Daza-Pacheco, Sophia v Westpac Banking Corp

[1997] FCA 1522

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NI 2248R of 1996

BETWEEN:	SOPHIA DAZA-PACHECO APPLICANT
AND:	WESTPAC BANKING CORPORATION RESPONDENT
JUDGE:	MOORE J
DATE OF ORDER:	2 DECEMBER 1997
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The application is dismissed.

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NI 2248R of 1996

BETWEEN:	SOPHIE DAZA-PACHECO APPLICANT
AND:	WESTPAC BANKING CORPORATION RESPONDENT

JUDGE:	MOORE J
DATE:	2 DECEMBER 1997
PLACE:	SYDNEY

REASONS FOR JUDGMENT
(Delivered ex temopore)

This is an application for the review by a judge of a judgment of a Judicial Registrar given on 2 July 1997 in an application under s 170EA by Sophia Daza-Pacheco ("the applicant"), concerning her dismissal from her employment with the Westpac Banking Corporation ("the Bank"). The Judicial Registrar dismissed the application. During the proceedings before the Judicial Registrar, the applicant was represented by counsel but in the review she has appeared for herself and has been assisted by another.

The review was not a hearing de novo in the sense that evidence was not called afresh. Reliance was placed on exhibits tendered before the Judicial Registrar and the transcript of the proceedings before her, though the applicant did file an affidavit in the review. Given the fact that the applicant has been legally unrepresented I have endeavoured to ensure that the review was conducted in a way that fairly permitted her to put fully her case and also for the Bank to put its case fully.

The background leading to the termination of the applicant's employment may be summarised in the following way. She commenced working with the Bank in 1994 as a teller. In March 1996 she approached a manager of the Bank with a view to obtaining a loan for purchasing a house. The amount discussed was $121,000. Steps were taken to effect that loan, though the purchase of that property ultimately did not proceed. No loan funds were provided to the applicant. However in June of 1996 the issue again arose of the Bank providing loan funds to the applicant for the purposes of purchasing a property. Again the sum discussed was $121,000. That loan application was again approved and the loan effected. A sum approximating $107,000 was dispersed from the loan funds that were made available. That left a residue of funds undispersed which had been lent to the applicant.

That fact gave rise to events which led to the applicant's dismissal. The applicant in early September 1996 withdrew two amounts from the loan funds that had not been dispersed. On 13 September 1996 a sum of $2000 was withdrawn from the loan account and transferred to a personal account maintained in the name of the applicant. On 16 September 1996, a further sum of $3500 was likewise withdrawn from the loan account and transferred or deposited in the personal account of the applicant. It was the dealings of the applicant in relation to that second amount that ultimately led to the termination of her employment.

The evidence before the Judicial Registrar as to what happened on 18 September 1996, which in my view is a critical day in these proceedings, was not entirely consistent. With a view to dealing with the matter in a way that fairly takes into account the position of the applicant in these proceedings, I am prepared to accept for present purposes the evidence of her account of two conversations she had during 18 September 1996 with two other employees of the Bank. Her evidence is found at page 17 of the transcript of the proceedings before the Judicial Registrar on 11 March 1997.

The first conversation was with a Ms Mullins and the second was with a Mr Stephenson. The applicant's account of these two conversations is as follows (the first is a reference to the conversation with Ms Mullins):

"She said that she had received a report that had rejected my $3500 withdrawal and I asked her why, and she said she was not sure at the time and I said, "It was from my loan account" and she said, "Oh well, maybe it did not have a redraw facility on that loan", and I said, "Well, there should not have been a problem with it because the $2000 had gone through the week before with no problem that I had been made aware of at the time". And she also asked me if I could phone the staff lender and see if he could okay it. The staff lender was Max Stephenson. I rang Max. He said he could not okay it as he did not think that the bridging loan had a redraw facility but I told him it was a bridging option loan. He said he still was not sure and he could not okay it because it was not his account and he did not have the paperwork to refer to".

In my view, two things of significance emerge from this evidence. The first is that Ms Mullins was informing the applicant that she had received a report that had rejected the $3500 withdrawal. The second was that at Ms Mullins' suggestion, the applicant rang Mr Stephenson to see if he could approve or okay the loan. In that conversation, on the account of the applicant, it is plain that Mr Stephenson did not okay the loan. After these two conversations, it should have been apparent to the applicant, in my opinion, that there was a real uncertainty attending the withdrawal of the $3500 and thus a real uncertainty attending the use, if any, she could make of those funds.

