Daynes v I-MED Central Queensland Pty Ltd - [2024] NSWSC 1064

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Daynes v I-MED Central Queensland Pty Ltd [2024] NSWSC 1064
Hearing dates: 8, 9, 10, 11 July 2024
Date of orders: 22 August 2024
Decision date: 22 August 2024
Jurisdiction: Common Law
Before: Cavanagh J
Decision:
(1) Judgment for the plaintiff in the sum of $348,179.96.
(2) The defendant is to pay the plaintiff's costs as agreed or assessed up to and including 28 June 2024.
(3) The plaintiff is to pay the defendant's costs as agreed or assessed from 29 June 2024.

Catchwords:
EMPLOYMENT LAW – contract – summary dismissal – whether the plaintiff engaged in misconduct of sufficient seriousness to justify summary dismissal – allegations of sexual harassment and bullying – whether allegation of sexual harassment proved – whether the plaintiff’s conduct amounted to bullying – relevance of the defendant’s workplace policies
CONTRACT – contract of employment – contractual power to terminate without notice where employee engaged in “serious misconduct” – whether employer obliged to act reasonably in forming the view that employee had engaged in such misconduct
DAMAGES – contract of employment – wrongful dismissal – whether absent the wrongful termination the plaintiff would have continued working for the defendant for the period alleged – whether the defendant would have exercised its power to terminate on notice at the end of the fixed term period

Legislation Cited:
Civil Procedure Act 2005 (NSW), s 100
Evidence Act 1995 (NSW), s 140

Cases Cited:
Bartlett v Australia and New Zealand Banking Group Ltd (2016) 92 NSWLR 639
Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66
Briginshaw v Briginshaw (1938) 60 CLR 336
Clouston & Co Ltd v Corry [1906] AC 122
Darling Island Stevedoring & Lighterage Co Ltd v Jacobsen (1945) 70 CLR 635
Eldridge v Wagga Wagga City Council [2021] NSWSC 312
Guthrie v News Ltd (2010) 27 VR 196
Harden v Willis Australia Group Services Pty Ltd [2021] NSWSC 939
Hadley v Baxendale (1854) 9 Ex 341
Johnson v Perez (1988) 166 CLR 351
New South Wales Cancer Council v Sarfaty (1992) 28 NSWLR 68
Martinez as trustee for Martinez HWL Practice Trust as representative of the partners trading as HWL Ebsworth Lawyers v Griffiths as trustee for the Griffiths HWL Practice Trust [2019] NSWCA 310
North v Television Corporation (1976) 11 ALR 599
Pastrycooks Employees, Biscuit Makers Employees and Flour and Sugar Goods Workers Union (NSW) v Gartrell White (No 3) (1990) 35 IR 70
Roderick v Washington H Soul Pattinson & Company Ltd (No 2) [2020] NSWSC 1224
Service Station Association Ltd v Berg Bennett & Associates Pty Ltd (1993) 117 ALR 393
Silverbook Research Pty Ltd v Lindley [2010] NSWCA 357
United Group Rail Services Ltd v Rail Corporation of New South Wales (2009) 74 NSWLR 618
Willis Australia Group Services Pty Ltd v Mitchell-Innes [2015] NSWCA 381

Texts Cited:
Riley, O’Grady and Sappideen, Macken’s Law of Employment, (Thomson Reuters, 9th ed, 2022)
Supreme Court Practice Note 16 (16 June 2010)

Category: Principal judgment
Parties: Anthony Kevin Daynes (Plaintiff)
I-MED Central Queensland Pty Ltd (Defendant)
Representation:
Counsel:
A Moses SC with J Bennett (Plaintiff)
L Saunders (Defendant)
Solicitors:
Gillis Delaney Lawyers (Plaintiff)
McCullough Robertson (Defendant)

File Number(s): 2022/00213195
Publication restriction: Nil

JUDGMENT

The plaintiff claims damages arising from the alleged wrongful termination of his employment with the defendant.
During the period 2 August 2019 to 11 May 2022, the plaintiff was employed by the defendant working as a senior radiologist in the defendant’s Cairns clinic.
On 11 May 2022, the plaintiff's employment was terminated summarily. The plaintiff disputes that the defendant was entitled to so terminate his employment.
The defendant says that during the period prior to termination the plaintiff had engaged in misconduct including bullying, victimisation and sexual harassment and that this justified his dismissal.
The case proceeded over four days commencing on 8 July 2024. Mr Moses SC appeared with Mr Bennett for the plaintiff and Mr Saunders appeared for the defendant.
There are really two issues for determination, being:

was the defendant entitled to terminate the plaintiff's employment in the way in which it did?

If not, what is the amount of damages to which the plaintiff is entitled?

Background

The plaintiff is a very experienced radiologist. He obtained specialist registration as a radiologist in 1987 and worked in that capacity until May 2022. He has not worked since his employment was terminated by the defendant. He is currently 72 years of age.
Since becoming a specialist radiologist, he has worked in Cairns. Indeed, after commencing work in Cairns, he quickly became a partner in the only radiology practice in Cairns. He and his partners went on to sell that business. Thereafter, he remained an employee of that business for a period before working for three years again in Cairns undertaking breast screening.
In 2010, he and his wife, Ms Gordon-Daynes, established their own radiology practice in Cairns. Over the next nine years that business developed into a very successful practice. In 2019, they sold that business to the defendant.
The amount which he received (and by this I mean the companies through which the practice operated) from the defendant was the subject of some disagreement in the trial but the sale and purchase deed records the completion payment as $15,000,087.00 (perhaps as adjusted in accordance with other terms of the deed). It was put to the plaintiff that he received $20 million (again meaning the companies through which he operated).
For the purposes of these proceedings, it does not matter. The business that the plaintiff and Ms Gordon-Daynes started in 2010 was sold for a substantial sum in 2019.
It was a term of the Sale and Purchase Deed (“the deed”), indeed a condition precedent to completion, that the plaintiff would enter into an employment agreement with the defendant on the terms set out in schedule 11 to the deed. This was described by both parties during the course of the hearing as a “golden handcuffs” arrangement in the sense that the defendant, having agreed to pay a sum to the plaintiff’s companies for purchase of the business, required the plaintiff to work in the business for a fixed term, in this case three years.
As must be apparent from the successful development of his practice during the period 2010 to 2019, the plaintiff had a reputation as an expert radiologist, with a focus on women's imaging. When the plaintiff commenced his practice in 2010 he was the only radiologist working in the practice. Ms Gordon-Daynes was the practice manager.
In 2015 they hired another radiologist and in 2017 they hired a further radiologist.
According to the plaintiff this allowed him to focus on breast work and the women's imaging side of the practice which included obstetrics, bone density, and breast imaging. The other radiologists handled more of the general radiology including CT and MRI.
Ms Gordon-Daynes was also critical to the success of the practice as she appears to have done everything other than the actual radiology work. By the time the practice was sold there were approximately 25 to 30 people working in the practice. The plaintiff took great pride both in his expertise as a radiologist specialising in breast work and the care and concern that he gave to his patients. He says that his practice became the leading site in Cairns for breast investigation work.
He says that, by the time of sale of the business, he was working extensive hours including weekends. It is not necessary to say more about the practice as it operated prior to its sale to the defendant. It seems clear that the plaintiff had an excellent reputation as a radiologist and that the business was successful.
Having said that, that is not the issue in these proceedings. The issue in these proceedings is, put generally, his behaviour at the workplace, specifically as particularised during the period September 2020 until his termination in May 2022 (being the time frame identified by the defendant).
Whilst the plaintiff's intentions regarding working after the expiry of the initial fixed term of three years is a matter of some dispute in these proceedings, it is clear that the plaintiff and Ms Gordon-Daynes decided to sell their practice as part of the process of, at the very least, winding back from their work. The plaintiff describes this as a form of succession plan. However, he says in is affidavit that he wanted to continue working as long as possible after the proposed sale, focusing on breast work. His work provided him with fulfilment and motivation. He says that he wished to continue working at least in a part-time capacity as long as he was physically and mentally able to do so. He refers to a colleague who worked into his 80s.
As I have said, it was a term of the sale of the business that he enter into a contract of employment with the defendant. The plaintiff entered into that contract of employment on 18 July 2019. The expiry date was noted as being three years from the start date.
The plaintiff commenced employment with the defendant on 2 August 2019, the day after completion of the sale. He continued working as a senior radiologist undertaking similar duties to that undertaken in the practice before it was sold to the defendant. During that time, he was the subject of a number of complaints (three complaints) from a radiographer, Nina Odgers, who had commenced working in the Cairns clinic in October 2019. Further, he was also the subject of a complaint relating to his conduct during the 2021 work Christmas party. It is alleged that during that function the plaintiff had performed a pelvic thrust in the direction of a female employee. The plaintiff denies any such conduct.
Following receipt of that complaint, there were some discussions between the plaintiff and the defendant (in particular with Bronwyn Nicholson, the defendant's general manager for Queensland and the Northern Territory). Those discussions might be best described as an attempt by the defendant to suggest to the plaintiff that it would be necessary to undertake a formal investigation into his conduct and, as Ms Nicholson had some concern that there may be some substance to the complaints, it might be preferable for all concerned if the plaintiff moved on without the need for any formal process.
The plaintiff was not interested in that approach. The defendant then wrote to the plaintiff on 20 December 2021 giving notice of a disciplinary investigation into his conduct. Annexed to that letter was a schedule of allegations made by Ms Odgers and Ms Turner (the person to whom the pelvic thrust had allegedly been directed at the Christmas party).
The plaintiff immediately instructed solicitors (the solicitors who continue to act for him in these proceedings). They responded challenging a number of matters. There followed ongoing correspondence between the defendant and the plaintiff's solicitors.
The defendant appointed an independent consulting firm (Work Dynamic) to carry out an investigation into the complaints and alleged conduct.
On 1 April 2021, Ms Nicholson received a draft report from Work Dynamic. On the face of the report, Work Dynamic conducted a thorough investigation. It concluded that the matters raised by the various persons as to the conduct of the defendant were “substantiated” and that the plaintiff had engaged in conduct contrary to the defendant’s Workplace Policies Handbook (“the handbook”).
In these proceedings, the plaintiff takes issue with the instructions provided to Work Dynamic, the content of the report and the conclusions. The opinion of the investigators is not evidence of the fact in these proceedings. It merely provides the context in which the decision was made.
On 11 May 2022, Ms Nicholson decided to terminate the plaintiff’s employment and wrote to the plaintiff doing so. She did so after speaking with her colleagues in the defendant's human resources and legal department. She considered that the employment relationship was no longer tenable and that the plaintiff's conduct was serious, particularly the alleged chronic bullying towards Ms Odgers. She felt she had no choice but to terminate based on the investigation findings.
On 16 June 2022, the solicitors for the plaintiff responded to the termination letter:

denying that any conduct by him amounted to serious misconduct;

not accepting the purported termination;

accepting that the purported termination evidenced an intention by the defendant to no longer be bound by the terms of the employment contract and was a repudiation of the employment contract; and

accepting the repudiation and terminating the contract.

