Denise Mckay v Department of Family & Community Services

[2018] NSWSC 44

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:	Denise McKay v Department of Family & Community Services [2018] NSWSC 44
Hearing dates:	13 September 2017
Decision date:	02 February 2018
Jurisdiction:	Common Law
Before:	Button J
Decision:	(1) The appeal of the plaintiff to this Court is allowed. (1) The order of the NSW Industrial Commission (the Commission) dismissing the appeal of the plaintiff to the Commission is set aside. (2) The appeal of the plaintiff to the Commission is allowed. (3) The matter is remitted to the Commissioner for the making of orders pursuant to s 100D(1)(b)-(c) of the Industrial Relations Act 1996 (NSW) as the Commissioner sees fit. (4) The Industrial Relations Secretary must pay the costs of the plaintiff of the proceedings before me.
Catchwords:	INDUSTRIAL LAW – appeal from decision of Commissioner of Industrial Relations Commission dismissing an appeal against termination of employment of a government sector employee – appeal to Supreme Court limited to questions of law alone – whether findings of fact made by Commissioner for which no evidence – whether Commissioner failed to apply “Briginshaw standard” – whether inadvertence in one’s private life to criminality constitutes “misconduct” for the purposes of s 69 of the Government Sector Employment Act 2013 (NSW)– appeal upheld – matter remitted to Industrial Relations Commission for making of ancillary orders
Legislation Cited:	Government Sector Employment Act 2013 (NSW), ss 50, 68, 69 Industrial Relations Act 1996 (NSW), ss 100D,197B Medical Practitioners Act 1938 (NSW), s 26
Cases Cited:	Briginshaw v Briginshaw (1938) 60 CLR 336 Mathieu v Higgins & Anor [2008] QSC 209 McKay v Department of Family and Community Services [2017] NSWIRComm 1028 Pillai v Messiter [No 2] (1989) 16 NSWLR 197
Category:	Principal judgment
Parties:	Denise McKay (Plaintiff) Secretary Department of Family and Community Services (Defendant)
Representation:	Counsel: A Crossland /N Nesbeth (Plaintiff) RS Warren (Defendant)   Solicitors: Watsons Law (Plaintiff) Crown Solicitors (Defendant)
File Number(s):	2017/201431
Publication restriction:	Nil
Decision under appeal	Court or tribunal: Commissioner of the Industrial Relations Commission Jurisdiction: Industrial Relations Commission Citation: [2017] NSWIRComm 1028 Date of Decision: 6 June 2017 Before: Murphy C

Judgment

Introduction

1. This is an appeal pursuant to s 197B of the Industrial Relations Act1996 (NSW) (the Act) by the appellant, Ms Denise McKay, against the decision of a Commissioner of the Industrial Relations Commission (the IRC) on 6 June 2017, dismissing her appeal to the IRC and confirming the termination of her employment with the Department of Family and Community Services.

2. The parties were agreed that, pursuant to the appeal-creating provision, all grounds of appeal would need to be founded on questions of law alone.

3. The orders sought in an amended summons that was filed in court at the commencement of the hearing were as follows:

1. That pursuant to s 197B of the Industrial Relations Act 1996, the order of the NSW Industrial Commission (Commission) dismissing the Plaintiff’s Appeal, be set aside.

2. That the plaintiff’s appeal to the Commission made pursuant to s 98 of the Industrial Relations Act 1996 (the Act), be allowed.

3. That the matter be remitted to the Commissioner for the making of orders under s 100D(1)(b)-(c) of the Act.

4. Costs of the present Appeal.

4. Pursuant to s 50 of the Government Sector Employment Act 2013 (NSW) (the GSE Act), in proceedings such as these the proper respondent is the Industrial Relations Secretary. Nevertheless, for the comprehension of the reader, and bearing in mind the differing roles that the disputants have played throughout the course of events, I shall simply refer to Ms McKay as the appellant, and the respondent as the Department.

Chronological background

5. The events leading up to the appeal before me can be shortly stated; the following is derived from the reasons of the Commissioner.

