr Beynon to Mr Whelan 13 November 2014) Hey mate, sure am. Boat looks awesome. T (Mr Whelan to Mr Beynon 13 November 2014) Thanks heaps mate. Yeah it's very well looked after. Older couple of Sovereign doesn't use it enough. Only has 150 hours and is in great condition. The boys will love it. Can't thank you enough mate for everything. 263 In his affidavit affirmed 1 July 2016, Mr Whelan gave the following evidence in relation to this issue: 52. In late November 2014 I was interested in purchasing a boat. I had looked at various boats and found one that I wanted to purchase for $70,000. I attempted to get finance on the boat through ANZ however ANZ were only prepared to finance just under half of the purchase price, or $33,000. 53. I recall Travers and I exchanged text messages about the boat and the price of $70,000.00 in early November 2014 while I was in Bali on holiday with my family. Travers had enquired about the boat and I texted him words to the effect: "I am just trying to work out finance as ANZ will only give me $33,000 finance due to the loan I have on my car." Travers offered to write the bank a letter based on bonuses and future earnings. I texted: "No they said no matter what they will only give me this amount of money". I recall Travers texting to the effect: "I don't like it when people say 'no' to you. The business has been doing so well lately so I will give you the money. The business is doing really well and so are our initiatives." I texted Travers in words to the effect: "No it's ok I will work out a way to get it". Travers texted: "Well the offer is there as I will look after you. Get the boat you deserve it." 54. A few days I contacted Travers to see if the offer was still available via text message. He replied: "Yes of course". 55. About 3 weeks later, on about 2 December 2014 I received an amount of $38,001.28 from Freechoice. I assumed this was the net amount after tax had been taken out from a discretionary bonus of $70,000.00. Annexed and marked AW-8 is a screenshot from my ANZ account showing this deposit from Freechoice. 56. This $38,001.28 payment was recorded as income on my end of year group certificate, which I discuss below. 57. As a result of the payment received from Freechoice I purchased the boat on about 3 December 2014. Annexed and marked AW-9 is a copy of the purchase documents regarding the boat. 58. I deny that Freechoice offered to "loan" me the money for the boat. There was never any discussion about a 'loan'. What was discussed and what I understood by the payment was that the monies I received in December was a result of the continued financial success of Freechoice and the fact I was first offered $150,000 for the Financial Year 2013/14 and was only paid $100,000 (being $80,000 for the bonus and $20,000 for signing up the additional 5 stores). There was never any discussion about a loan or loan documents. There was no mention from Travers or Freechoice that I had to pay this money back until after I was summarily dismissed by Travers 24 August 2015 59. Annexed and marked AW-10 is a copy of my group certificate issued by Freechoice for the 2014/15 Financial Year. It states that my gross annual earnings were $468,963. This is comprised of: (a) My gross annual salary of $230,000; (b) The increase for the payment of the car in the amount of $79,000; (c) The bonus paid in September 2014 in the gross amount of $100,000; and (d) The second bonus paid in December 2014 in the gross amount of approximately $70,000. (Emphasis omitted.) 264 Mr Whelan was cross-examined in relation to his evidence concerning the payment of $70,000. In particular I note the following exchange between Mr Whelan and Mr Roney QC for the respondents: And then the last reference is at page 45, I think. Let me just check. Yes. Sorry. It's at page 45 about a third of the way down the page. Mr Beynon says to you - he's talking about your responsibilities and him raising his voice and his getting angry. He says it's not his job but: …at this level because you get paid that much and looked up you couldn't get a bank loan for a boat, so I advanced the money to you. Not only is that a $400,000-odd gross. I advanced the money to help you out for a boat. Your answer: I know. Yes?---Yes. Now, can I suggest to you that if, in truth, this was a bonus that you had been paid that was yours to keep, you would not have agreed with him when he put the proposition that he had advanced the money to help you out for a boat?---No. What other possible interpretation could there be?---If you look at this transcript, by that time, a lot of my answers are very short because of the barrage of abuse that I got that day. Just answer my question. What other possible explanation could there be for your not saying in response to that statement that, "Travers, that was my bonus. It wasn't an advance." That's a short answer?---Yes. Well, it is, but not when someone is having a barrage of abuse at you. Well, certainly it's clear, isn't it, that insofar as he was concerned, his state of mind was that he believed he had made an advance to you?---I don't know. And you didn't contradict that?---No, I didn't at that time. You didn't any time, did you? Did you?---Yes, I have. What is an advance on a bonus which is paid in November 2014?---Well, at first, your client said it was a loan. Sorry. Let me ask the question, please? What is an advance - sorry. What is a bonus entitlement which is paid in November 2014?---A discretionary bonus as per my contract. I see. So it's not one of those bonuses that exhibit 3 deals with?---No, that's right. It's the category that we talked about yesterday where it's entirely up to Mr Beynon whether he gives it to you or not?---That's right. For whatever reason?---That's right. I think there was 200,000 or something put aside for that year for that - for that reason. So it's the case, isn't it, that there is not a single item of correspondence between you and Mr Beynon, you and anyone else which talks about the $70,000 being a discretionary bonus that you were being given in November 2014?---No, that's right. (Transcript pages 225-226) 265 Mr Whelan does not dispute that the first respondent paid him the amount of $70,000 (gross). Succinctly, however, the respondents' case is that the sum of $70,000 was money provided by the first respondent to Mr Whelan as a loan or in anticipation of his receipt of a bonus to which he never became entitled (thus in the circumstances the money was repayable), whereas Mr Whelan claims that the money was a discretionary bonus paid to him then and there. 266 The use of the term "advance" in communications by both Mr Beynon and Mr Whelan is ambiguous. In the absence of evidence by Mr Beynon as to the meaning he attributed to the term, I look to Mr Whelan's evidence, the context in which the communications were sent and their surrounding language, and the usual meaning of the word "advance". 267 First, as a general proposition the term "advance" should be given a wide meaning, and does not necessarily equate with "loan": London Financial Association v Kelk (1884) 26 ChD 107 at 136, Armco (Aust) Pty Ltd v Federal Commissioner of Taxation [1948] HCA 49; (1948) 76 CLR 584 at 621. 