On 21 July 2022, the plaintiff commenced these proceedings.
As set out in the Statement of Claim, the plaintiff seeks damages, reimbursement of sums and interest. The sums referred to in paragraph 9 and 10 of the Statement of Claim are described as licence fees up to a maximum amount of $3500. No submission was made about these amounts during the hearing.
The plaintiff pleads that, in terminating the employment in the way in which it did, the defendant breached the employment contract and/or evidenced an intention not to be bound by the terms of the contract. This constituted a repudiation of the contract.
In the alternative, the plaintiff pleads that it was a term of the employment contract that, in forming the opinion that the plaintiff engaged in serious misconduct, the defendant was obliged to:

act reasonably in so far as its process for reaching that opinion was concerned; and/or

exercise its discretion in a manner that was not arbitrary, unreasonable or capricious.

The plaintiff pleads that the defendant was in breach of these terms because the defendant:

did not act reasonably in its process of reaching its opinion that the plaintiff engaged in seriousness misconduct; and/or

failed to exercise its discretion in a manner which was not arbitrary, unreasonable or capricious.

The basis on which the defendant is alleged to have so acted is particularised as including:

the defendant refused to provide the plaintiff with documents requested in order to respond to the allegations;

the plaintiff was not told the basis on which any of the allegations made against him were said to be substantiated;

the plaintiff was not provided with any opportunity to respond to the evidence relied upon by the defendant;

the plaintiff was informed by a letter dated 8 April 2022 that he would be provided an opportunity to respond, but this was never provided.

The plaintiff pleads that the defendant's failures have caused him to suffer loss and damage equivalent to the amount claimed in respect of the alleged repudiation of the contract. Those amounts are:

an annual salary of greater than $500,000 per annum or 20% of billings;

a regional allowance of $100,000;

a clinic director allowance of $40,000 per annum; and

reimbursement of licence fees.

In other words, the plaintiff seeks the same amounts whether claiming damages based on the alleged repudiation of the employment contract or damages based on the failure to act reasonably. This was confirmed by Mr Moses during closing submissions in the sense that Mr Moses accepted that, if the plaintiff succeeded on his primary case, he would obtain no additional benefit from establishing the alternative case (based on the failure to act reasonably).

The evidence

Evidence was adduced from the following persons:

the plaintiff – affidavits dated 29 September 2023 and 29 January 2024;

Kayla Della Bella – affidavit dated 7 February 2024;

Dr Timothy Elston – affidavit dated 31 January 2024 – Dr Elston was not required for cross-examination;

Philomena Crew – affidavit dated 2 February 2024 – Ms Crew was not required for cross-examination;

Dr Angela Robson – affidavit dated 9 February 2024 – Dr Robson was not required for cross-examination;

Dr Ahmed Kamalaldin – affidavit dated 21 February 2024 – Dr Kamalaldin was not required for cross-examination;

Lisa Couch – affidavit dated 21 March 2024;

Bronwyn Nicholson – the defendant's Queensland general manager – affidavits dated 13 November 2023 and 15 March 2024;

Nina Odgers – affidavits dated 13 November 2023 and 11 March 2024;

Janelle Bailey – affidavit dated 15 November 2023;

Skye Cracknell – affidavit dated 15 November 2023;

Keri Kamau – affidavit dated 15 November 2023;

Mandy Pengilly – affidavit dated 15 November 2023;

Charlotte Wilson – affidavit dated 15 November 2023; and

Paul Wellby – affidavit dated 2 July 2024.

Much of the evidence was not the subject of dispute and a number of witnesses were not required for cross-examination.
The focus of the dispute was very much on whether the plaintiff engaged in the conduct alleged and how the defendant dealt with the complaints and ultimately made its decision.
Except in respect of some answers given by the plaintiff, I consider that all of the witnesses were giving evidence in a genuine manner and to the best of their recollection. Indeed, as it emerged, a number of the aspects of the plaintiff's behaviour towards Ms Odgers were not in dispute.
The parties took different views as to the significance, impact or consequences of such behaviour. Some witnesses’ perception of some conduct might differ depending on their perspective and views of the persons involved. That is not unusual in this type of case. Some witnesses used generalised or emotive language to describe some conduct, even though the conduct when looked at perhaps dispassionately might not be described in such a way.
I am unable to accept the plaintiff’s statement made during cross-examination that, contrary to all earlier indications, he had made a decision at some time whilst he was employed by the defendant to continue working for the defendant after the expiry of the fixed term because “he needed the money”.
He was 70 years of age at the time of his termination. He and Ms Gordon-Daynes had received through various corporate structures an amount of at least $15–20 million. He may have been unhappy with the amount he received as an earnout payment (as determined by the deed) but the assertion that he needed to keep working with the defendant for the money defies belief.
No evidence was adduced in support of that suggestion. I do not accept that the defendant was in some way required to disprove the assertion. The plaintiff's change of mind might have been supported by Ms Gordon-Daynes but she did not give evidence, even though she was plainly available as she was in court.
I found this surprising because her evidence might have been important. Having said that, the only inference I draw in accordance with Jones v Dunkel (1959) 101 CLR 298 is that it would not have made the plaintiff's case any better.
The plaintiff is also pursuing proceedings in the Federal Court against the defendant in respect of issues arising from the amount of the earnout payment made by the defendant to the plaintiff.
It is not necessary that I make findings about the level of support or arrangements put in place which might have contributed to the level of the earnout payment. The plaintiff’s suggestion that he needed to keep working for the money seems conveniently self-serving.
Subject to some observations about the evidence of some of the witnesses, it is not necessary that I provide a summary of the evidence of each witness in this judgment. This is because:

in respect of some of the conduct said to constitute bullying, there is not much dispute as to the conduct but to the extent there is any dispute I will identify it;

in respect of the conduct said to constitute sexual harassment, there is only one incident, being the alleged pelvic thrust; and

there are some other statements which form part of the evidence, such as:

a comment said to be made by the plaintiff, even before the selling of the business about a person wearing a low-cut top; and

a comment made to another female employee to the effect that she was lucky it was not “hug your boss day”.

This evidence might have been adduced by the defendant to bolster or add support to the idea that the plaintiff might have done a pelvic thrust towards Ms Turner at the Christmas party (that is, this conduct was consistent with earlier conduct at the workplace), but they add little to the determination of whether the plaintiff actually engaged in the conduct at the Christmas party.
It is hardly necessary to say that any form of sexual harassment, suggestive or explicit conduct, or sexually charged behaviour, is inappropriate, wrong, should not be tolerated or condoned and should be the subject of some form of response from the employer.
The same must be said of bullying at the workplace. It should not be tolerated or condoned. It is known to be injurious to the health of workers and has no place in society, including at the workplace.
Having said that, my task is not to offer a social commentary on aspects of the plaintiff's conduct, but to make findings of fact as to what the plaintiff actually did and the legal rights and obligations of the parties’ consequent upon those findings.

The termination letter

On 11 May 2022, the defendant wrote to the plaintiff care of his solicitors terminating his employment effective immediately, purportedly in accordance with clause 7.3 of the Radiologist & Nuclear Medicine Physician’s Terms and Conditions of Employment.
The defendant referred specifically to the results of the investigation undertaken on its behalf and annexed to the letter the factual findings made by the investigators which the defendant said supported the immediate termination.
Specifically, the defendant said:

“The investigators also found that you breached several I-MED policies, specifically:

you engaged in bullying conduct towards Ms Odgers in breach of I-MED’s Workplace Behaviours and Equal Opportunity Policy;

you engaged in victimisation towards Ms Odgers in breach of I-MED’s Workplace Behaviours and Equal Opportunity Policy;

you engaged in sexual harassment towards Ms Turner in breach of I-MED’s Workplace Behaviours and Equal Opportunity Policy; and

you breached I-MED’s Code of Conduct and the I-MED Radiology Network Values.

I have considered the findings of the investigation. I consider that the process conducted was fair and have accepted the findings in their entirety.”

The defendant then said:

“I have concluded that your conduct above, and in particular the sexual harassment, amounted to serious misconduct in direct breach of your duties and responsibilities as an I-MED employee”.

As is apparent from the termination letter, the defendant relied on three types of conduct as granting the right to terminate being:

bullying conduct towards Ms Odgers;

victimisation towards Ms Odgers; and

sexual harassment towards Ms Turner.

The parties accept that these proceedings are not in the nature of an application for review of the decision having regard to a consideration of the information available to the defendant at the time. The defendant accepts that it must prove in these proceedings through admissible evidence that it was entitled to terminate in the manner in which it did.
The question of whether the defendant was entitled to terminate is not confined either to the matters raised in the termination letter or limited to the information available to the defendant at that time. Similarly, it is not necessary for the defendant to prove every matter, fact or relevant consideration that is referred to in the termination letter.
Having said that, the defendant maintains that it has established each and every one of the matters referred to in the termination letter and that it has established that the plaintiff engaged in bullying, victimisation and sexual harassment whilst at the workplace, which entitled the defendant to terminate in accordance with clause 7.3 of the employment contract.

The investigation report

Work Dynamic prepared an extensive report dated 1 April 2022. The content of the report was governed by the instructions provided by the defendant. Those instructions were to investigate for the purposes of determining whether the allegations against the plaintiff were substantiated. Work Dynamic described its role in the investigation as being to make findings of fact in relation to:

complaints made by Ms Odgers and Ms Turner about the plaintiff; and

whether any of the substantiated allegations constituted misconduct or breach of any relevant I-MED policies or codes.

It did just that. That is, it purported to make findings of fact as to the complaints made by Ms Odgers and Ms Turner. Ms Nicholson acted on those findings.

Summary dismissal

The essential issue in these proceedings is whether the plaintiff engaged in conduct so as to entitle the defendant to terminate him without notice. The defendant accepts that it must establish that it had a right to terminate without notice. This requires it to establish both that:

the plaintiff engaged in certain conduct; and

the conduct gave the defendant a legal right to terminate the plaintiff's employment without notice.

The starting point for an assessment of whether the summary dismissal of an employee was justified is the terms of the contract of employment (see Eldridge v Wagga Wagga City Council [2021] NSWSC 312 at [285] per Bell P (“Eldridge”)).
As Smithers and Evatt JJ observed in North v Television Corporation (1976) 11 ALR 599 at 609, until the relevant terms of the contract are identified “it is impossible to say whether or not any particular conduct is in breach thereof or is a breach of such gravity or importance” so as to justify summary dismissal.
Whilst the contract is the starting point, the general law of summary dismissal is relevant to determining its proper construction (Willis Australia Group Services Pty Ltd v Mitchell-Innes [2015] NSWCA 381 at [87] per Macfarlan JA, Ward and Leeming JJA relevantly agreeing) and colours the assessment of whether conduct is sufficiently serious so as to warrant summary dismissal. Whether conduct of an employee is sufficient to justify summary dismissal is a question of fact and there is “no fixed rule of law defining the degree of misconduct which will justify dismissal” (Clouston & Co Ltd v Corry [1906] AC 122 at 129; Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66 at 73).
The right of an employer to terminate the employment of an employee summarily or without notice is a right that should only arise in exceptional circumstances. Exceptional circumstances would generally involve some form of serious wrongdoing or misconduct on the part of the employee.
Contracts of employment must be interpreted with that principle in mind.
In Bartlett v Australia and New Zealand Banking Group Ltd (2016) 92 NSWLR 639 (“Bartlett”), Macfarlan JA considered the impact of the general law of summary termination on the construction of a termination clause in a given contract of employment at [33]:

“Another relevant consideration is that the agreement was entered into against the background that at common law an employer’s right to summarily dismiss an employee is a narrow one. It will only arise where the employee has engaged in conduct ‘which in respect of important matters is incompatible with the fulfilment of an employee’s duty, or involves an opposition, or conflict between his interest and his duty to his employer, or impedes the faithful performance of his obligations, or is destructive of the necessary confidence between employer and employee’ (Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66; [1933] HCA 8 at 81). Whilst parties may, by contract, confer a broader right to dismiss summarily their contract should be scrutinized carefully before concluding that they have done so.”

