Dayton, Christopher Noel v Franklins Ltd

[1998] FCA 242

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 776 of 1997

ON APPEAL FROM A JUDGMENT OF A SINGLE JUDGE OF THE FEDERAL
COURT OF AUSTRALIA

BETWEEN:	CHRISTOPHER NOEL DAYTON Appellant
AND:	FRANKLINS LIMITED Respondent
JUDGES:		RYAN, BRANSON and MARSHALL JJ
DATE OF ORDER:		5 MARCH 1998
WHERE MADE:		SYDNEY

MINUTES OF ORDER

THE COURT ORDERS:

1. That the appeal be dismissed.

Note:Settlement and entry of orders are dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 776 of 1997

BETWEEN:	CHRISTOPHER NOEL DAYTON Appellant
AND:	FRANKLINS LIMITED Respondent

JUDGES:	RYAN, BRANSON and MARSHALL JJ
DATE:	5 MARCH 1998
PLACE:	SYDNEY

REASONS FOR JUDGMENT

RYAN J: This is an appeal from a judgment of Wilcox J, dismissing an application for review of a decision of Tomlinson JR who refused an application for compensation pursuant to what was then s 170EA of the Industrial Relations Act 1988. The appellant, Mr Dayton, was employed by the respondent, Franklins Limited, as night fill manager at its Marrickville store. It appears that on the morning of 6 June 1996 Mr Dayton was interviewed by the store manager, Mr Hunter, and a Franklins loss prevention officer, Mr Nasr.

According to the respondent’s evidence before the Judicial Registrar Mr Dayton, in the course of that interview, admitted stealing some cigarettes.  Later that morning he was interviewed by two officers from the Newtown Police Station and he explained that he had taken the cigarettes because he had been too busy as team leader to go and buy them.  Under questioning by one of those police officers, according to that police officer, he conceded that he had made no offer to pay for the cigarettes and had made no record which would have enabled the company to debit him with their value.

As noted by Wilcox J, the case put by Mr Dayton to the Judicial Registrar was that he had taken the cigarettes but on each occasion had paid for them when the store next opened for business at 8.30am.  It does not appear that any assertion to that effect had been made by Mr Dayton before his appearance before the Judicial Registrar.  Before this Court, Mr Dayton sought to introduce into evidence original pages of a diary for June 1996 which contained, unlike the photocopy before the Judicial Registrar and Wilcox J, a legible note to the effect “I was paying for them”.

There has been considerable discussion in the course of the hearing of the appeal as to whether those words were a later interpolation or whether they were present on the document as originally compiled by the appellant and were omitted from the subsequent photocopies because of the darkening effects of a photocopier.  For myself, I find it unnecessary to resolve that controversy because I do not consider it appropriate to receive fresh evidence in the form of the original diary pages on the hearing of this appeal.

One of the criteria which are observed by appellant courts on the reception of fresh evidence is that:

It must be reasonably clear that if the evidence had been available at the first trial and had been adduced, an opposite result would have been produced or, if it is not reasonably clear that it would have been produced, it must have been so highly likely as to make it unreasonable to suppose the contrary.  Again, reasonable diligence must have been exercised to procure the evidence which the defeated party failed to adduce at the first trial. (Council of the City of Greater Wollongong v Cowan (1954) 93 CLR 435 at 444).

In my view, the essential question to which this documentary evidence might arguably have been relevant was the existence of a valid reason for the employer to have taken the action which it did in dismissing Mr Dayton on 6 June 1996. Whether or not as assertion had been made on that day by Mr Dayton to the effect which he now contends, it would not have diminished the validity of the reason which Wilcox J found had existed for the termination of the appellant’s employment.

The concept of “valid reason” has been discussed on a number of occasions by the Industrial Relations Court of Australia and I refer, without intending to be exhaustive, to the judgment of Northrop J in Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 where his Honour said at 373:

Section 170DE(1) refers to a “valid reason, or valid reasons”, but the Act does not give a meaning to those phrases or the adjective “valid”.  A reference to dictionaries shows that the word “valid” has a number of different meanings depending on the context in which it is used.  In the Shorter Oxford Dictionary, the relevant meaning given is: “2. Of an argument, assertion, objection, etc; well founded and applicable, sound, defensible: Effective, having some force, pertinency, or value.”  In the Macquarie Dictionary the relevant meaning is “sound, just, or well founded; a valid reason”.