6. The appellant commenced employment with the Department on 12 November 2007. She worked to help vulnerable families, including children who were in need of protection.

7. In October 2013, so-called synthetic cannabis became a prohibited drug in New South Wales.

8. In early 2015, the appellant became the Acting Manager in charge of casework at the Auburn Community Services Centre of the Department.

9. On 12 August 2015, New South Wales police executed a search warrant at the home that the appellant shared with her husband, his father, and her four-year-old child (I shall not, of course, refer to the child by name). The police located a large amount of the prohibited drug synthetic cannabis, drug paraphernalia, and a significant sum of cash.

10. The appellant was not charged with any offence arising from the execution of the search warrant. My understanding is that, at the least, her husband was charged with offences to do with dealing in prohibited drugs.

11. On 19 August 2015, the District Director of the South-Western Sydney District of the Department was advised that the police had made a report about the child of the appellant being exposed to prohibited drugs.

12. On 4 September 2015, the appellant was suspended without pay (subsequently her suspension was with pay), pending the resolution of five allegations against her. Those five allegations were as follows:

1. That you have exposed your child “A” to (schedule 1) illegal drugs in your family home, as recently as 12 August 2015.

2. That you have failed to report illegal activity being undertaken by your husband and his father.

3. That you have concealed illegal drugs in your home, as recently as 12 August 2015.

4. That prior to, and after October 2013, you have been knowingly involved in a drug distribution business.

5. That you have engaged in unauthorised secondary employment.

13. On the same day, an investigator was engaged by the District Director to investigate the five allegations made against the appellant.

14. On 21 July 2016, the investigator provided his report to the District Director. In a nutshell, having considered evidence provided by the New South Wales police, and having extensively interviewed the appellant, the investigator came to the opinion that the appellant was aware of the criminal conduct of her husband, and of the presence of prohibited drugs within their home.

15. Focusing with precision on the five allegations set out above, the investigator found that allegations (3) and (4) were not sustained, but that allegations (1), (2), and (5) had been sustained on the balance of probabilities.

16. The District Director reviewed the report of the investigator, and came to the view that the appellant had engaged in misconduct, and that that misconduct justified termination of her employment.

17. On 21 July 2016, the District Director wrote to the appellant, advising her that, in the opinion of the Director, the appellant had engaged in misconduct with regard to allegations (1), (2), and (5). The appellant was given a chance to make submissions, including as to penalty.

18. Over subsequent weeks, written submissions and a number of character references were provided by the solicitor for the appellant to the Department.

19. On 17 August 2016, in the absence of the District Director, the Acting District Director wrote to the appellant directing her to resign, on pain of termination.

20. On 30 August 2016, the District Director returned from leave, and considered for herself the material provided by the solicitor for the appellant. The District Director did not come to a view contrary to that of the Acting Director.

21. On the same date, the appellant filed a notice of appeal in the Industrial Registry of the IRC.

22. On 1 September 2016, the District Director wrote to the appellant, advising her that her employment had been terminated, effective immediately.

23. Over a number of days in the first part of 2017, the hearing of the appeal to the IRC against the decision of the Department to terminate the employment of the appellant took place before the Commissioner.

24. The Commissioner provided his decision resolving that appeal on 6 June 2017, and dismissed it. Extensive reasons were given for that order: see McKay v Department of Family and Community Services [2017] NSWIRComm 1028.

25. It is from that decision that this appeal has been brought to this Court.

The reasons of the Commissioner

26. Due to the focused way in which the appeal was conducted, it is not necessary to provide anything but a very concise summary of the majority of the reasons for the decision of the Commissioner.

27. In short, the Commissioner found (contrary to the finding of the investigator) that allegation (5) had not been made out. That was on the basis that, although the appellant had been a director of a company maintained by her husband, in light of the fact that she played no active part in it, she was unaware that she required approval from the Department in order to fulfil the role of director. As well as that, the Commissioner queried in any event whether a non-active directorship was captured by the definition of “private work” to be found in the relevant code of conduct.