Whilst the parties to the employment contract are obviously bound by the terms on which they agreed, the court will construe the employment contract reasonably and purposefully, having regard to the fact that it could not have been the intention of the parties that an employer would have an unfettered or broad right to summarily dismiss an employee in respect of just any breach of the employment contract.
In Eldridge, Bell P (as the Chief Justice then was) set out the applicable legal principles in detail at [285]-[298]. After reviewing the authorities, his Honour observed at [297]:

“What is required is the ‘exceptional circumstances’ founded in conduct ‘destructive of the mutual trust between the employer and employee’, taking into account the primacy of the rights of termination as they arise under the relevant contract. The relevant breaches must be ‘serious or persistent’, suggesting in the context of the Standard Contract, that persistent breaches need not necessarily have the same degree of seriousness required of a single breach to justify summary dismissal.”

Bullying is wrong and inappropriate for a number of reasons and on a number of different levels. It should not take place in the workplace, and it should not be tolerated or condoned.
However, describing something as bullying does not of itself lead to a particular result. Identifying that a particular act of an employee might fall within the meaning of bullying as defined in a particular workplace handbook may not of itself justify summary dismissal.
In reality, whether an employee’s conduct justifies summary dismissal is often a question of fact and degree.
When faced with an allegation of bullying, an employer often has competing responsibilities. An employer has an obligation to ensure the health and safety of all of its employees. The employee the subject of the bullying may be at risk of injury to their health. An employer must take reasonable steps to prevent such injury.
On the other hand, the employer also has obligations to the person against whom the complaint is made. Those obligations may include to treat the employee fairly and to be careful not to take adverse action which is not warranted. Of course, employees are often valuable resources, and an employer will generally have systems or processes in place to deal with such complaints, having regard to these competing responsibilities or obligations as well as having regard to its own commercial interests.

The contract of employment

The contract specified the salary and benefits to which the plaintiff was entitled.
The earnout payments were specified in schedule 3 to the deed. The additional amounts payable were dependent upon the number of MRI procedures achieved by the business in the 12-month period after the completion date. For example, if there were less than 1250 MRI procedures in the 12-month period, the plaintiff would not receive any additional amount.
However, there was then a scale of additional payments ranging between an additional $2.33 million to an additional $7 million depending on the number of excess MRI procedures. In order to earn $7 million, the number of excess MRI procedures would need to be more than 3750. Plainly, the plaintiff had a real interest in efficiencies and productivity during his employment by the defendant.
The proceedings being pursued in the Federal Court against the defendant relate to the amount of the earnout payment paid by the defendant and the alleged problems at the Cairns clinic which are said to have negatively impacted upon the amount of the payment.
The employment contract is annexed to the deed. The contract comprises a document headed “Schedule of Commercial Terms – employee” which is dated 31 May 2019 and another document titled “Radiologist & Nuclear Medicine Physician’s Terms and Conditions of Employment” which is dated 1 May 2016. In other words, the contract comprises a document which was signed by the plaintiff on 18 July 2019 with standard terms and conditions attached thereto.
As set out in the schedule of commercial terms, the plaintiff agreed to undertake radiology services for an original fixed term of three years with conversion thereafter to an indefinite term with a notice period. The expiry date was three years from the start date.
A notice period of three months would apply from that date onwards. The defendant accepts that if it did not terminate the plaintiff in the manner that it did it would have been required to give the plaintiff 3 months’ notice of its intention to terminate at the end of the fixed term.
The plaintiff was employed at a base salary of $500,000.00 per annum or 20% of billings, whichever was the greater. The plaintiff was also entitled to a regional allowance of $100,000.00 per annum, and a clinic director allowance of $40,000.00 per annum.
The plaintiff agreed that the commercial terms, plus the standard conditions of employment, constituted the binding contract of employment and the contract formed the entire agreement between the plaintiff and the defendant in relation to the plaintiff's employment.
The commercial terms document also included the following clause (on which the defendant placed some reliance):

“The employee also acknowledges and agrees that the Employee has been provided with a copy of the I-MED Workplace Policies Handbook, that the Employee has read and understands each of the policies contained in the Handbook and that the Employee will comply with the policies in the Handbook, as amended from time to time. The I-MED Workplace Policies Handbook does not form part of this employment agreement”.

The standard terms and conditions of employment contained what might be described as standard terms and included terms specifying the obligations of the parties and terms governing the termination of the agreement.
Clause 1.9 set out the employee’s obligations as follows:

“You must at all times perform your work and conduct yourself:
(a) promptly, faithfully and diligently;
(b) in a professional and commercial manner;
(c) with care, diligence and skill having regard to your status as a professionally competent Radiologist or Nuclear Medicine Physician;
(d) in accordance with reasonable directions given by us, the Business Unit Management Committee and the Clinical Management Committee;
(e) in accordance with our values and ethics;
(f) in accordance with minimum performance requirements as agreed between I-MED, the Business Unit Management Committee and the Clinical Management Committee from time to time; and
(g) in accordance with the Medical Board, RANZCR and ANZAPNM approved quality standards and appropriate managerial standards, including the standards set out from time to time in Clinical Protocols and Practice Guidelines”

Clause 7 covered termination:

“7.1 Term
The provisions of this clause 7 apply despite clause 1.4.
7.2 Immediate termination by you
You may terminate this agreement immediately and without providing notice to us if:
(a) we breach a material term of these terms and conditions and, if the breach is capable of being remedied, we cannot or do not remedy the breach within 30 days, or such shorter time as is reasonable, of receiving notice from you specifying the breach;
(b) you are not paid when payment is due under these terms and conditions and at least $5,000 is overdue for a period of more than 30 days after you give us a notice setting out the amount due and demanding payment; or
(c) we become insolvent, are deregistered, or a liquidator, administrator, receiver, receiver and manager or other controller (as defined in the Corporations Act 2001) is appointed to it or substantially all of its assets (other than pursuant to a scheme of arrangement while solvent).
If you terminate this agreement pursuant to this clause 7.2, you will not be bound by the restrictions contained in clauses 9.1(a) and 9.1(b).
7.3 Immediate termination by us
We may terminate this agreement immediately and without providing notice to you if:
(a) Serious misconduct: you:
(1) commit any dishonest, fraudulent, reckless or criminal act or omission in connection with the Business, as determined by I-MED and/or the I-MED Network Pty Limited Board or the Business Unit Management Committee; or
(2) commit any other act or omission, that we consider materially and detrimentally affects us or the I-MED Network including deliberate or serious misconduct, serious professional misconduct or serious breach of duty;

(b) Repudiation: you repudiate these terms and conditions, cease or suspend performing your obligations under them, or inform or indicate to us or I-MED that you intend to cease or suspend performing your obligations;
(c) Breach: you breach a material term of these terms and conditions;
(d) Repeated breaches: you repeatedly or persistently breach these terms and conditions;
(e) Failure to follow lawful and reasonable directions: you refuse to comply with any lawful and reasonable direction given to you in the course of your employment;
(f) Bankruptcy: you become bankrupt, commit an act of bankruptcy, enter into any arrangement or assignment for the benefit of your creditors, or admit in writing to being insolvent or unable to pay your debts when they fall due;
(g) Deregistration: you cease to be eligible to practice as a Radiologist or Nuclear Medicine Physician; or
(h) Engage in any conduct for which the Employer may terminate your employment at law.”

Clause 7.4 covered termination with notice, the notice period being the period specified in the commercial terms document.
The defendant relies on clause 7.3 suggesting that it was entitled to terminate without notice, either on the basis that:

the plaintiff’s conduct constituted serious misconduct; or

the plaintiff by his conduct repudiated the agreement; or

the plaintiff by his conduct was in breach of a material term; or

the plaintiff by his conduct had engaged in repeated breaches; or

the plaintiff failed to follow lawful and reasonable directions; or

the plaintiff engaged in conduct for which the defendant would be entitled to terminate his employment at law.

For the purposes of clause 7.3(c) the defendant relies on clause 12 as follows:

“You must at all times comply with the policies and procedures outlined in the I-MED Workplace Policies Handbook as amended from time to time. A copy of the I-MED Workplace Policies Handbook will be issued to you together with these terms and conditions. The I-MED Workplace Policies Handbook does not form a part of this agreement.”

Although there seemed to be some dispute between the parties as to whether the Handbook formed part of the agreement, it is plain from clause 12 that it does not.

The defendant's position

The defendant says the plaintiff was at all times required to conduct himself “in accordance with I-MED’s values and ethics” as set in clause 9 of the standard terms and conditions. According to Ms Nicholson, the plaintiff was provided with a copy of the Handbook. He was obliged to comply with the policies and procedures outlined in the Handbook, having regard to clause 12.
This required the plaintiff to:

as per the code of conduct, respect fellow staff, show willingness to solicit fellow staff members’ opinions and value the feedback, treat staff with respect, dignity and compassion;

as per the workplace behaviours and equal opportunity policy:

not engage in sexual harassment, which included humour such as smutty and sexist comments or innuendo, including with intent to offend;

not engage in workplace bullying, being “repeated, unreasonable behaviour directed towards a worker … that creates a risk to their health and safety” including where conduct was unintentional in that it was not intended to cause humiliation or stress but could reasonably be expected to have that effect; and

as a supervisor, “take all reasonable steps to ensure that the work environment is free from the conduct prohibited under this policy”.

The defendant says that (referring to clause 7.3(e)), its employees were on notice that the defendant took allegations of prohibited conduct in the workplace very seriously and that dismissal could be a consequence.
Serious misconduct is a defined term. It includes the commission of any dishonest, fraudulent, reckless or criminal act or omission, or any other act or omission that “we consider” materially and detrimentally affects the defendant including “deliberate or serious misconduct, serious professional misconduct or a serious breach of duty”.
The defendant submits that the definition imports a level of subjectivity, that is, if the conduct occurs and the defendant formed the state of mind required, that is sufficient to allow termination without notice.
In the end, the defendant’s case is simply put, being that:

the plaintiff engaged in certain conduct, being:

the pelvic thrust at the Christmas party

the conduct described by Ms Odgers and others which the defendant generally described as bullying and victimisation

such conduct constituted a breach of the defendant’s workplace policies with which the plaintiff was bound to comply whilst at the workplace;

such that a breach of those policies rendered him in breach of the contract of employment;

such that he was engaged in serious misconduct as defined in clause 7.3; and

such conduct was considered by the defendant to materially and detrimentally affect it;

such that the defendant was entitled to and did terminate the plaintiff's employment.

The allegation of sexual harassment

The defendant says that it was entitled to terminate having regard to all of the conduct of the plaintiff but the allegation of sexual harassment (on which the defendant placed emphasis in its termination letter) relates only to one incident.
The defendant says that the plaintiff engaged in sexual harassment (as referred to in the Handbook) of Ms Turner. There is a dispute between the parties as to with which Handbook the plaintiff was provided, although I doubt that it matters.
The Handbook dated February 2020 has a long description of sexual harassment. It is said to mean any unwelcome conduct of a sexual nature that a reasonable person would find offensive, humiliating or intimidating having regard to all of the circumstances. It is said that a person sexually harasses another person if they:

make an unwelcome sexual advance; or

make an unwelcome request for sexual favours; or

engage in other unwelcome conduct of a sexual nature in relation to the person harassed.