268 Second, cl 4.0 of Mr Whelan's employment contract provided that he would be eligible for additional incentive bonuses at Mr Beynon's discretion. There is no reference in any contemporaneous communications between Mr Beynon and Mr Whelan to the amount of $70,000 as a "loan" and no suggestion that the provision of funds in this amount was tied to any future performance. Rather, in the circumstances it is more likely that the payment of $70,000 was an additional incentive bonus to Mr Whelan. The warm and approving tone of Mr Beynon's messages to Mr Whelan concerning the boat Mr Whelan wanted to buy at that time, the obviously close relationship between Mr Beynon and Mr Whelan, and Mr Whelan's clear gratitude for Mr Beynon's offer (and subsequent provision) of the money, indicates that the money was an unconditional bonus rather than a loan or a part-payment of a future bonus entitlement. 269 Third, in his text message Mr Beynon wrote that he would "take care" of the $38,000 Mr Whelan required to complete the purchase of the boat "by way of advance or something". Even if Mr Beynon at one point contemplated a loan to Mr Whelan, the open-ended nature of this communication whereby Mr Beynon also contemplated "something" is consistent with the subsequent provision of the money without ties to future bonus entitlements of Mr Whelan. 270 Fourth, Mr Whelan's uncontested evidence was that he actually received the amount of $38,001.28, being equivalent to the net amount after deduction of tax of a discretionary bonus payment of $70,000. This evidence is consistent with the statement on Mr Whelan's group certificate issued by the first respondent for the 2014/15 Financial Year (annexed to Mr Whelan's affidavit of 1 July 2016) that his gross annual earnings were $468,963 and Mr Whelan's evidence that this gross amount included the payment of $70,000. It also supports a finding that the amount of $70,000 was income in Mr Whelan's hands during the 2014-2015 financial year, rather than a loan. 271 Fifth, while during cross-examination Mr Whelan accepted that there was not a single item of correspondence which described the sum of $70,000 as a discretionary bonus, equally there was nothing in writing produced by the respondents which described that sum as a loan or conditional payment to Mr Whelan. 272 Finally I accept as plausible Mr Whelan's evidence under cross-examination that Mr Whelan was, in effect, intimidated by Mr Beynon during the meeting of 24 August 2015 and for that reason chose not to point out to Mr Beynon that he had already received a bonus in the form of the $70,000 payment. 273 In my view the payment was a bonus to Mr Whelan, and not repayable by him. No basis has been demonstrated for Mr Whelan to repay the money in accordance with restitutionary principles. The cross-claim is not substantiated and is dismissed.
Claim for relief: Compensation 274 Section 545(1) of the FW Act empowers the Court to make any order the Court considers appropriate if the Court is satisfied that a person has contravened, or proposes to contravene, a civil remedy provision. Section 545(2)(b) provides that, without limiting s 545(1), the Court make an order awarding compensation for loss the person has suffered because of the contravention. 275 The power to award compensation under s 545(2)(b) is broadly expressed: Australian Licenced Aircraft Engineers Association v International Aviation Service Assistance Pty Ltd [2011] FCA 333; (2011) 193 FCR 526 at [421] (Australian Licenced Aircraft Engineers Association). Cases cited by Creighton and Stewart at [20.96] support the proposition that this may include damages for non-economic loss such as shock, distress or humiliation, or damages for loss of an opportunity. The learned authors also point out that such loss must be caused by the contravention, requiring the Court to consider what would have been likely to occur had the FW Act not been contravened. Helpfully they write: In some cases, but for the contravention, the employment would have ended within days of the dismissal in any event and so little compensation is payable; in other cases, the employment would have lasted for years if it had not been for the contravening conduct and so the compensation awarded may be enormous… 276 In Maritime Union of Australia v Fair Work Ombudsman [2015] FCAFC 120, the Full Court made the following observations in respect of s 545(2)(b): 28 The task of the primary judge, having found the relevant contraventions, was to assess the compensation, if any, that was causally related to those contraventions. That involved not an examination of what did happen, but an assessment of what would or might have occurred, but which could no longer occur (because of the contraventions). Subject to any statutory requirement to the contrary, questions of the future or hypothetical effects of a wrong in determining compensation or damages are not to be decided on the balance of probability that they would or would not have happened. Rather, the assessment is by way of the degree of probability of the effects - the probabilities and the possibilities: Malec v JC Hutton Pty Ltd [1990] HCA 20; 169 CLR 625 at 642-643; Sellars v Adelaide Petroleum NL [1994] HCA 4; 179 CLR 332 at 352-356. The above proposition must be qualified by the recognition that, where the fact of injury or loss is part of the cause of action or wrong, it must be proved on the balance of probability. Compensation is generally awarded for loss or damage actually caused or incurred, not potential or likely damage: Tabet v Gett [2010] HCA 12; 240 CLR 537; Sellars at 348; Wardley Australia Ltd v Western Australia [1992] HCA 55; 175 CLR 514 at 526; that is equally so here under ss 807(1)(b) and 545(2)(b). 277 In summary, Mr Whelan submits: His unchallenged evidence is that he left his secure job with BATA in Sydney to take up the offer made to him by Mr Beynon in May 2013; He sold his house in Sydney and moved to the Gold Coast with the intention of staying with the first respondent for a long-term period; On the day he was dismissed he had no intention of resigning or leaving the employment of the first respondent; His unchallenged evidence is that he was "stuck", could not get another job, and would have remained in his position with the first respondent for at least another five years in light of his good salary, financial commitments, and need to support his family; and The applicant had plans for staying with the first respondent, as reflected in the "Visions and Goals" document he put together regarding where he saw himself and the first respondent in three years' time. 278 In his affidavit, Mr Whelan also gave detailed evidence of harassment by Mr Beynon and employees or agents of the second respondent including: On the afternoon and evening of his dismissal, at his home; Photographs being dropped in his letter box making allegations that he had an affair whilst travelling on Freechoice business; Abuse at local coffee shops by employees and contractors of the first respondent; and Text messages being sent to Mrs Whelan stating that Mr Whelan had cheated on her.