28. Allegation (2) was not sustained either (again, contrary to the finding of the investigator). In a nutshell, the Commissioner found that the appellant did not know of the illegal activities of her husband and her father-in-law, and therefore was not in a position to report it to the authorities.

29. Finally, allegation (1) as originally framed was not established either. In short, the Commissioner was not satisfied that the appellant knew of the illegal activity, or knew of the presence of the prohibited drugs in the home. For those reasons, the Commissioner was not satisfied that the appellant actively or intentionally exposed her four-year-old child to those prohibited drugs. (In the rest of this judgment, I shall refer to that allegation as “primary allegation (1)”).

30. None of those exculpatory findings of the Commissioner need to be explored more deeply by me in this judgment, because (of course) the appellant does not impugn any of them in her appeal.

31. The Commissioner, however, did make a finding of misconduct against the appellant. In a nutshell, it was that her failure to be aware of the illegal activities of her husband within her private life constituted misconduct for the purposes of the Act. It was on the basis of that finding that the appeal was dismissed. In this judgment, I refer to that finding as “secondary allegation (1)”.

32. The portion of the reasons that relate to secondary allegation (1) is not overly long. Rather than quoting disjointed portions of it, I consider that it is just as easy to provide it in its entirety.

“116. The starting point for consideration of whether or not the appellant’s failure to be aware of the presence of synthetic cannabis in her home, in places accessible to her daughter, constituted negligence, is the position she held with the Department. The appellant’s job had as its focus, the protection of children at risk, including the risk of children being exposed to illegal drugs.

117. I accept the following evidence given by Ms Donnellan [the District Director, South Western Sydney District], which was not disputed:

During her employment with FACS, Ms McKay was required to make tough decisions regarding the safety of children, using sound judgement and always acting in the best interests of children. Caseworkers and Managers need to have difficult conversations with parents/carers about the safety of their children. These assessments require keen observation and questioning skills, the ability to assess immediate and long term safety of children.

118. The appellant was engaged in an occupation in which consciousness of the dangers that exposure to illegal drugs posed to children was paramount. It was not a job which could be performed by any air headed individual who is oblivious to what is going on around them, and, in my assessment, the appellant is certainly not such an individual.

119. The appellant was particularly alive to the dangers posed by synthetic cannabis and she made her feelings known to her husband during the conversation she had with him in 2012 (at paragraph 60 above [not extracted]). She was aware that synthetic cannabis was addictive and, through her work, she had seen the “issues” it had caused for its users. She didn’t want anything do with the substance and she didn’t want her husband to have anything to do with it. Importantly, the appellant did not care, at this time, that synthetic cannabis was not an illegal drug. The fact that synthetic cannabis subsequently became an illegal drug, a matter about which the appellant, surprisingly, claimed to have been unaware, would not have changed her views as to the danger that exposure to this drug could pose to children.

120. The submission was put that what the appellant understood, at the time of this conversation, was not that her husband had been dealing, selling or handling synthetic cannabis, but rather that, while he worked at King of the Pack, representatives would come to him to attempt to sell the product to King of the Pack for him to then distribute it to the tobacconists that he had developed. It was then submitted that there is no evidence that the appellant believed her husband to be involved commercially with synthetic cannabis at the time of this conversation (or indeed ever), or that, at this time, he was involved.

121. During the interview between the appellant and Mr Madden [the investigator] on 8 March 2016, as part of the investigation, the following exchange occurred in relation to one of her husband’s business entities, Sky High Distributors:

Madden: So the Sky High Distributors, the Police have indicated that that was the sale of synthetic cannabis the time when the sale was legal. Do you know whether that’s true or not?

Appellant: Don’t know. Like I said, he was doing on-line – I mean accessories for cigarettes, so I don’t know what exactly that was.

Madden: So during the time that you knew him and prior to the legislation changing in 2013, did you ever become aware that he was involved in the sale of synthetic cannabis, this is when it was illegal?