Further, the Handbook specifies that it can be sexual harassment, even if the person did not intend to sexually harass anyone.
The suggestion that the plaintiff engaged in sexual harassment at the workplace was based on one incident at the 2021 Christmas party. The defendant held its Christmas party on 11 December 2021.
At some point Ms Turner arrived. The Christmas party was fancy dress and Ms Turner was wearing a large foam costume over her clothes in the shape of a holly leaf (her first name being Holly).
According to the plaintiff, there were about 20 to 30 people on the veranda of the Edge Hills Bowls Club, where the function took place.
Although the theme of the party was to come as something relating to your first initial or name, most people did not come dressed in costume or were dressed simply. The plaintiff was not in costume. The plaintiff consumed only one glass of wine at the function. After she arrived, Ms Turner stood in around the circle of people where the plaintiff was.
According to the plaintiff, he had a conversation with Ms Turner to the following effect:

“Plaintiff: Did you come as a Christmas tree?
Ms Turner: I’m Holly. Obviously, it’s holly.
Plaintiff: So are these prickly holly things?
Ms Turner: What are you dressed as?
Plaintiff: Well, I tried to work out what to come as. I could either come as an angel or an arsehole.”

The plaintiff says that his comments were supposed to be a self-deprecating joke at his own expense.
Ms Turner then left the group but returned sometime later. According to the plaintiff, there was a further conversation as follows:

“Approximately 15 minutes later, she returned to the same position to my left, wearing regular clothes. Someone – I cannot remember if it was me or another member of the group – said words to the effect, ‘You’ve removed your costume.’ Ms Turner relied [sic] with words to the effect:
Yeah. Well it’s pretty hot. I made the costume myself. I’m pretty proud of it. It’s made of plastic. I took it off because it was hot.”

(Emphasis in original).

The plaintiff says that he did not leave the group at all during the function. He only stayed a short time and then went home. He says that at some stage, while standing in the circle, he responded to a comment made by another member of the group, Mr Mohan (a sonographer), about kiwis and hakas. He says that he responded by moving a little on the spot and raising his hands to face level as if to demonstrate some form of Haka.
He does not recall Ms Turner being in the group at that particular time. He may be wrong about that as there is evidence from other persons that at some time Ms Turner and Mr Mohan were standing in the same group.
He denies ever making a pelvic trust towards Ms Turner.
Ms Turner did not give evidence. The defendant relied on an affidavit from Mandy Pengilly, who became the general manager of the defendant in Queensland as of June 2022, as to why Ms Turner was not called. It seems that there had been an approach to Ms Turner to give evidence but she said she could not cope with giving evidence and did not want any confrontation.
I accept that the defendant determined, in the interests of Ms Turner, that she would not be required to give evidence. That leaves a gap in the evidence as it was she who made the complaint about the plaintiff's conduct.
According to Ms Nicholson, sometime in the week commencing 13 December 2021, she was informed by a member of the human resources team, Ms Murphy, that Ms Turner had made a complaint about the plaintiff to the effect that the plaintiff had acted inappropriately towards Ms Turner at a Christmas party function by thrusting into her and that this occurred in front of other colleagues.
There is a section in the Work Dynamic report which deals with the allegations relating to Ms Turner. Ms Turner provided information consistent with the complaints she had made and, on that basis, Work Dynamic considered that the complaint was substantiated and determined that the conduct represented sexual harassment, contrary to the defendant's Handbook dated March 2021.
In the Work Dynamic report, there is reference to comments being made by other employees adverse to the plaintiff, in particular, relating to comments or behaviour, heard or observed, by the plaintiff of a sexualised nature (that is at times other than the Christmas party).
Plainly, some other employees of the defendant felt that the plaintiff’s comments or behaviour was inappropriate at least on other occasions but I place no weight on these remarks or observations. The defendant does not rely on this earlier alleged behaviour as providing any part of the foundation for its termination.
Although the defendant did not adduce evidence from Ms Turner, and Ms Nicholson could only give evidence of her complaint, the defendant did adduce evidence from a witness, Janelle Bailey, a supervisor employed by the defendant, who was at the 2021 Christmas party. She observed Ms Turner walking to the party, observed her outfit and observed her enter the group. She says that at some point the plaintiff suddenly made a pelvic trust towards Ms Turner. She did not know whether it connected with Ms Turner because of the size of the costume covering her but suggested it could have. She says that she and Ms Turner exchanged a look as if to say why did that happen. The pelvic thrust was very brief and very odd, but she is sure it was a pelvic thrust directed towards Ms Turner. She thought it was inappropriate and out of line. She observed the plaintiff leave shortly after.
Ms Bailey was cross-examined as to her general recollection. Understandably, she seemed uncertain as to who was in the group at the time and where persons might have been standing. However, when asked to explain what she observed, she said:

“We were chatting about costumes because it was a dress-up party. I don’t know if Holly and Dr Daynes actually discussed that in private, but it was just a general conversation. And Dr Daynes then turned towards Holly’s side, and pelvic thrusted the side of her costume.”

She subsequently said she could not confirm that Dr Daynes contacted the costume. She could not recall any conversation at the time when she deposed her affidavit. When asked to describe the costume she said that Ms Turner was fully clothed but had foam covering all of her body, including around her chest and legs. Her arms were free.
She did not recall any conversation about kiwis and a haka. She did not agree that what she observed was the plaintiff doing an imitation of the haka. She rejected the proposition that she would have mixed up the two. Her concession that she did not know whether the plaintiff made contact with Ms Turner means that there is no evidence that the plaintiff thrusted into Ms Turner as referred to in the original complaint.
Lisa Couch was called on behalf of the plaintiff. She worked as a medical receptionist at the practice having formerly worked for the plaintiff prior to the defendant purchasing the practice. She gave evidence both about the plaintiff's relationship with Ms Odgers and the 2021 Christmas party. She was there at the party before the plaintiff. She recalled that he said he was not going to come originally but then said he would pop in for a quick glass of wine. She was standing in a group when Ms Turner arrived.
She recalled that Ms Turner was in costume. She recalled that the plaintiff was also standing in the group. She identified a number of other people who were in the group. She did not recall any interaction between Ms Turner and the plaintiff that evening. She did not observe the plaintiff do a pelvic thrust in the direction of Ms Turner. She said she would be surprised if he had, as that would be inconsistent with her observations as to the plaintiff's character and behaviour.
She recalled that later in the evening there was some game being played and there seemed to be some issue between Ms Turner and Mr Mohan. Ms Turner had tried to explain how to play the game to Mr Mohan and Mr Mohan told her to “fuck off”. Ms Couch was cross-examined. She was not asked any questions about those paragraphs of her affidavit dealing with the Christmas party.
Kayla Della Bella also attended the Christmas party. She was a medical receptionist and then became the practice manager. In her affidavit, she says that she did not hear the plaintiff make any comment about Ms Turner's costume. She did not see any physical contact between Ms Turner and the plaintiff. She recalled there was some awkwardness based on something that Mr Mohan had said to Ms Turner.
There is thus direct and specific evidence from one person who was at the Christmas party, Ms Bailey, that the plaintiff did a pelvic trust directed at Ms Turner. There is also direct evidence from another employee, Lisa Couch, who says that she was standing in the group where the plaintiff and Ms Turner were and did not observe any such conduct. There is then the further witness Ms Della Bella, who also did not observe anything like that happening.
An allegation of sexual harassment against any person in the workplace is obviously serious. It is a particularly serious allegation to make in the context of a senior radiologist specialising in women's imaging, particularly breast care. There is little doubt that such an allegation could impact upon the reputation of the employee and, indeed, that person's future prospects of employment.
As the plaintiff submits, the defendant bears the onus of proving those matters of fact on which it relies to justify its termination. Further, having regard to the seriousness of the allegation, the defendant must prove those matters to a high degree of satisfaction (see s 140 Evidence Act 1995 (NSW); Briginshaw v Briginshaw (1938) 60 CLR 336). This is because the allegations against the plaintiff could involve serious misconduct.
In the circumstances, I must be comfortably satisfied to a high degree that the matters relied upon by the defendant actually occurred.
In a case in which there is conflicting evidence as to the occurrence of the event but there is no reason to doubt that the beliefs held by the witnesses are honestly held, I must have regard not just to the statements of the witnesses as to what they saw and did not see, but also consider the probability or likelihood of the event occurring, the context in which the event is said to have occurred and whether there might be any explanation or reasons why such conduct occurred.
The difficulty for the defendant is that there is nothing in the context or circumstances or even surrounding conversation which provides any real explanation as to why the plaintiff would have done a pelvic thrust towards Ms Turner.
There is no suggestion that the plaintiff had consumed excess alcohol. There is no suggestion that the conversation between anyone in the group was of a sexual nature. There is no suggestion of the plaintiff making any sexualised comment to Ms Turner. Ms Turner did not generally work with the plaintiff. There is no evidence of any relationship between them. Except for the suggestions that the plaintiff may have been “slimy” or behaved inappropriately towards women at other times (which are only referred to in the investigators report and are somewhat vague and non-specific), there is really no explanation as to why the plaintiff would have done what he is alleged to have done.
Two witnesses speak of subsequent interactions with Ms Turner at the Christmas party and refer to some issue between her and another employee (I emphasise that I am not in any way suggesting that occurred or being critical of Ms Turner).
Ms Bailey struck me as a genuine person. I have no reason to doubt that she believes what she said she saw. However, it is at least possible that she saw what the plaintiff says he was doing, that is attempting to imitate a haka. He was standing next to Ms Turner at the time and did not actually come into contact with her or her costume in any way (as Ms Bailey ultimately accepted). The plaintiff denies making a pelvic thrust and one other person in the group (Ms Couch) did not see any such thing. I am unable to compare and assess what Ms Turner says she saw as she did not give evidence.
In the circumstances, I am unable to be satisfied to the required standard that the plaintiff engaged in conduct of a sexual nature towards Ms Turner at the Christmas party. The allegation of sexual harassment (however it may be defined) is not made out.

Bullying and victimisation

As notified to the plaintiff at the time of termination and as sought to be established in these proceedings, the defendant alleges that the plaintiff engaged in bullying and victimisation of Ms Odgers. It is not suggested that the plaintiff engaged in such conduct towards any other employee.