Loss of opportunity to continue employment with the first respondent 279 First, Mr Whelan sought compensation for loss of the opportunity to continue employment with the first respondent in the role of General Manager for an anticipated period of at least five years. In the amended statement of claim this was particularised as follows: i. Annual wages - $309,586 annual wage as at date of termination x 5 years (anticipated future employment ) = $1,547,930 ii. Annual Bonus - $160,000 annual bonus as at date of termination x 5 years (anticipated future employment) = $800,000 iii. Discretionary Bonus - $70,000 annual commission as at date of termination x 5 years (anticipated future employment) = $350,000 Total loss for contravention of section 340 (1) = $2,697,930 (Emphasis omitted.) 280 I am not satisfied that Mr Whelan is entitled to compensation for the loss of opportunity to continue employment with the first respondent. Mr Whelan's contract of employment entitled the first respondent to terminate his employment at any time, for any reason, on the provision of notice prescribed by cl 9.0 of the contract unless he was dismissed for gross misconduct or other grounds that justified instant dismissal. The evidence before the Court revealed that Mr Whelan's relationship with Mr Beynon had significantly deteriorated by the date of his dismissal to the point where Mr Beynon berated Mr Whelan at length and refused to contemplate any further bonuses, as I have already set out in this judgment. Further, in his communications with Mrs Whelan, Mr Whelan was referring to Mr Beynon in highly disparaging language. Examples of such communications (as annexed to the affidavit of Daniel Hains, exhibit 14(R) were: "He's spending money like no tomorrow and won't reward me, the cunt. I'm done here, mate. No one f-k-e-n like that. Told me I need to do a better job. Record growth and profit and he spends most time out of business. Yes, right." "I agree, mate. Me too. Sick of working for some cunt." "Hate the prick. Have to put in a good face and smile and want to walk away." "Yes, I'm gone anyway." "I am stuck, as I can't just go get another job due to our payments, and it hurts me." "Hold on to [Mr Beynon's credit card details] for one day to fuck him up, as I will with the ATO." 281 Mr Whelan was not employed under a fixed term contract with an expectation of ongoing employment with the first respondent. Even if Mr Whelan had forced himself to continue working for the first respondent for financial reasons - which, given the level of vituperation in his references to Mr Beynon, is by no means certain - I consider it likely that Mr Beynon would have terminated Mr Whelan's employment in the immediate future anyway given the deterioration in their relationship. 282 Finally, there is no evidence before the Court that Mr Whelan would have received an annual bonus of $160,000 had his employment with the first respondent continued, or that the first respondent would have paid a discretionary bonus to Mr Whelan of any amount in the future. 283 I am not satisfied that Mr Whelan has lost an opportunity to work for the first respondent, and that he should receive compensation he has claimed.
Loss of opportunity to continue at BATA 284 Second, and in the alternative, Mr Whelan claims compensation for loss of opportunity to continue employment with BATA. At [72(b)] of the amended statement of claim Mr Whelan pleads: Further and/or in the alternative to paragraph 71 [sic], the Applicant lost the opportunity to continue in his employment at BAT for a period of at least 5 years. Particulars Loss of income at $205,000 per year, plus $80,000 in bonuses ($285,000 per year x 5 years) = $1,425,000 LESS income earned at the First Respondent (Particulars to be provided in evidence) (Emphasis omitted.) 285 There is no causal connection between any conduct of the respondents and Mr Whelan's claim that he lost the opportunity to continue working with his previous employer for "at least 5 years". In particular I note that the respondents made no misleading representations contrary to s 31 of the ACL, and that the adverse action of the respondents took place years after Mr Whelan - of his own volition - ceased working for BATA and commenced working for the first respondent. In my view this aspect of the claim has no merit.