Notwithstanding those two conversations and shortly after participating in them the applicant withdrew from her personal account the sum of $3460 representing, in substance, the amount of $3500 that had earlier been withdrawn from the loan account. In my opinion, the conduct of the applicant in following that course constituted conduct that provided the Bank with a valid reason for the termination of the employment of the applicant. I say that because the relationship of an employee to a bank is plainly enough a special one in the sense that it should ordinarily involve a fair measure, indeed a high measure, of trust and honesty. Indeed so much is reflected in a document entitled "Code of Conduct" which, it is common ground, was provided to the applicant when she commenced or shortly after she commenced employment with the Bank. In one part of that document it is said:

"As a fundamental principle, we in Westpac conduct ourselves with absolute honesty and integrity. We do not tolerate dishonest behaviour in other employees or customers. If we suspect dishonest behaviour we bring it to the attention of someone who will take action. Dishonesty and lack of integrity harm our business and may be an offence under the Crimes Act"

In my view, the conduct of the applicant can fairly be described as conduct evidencing a want of integrity on her part. To have conducted herself in the way she did flew in the face of the clear intimation she had received that there was some difficulty, and a significant difficulty, about the use by her of the sum of $3500 she had earlier withdrawn from her loan account. In my view the Bank has established, as it is required to given the onus of proof provisions in the Act, a valid reason for the termination of the applicant's employment having regard to her conduct.

However this leaves a residual issue arising under section 170DC of the Act. Section 170DC of the Act requires an employer to give an employee an opportunity to deal with allegations concerning, inter alia, the conduct of the employee. In evidence before the Judicial Registrar, a Mr Capell, who was instrumental in the bank taking the decision to terminate the employment of the applicant, said that he had formed the view that the applicant had been untruthful and that was a factor affecting the decision of the Bank or influencing the decision of the Bank to terminate the applicant's employment. While during the hearing of the review there was some uncertainty in my mind as to what the untruthfulness related to, it appears from an earlier passage in the evidence of Mr Capell, to which the applicant took me, that his reference to untruthfulness concerned the statements made by the applicant at the time as to her state of belief concerning her entitlements to withdraw funds from the loan account.

The grounds upon which the Bank proposed to consider the position of the applicant were communicated in a formal way to her in a letter dated 30 September in which three allegations are outlined. They each concern the use that was made by the applicant of the funds that had been made available to her in the loan account. The first allegation concerned the withdrawal of the $2000 on 13 September 1996 to which I earlier referred. The second related to the withdrawal of the $3500 on 16 September 1996 to which I earlier referred, and the third allegation related to the withdrawal of the $3460 on 18 September 1996 which again I earlier referred to. These allegations point to conduct involving the applicant dealing with the loan funds in a particular way. They do not expressly, and in my view do not by implication, also involve an allegation that the applicant had acted untruthfully in her dealings with the Bank during the course of its investigations of these three allegations.

To that extent, the failure of the bank to put to the applicant that her untruthful conduct or behaviour was a factor that might influence any decision ultimately made to terminate her employment was not an aspect of her conduct put to her for her to respond to. To that extent I am satisfied that there has been a contravention of section 170DC.

However it is a contravention of that section which, in the circumstances, would have had no material bearing on the ultimate decision the Bank took. The Bank's concern was primarily with the way the applicant had dealt with the loan funds and, in particular, the way in which she had withdrawn from her own account the sum of $3460 in circumstances where, as I earlier said, she was on notice that there was some real issue about her entitlement to follow that course. In those circumstances this is a case, in my opinion, where the discretion conferred by section 170EE of the Act which deals with the question of remedy should be exercised in such a way as to provide no remedy to the applicant. The course I will follow in a moment is to dismiss the application for review.

I should, however, mention one matter that assumed some significance in the hearing of the review and it arises from a document the applicant tendered without objection, namely a report of the Australian Banking Industry Ombudsman. The Ombudsman has considered a complaint made on behalf of the applicant by a Mr Roger Price, who is a member of Parliament. In the course of its consideration of the complaint, certain views have been expressed about some of the matters concerning the use by the applicant of the loan funds. In particular, reliance is placed by the applicant on page 11 of the report in which it is indicated that there was a measure of uncertainty attending the rights, or relating to the rights, of the applicant under the loan fund. There are six matters referred to which indicate why the Ombudsman has formed the view expressed on page 11. However these matters relate to the loan funds and the use that might be made of them but not the specific circumstances of the withdrawal of the sum of $3460, after the conversations between the applicant and Ms Mullins and Mr Stephenson. It is the conduct of the applicant after those conversations took place that, as I earlier noted, provided a valid reason for terminating the employment of the applicant. What is said by the banking Ombudsman at page 11 does not, in my view, answer the case put by the Bank. I propose to dismiss the application for review.

I certify that this and the preceding five (5) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore.

Associate:

Dated:            2 December 1997

The applicant appeared in person.
Counsel for the Respondent:	Mr A Moses
Solicitor for the Respondent:	Henry Davis York
Date of Hearing:	2 December 1997
Date of Judgment:	2 December 1997