Nina Odgers

Ms Odgers first trained in radiography 50 years ago. She moved to Cairns in September 2019 and commenced employment with the defendant on 8 October 2019 in the Cairns clinic. She worked four days a week. She took time off during Covid and ultimately continued working after Covid three days a week.
She worked as a radiographer specialising in mammography. She says she regularly interacted with the plaintiff as the senior radiologist. She says that whilst initially she got on well with the plaintiff and was looking forward to working with someone such as the plaintiff, after a few months his behaviour towards her changed. She says his treatment of her became rude and she became uncomfortable at work. This first started in late 2019.
She acknowledges that the plaintiff's change in attitude towards her coincided with changes in the software that the clinic was using. That is, the defendant was changing from the systems which the plaintiff had used when he was running the practice to its own systems. She observed the plaintiff become frustrated with the technology and his criticism seemed to be directed at her. She felt the plaintiff was personally blaming her for technology problems which was unfair and upset her.
She recalled an incident when the software had a glitch and she was blamed by the plaintiff. She says this happened several times. She raised these issues with the chief radiographer, Paul Wellby. She said she heard Mr Wellby informing the plaintiff that the problems with the software were not her fault.
In late January 2020 she sent an email to Mr Wellby outlining her concerns about the plaintiff's conduct. In her affidavit she says that the content of the email accurately represented what was happening at the time. I accept her concerns, although I emphasise that the defendant does not rely on this conduct to justify its decision as it falls before the specified period.
During the next few months Ms Odgers interacted less with the plaintiff and she was able to tolerate his conduct. However, by August 2020, she was again becoming upset about his conduct towards her. She recalls receiving a phone call from the HR manager, Marcia Ross, about the issues. She then spoke to Ms Nicholson. She received feedback from Ms Nicholson that the plaintiff said that she talks too much to patients, which was the plaintiff's job. However, she felt that was part of her responsibility.
She recalls that after these discussions, the plaintiff spoke less and less to her. He would return hard copies of images to her with sticky post-it notes on them, with messages that she considered rude and abrupt. They would say things like “no images” or be written in capital letters. She did not give evidence of any actual rude words on the post-it notes but perceived the plaintiff’s method of communicating as rude and abrupt.
She did not observe the plaintiff treat other staff in that way. She also felt that the plaintiff was ignoring her. She would stand in the doorway and ask to speak to him. He would respond in a short and sharp tone. He would scowl or look at her with disdain. There were further discussions with human resources but she considered the plaintiff's conduct towards her did not change. This started to have a more significant effect on her. She felt he was intentionally trying to humiliate her. She would cry from time to time.
On 6 December 2021, she was leaving the staffroom when she heard the plaintiff coming towards her. She heard him say in a raised and angry tone “[t]he request said follow up. If it’s a follow-up, it’s old images. But oh no you can't get the old images for me”. She started to ask the plaintiff for a name of the patient. The plaintiff responded, “[d]on't you dare argue with me!”
She recalls that after this incident, both Ron Mohan and Paul Wellby went to speak to the plaintiff. She became very upset. She wanted an apology. She went home that day distressed and crying. She felt she had put up with two years of the plaintiff behaving towards her in an unacceptable manner. She then made a formal complaint to the defendant. She also made an application for workers compensation, which was accepted.
She acknowledges that she had made notes of the plaintiff's conduct on her phone but she had recently deleted those messages as she felt she did not need them anymore. I accept that there is nothing sinister in her deleting her phone records at a time some years after she ceased employment and before she knew that they might be relevant in these proceedings.

She participated in the Work Dynamic investigation. There was a telephone interview with her which she confirms is correct.
Ms Odgers made three complaints. Only the latter two form part of the conduct said to justify the termination as the defendant has particularised the conduct as happening between September 2020 and December 2021.
Much of her first complaint/email was directed at the technological problems with the system and the difficulties which this was causing, particularly in her relationship with the plaintiff.
The second complaint emerged in August 2020. Ms Nicholson received an email from the Queensland regional manager, Mr Keri Kamau, relaying the content of a Microsoft Teams message that had been sent to him by Mr Wellby. Mr Wellby made reference to the plaintiff not speaking to Ms Odgers, swearing at her, and throwing paperwork around. He said his children behave better and it is all because he has trouble tolerating her. Mr Wellby said we have seen this behaviour from him over many years, but not to this extent.
As I will discuss later, not all of this alleged behaviour has been established or is the subject of evidence in these proceedings. Mr Wellby suggested that Ms Odgers was a really hard worker, and all the other staff thought she was fantastic to work with but Ms Odgers was terrified of the plaintiff. There is no reason to doubt her relationship with other staff or her hard work.
Ms Nicholson says that she spoke to the plaintiff about his behaviour (disputing the plaintiff’s suggestion that he did not receive guidance or feedback about the issues). She recalls the plaintiff suggesting that she (meaning Ms Odgers) talks too much. He admitted not talking to her and ignoring her. Ms Nicholson claimed he said, “what do you want me to do, she’s hopeless”.
Ms Nicholson says that she then contacted Ms Odgers to discuss her concerns. The defendant's human resources department again became involved. There are email exchanges between Marica Ross and senior management, including Anna Warne, Chief Human Resources Officer, confirming Ms Ross had spoken to Ms Odgers and Ms Odgers suggesting that she was comfortable returning to the workplace.
There appeared to have been no further complaints from Ms Odgers until December 2021 when she made a further complaint about the plaintiff's conduct towards her. Ms Nicholson again became involved, having been informed of the situation by Ms Murphy of the human resources department.
In an email dated 8 December 2021 from Ms Odgers to Ms Nicholson, Ms Odgers complained that the plaintiff continued to ignore her and would turn and walk out of the room if she was there. She would frequently receive yellow sticky notes from him saying things aren't right or more views were needed. She suggested that when she had to talk to the plaintiff concerning a patient request, he ignored her for a few minutes making her stand there like a child. Eventually he would turn around and look at her with disdain before saying, “yes?” She believed that his response to her came with an edge to it or a sarcastic comment. She referred to these complaints as small complaints which were slowly eroding her confidence and her mental health.
Things boiled over on 6 December 2021, when she was walking along the corridor and heard a whole lot of vitriol directed to her in the following words, “this request says follow up, which means there are images to compare and yet there are no previous images. You are supposed to do this, but you don't.” She went to find the paperwork again. There was a yellow sticky note in heavy capital letters asking for old images. She then spoke to Mr Mohan who was said to be horrified that she had again been targeted. After some further discussion she said the plaintiff realised he had been in error and he was wrong but no apology was forthcoming. When she went home, she could not stop crying. She said the attack was horrendous, especially on top of his other bad behaviour. She felt she was being targeted.
I accept that Ms Odgers felt considerably aggrieved by the plaintiff’s conduct towards her.
I accept that she was doing her best to summarise the plaintiff’s conduct both in her evidence in these proceedings and her earlier formal complaints.
However, some of the words used to describe his conduct might not accurately reflect the actual words spoken by the plaintiff or what he actually did. This is understandable but, for example, suggestions that he was acting with vitriol towards her or that he was throwing things around or swearing at her (as referred to by Mr Kamau) are not made out by the evidence.

Bronwyn Nicholson

Bronwyn Nicholson gave evidence and was cross-examined extensively about her response to these complaints and her own role and performance. The criticisms of her were unwarranted. I found her to be an impressive witness. However, she was responding to information provided to her. She had no direct knowledge of these interactions between the plaintiff and Ms Odgers. She endeavoured to give the plaintiff an opportunity to leave without the necessity for a formal investigation. She responded to the investigation by accepting the so-called substantiation.

Charlotte Wilson

Charlotte Wilson was employed by the defendant and identified an emerging problem between the plaintiff and Ms Odgers starting around six months after Ms Odgers started work. She said she was not given post-it notes in the same way. She recalled several occasions when Ms Odgers walked into the room talking to the plaintiff but the plaintiff responded in words to the effect “I don't want to talk to you about this, I want to talk to someone who knows what they're doing” or just ignored her completely.
She recalled occasions when Ms Odgers would go to see the plaintiff to provide results and she would leave the office and say, “he didn't want to talk to me, can you come in?” He would then refer to her in words such as “oh, someone I can talk to about this” or “someone who knows what they're doing”.

Keri Kamau

Keri Kamau was employed by the defendant as the operations manager. He recalls that when he attended Cairns in late January 2020 Mr Wellby raised issues between the plaintiff and Ms Odgers. This was the first time the issue had been raised with him. He then raised the issue with Ms Gordon-Daynes who said she would take it up directly with the plaintiff. He agreed with that proposal, particularly as Ms Gordon-Daynes was the plaintiff's wife.
He also recalled becoming aware of the issue being raised again in August 2020, but had no knowledge of any subsequent issues.
Mr Kamau was cross-examined as to his knowledge of Ms Odgers’ experience and competency in the area which she was employed. He agreed that he was relying on the senior radiographer, Mr Wellby, to inform him of any problems in that regard. He did not form a view as to who was right and wrong when informed of the issues between the plaintiff and Ms Odgers. He agreed that he had an understanding from Mr Wellby in August 2020, that the plaintiff was swearing at Ms Odgers (there was no other evidence that he was).

Paul Wellby

The senior radiographer, Paul Wellby, also gave evidence. In his affidavit, he does not say that he observed any conduct on the part of the plaintiff directly but says he was aware of issues between the plaintiff and Ms Odgers. He recalled the plaintiff raising Ms Odgers’ competency with him, particularly in intervention work.
Mr Wellby had worked with the plaintiff before he sold the business. He had known him a long while. He was the chief radiographer at the Cairns clinic. He assisted in the recruitment of Ms Odgers to the practice.
He recalled speaking to Ms Nicholson in early 2020 about his concerns as to the treatment of Ms Odgers but could not recall the specific incident that prompted that conversation. It was raised with him that Ms Odgers had complained about her treatment by a mammographer (that is another person). Mr Wellby recalled that there were numerous issues with this mammographer, and he was required to speak to her about these issues. She was still employed by the defendant. I assume the cross-examiner was intending to highlight the difference in treatment but it is difficult to make a comparison on such limited information.
Mr Wellby recalled that Ms Odgers raised issues with him about the plaintiff on a number of occasions. He raised it with Ms Nicholson. He agreed he did not invoke any of the workplace policies to deal with these issues.
Mr Wellby’s evidence did little more than confirm that he was aware of the complaints and that he was aware that they were being dealt with. He seemed somewhat hesitant when answering questions about the plaintiff, almost as if he wanted to say something else. Bearing in mind that there is no issue that Ms Odgers made complaints and there is really no issue as to the nature of those complaints, Mr Wellby's evidence did not take that matter any further.