Non-economic loss 286 Third, at [73] of the amended statement of claim Mr Whelan claims compensation in the amount of $60,000 for distress, hurt, humiliation, emotional upset, anxiety, feelings of inadequacy, depression and other emotional and psychological damage. 287 Mr Whelan gave evidence that he felt defeated and humiliated as a direct consequence of the termination of his employment, and subsequent harassment to which he was subjected by the respondents and its employees. His affidavit evidence was as follows: 117. I then began to drive to my home in Helensvale. While driving home I noticed that Travers was following behind. I drove into my driveway, shutting the electronic gate behind me. As I approached, I could see my wife standing in the driveway, crying and upset. I then got out of my car and saw that Travers was parked out the front of my house. Travers Beynon was also with Suzie, Cassandra Blight and Zalie Harrison. Cassandra Blight and Zalie Harrison were Travers' personal assistants. 118. All four of them then got out from Travers' car and approached my gate. I saw my wife yelling at them and I told her to come inside as I could see she was extremely upset with them. At this point I was also crying and shaking uncontrollably. 119. My wife then advised me that the four of them had already been to my house and in an intimidating and threatening way to "collect company things'. The four of them left the house at this time. I then proceeded to tell her I had been terminated and showed her the email message and attachment. 120. My wife then called her parents and asked them to attend our house because we felt in fear of our safety and the family was not in a good state. I asked her to do this as I did not believe I could control my own emotions. My wife was hysterical and angry. At about 5.30pm, a security guard I know as Adam, came to our house and stood out the front of our house. I know Adam as one of Travers' security guards. We had a conversation to the following effect: Adam: "I have been hired by Travers to retrieve Freechoice's laptop and phone. I have to stay out the front all night if required. I'm sorry for what had happened to you but I have been paid to stay here." Me: "Adam I have been sacked for no reason and I am not handing over my things until I find out what has happened. My kids are hysterical, we are all not well I need to call the police and you cannot be standing at my door all night." Adam: "Just do what you need to do, I'm sorry". 121. We then called the police, and the police removed Adam from the front of our house. 122. At 9.45am on Wednesday, 26 August 2015, I gave the laptop and phone back to Freechoice. 123. After this my family and I were harassed with photos dropped in our letter box that made allegations that I had an affair whilst travelling on Freechoice business, I was abused at local coffee shops by Travers' employees and contractors, and text messages were sent to my wife saying that I had cheated on her. I made further complaints to Freechoice's Lawyers Nyst Legal and the police. 124. As a result of this harassment I had to have security camera put up at my house and I sought a non-harassment order in legal proceedings commence by C&GW in the Supreme Court of Queensland. 288 Further during the hearing Mr Whelan gave evidence that: three weeks after the termination of his employment, he and his family were subjected to yelling and other harassment during two incidents at a Zarraffa's coffee outlet at the Gold Coast in September 2015; and he was embarrassed by his termination of employment, and by having to explain to his current employer about the embarrassment of being terminated. 289 Examination of evidence of Mr Whelan, Ms Marshall and Ms Ozioko indicates that: an incident occurred at the relevant Zarraffa's coffee shop on 28 September 2015 when Mr Whelan was with his wife and six year old son. Ms Ozioko was not present, however it appears that Ms Taesha Beynon, Ms Tori Armstrong and Ms Parnia Marshall were present; and a second incident occurred at the Zarraffa's coffee shop on 29 September 2015 when Mr Whelan was accompanied by his son, and Ms Ozioko and Ms Armstrong were present. 290 An outline of Mr Marshall's evidence was settled on 3 March 2017 and marked as an exhibit in the proceedings. It included the following: 7. Around 20 September 2015, the Second Respondent, while at the Candy Shop Mansion, and in the presence of Ms Marshall, amongst others, reviewed and selected a series of pictures of the Applicant with women who weren't his wife, to be used to intimidate the Applicant by way of leaving them in his mailbox for the Applicant's wife to find. 8. Around 28 September 2015, the Second Respondent organised a number of individuals, including Ms Marshall, to harass and intimidate the Applicant, based on information regarding the whereabouts of the Applicant obtained from a private investigator retained to follow the Applicant. 291 At the hearing Ms Marshall gave evidence as follows: Right. And can you tell the court what happened on that occasion?---So that was the night that Travers had his laptop out and he had photos up from his Europe trip with Andrew and what I remember about that is Travers is going through them and, you know, he was laughing and he was like, oh, we will use this one and we will use this one, and Tracey is like the man in this relationship, she will fucking kill him for this and blah, blah, blah. When you say blah, blah, blah - - -?---Sorry. - - - just be - - -?---Yes. So he was just, like, rambling on about, like, you know, that he was going to use them for, you know, some sort of reason. (Transcript 17 March 2017 page 359 lines 22-32) 292 In relation to events on 28 September 2015, Ms Marshall gave evidence as follows: Do you recall where you were on that occasion once again in relation to Mr Beynon, the FreeChoice companies and your employment?---Yes. Again, I - it started off probably - I'm not sure what time, maybe from morning to midday. We were at The Candy Shop Mansion and Travers was - had talks about a PI following Andrew and Tracey and that - - - When you say PI, do you mean - - -?---Personal investigator. That's what he referred to it as, as a PI. … HER HONOUR: Please continue, Ms Marshall?