In its context in s 170DE(1), the adjective “valid” should be given the meaning of sound, defensible or well founded.  A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s 170DE(1).  At the same time the reason must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business.  Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them.  The provisions must “be applied in a practical, commonsense way to ensure that” the employer and employee are each treated fairly, see what was said by Wilcox CJ in Gibson v Pty Ltd (1995) 60 IR 1, when considering the construction and application of s 170DC.

In my view, having regard to the exigencies of work at the respondent’s premises during the night fill shift, it is clear that any interference by staff with cigarettes, with or without an intention subsequently to pay for them, could constitute a valid reason for termination as that concept has been explained in the passage which I have just cited.  I also observe that there was no real issue taken either before the Judicial Registrar and certainly not before Wilcox J about the procedural fairness achieved in the processes of interview and discussion which occurred at the respondent’s premises before and after the appellant had been interviewed at the Newtown Police Station.

In these circumstances, and for the reasons which I have endeavoured briefly to explain, I consider that Wilcox J was entirely correct when he concluded his reasons for judgment by observing:

The case is really a very sad one because Mr Dayton seems to have had a promising career in Franklins.  However, the evidence starkly indicates Mr Dayton admitted at the time that he had taken the cigarettes without paying for them; that is to say, he had stolen them.

Mr Dayton was in a position of trust.  He was the senior person in a large store during the night, with control of the storeroom keys and some 50 people working under him.  It seems to me that, if a person in such a position is caught stealing, an employer has little option other than to terminate his employment.  To put the matter in terms of the legislation, there is certainly a valid reason for the termination related to the operational requirements of the employer’s undertaking.

As I say, this is a sad case; but I must uphold the employer’s submission that there was a valid reason for termination of the applicant.  The consequence is that the application for review must be dismissed.

Even putting a gloss on those remarks of his Honour’s to acknowledge the possibility that the appellant intended subsequently to pay for the cigarettes, I consider, in the light of the system which the respondent had erected, that the taking and consumption of cigarettes in the circumstances which prevailed on the night fill shift was sufficient to constitute a valid reason for termination.  Accordingly, I would dismiss the appeal.

I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan.

Associate:

Dated:            5 March 1998

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 776 of 1997

BETWEEN:	CHRISTOPHER NOEL DAYTON Appellant
AND:	FRANKLINS LIMITED Respondent

JUDGES:	RYAN, BRANSON and MARSHALL JJ
DATE:	5 MARCH 1998
PLACE:	SYDNEY

EX TEMPORE REASONS FOR JUDGMENT

BRANSON J:  I agree that it would not be appropriate for this Court, sitting on appeal from Wilcox J, to receive in evidence from the appellant a document, purportedly the original of a diary entry made by him on 6 June 1996, when the case before Wilcox J was litigated on the basis of a photocopy of that diary note.  The photocopy that was before Wilcox J does not include certain notations that can be seen on the original that has been shown to the Court this morning.

In my view, the decision of Wilcox J should be upheld.

I would dismiss the appeal.

I certify that this one page is a true copy of the Reasons for Judgment herein of the Honourable Justice Branson.

Associate:

Dated:            5 March 1998

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 776 of 1997

BETWEEN:	CHRISTOPHER NOEL DAYTON Appellant
AND:	FRANKLINS LIMITED Respondent

JUDGES:	RYAN, BRANSON and MARSHALL JJ
DATE:	5 MARCH 1998
PLACE:	SYDNEY

REASONS FOR JUDGMENT

MARSHALL J: This is an appeal by Mr Christopher Dayton from the judgment of Wilcox J (“the trial Judge”) given on 5 September 1997 in which the trial Judge dismissed Mr Dayton’s application to review the exercise of power by Judicial Registrar Tomlinson on 14 April 1997. The Judicial Registrar had dismissed Mr Dayton’s application pursuant to s 170EA of the Workplace Relations Act 1996 in which Mr Dayton had alleged that his employment had been unlawfully terminated by Franklins Limited (“Franklins”), the respondent to this appeal.