Appellant: No. I knew that obviously the King of the Pack, obviously he was exposed to that, but that’s all I knew

Madden: So sorry, so you knew he was exposed to it?

Appellant: King of the Pack being tobacconists, they had reps coming to them and things like that, but that’s as much as I knew about it. I think I spoke about it in my statement saying that I was aware that was being sold through those stores when it was legal, but that was not something that I was – I was against it, I don’t agree with it.

Madden: Okay, but what you said is that even when it was legal and he was involved in Sky High Distributors Pty Limited, you were unaware that it was involved in the sale of synthetic cannabis, albeit legal at that time?

Appellant: He sold a lot of different things. I don’t know exactly everything that he sold from that.

Madden: But did he ever discuss that he was selling synthetic cannabis during the time that it was legal?

Appellant: He talked about being able to get it and do it if he wanted to, but obviously we had discussions about how I felt about it.

Madden: Okay, but specifically – and I’m sorry, I just need to clarify – did he ever actually indicate he was involved in the distribution?

Appellant: Can we just stop for a minute?

Madden: Yeah, absolutely. Suspend at 10:04.

[SHORT ADJOURNMENT]

Madden: Interview resumed at 10:06. So sorry, just to clarify then, in terms of prior to 2013 and the legislation and during the time – changes in the legislation and during the time your husband was involved in Sky High Distributors Pty Limited, did he ever indicate to you that he was involved in the sale of synthetic cannabis?

Appellant: He talked about lots of different accessories. I wasn’t specific in what he said he was buying.

122. I take it from this extract from the appellant’s interview with Mr Madden, that the appellant’s husband had discussed with her the possibility of him obtaining and selling synthetic cannabis at a time when this would have not been illegal. However, the appellant’s position was that, regardless of its legal status, she was aware of the dangers which synthetic cannabis posed and she didn’t want herself or her husband to have anything to do with it. Nevertheless, the appellant was unable to say whether or not her husband was involved in the sale of the drug through his business, Sky High Distributors, at a time when synthetic cannabis was not an illegal drug.

123. Under cross-examination, the appellant gave the following evidence:

Q. So, do you agree with the proposition, after he stopped - I understand that he stopped Sky High, which was his business, prior to October 2013. Did you understand him to be selling synthetic cannabis prior to that date?

A. No, as I’ve said previously, he told me he was selling tobacco accessories, so he was doing lighters, cigarette cases, e-cigarettes, things like that, that’s what he told me.

Q. But you did have conversations with him about selling synthetic cannabis, did you not?

A. When he was working for King of the Pack, prior to him leaving that job.

Q. And you told him, I understand, that you didn’t want him to have anything to do with it?

A. Yes.

Q. But he didn’t take any notice of you, obviously.

A. It would appear so.

124. It is apparent that the appellant understood that her husband’s interest in, and involvement with, synthetic cannabis extended beyond simply being approached by “reps” to distribute the substance to tobacconists when he worked for King of the Pack. It is apparent that they had a conversation, or conversations, about selling synthetic cannabis when he worked for King of the Pack, and that he later talked about how he could obtain and sell the drug through his own business, Sky High Distributors.

125. Whilst the conversation about synthetic cannabis which the appellant had with her husband in 2012 (set out at paragraph 60 above) might not have “put her on high alert about what her husband was doing”, it should have, at the very least, made her aware of her husband’s ability to obtain and distribute synthetic cannabis if he wanted to. Accepting the appellant’s claim that she was unaware, until 12 August 2015, that to do so would be illegal, she should, nevertheless, have been diligent to ensure that her husband did not bring the substance into the family home even though, in her mind at least, no illegality would be involved if he did. But that is precisely what happened.

126. Whilst the evidence does not disclose how long the synthetic cannabis had been present in the family home, there is enough evidence to support the inference that it had been there for a sufficiently long period of time to have been detected by the appellant had she not been grossly negligent in failing in her duty to protect her child from exposure to what she regarded as a dangerous substance.