---Yes. So then from there when he said that the PIs were - personal investigators were tracking where Andrew and Tracey were, we got direction off him - like, there was me, Tori Armstrong, Taesha - we were all there and we got direction of Travers to just go to the coffee shop and give him a hard time. All right. And what did you do as a result of that direction?---From a result of that 20 direction, Taesha and I pretty much arrived there at the - at the same time as Tracey and Andrew did, and we hopped out of the car, we walked into the coffee shop and Andrew and Tracey were - looked pretty distressed at the time, and that's when Tori Armstrong started coming up to the car and harassing and filming and all that. Do you recall anything that she said?---That Tori said? Yes?---Yes. She was saying, like, you fucking pussy, you're a fucking pussy, blah, blah - sorry, I can't say blah, blah. Just saying you're a fucking pussy, you know, how does it feel being a pussy. HER HONOUR: So which coffee shop was this, please?---Zarraffa's at Hope Island, just close to 36 River Cove Place. Thank you. MR WHITE: And do you recall whether a child was present at this time?---There was. There was a son in the back who I could hear crying through the car that seemed, you know, really, really upset at the time. Her evidence was that she participated in such an incident at Zarraffa's at Hope Island, close to 36 River Cove Place. Is that in the back of Andrew and Tracey's car?---That's right. Yes. And that finished. Do you recall how that scene finished?---So how it finished was we pretty much - Tori put, like, a rude sort of sticker on the car - something to do with male strippers or something like that. And then Tracey and Andrew and their son rushed off. They left. And then we went back to The Candy Shop Mansion. And that's when we came back to Travers and we told him what happened. And he was, like, "Yeah, he is a fucking pussy. Good." You know, he seemed very pleased by what had just happened. (Transcript pages 361-362) 293 In cross-examination Ms Marshall gave the following evidence: Well, in short, what you're saying in your evidence is that Mr Beynon instructed you and others to go and harass Mr Whelan?---Yes. You then did you and harass Mr Whelan?---Yes. And then you went back to Mr Beynon, told him, and he was pleased with it?---Yes. (Transcript page 369 lines 11-16) 294 And later: MR RONEY: I will change this particular tack. I asked you a moment ago if Mr Beynon - I suggested to you a moment ago that Mr Beynon said nothing to instruct any of the women who went there that day to give Mrs Whelan a hard time. All right. Now, I want an answer to that question. You said no, and then you thought about it. Do you recall him saying anything to anyone about putting a sticker on Mrs Whelan's - or on the vehicle?---Yes. Tori Armstrong. Right. And what was that?---It was a Red Hot Strippers male - - - What was said, is what I'm asking. What did Mr Beynon say?---He said words to the effect of, "Yeah, do that." Because she - she said that she would do it. And he said, "Yeah, do that." And is that something you've just remembered, is it?---Not just remembered. See, I suggest to you that - that going there that day was in no way under instruction from Mr Beynon?---That's not true. And that, indeed, there was no private investigator engaged and nor was there any conversation about him being engaged or about one being engaged?---That's what came out of his mouth and Tori Armstrong's mouth. And you most certainly did not report back to Mr Beynon about what had happened?---Yes, we did. And you most certainly - he most certainly did not respond that he was pleased with what you had done?---Yes, he did. (Transcriptpage 371 lines 11-37) 295 In summary, Mr Whelan submitted that: He felt defeated and humiliated as a direct consequence of his termination and the subsequent harassment to which he was subjected by the respondents and employees of the first respondent; Evidence of Ms Ozioko was that it was not usual procedure for Mr Beynon and other employees to attend the private residence of an employee to collect company property; The posting of a security guard outside his house after the termination of his employment was conduct of the respondents seeking to intimidate and threaten him; Evidence of Ms Marshall supported his evidence; Mr Beynon gave no evidence to the contrary; This harassment occurred after the applicant notified the first respondent that he intended to commence these proceedings, and was projected at intimidating him and deterring him from doing so; and The harassment and intimidation by the respondents has been deliberate, malicious and continued throughout the course of the proceedings, and he suffered anxiety and stress as a result. 296 The respondents rely on evidence of Ms Ozioko. In her affidavit affirmed 19 September 2016, Ms Ozioko deposes that: At the time of the termination of Mr Whelan's employment, Mr Whelan was still in possession of a laptop and iPhone provided to him by the first respondent pursuant to the terms of his employment agreement and she was concerned that Mr Whelan would try to download company records from those devices; On the evening of 24 August 2015, Ms Ozioko and Mr Beynon drove to Mr Whelan's home to ask for the return of the laptop, iPhone and keys to the office. They arrived at Mr Whelan's home at approximately 5.15 pm and spoke with Mrs Whelan who informed them that Mr Whelan was not at home. As they were leaving Mr Whelan arrived at home, however, he refused to speak with Mr Beynon and Ms Ozioko; Ms Ozioko called the police; Ms Ozioko returned with a security guard to Mr Whelan's residence at approximately 6.00 pm to demand the return of the first respondent's property. Mrs Whelan handed the office keys to the security guard but refused to hand over the laptop computer or iPhone; On 26 August 2015, a representative of the first respondent's lawyers collected the laptop and iPhone from Mr Whelan's house and delivered them to Ms Ozioko; and Hard copy records related to Mr Whelan's employment with the first respondent were missing from the first respondent's files after Mr Whelan's termination. She had viewed security footage which showed Mr Whelan departing the office of the first respondent on 24 August 2015 with a large volume of hard copy files. 