The plaintiff’s response

The plaintiff denies bullying Ms Odgers at any time. He acknowledges he was under significant stress during the period whilst working for the defendant. He was the subject of an audit from Medicare regarding over 4000 billings by the defendant using his provider number relating to approximately $400,000-500,000 in payments that had been received by the defendant from Medicare. He was required to prepare a response.
He had concerns in 2020 about the spread of Covid and the way in which the practice was being operated by the defendant.
He says that he had only become aware of Ms Odgers’ experience when reading her affidavit (meaning he was unaware that his behaviour affected her so much). He says he did not consider her to have the experience necessary to be hired for the job. He accepted that he demanded a high standard from the team because of the impact that mistakes can have on the well-being of patients. He considered that Ms Odgers breast biopsies missed the mark required, citing about 20% of cases when the usual success rate is 96 to 99%. He had a concern that mistakes could expose the practice to malpractice.
He gave evidence about the difficulties with the I-MED system and the difference between the way in which he and his wife used to do it and the defendant's imaging system. On many occasions he had difficulty accessing the necessary images. The common reason for this was said to be that a radiographer had not sent the images or had not signed off on the images. He said he needed to ask for images to be sent on an almost daily basis and had hundreds of communications in respect of that issue.
He accepted he was frustrated. He did use the words “I have not received images” rather than “you have not sent the images”. He suggested that on most occasions when he spoke to Ms Odgers about these difficulties accessing images, she offered an excuse or argued that she had already sent the images. He said that he was aware Ms Odgers was critical of him to others.
In respect of the complaint about him using post-it notes to communicate, he said there was a general practice of staff using post-it notes to leave messages. He engaged in that process of using post-it notes to leave instructions with all radiographers, not just Ms Odgers. He used post-it notes 20 to 30 times a day. He denied leaving post-it notes to the effect “this work is unacceptable”.
He acknowledged that there were many occasions when he was approached by a radiographer while he was working at his desk in the reporting room. The monitors were placed against the wall so he sat with his back facing the door. His practice was to simply tell them to put the study down (I understand this to mean that he did not engage in conversation with them). His standard practice when responding to a question was just to say “yes?” He says he was typically focused on his work and he did not always notice when someone entered the room. He admitted to becoming irritated at times by interruptions from technicians generally.
He acknowledged that there was a difficulty in December 2021 again relating to the sending through of images. He acknowledged that when he became aware that Ms Odgers was the radiographer responsible, he went looking for her but was unable to find her. He spent 10 minutes looking for her and then wrote a post-it note which was to the effect of “can you ALWAYS SEND through the old films.”
He acknowledged that a conversation took place when he asked Ms Odgers to send through old images for a patient. When Ms Odgers asked the patient’s name, he said “it’s at your workstation”. When she started to say something in response he said “don't argue with me. Just send the films through”. He acknowledged that he became aware that the patient was not Ms Odgers’ patient and there were no old films. He agreed that Mr Wellby approached him about the situation and he said he would go and apologise, but recalled that Mr Wellby said that was not necessary. He said he did not apologise to Ms Odgers on the basis of that comment from Mr Wellby. I have difficulty accepting that particular aspect of the plaintiff's evidence.
The plaintiff acknowledged that it was not his practice to engage in small talk in the tearoom or engage in conversation in the hallways, but says it was rare for him to encounter Ms Odgers in the tearoom in any event. At least generally, he denied not speaking to Ms Odgers or failing to acknowledge her. He denied swearing at or yelling at her. He denied throwing paperwork around and denied saying that he didn't want to talk to her. He denied saying to Ms Wilson in front of Ms Odgers, “oh, someone who knows what they're doing”.
He accepted that he did not respond to her wishing him Happy Christmas at the 2021 Christmas party. He explained that on the basis that Ms Gordon-Daynes was Jewish and that he was somewhat affronted by the expression of “Happy Christmas” in those circumstances. I am not sure that provides a basis for not at least responding in a courteous way.
He denied throwing paperwork or ever swearing at Ms Odgers. As I understand his evidence, except for issues which he related to Ms Odgers performance or lack of performance, he does not consider that he treated her differently from other staff.
There was evidence in support of the plaintiff such as that contained in Timothy Elston’s affidavit sworn on 31 January 2024. He was a staff surgeon at Cairns Hospital. He had worked with the plaintiff over a long period and had never heard a rumour or allegation that the plaintiff had engaged in sexual harassment or bullying. He was generally complimentary of the way in which the plaintiff performed his work.
Philomena Crew was originally diagnosed with breast cancer and ultimately joined the breast screening Queensland Community Advisory Committee at Cairns. She has also had a long association with the plaintiff. She points to her positive experience with the plaintiff. She says she never heard any negative comments concerning him, only high praise. She says she had never heard of an allegation of bullying or sexual harassment against him.
Kayla Della Bella did not observe any out of the ordinary interactions between the plaintiff and Ms Odgers. She did not see the plaintiff avoid Ms Odgers or hear him criticise her. She confirmed post-it notes were a usual method of communication. She acknowledged that the plaintiff had difficulty accessing information and there were times when she went into the reporting room to speak to him and he would take some time to respond to her. She says there were occasions when she observed Ms Odgers come into the reporting room when the plaintiff was there. She observed their conversations to be professional and no different from other conversations the plaintiff had with radiographers. She did observe Ms Odgers crying, which tended to happen once every month or two. She was not aware of the causes but put them down to working in a high stress environment. In December 2021 she did ask Ms Odgers about the problem and she said something had happened between her and the plaintiff.
Dr Angela Robson has known the plaintiff since 2013. She is a general surgeon specialising in breast surgery. She was aware of the plaintiff's work. She spoke to the plaintiff about once a week. She received positive feedback about the plaintiff's work. She said she never received any patient complaints about the plaintiff except for one but the complaint was not substantiated.

Did the plaintiff engage in conduct such as to justify summary dismissal?

It is difficult in a case such as this to be satisfied of precisely what conduct the plaintiff engaged in and how often he engaged in such conduct. There is conflicting evidence from persons who worked closely with him.
Three complaints were made by Ms Odgers over three separate periods. The particulars identify the bullying as occurring from September 2020 to December 2021. In that sense, the first complaint is relevant only as background or context evidence.
It seems that whatever concerns Ms Odgers had in the first part of 2020, the behaviour improved or ceased over the next few months, even on the defendant's case. It is difficult to be sure of the full extent of the conduct because evidence was adduced from persons who worked at the Cairns clinic in support of the plaintiff, who did not observe the conduct complained of, and even observed the plaintiff interacting with Ms Odgers in a way quite contrary to the complaints. That tends to suggest that the asserted conduct was not necessarily continuous or always the same.
There is no doubt that Ms Odgers made complaints. She documented the first and third complaints and there were others at the clinic who observed at least some of the behaviour complained of seemingly on a repeated basis.
As the defendant submits, it is important not to separate out each aspect of the alleged bullying and consider whether it might constitute bullying if considered independently of the other conduct. It is important to consider all of the conduct in the context in which it emerged. Having said that, it is necessary to make findings as to what occurred.
In this regard, I accept that the following.

The plaintiff experienced performance related issues with Ms Odgers within weeks of her commencing work. Those issues may not have been Ms Odgers fault as she came into the job with a significant gap between her last experience in undertaking breast intervention work and there were problems with the defendant’s systems. However, I accept that the plaintiff was at least on occasions directing his frustrations at Ms Odgers.

Further, I accept that the primary origin of the conflict between Ms Odgers and the plaintiff, such as it was, was performance related. The plaintiff became frustrated with the work, the defendant’s computer system and the technology difficulties which were arising which he believed were hampering him in his work.

I accept that over time the plaintiff perceived that some of these difficulties might also have been caused by Ms Odgers lack of experience or shortcomings, albeit it is also the position that specific instances have been referred to in which no blame should have been attributed to Ms Odgers. I am not attributing any blame or criticism to Ms Odgers but merely identifying the context in which there appears to have been a deterioration in the relationship.

I accept that the plaintiff took to communicating with Ms Odgers by means of post-it notes, but also accept that this was a practice which he used for some other staff, albeit he might not have always done so.

I accept that the plaintiff capitalised some of the notes so as to import some urgency or dissatisfaction.

I accept the plaintiff decided it was best that he not be social with Ms Odgers. He wasn't interested in talking with her in the tearoom and decided not to engage if they happened to pass in the corridors.

I accept that on one occasion, in December 2021, he raised his voice with her again complaining of an issue with the imaging or reporting.

I accept that Ms Odgers felt stressed and anxious and even belittled by the plaintiff's conduct towards her. She ended up stopping work and receiving workers compensation.

I accept that there were times when the plaintiff was rude to Ms Odgers. He seemed to Ms Odgers to be going out of his way not to talk to her (which is so). He kept her waiting by refusing to acknowledge her presence whilst he was working in the imaging room.

I accept that he made adverse comments about her performance, both directly to her and to others, albeit he was the senior skilled employee and was responsible for ensuring that the work was done properly. His view of her performance may have been mistaken at times but it was a view he had. There is no evidence that he imagined some false narrative for some devious purpose. He may have been wrong, but his complaints were based on his perception of her performance.

He presented to Ms Odgers as being frustrated and exasperated by his difficulties with her.

His method of communication with her was abrupt and might have seemed to her to be rude.

Having said that, I do not accept the following.

He swore at Ms Odgers.

He raised his voice with her on a regular basis or even on more than one occasion (he did so only once).

He threw any paperwork at her.

He did not speak to her at all from August 2020 to December 2021 (as there is evidence from other persons of observing the plaintiff engaging with Ms Odgers in a professional way during that period).

He engaged in any conduct which tended to isolate her from other staff or in any way prevented her from working with other staff (other than the conduct that I have referred) or prevented her from doing her job.

He sought to have her removed or her employment terminated.

He spoke about her behind her back in respect of any personal issues or in respect of matters other than her work performance. He did however raise issues with her performance.

The defendant bears the onus of proving that it was entitled to terminate employment in the manner that it did (see Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66 at 83 per Dixon and McTiernan JJ; see also Darling Island Stevedoring & Lighterage Co Ltd v Jacobsen (1945) 70 CLR 635 at 643 per Dixon J and Pastrycooks Employees, Biscuit Makers Employees and Flour and Sugar Goods Workers Union (NSW) v Gartrell White (No 3) (1990) 35 IR 70 at 83-84).
It is important to emphasise that a simple breach of the contract of employment will not generally be sufficient to justify summary dismissal and that isolated conduct will also not be generally sufficient to demonstrate serious misconduct.
I do not mean to be suggesting that isolated instances of theft or fraud or similar type behaviour would not be considered serious misconduct, but in the context of what I will term ‘workplace misbehaviour’, it is important to have regard to whether the conduct is one-off or isolated or represents a repeated pattern of behaviour.
The inquiry is fact specific. No hard and fast rule can be laid down for what constitutes bullying as it may be considered in any particular case. All bullying necessarily involves interaction between employees at the workplace. In determining whether there was bullying, it is necessary to have regard to a number of factors including:

the relationship between the employees involved;

the context of the conduct;

the extent to which the conduct is repeated; and

the explanation and perhaps purpose of the conduct, and the circumstances in which it is said to have arisen.

Whilst the defendant relies on clause 12 and says that the plaintiff did not comply with the workplace policy which gives rise to the operation of clause 7.3(c), the contract of employment should not be construed in such a way that any breach of the contract would give rise to a right to dismiss an employee without notice.
Indeed, in my view, the reference to breaching a “material term” in clause 7.3(c) suggests that the parties did not intend that merely any breach of the terms and conditions would give rise to a right to terminate without notice. Material must be a reference to something so significant such that the conduct might constitute serious misconduct as referred to in 7.3(a).
Workplace bullying is defined in the Handbook as:

“Workplace bullying means repeated, unreasonable behaviour directed towards a worker or a group of workers, that creates a risk to their health and safety. Workplace bullying includes behaviours that intimidate, offend, degrade or humiliate others.
Bullying can be:

intentional – where conduct is intended to humiliate, offend, intimidate or distress (whether or not the behaviour did have that effect); or

unintentional – where conduct is not intended to humiliate, offend, intimidate or distress another person but can reasonably be expected to have that effect.

A broad range of behaviour can be viewed as bullying behaviour and includes both physical and psychological behaviours. Bullying may involve humiliation, sabotage, spreading gossip, overwork, unnecessary pressure, delaying tactics and physical or verbal assault.”

The Handbook also provides examples of bullying. The two examples relied upon by the defendant are constant belittling and isolating individuals from normal work/study/interaction without justification.
The Handbook also provides examples of what is not bullying which includes the following.

It is not bullying for a manager or supervisor to provide feedback, counsel a staff member or initiate a performance improvement plan about their performance or conduct. This is a necessary part of ensuring that staff meet expected standards of work and behaviour.

Poor or bad management practices on their own will not constitute bullying.