127. A document prepared by the Department listing what was seen in the video recording of the execution of the search warrant, shows the discovery of the following items and the locations where they were found around the appellant’s home:

- A notepad is located on the dining table which contains handwritten notes referring to amounts of synthetic cannabis and money owed by individuals.

- Packaged synthetic cannabis located in Mr Algie’s [the husband of the appellant] desk drawer.

- “Hardcore XXX” labels and more packaged synthetic cannabis found in the top drawer of Mr Algie’s desk.

- Large silver bowl containing synthetic cannabis, scales and a black bag of synthetic cannabis located in a bottom drawer of Mr Algie’s desk.

- 7 gram labels for synthetic cannabis found in the drawers of Mr Algie’s desk.

- Packaged synthetic cannabis located in the top drawer of the dresser in the bedroom.

- Small resealable bags located in the drawer of the dresser in the bedroom.

- Packaged synthetic cannabis located in a side pocket of a bag in the bedroom. Mrs McKay states that Mr Algie was the last to use that bag.

- “Hardcore XXX” labels and five packets of synthetic cannabis located in the left pocket of Mr Algie’s shorts in the bedroom.

128. A great deal more of the drug and drug paraphernalia was discovered in the downstairs area of the house which, the appellant claimed that she did not access. Nevertheless, in the living area of the home, which was accessible to the appellant and to her daughter, the number and variety of items, and the different locations in which they were found, precludes an inference being drawn that they all spontaneously and simultaneously appeared there in the period immediately prior to the execution of the search warrant on 12 August 2015.

129. Whilst it is not possible to be precise, I do draw the inference that synthetic cannabis had been present in the home for a significant period of time and, certainly, a sufficiently long period of time to have been discovered by the appellant had she bothered to look.

130. In my opinion, the appellant’s lack of awareness of the presence of synthetic cannabis in her home, in places which were accessible to her daughter, was the product of her “turning a blind eye” to what her husband was bringing into the home. This constituted a dereliction of her responsibility to be aware of risks in the home to her daughter’s health and safety. Even if it be accepted that the appellant was not consciously aware of the presence of synthetic cannabis in her home, her lack of such awareness was the product of gross negligence of such magnitude as to constitute misconduct on her part.

131. Counsel for the appellant submitted that the Department is asking the Commission to extend or change what the law says in Rose about the circumstances in which conduct away from work might constitute the basis for dismissal. I have previously expressed reservations about the extent to which the statements made by Ross VP in Rose might be of assistance in resolving unfair dismissal claims where the dismissal occurred as a result of out-of-hours conduct, but in completely different factual circumstances to those present in Rose (see Hansen v Secretary of the Department of Transport – as head of the Transport Service and exercising the employer function of staff of Roads and Maritime Services [2016] NSWIRComm 1011 at [28]-[72]). I do not repeat those remarks here but simply observe that caution needs to be exercised in applying statements made in a case such as Rose, where the dismissal arose as a consequence of two drunken Telstra technicians getting into a fight in a hotel long after they had both knocked off work, to a case involving completely different facts and circumstances, such as the present matter.

132. Unlike the situation in Rose, the misconduct of the appellant in the present case had a direct connection with her child protection role in the Department. It was conceded by the appellant that, if she had knowingly exposed her daughter to illegal drugs, then her dismissal was justified and her appeal must fail (see paragraph 50 above). I fail to see how exposing her daughter to illegal drugs loses its connection with the appellant’s job if it occurs as a consequence of her gross negligence, rather than in her conscious awareness.

133. Allegation (1) of the misconduct allegations against the appellant is sustained on the evidence. Through her own negligence, the appellant did expose her child “A” to (schedule 1) illegal drugs in her family home, as recently as 12 August 2015.”

33. It is from the dismissal of the appeal, on the basis explained above that secondary allegation (1) had been established, that Ms McKay has appealed to this Court.