297 Ms Ozioko also gave evidence that she was present at Zarraffa's coffee shop during an incident in September 2015 when Mr Whelan was present. Her evidence was as follows: MR RONEY: Could I ask you please about an incident which occurred at Zarraffa's Coffee Shop in late September 2015 for which you were present?---Yes. And involved - was it Mr and Mrs Whelan?---No. Mr Whelan was the only person present. Just Mr Whelan. And did you - were you present that day when that incident occurred?---Yes, I was. All right. How did you and the others that were with you come to be there?---We went down to the coffee shop to have a meeting with Tori Jackie Armstrong who's the person that manages the promotional models because we had an upcoming event. HER HONOUR: Sorry. Because what?---We had an upcoming event. Thank you. MR RONEY: When you went, did you have any idea or inkling that Mr Whelan was there?---We did see him as we arrived. Yes. No, but as you went?---Prior to? No. We did not. So was it pre-arranged that anything would happen to intimidate or otherwise harass him that day?---No, it was not. All right. And so did you say anything yourself to Mr Whelan in the coffee shop?---No, I did not. Who was speaking?---Jackie Armstrong was - they were exchanging words back and forth as was Andrew Whelan. So they had words with each other, did they?---They did. All right. And - all right. Did you have anything to say in that context at all?---No. I was a little uncomfortable, but the words were going back and forth between both Ms Armstrong and Mr Whelan. Had, to your knowledge, Mr Beynon instructed any of those on your side of the business to go there to have this conversation with him?---No. (Transcript pages 399-400) 298 The respondents challenge Mr Whelan's claim of psychological damage. They submit that Ms Ozioko's evidence conveys a very different account of the incident at Mr Whelan's house on the evening of 24 August 2015; that Ms Marshall's evidence concerning the incident involving her at Zarraffa's coffee shop should be treated with caution; and that any harassment of Mr Whelan at the coffee shop was limited and not caused by any of the adverse action alleged to have been taken by the first respondent. They also submit that the Court should prefer Ms Ozioko's evidence concerning the incident on 29 September 2015 to that of Mr Whelan. 299 Turning now to Mr Whelan's claim for non-economic loss and damage I make the following observations. 300 First, s 545 of the FW Act empowers the Court to order compensation for non-economic loss by way of distress, hurt or humiliation. Qualifications to that power are that the Court:: considers the order appropriate; is satisfied that a person has contravened, or proposes to contravene, a civil remedy provision; and may order compensation for loss that a person has suffered because of the contravention. 301 Mr Whelan relied on a number of authorities which have examined this power, including Lai v Chance Trading Pty Ltd [2015] FCCA 441, McIlwain v Ramsey Food Packaging Pty Ltd (No 4) [2006] FCA 1302; (2006) 158 IR 181 and Richardson v Oracle Corporation Australia Pty Ltd [2014] FCAFC 82; (2014) 223 FCR 334. 302 Second, as I have already found, the first respondent contravened s 340 of the FW Act which is a civil remedy provision. I have also found that Mr Beynon was involved in those contraventions. 303 Third, the power of the Court under s 545(2) is to order compensation for the loss the person has suffered because of the contravention or contraventions. As Barker J observed in Australian Licenced Aircraft Engineers Association at [423] in the context of a claim for compensation pursuant to s 545, an appropriate causal connection between the contravention and the loss claimed is required. In that case the relevant contraventions related to the making of a negative assessment and the provision of that negative assessment to Garuda Indonesia, resulting in the worker losing his job and his visa and obliging him to return to Indonesia to find work. His Honour accepted the employer's submission that no medical evidence had been adduced to support a finding that the contravention caused the worker stress, but nonetheless found that the dismissal and the fact of the negative assessment together relevantly hurt and humiliated the worker as he claimed and was a direct consequence of the contraventions found. Materially his Honour continued: 443 However, the power of the Court under s 545(1) and (2) to make appropriate orders following contravention including an order for compensation is quite divorced from this type of contractual consideration. As a matter of broad public policy, the Parliament of Australia has provided that the Court may give appropriate relief where contravention is proved. Relief in these circumstances helps to uphold the policy indicated in the FW Act that, amongst other things, contraventions of the freedom of association provisions should not occur and that appropriate orders should be made to remedy the contravention of such provisions. There is, therefore, in my view, no obvious policy consideration that militates against the making of a compensation order under s 545(1) or a compensation order under s 545(2), for the sorts of reasons that have inhibited the award of damages at common law for a breach of contract which is attended by shock, distress or humiliation. 304 Subsequently his Honour added: 449 Additionally, I do not consider that the word "loss" in s 545(2), to the extent this provision must be relied upon for the making of a financial compensation order, limits the loss that may be claimed for economic loss. While the respondent contends that a distinction should be drawn between "loss" and "damage", and that shock, distress and humiliation should be considered as "damage", and not as "loss", I find the distinction elusive and unhelpful. Shock, distress and humiliation may be considered, where it exists, as an injury the person suffers which is apt to be described as non-economic loss or damage. 