Differences of opinion expressed respectfully between staff will not amount to bullying.

Overlooking staff members for promotion based on their performance and other merit factors where they compare unfavourably to other staff or do not meet business needs.

Organisational restructuring, including the retrenchment of staff where done for legitimate business reasons.

Making a complaint about a manager or other staff members conduct if the complaint is made in a proper and reasonable way.

The appropriate management of an injured worker.

As the Handbook specifies, there may be times when a situation or time at work is upsetting or an unpleasant experience, but that may not constitute bullying. Bad management practices on their own will not constitute bullying.
The plaintiff was in a position of authority to Ms Odgers. He ought to have been conscious as to how his behaviour might impact upon her. It can be said that there should be no place for rudeness and discourtesy at the workplace but the workplace remains a melting pot of persons with different personalities, different levels of experience, different levels of competence and is often mixed with high levels of stress and anxiety. Again, none of that justifies rudeness or discourtesy, but there is a line to be drawn between what might be described as bullying an employee at the workplace and being rude, discourteous and uncooperative.
In my view, the plaintiff's conduct (as I have accepted it) fell below that line even having regard to the definition of workplace bullying in the Handbook. The reasons for that conclusion, in addition to matters I have already raised, include the following.
The issues between the plaintiff and Ms Odgers appear to have arisen as a result of a loss of confidence on the part of the plaintiff in relation to Ms Odgers, perhaps more arising out of some deficiencies in the defendant’s systems rather than Ms Odgers’ own competence levels, but nevertheless were still perceived by the plaintiff to be arising as a result of lack of training or experience in the particular task.
As established by other evidence, there was a practice of using post-it notes to communicate, particularly instructions about imaging. The fact that the plaintiff used capital letters might have been a sign of his frustration but I do not accept that Ms Odgers was ever being singled out or in some way humiliated because the plaintiff sent her post-it notes using capital letters.
The plaintiff’s decision not to go into the tearoom with Ms Odgers or speak to her as they passed in the hallway might be described as rude and was perceived by Ms Odgers as being so but I do not consider that such conduct could fall within the definition of bullying a fellow employee. Not speaking to a more junior employee working side by side on a continuous basis may be different but that is not case. Again, each case is fact specific. There is evidence from one witness that the plaintiff did engage with Ms Odgers in a professional manner, such that this is not a case of a senior employee not speaking to a junior person over a continuous and lengthy period.
There is only one complaint of the plaintiff raising his voice at Ms Odgers and there is no evidence that he swore at her or abused her in anyway.
There is no evidence of the plaintiff holding Ms Odgers up to ridicule amongst a group of her peers or her being taunted or teased in anyway.
The evidence does not rise to the level of constant belittling. There are some isolated examples of the plaintiff making adverse comments about Ms Odgers’ ability to do the work to which she objects and says were unfair but, in my opinion, the evidence does not rise to the level of constant belittling of Ms Odgers by the plaintiff. On the evidence, the language used by the plaintiff is not indicative of him directing constant vitriol at Ms Odgers.
It is clear that the plaintiff wrongly blamed her for workplace performance and for errors on occasions but the examples given are again limited. The termination letter refers to the plaintiff repeatedly belittling the plaintiff in relation to the work she has performed, but the actual evidence does not support the suggestion of repeated belittling or berating.
In the end, it is necessary to have regard to the terms of clause 7.3. Having regard to my findings, I do not consider that the plaintiff engaged in serious misconduct as that term is understood, as set out in clause 7.3(a)(2). Although I accept the defendant's submission that the construction of 7.3(a)(2) involves a subjective element (having regard to the words “that we consider”), and although the description in 7.3(a)(2) is said to be inclusive (having regard to the use of the word “including” rather than an exhaustive statement), there must be deliberate or serious misconduct or serious professional misconduct or serious breach of duty. It is not just any conduct or poor behaviour at the workplace which would give rise to the right to terminate without notice.
Further, I do not consider that the plaintiff by his conduct repudiated the terms and conditions in the sense of demonstrating an intention not to be bound by the terms and conditions (see clause 7.3(b)).
I do not consider that merely pointing to a word or words used in the Handbook and identifying that some of the plaintiff's behaviour would be consistent with those words would give rise to a right to terminate without notice. Not just any failure to comply with any particular guideline or policy in the Handbook would give rise to the right to terminate without notice.
The defendant has also not established a right to terminate under clause 7.3(e). The plaintiff was not told he must talk to Ms Odgers in the tearoom or as they walked past each other. He was not told that he must not send her post-it notes. He might have known that he should not have been rude to her (such as refusing to acknowledge her at the Christmas party) but that conduct could hardly give rise to a right to summary dismissal.
For all the reasons set out herein, I am not satisfied that the conduct engaged in by the plaintiff entitled the defendant to dismiss the plaintiff without notice.

The alternative case

It is not necessary that I consider the alternative case in any detail. As I have already identified it is based on criticisms of the process and manner in which the defendant came to its conclusion that it was entitled to summarily dismiss the plaintiff.
The plaintiff submits that the defendant exercised its power to terminate unreasonably and in a manner that was arbitrary, unreasonable or capricious. It identifies a number of acts by the defendant during the process, which leads to this conclusion. It says that:

“Without having afforded basic procedural fairness, nor properly articulating the basis on which the findings of fact of 11 May 2022 were substantiated, the way the investigation was conducted (and the way conclusions and findings were reached) was arbitrary, unresolved and capricious.”

The plaintiff submits that in forming its opinion the defendant was obliged to:

act reasonably in so far as its processes for reaching that opinion was concerned; and

exercise its discretion in a manner that was not arbitrary, unreasonable or capricious.

The plaintiff says these are implied terms which are an incident of the implied duty of good faith in employment contracts.
In New South Wales, the Court of Appeal has on several occasions recognised “good faith” in some degree or to some extent as part of the law of performance of contracts (United Group Rail Services Ltd v Rail Corporation of New South Wales (2009) 74 NSWLR 618 at [58], [62] per Allsop P; see also Bartlett v Australia & New Zealand Banking Group Ltd (2016) 92 NSWLR 639 at [39]–[49] per Macfarlan JA).
In Harden v Willis Australia Group Services Pty Ltd [2021] NSWSC 939, Sackar J accepted that such an obligation could be implied into an employment contract, albeit that proposition does not appear to have been taken up by a higher authority.
On the other hand, the exercise of a power of termination may in some circumstances be subject to a condition that the formation of a state of mind necessary to exercise that power be arrived at reasonably (see Bartlett at [49] per Macfarlan JA and Service Station Association Ltd v Berg Bennett & Associates Pty Ltd (1993) 117 ALR 393 at 401–404 per Gummow J).
The point is that although the Court may not ordinarily imply a term to act reasonably, when the contract requires the employer to form an opinion it may be that there remains an obligation to act reasonably in forming that opinion.
It is not necessary that I come to any conclusion on these issues as, at least in general terms, I do not accept the plaintiff's criticisms of the defendant’s processes. It is not necessary to say anything further because the plaintiff accepts that findings on the alternative case could not result in him recovering any damages over and above that which he would be entitled to in any event. It seems to me that it would only have been necessary to make a determination on the alternative case should the plaintiff have not succeeded on his primary case. As it turns out, he has done so.
It is also appropriate to say that I do not accept the generalised criticisms of the defendant by the plaintiff as emerged during the hearing. References were made to Ms Nicholson being moved on, or suggestions of the plaintiff being thrown overboard as if decisions were made without any concern for the consequences. I do not accept that.
Indeed, I accept that the defendant had in place extensive, thorough and appropriate workplace policies and guidelines as set out in its Handbook.
It initially determined not to take action in respect of Ms Odgers’ first complaint but by the end of 2021 it determined to appoint an independent investigator, having regard to the complaints from both Ms Odgers and the complaint about the incident at the Christmas party involving Ms Turner. As it turns out, the investigator came back with a report in which opinions were offered that almost all of the matters alleged were substantiated.
Ms Nicholson considered that in those circumstances, it was appropriate to terminate the plaintiff’s employment without notice. On the evidence in these proceedings, she was not entitled to do so. However, that does not mean that the defendant’s policies and procedures were in some way flawed.

Damages

The plaintiff is entitled to be placed in the position he would have been had the wrongful summary dismissal not occurred (Johnson v Perez (1988) 166 CLR 351 at 355 per Mason CJ).
In Martinez as trustee for Martinez HWL Practice Trust as representative of the partners trading as HWL Ebsworth Lawyers v Griffiths as trustee for the Griffiths HWL Practice Trust [2019] NSWCA 310, the Court of Appeal (per Meagher JA) succinctly explained the application of the rule in Hadley v Baxendale (1854) 9 Ex 341 in the context of an action for wrongful summary dismissal at [51]:

“Here the breach was the wrongful termination of the respondent’s employment contract. The damages which arise naturally from that breach are for loss of the benefits to which the respondent would have been entitled had the contract been performed: Foran v Wight (1989) 168 CLR 385 at 430 (Brennan J); [1989] HCA 51. Those benefits include any commercial advantages which would have been acquired as a result of performance of the contract but which have been lost by reason of the defendant’s breach: Amann Aviation per Brennan J at 104. See also Mason CJ and Dawson J at 92-94.”

The essential task is to “identify and characterise what, in substance, was promised and what has been lost or denied by the breach of contract.” (Silverbook Research Pty Ltd v Lindley [2010] NSWCA 357 at [2] per Allsop P).
This requires the Court to engage in an assessment, as a matter of probability, of what would have occurred but for the wrongful summary dismissal (Willis Australia Group Services Pty Ltd v Mitchell-Innes [2015] NSWCA 381 at [122] per Macfarlan JA (“Willis”)).
A successful plaintiff is entitled to recover the value of the loss of entitlements that he would have received but for the wrongful termination. This includes the loss of an opportunity to have an employment contract renewed for a further term (see Guthrie v News Ltd (2010) 27 VR 196 at [57]; Riley, O’Grady and Sappideen, Macken’s Law of Employment, (Thomson Reuters, 9th ed, 2022) [10.530]).
There is a difference between termination of the employment relationship and termination of the employment contract.
As I explained in Roderick v Washington H Soul Pattinson & Company Ltd (No 2) [2020] NSWSC 1224 at [382]:

“A contract of employment is a contract for personal services. By purporting to terminate the plaintiff without notice, the defendant had demonstrated an unwillingness to comply with its contractual obligations … That was repudiatory conduct. The plaintiff had little choice but to accept that repudiation, terminate the contract and sue for damages.”

This is what the plaintiff did.
The plaintiff claims that but for the termination of his employment, he would have continued to work until he was 77 years of age, that is 6 years and 8 months from the date of his termination. He must mean continued to work for the defendant as the amounts he claims are the amounts that would have been payable by the defendant. He could not have worked anywhere else (at least for a period) in Cairns as he was under a restraint. He says that in those circumstances his damages should be assessed on the basis of his base salary, a regional allowance and a clinic director allowance, which for 6 years and 8 months amounts to $4,308,164.38. The table of damages outcomes provided by the plaintiff had included a “bonuses” column, but the plaintiff withdrew his reliance on that column during the hearing.
The defendant accepts that, if it was not entitled to terminate the plaintiff's employment, it must pay damages to the plaintiff but says that those damages are limited to the additional three months until the expiration of the fixed term contract and a further three months based on the period of notice that the defendant would have been required to give the plaintiff should it not have wished to continue with the plaintiff's employment after the fixed term.