Mr Dayton commenced employment with Franklins at its Marrickville store in October 1992.  He was summarily dismissed from that employment on 6 June 1996.  In June 1996 Mr Dayton was a trainee night fill manager.  The position he occupied was a responsible one.  It was a position in which trust was vested in him by Franklins.  Mr Dayton had access to security keys and, as his title suggests, he had supervisory responsibility over other staff.

On the morning of 6 June 1996 Mr Dayton was interviewed by the store manager, Mr Hunter, and a loss prevention officer employed by Franklins, Mr Nasr.  Mr Dayton was interviewed in relation to an allegation that he had stolen cigarettes from a secured area of the store.  Shortly after the interview Mr Dayton made a diary note of the interview.  The diary note contains admissions by Mr Dayton of theft of cigarettes.  The note is consistent with evidence given by Messrs Hunter and Nasr of oral admissions of theft made at the interview.

Mr Dayton was interviewed by police in relation to the theft of cigarettes.  Senior Constable Ahern testified that oral admissions were made by Mr Dayton to him concerning the theft of cigarettes.  Mr Dayton claimed in his evidence that inducements were made to him to confess by management and the police.  He was disbelieved on that point by the Judicial Registrar and the trial Judge.  The trial Judge noted that no such inducements were referred to in Mr Dayton’s diary note.  The trial Judge was satisfied that Mr Dayton took cigarettes without paying for them; that is, that he had stolen them.  He held that Franklins had a valid reason for terminating the employment of Mr Dayton “related to the operational requirements of the employer’s undertaking”.

Mr Dayton filed a notice of motion which was returnable at the commencement of the appeal.  The notice of motion sought leave for the admission into evidence on the appeal of two types of documents:

1. Mr Dayton’s original diary notes; and

2. “Budget and other relevant material”.

There is, in my view, a real question as to whether the so-called original diary notes are in fact original diary notes or notes that had been supplemented since the trial.  The extra sentence in the notes contains the words, “I was saying I paid for them”.  It appears that those words, which are relied upon by Mr Dayton, were inserted by some person between the trial before Wilcox J and the appeal.  Those words appear in a position on the page which makes them appear out of sequence in what otherwise is a narrative description of events.

The copy diary notes which were tendered before the Judicial Registrar were certified by a Justice of the Peace as being a copy of the original which the Justice of the Peace said she had seen.  Those copy diary notes did not contain the words “I was saying I paid for them”.

The “Budget and other relevant material” was sought to be adduced in support of the submission that Mr Dayton was terminated for a reason extraneous to what I might call “the cigarette issue”.  No such suggestion was put to any witnesses called by Franklins before the Judicial Registrar.  The new material is therefore not such that had it been admitted it seems likely that an opposite result would have been produced; see Commonwealth Bank of Australia v Quade (1993) 178 CLR 134 at 141. I would also refuse leave for Mr Dayton to admit the new evidence as to the so-called original diary notes and “Budget and other relevant material”.

Having carefully read the reasons for judgment of the trial Judge I see no reason to disturb his finding that Mr Dayton stole cigarettes from Franklins.  Any contrary view would entail a finding that management representatives and police gave false evidence about Mr Dayton’s submissions in circumstances where relevant admissions are made in his own diary notes.

I find Franklins had a valid reason to terminate Mr Dayton’s employment based on its operational requirements and upon the conduct of Mr Dayton.  I am also satisfied that Mr Dayton was given a reasonable opportunity to disabuse Franklins concerning the allegations made against him which led to the termination of his employment.  I note that no such submission concerning procedural fairness was in any event raised before the trial Judge.  I would also dismiss the appeal and the notice of motion.

I certify that this and the preceding two (2) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall.

Associate:

Dated:            5 March 1998    (delivered ex tempore)

Counsel for the Appellant:	-
Solicitor for the Appellant:	Appeared in Person
Counsel for the Respondent:	-
Solicitor for the Respondent:	Michael J Easton Retail Traders’ Association of New South Wales
Date of Hearing:	5 March 1998
Date of Judgment:	5 March 1998