305 I respectfully adopt these statements of principle by his Honour. 306 Turning to the case before me, I accept that Mr Whelan's dismissal was in contravention of s 340 of the FW Act, and that he felt humiliated as a result. I accept that he felt humiliated by the attendance of Mr Beynon and Ms Ozioko, and subsequently Ms Ozioko and a security guard, at his home to recover property of the first respondent. Further, and in line with comments of Barker J, I do not consider that Mr Whelan is precluded from claiming non-economic loss because he has not proven psychological damage by medical evidence. 307 To that extent, I consider that Mr Whelan is entitled to an order for compensation by the respondents. 308 However, I do not find other aspects of his claim persuasive insofar as he claims a causal connection between hurt and humiliation, and his dismissal. In particular: I consider that Mr Whelan's claim of hurt and humiliation in being required to explain to other employers, months if not years after his dismissal, that he was dismissed from his employment with the first respondent, is too remote from the adverse action of the first respondent to support a finding of compensation. Further, I note that Mr Whelan's contract entitled him to be dismissed without reason, at any time during his employment. If Mr Whelan had been dismissed without conduct involving adverse action he would be precisely in the same position as he currently claims (namely, of being required to explain to subsequent employers that he had been dismissed) but there would be no issue of the respondents being liable for compensation. I also note the large volume of evidence that Mr Whelan very much disliked both the respondents and his job, that he only remained at the job because he needed the money, and that he harboured some ideas of harming Mr Beynon with the Australian Taxation Office. To that extent I am not persuaded that Mr Whelan suffered hurt in being dismissed, other than the fact that it was the respondents who made the decision that his employment cease rather than Mr Whelan. Although I consider that Mr Whelan's version of events in late September 2015 to be plausible, I also consider that Ms Ozioko's evidence that she did not actively seek or engage in harassment of Mr Whelan, was plausible. The evidence before me was that Mr Whelan attended the Zarraffa's coffee shop two days in succession, presumably because in light of its location it was convenient to him to do so, and that people associated with Mr Beynon including Ms Ozioko attended the same coffee shop for the same reason rather than for the purpose of seeking out Mr Whelan. Indeed on balance it is difficult to identify why Ms Ozioko, who appeared busy in her role with the first respondent, and further gave every appearance of being professional, would have bothered to deliberately engage in malicious and spiteful harassment of Mr Whelan. I find that Ms Beynon, Ms Armstrong and Ms Marshall engaged in malicious and spiteful harassment of Mr Whelan and his family on 28 September 2015, and that Ms Armstrong appeared to engage in incidents both on 28 and 29 September 2015. However, although it is possible that this harassment was with the approval of Mr Beynon, evidence of Mr Beynon's involvement in the relevant incidents is weak. It is quite possible that the harassment was orchestrated by Ms Beynon or Ms Armstrong, although in the absence of evidence from either it is not possible to be sure. Ms Marshall's credibility in respect of his evidence is, in my view, tainted by the fact that she was one of the participants in the harassment of Mr Whelan. Further, that Mr Beynon may have approved of the harassment does not establish either that he directed it, or more relevantly that there was a causal connection between that conduct and the adverse action of the first respondent (to which Mr Beynon was an accessory) within the meaning of s 545 of the FW Act. In this respect, I note in particular that this conduct was more than one month after the termination of Mr Whelan's employment. It may have been that Mr Beynon and his wife and friends did not like Mr Whelan and were prepared to either engage in or condone malicious conduct towards him - that, however, is not of itself compensable under s 545 of the FW Act. 309 I also note that the attendance by Mr Beynon and Ms Ozioko at Mr Whelan's home on the afternoon of 24 August 2015, while unusual, was for the purpose of recovering property of the first respondent which Mr Whelan had in his possession as general manager, and which Mr Beynon and Ms Ozioko feared could be used by Mr Whelan to cause damage to the first respondent. Indeed the concern expressed by Ms Ozioko in her evidence as to potential damage she feared Mr Whelan could inflict on the first respondent was to some degree borne out in communications between Mr Whelan and his wife in which Mr Whelan discussed the prospect of causing harm to Mr Beynon. 310 Further, although Mr Whelan expressed hurt and humiliation at a security guard being posted to his home, his evidence was that the summoning of the police resulted in the security guard's expeditious removal. To that extent Mr Whelan was successful in "turning the tables" on the respondents, and humiliating them by drawing the attention of the police to their conduct. It is not clear to me why Mr Whelan is entitled to compensation in such circumstances. 311 I consider that Mr Whelan is entitled to a modest sum for the hurt and humiliation he suffered as a result of being dismissed by the first respondent in contravention of s 340 of the FW Act, and for the attendance at his home of Mr Beynon, Ms Ozioko and the security guard. I consider that the amount of $60,000 he seeks is disproportionate - an award of compensation in the amount of $5,000 is appropriate. 312 Mr Whelan does not make separate claims for compensation against the first and second respondents. On the facts of this case, particularly as I have found that the first respondent in dismissing Mr Whelan was acting at the direction of the second respondent, it is appropriate to order that the first and second respondents be jointly and severally liable to pay Mr Whelan this award of compensation.