The defendant accepts that the plaintiff would be entitled to his base salary, regional allowance and clinic director allowance for that six-month period.
The plaintiff's claim is obviously based on the proposition that, if not for the termination of his employment, he would have continued to work full-time as a senior radiologist until the age of 77. The defendant says that I would not accept this, pointing to the various statements made by the plaintiff prior to the termination of his employment, and indeed about his intention to retire, as well as the fact that he sold his business as part of his transition to retirement. These matters were highlighted during a forensically successful cross-examination of the plaintiff.
The assessment of damages is further complicated by the fact that as part of the deed, the plaintiff agreed not to work at any other radiology practice in Cairns for a period of 5 years.
The fact of the restraint may be relevant in two ways. Firstly, the existence of the restraint may explain the plaintiff’s complete absence from work since his employment was terminated in May 2022. He was restrained from working elsewhere in Cairns and thus he cannot be said to have failed to mitigate his loss or failed to obtain other employment available to him. The defendant’s wrongful termination deprived him of the opportunity to work at all, having regard to the restraint.
The restraint is relevant also because the plaintiff entered into the restraint willingly in return, in part, for a substantial sum for his business. He cannot now recover compensation on the basis that the ability to work elsewhere was impacted by the manner and reasons for his dismissal. There is no evidence that he sought work elsewhere and no evidence that he would have worked away from Cairns. There is no evidence that he sought and was prevented from obtaining remote work even on a part-time basis.
The question in these proceedings is thus for how long the plaintiff would have worked for the defendant but for his wrongful dismissal.
In terms of assessing the amount payable, the plaintiff submits that the proper approach requires the assessment of what would have happened but for the wrongful termination by the defendant. The defendant submits that I should apply the principle (seeNew South Wales Cancer Council v Sarfaty (1992) 28 NSWLR 68 (“Sarfaty”)) that in assessing damages I would accept that the defendant would have adopted the most advantageous approach to it regarding the plaintiff's continued employment (meaning that the defendant would have terminated him by giving the least notice permitted by law). However, in Willis a majority of the Court of Appeal (per Macfarlan JA at [121], Ward JA agreeing at [130], Leeming JA declining to decide the point at [139]) said that the approach in Sarfaty should not be followed.
In the end, on my findings, it is not necessary to consider this submission further as on my view of the case, the result is the same.
Firstly, I have a considerable doubt that the plaintiff would have wanted to remain in employment with the defendant in any event despite his suggestion to the contrary in the witness box.
Secondly, I do not accept that the defendant would have continued to employ the plaintiff, even if the plaintiff wanted to continue his employment after his fixed term.
The reasons I have come to these conclusions are as follows.

The fixed term was coming to an end in less than 3 months. If the defendant had not summarily dismissed the plaintiff, his contract would have come to an end in any event subject to the giving of the extra 3 months’ notice.

The defendant's concerns about the plaintiff’s behaviour at the workplace would have remained. The defendant had received complaints about the plaintiff’s conduct of the type which I have accepted and about which it was concerned. It seems somewhat wishful thinking on the part of the plaintiff that, if the defendant had not summarily dismissed him, it would have continued to employ him beyond the fixed term, even despite its concerns about his conduct.

The defendant had hired a replacement for the plaintiff and the plaintiff had been involved in training that replacement.

On the plaintiff’s own case, the quantity or level of imaging being undertaken was not as high as he wanted or might have been expected. He blames the defendant for that, thus resulting in less of an earnout payment than he had hoped for. Whatever the cause, the fact is that the level of imaging was not as high as might have been hoped for by both the plaintiff and the defendant. This tends to detract from the idea that the defendant might have been in a position to continue to employ both the plaintiff and his replacement.

The plaintiff was in dispute with the defendant about its lack of support and problems with its systems. He admits to being frustrated. He was plainly disgruntled. The level of dispute was such that the plaintiff is taking action in a different court to recover damages from the defendant in respect of his earnout payments.

The defendant and the plaintiff had been required to respond to an audit of the billings using the plaintiff’s provider number, albeit that audit was discontinued following correspondence from the plaintiff. As part of the process of bringing the audit to an end his solicitors wrote to the Department of Health informing it that he intended to retire:

“Dr Daynes turns 70 years of age in January 2022 and is preparing to wind down his practice to retirement in July 2022. The administrative processing required by the remaining portion of the audit would effectively remove Dr Daynes from clinical practice.”
Again, he seeks to overcome the statement in that letter by suggesting that he needed the money. I do not accept that.

The defendant points to the evidence of Ms Nicholson, the relevant manager, to the effect that it would not have continued to employ the plaintiff in any event, albeit the plaintiff says that that statement was not admitted to prove that fact. I accept that. However, there is ample other evidence to support the defendant's case that it would not have continued to employ the plaintiff.

The idea that he wanted to continue to work because he needed the money seems absurd. No other evidence was adduced such as financial records, details of debts or outstanding loans or any other evidence suggesting that the plaintiff was in financial difficulty. No evidence was adduced which would suggest that he made use of that very significant sum he received for the sale of business for some other purpose. Ms Gordon-Daynes was not called.

As demonstrated through cross-examination, he had both sold the business with the intention to retire and made it plain during the course of his work as an employee of the defendant that he was going to retire. By his own admission, he was frustrated working for the defendant. He was unhappy with their systems, and as is evident by his relationship with Ms Odgers, he was experiencing difficulties with other employees at the workplace.
I accept that despite indicating an intention to retire he might have wanted to undertake some part-time work going forward after the fixed term contract expired.
However, he could not initially obtain any other part-time work from any other radiology practice in Cairns because of the restraint arising under the deed. There is no evidence that would permit a finding that but for the wrongful dismissal he would now be working at some other clinic on a part-time basis.
That would have left him only seeking part-time work from the defendant.
For the reasons I have already set out, I do not accept that the defendant would have offered him part-time work.
The reality is the plaintiff was summarily dismissed less than 3 months before the expiry of the fixed term contract, in circumstances in which the plaintiff was required to work for the defendant for that three-year period, as part of the payment of a significant sum to the plaintiff for the sale of his business to the defendant.
All indications by the plaintiff prior to him being dismissed were to the effect that he would be ceasing work at the end of his fixed term contract. In any event, the relationship between the plaintiff and the defendant was deteriorating for the various reasons referred to in this judgment. I do not accept that the defendant would have continued to offer the plaintiff employment even if as he says he had a change of heart and wanted to remain employed.
In the circumstances, the damages the plaintiff is entitled to recover are limited to the last 11 weeks and 5 days of his fixed term period and the additional three months’ notice which the defendant accepts it would have been required to provide to the plaintiff.
The defendant accepts such damages include his base salary, and those other allowances. The total package per annum was $640,000.
In all these circumstances, damages are assessed in the sum of $302,769.23.
The plaintiff is entitled to pre-judgment interest on these sums (see s 100 of the Civil Procedure Act 2005 (NSW)).
I have calculated interest in accordance with the Civil Procedure Act 2005 (NSW). I have used the commencement date as the expiry date of the fixed term period (being 1 August 2022) and the end date as the date of this judgment. Interest for that period on the capital sum of $302,769.23 amounts to $45,410.73.
The orders I make are thus:

Judgment for the plaintiff in the sum of $348,179.96.

The defendant is to pay the plaintiff's costs as agreed or assessed up to and including 28 June 2024.

The plaintiff is to pay the defendant's costs as agreed or assessed from 29 June 2024.

Amendments

21 October 2024 - Judgment amended in accordance with Daynes v I-MED Central Queensland Pty Ltd (No 2) [2024] NSWSC 1313 at [49].

Decision last updated: 21 October 2024

Medium Neutral Citation:	Daynes v I-MED Central Queensland Pty Ltd [2024] NSWSC 1064
Hearing dates:	8, 9, 10, 11 July 2024
Date of orders:	22 August 2024
Decision date:	22 August 2024
Jurisdiction:	Common Law
Before:	Cavanagh J
Decision:	(1) Judgment for the plaintiff in the sum of $348,179.96. (2) The defendant is to pay the plaintiff's costs as agreed or assessed up to and including 28 June 2024. (3) The plaintiff is to pay the defendant's costs as agreed or assessed from 29 June 2024.
Catchwords:	EMPLOYMENT LAW – contract – summary dismissal – whether the plaintiff engaged in misconduct of sufficient seriousness to justify summary dismissal – allegations of sexual harassment and bullying – whether allegation of sexual harassment proved – whether the plaintiff’s conduct amounted to bullying – relevance of the defendant’s workplace policies CONTRACT – contract of employment – contractual power to terminate without notice where employee engaged in “serious misconduct” – whether employer obliged to act reasonably in forming the view that employee had engaged in such misconduct DAMAGES – contract of employment – wrongful dismissal – whether absent the wrongful termination the plaintiff would have continued working for the defendant for the period alleged – whether the defendant would have exercised its power to terminate on notice at the end of the fixed term period
Legislation Cited:	Civil Procedure Act 2005 (NSW), s 100 Evidence Act 1995 (NSW), s 140
Cases Cited:	Bartlett v Australia and New Zealand Banking Group Ltd (2016) 92 NSWLR 639 Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66 Briginshaw v Briginshaw (1938) 60 CLR 336 Clouston & Co Ltd v Corry [1906] AC 122 Darling Island Stevedoring & Lighterage Co Ltd v Jacobsen (1945) 70 CLR 635 Eldridge v Wagga Wagga City Council [2021] NSWSC 312 Guthrie v News Ltd (2010) 27 VR 196 Harden v Willis Australia Group Services Pty Ltd [2021] NSWSC 939 Hadley v Baxendale (1854) 9 Ex 341 Johnson v Perez (1988) 166 CLR 351 New South Wales Cancer Council v Sarfaty (1992) 28 NSWLR 68 Martinez as trustee for Martinez HWL Practice Trust as representative of the partners trading as HWL Ebsworth Lawyers v Griffiths as trustee for the Griffiths HWL Practice Trust [2019] NSWCA 310 North v Television Corporation (1976) 11 ALR 599 Pastrycooks Employees, Biscuit Makers Employees and Flour and Sugar Goods Workers Union (NSW) v Gartrell White (No 3) (1990) 35 IR 70 Roderick v Washington H Soul Pattinson & Company Ltd (No 2) [2020] NSWSC 1224 Service Station Association Ltd v Berg Bennett & Associates Pty Ltd (1993) 117 ALR 393 Silverbook Research Pty Ltd v Lindley [2010] NSWCA 357 United Group Rail Services Ltd v Rail Corporation of New South Wales (2009) 74 NSWLR 618 Willis Australia Group Services Pty Ltd v Mitchell-Innes [2015] NSWCA 381
Texts Cited:	Riley, O’Grady and Sappideen, Macken’s Law of Employment, (Thomson Reuters, 9th ed, 2022) Supreme Court Practice Note 16 (16 June 2010)
Category:	Principal judgment
Parties:	Anthony Kevin Daynes (Plaintiff) I-MED Central Queensland Pty Ltd (Defendant)
Representation:	Counsel: A Moses SC with J Bennett (Plaintiff) L Saunders (Defendant) Solicitors: Gillis Delaney Lawyers (Plaintiff) McCullough Robertson (Defendant)
File Number(s):	2022/00213195
Publication restriction:	Nil