Payment in lieu of notice of termination and unpaid leave entitlements 313 I have already found that Mr Whelan was entitled to, but not paid, amounts in lieu of notice of termination of employment and accrued leave, and this failure to pay him contravened the FW Act. The appropriate compensation that directly and causally flows from these contraventions is: An amount in lieu of notice, and An amount equal to Mr Whelan's unused annual leave entitlements 314 Mr Whelan's unused annual leave entitlements are not in dispute. Mr Whelan is entitled to the sum of $17,160.40 for untaken but accrued annual leave (calculated as 109.53 hours at an hourly rate of $156.6731). 315 In relation to the appropriate payment in lieu of notice, the respondents submit that Mr Whelan is entitled to 2 weeks' notice of termination whereas Mr Whelan claims 3 weeks. 316 As Mr Whelan had been employed by the first respondent more than one year, but less than three years, cl 9.1 of Mr Whelan's contract of employment entitles him to three weeks' notice, or payment in lieu of three weeks. Mr Whelan is entitled to the sum of $17,625.72 in lieu of notice (calculated at three weeks, being 112.5 hours at an hourly rate of $156.6731).
Loss associated with relocating from Sydney to the Gold Coast 317 A considerable amount of evidence was adduced as to losses Mr Whelan experienced in relocating from Sydney to the Gold Coast, including in relation to the value of Mr Whelan's previous home in Sydney. For reasons I have already given, I am not persuaded that, even if Mr Whelan could establish losses associated with such relocation, the respondents are responsible for them. I am not satisfied that the conduct of the respondents associated with Mr Whelan's decision to accept employment with the first respondent warrants compensation of Mr Whelan. 318 This aspect of Mr Whelan's claim is not sustainable.
Interest 319 I have found that Mr Whelan is entitled to compensation in the following amounts: the sum of $17,625.72 in lieu of notice the sum of $17,160.40 for untaken but accrued annual leave the sum of $5,000 in compensation for non-economic loss suffered by him because of the contravention of s 340 of the FW Act. 320 This totals $39,786.12 in compensation. 321 Mr Whelan seeks interest on any judgment for compensation. 322 Section 547 of the FW Act provides (1) This section applies to an order (other than a pecuniary penalty order) under this Division in relation to an amount that a person was required to pay to, or on behalf of, another person under this Act or a fair work instrument. (2) In making the order the court must, on application, include an amount of interest in the sum ordered, unless good cause is shown to the contrary. (3) Without limiting subsection (2), in determining the amount of interest, the court must take into account the period between the day the relevant cause of action arose and the day the order is made. 323 The Federal Court of Australia Interest on Judgments Practice Note (GPN-INT) (Practice Note) issued on 18 September 2017 provides guidance in regard to interest on judgments arising under s 51A of the Federal Court of Australia Act 1976 (Cth) as well as interest up to judgment arising under s 547 of the FW Act. The Practice Note provides for the following rates: (a) in respect of the period from 1 January to 30 June in any year - the rate that is 4% above the cash rate last published by the Reserve Bank of Australia before that period commenced; and (b) in respect of the period from 1 July to 31 December in any year - the rate that is 4% above the cash rate last published by the Reserve Bank of Australia before that period commenced. 324 Mr Whelan was dismissed on 24 August 2015. In addition to total compensation in the amount of $38,286.12 he is entitled to interest on that amount from 24 August 2015 to the date of judgment, calculated in accordance with the Practice Note.
Civil Penalties 325 The applicant seeks the imposition of pecuniary penalties on the respondents for contravention of the FW Act and the ACL. For reasons I have given, the respondents have not contravened the ACL and the issue of pecuniary penalties does not arise in that context. 326 The situation is different in relation to the FW Act. I have found that the first respondent contravened s 340(1) of the FW Act in respect of the dismissal of Mr Whelan, and s 44(1) of the FW Act in respect of its failure to pay Mr Whelan his entitlements. I have also found that Mr Beynon was involved in those contraventions. 327 Mr Whelan also seeks an order pursuant to s 546(3)(c) of the FW Act that any pecuniary penalties imposed on the respondents be paid to him personally. 328 Although Mr Whelan has filed written submissions in relation to this issue it is appropriate that the quantum of penalty be separately addressed in light of my reasons for judgment. I will hear the parties in respect of appropriate timetabling orders for filing of submissions on this point.
Costs 329 Similarly, I will make timetabling orders for filing of submissions in respect of costs. I certify that the preceding three hundred and twenty-nine (329) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier.
Whelan
Cigarette & Gift Warehouse Pty Ltd
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[1998] HCA 55
[2014] HCA 32
[2005] VSCA 228
[2010] FMCA 863
[1994] HCA 4
(1948) 76 CLR 584
(2011) 193 FCR 526
(2012) 248 CLR 500
(1977) 180 CLR 266
(1998) 195 CLR 232
(2014) 253 CLR 169
(2002) 170 FLR 290
(2015) 238 FCR 273
(2014) 253 CLR 243
(2012) 209 FCR 448
(2003) 140 IR 433
(2010) 245 FLR 242
(1993) 45 FCR 164
(1999) 43 IPR 545
(2008) 165 FCR 230
(2006) 158 IR 181
(2014) 223 FCR 334
(2001) 205 CLR 434
(2007) 72 IPR 555
(2014) 242 IR 1
(2014) 246 IR 441
(1998) 88 FCR 511
(2015) 233 FCR 46
(2014) 314 ALR 346
(1985) 158 CLR 661
(2011) 245 CLR 282
(2012) 203 FCR 1
(1984) 158 CLR 661
(2002) 118 FCR 236
(2012) 287 ALR 437
(1985) 156 CLR 473
(2007) 164 IR 299
(2011) 280 ALR 503
(2009) 180 IR 350
(1995) 37 NSWLR 438
[2010] HCA 12
[2001] HCA 18