34. I interpolate at this stage that, at the hearing of the appeal, counsel for the appellant respectfully submitted that, despite the degree of imprecision in the terminology used by the Commissioner to describe the state of mind of the appellant that led to the finding of misconduct (for example, “failure to be aware”, “gross negligence”, “lack of awareness”, “turning a blind eye”, “not consciously aware”), I should approach the reasons on the basis that what was actually found against the appellant was that she had been truly inadvertent to the illegal activities of her husband.

35. Importantly, at the hearing before me counsel for the Department conceded that that is the way in which I should approach the reasons of the Commissioner.

36. In other words, I shall in due course determine the appeal on the basis that the Commissioner did not find that the appellant committed the tort of negligence; nor (in a more general sense) was subject to a duty that she breached; nor that she was wilfully blind, in the sense that she suspected something of the activities of her husband, but deliberately closed her eyes to them.

37. In accordance with the joint position of the parties at the hearing before me, I shall determine the appeal on the basis that the adverse finding of the Commissioner was simply that the husband of the appellant was engaged in the supply for profit of a prohibited drug, and, despite the fact that they shared a home, the appellant was sincerely and completely unaware that that was occurring.

Grounds of appeal

38. Although a multiplicity of grounds were notified before the hearing by the appellant, at the hearing her counsel gave me to understand that the three overarching grounds relied upon were as follows.

39. First, the Commissioner made a number of findings of fact for which there was no evidence. It was said that, in doing so, the Commissioner committed an error of law.

40. Secondly, with regard to secondary allegation (1), the Commissioner did not apply the well-known “intermediate standard of proof” discussed in Briginshaw v Briginshaw (1938) 60 CLR 336.

41. Thirdly, it was an error of law for the Commissioner to find that inadvertence on the part of the appellant in her private life to the criminality of another person could constitute misconduct for the purpose of s 69(1) of the GSE Act. Counsel for the appellant emphasised that the ground had two discrete bases: first, the contention that “gross negligence” could not be misconduct; secondly, the contention that conduct outside one’s employment cannot constitute “negligence” in any event.

42. It is convenient to deal with each of those grounds in the order in which I have summarised them above. Having said that, due to my decision with regard to the third of them, the first two are not dispositive, and accordingly I shall deal with them quite concisely.

The first ground – findings for which no evidence?

Submissions of the appellant

43. Counsel for the appellant submitted that a factual finding with no evidentiary support could constitute an error of law.

44. There were three findings that were impugned as simply unsupported by any evidence before the Commissioner.

45. The first fact impugned was whether the husband of the appellant told her that he could obtain and sell drugs through his own business, Sky High Distributors: see the extract from the reasons for decision above at [124]. The finding was based on a conversation that took place between the appellant and her husband. Counsel for the appellant submitted that the conversation about the general topic of the selling of synthetic cannabis in fact took place in 2012, when her husband worked for King of the Pack, not Sky High Distributors, for which he worked quite some time later.

46. Counsel for the appellant submitted that such a misstatement of fact was important, as the question of when it was that the appellant was told certain things by her husband could have had an impact upon the extent of her knowledge (or lack thereof) of his activities at a later time; that is, when her misconduct was alleged to have occurred.

47. The second fact impugned was the finding by the Commissioner of wilful blindness on the part of the appellant. It was said that that was simply unavailable. As I have said, counsel for the appellant was content, however, with me approaching the matter as a whole on the basis that a finding was correctly made of what I have called true inadvertence; in other words, complete lack of knowledge, without a disingenuous shutting of one’s eyes to what one suspects.

48. The third finding of fact impugned was again to be found in [124]. It was said that, quite apart from the error to do with chronology, it was not open to find that the understanding of the appellant was that the interest in, and involvement with, synthetic cannabis of her husband went beyond approaches from sales representatives. Again, it was simply submitted that there was no evidence for that proposition.

Submissions of the Department

49. In response to the first impugned fact regarding chronology, counsel for the Department submitted that, whilst the Commissioner may have wrongly attributed the conversation the appellant had with her husband to the period when he was working at Sky High Distributors, the simple fact remained that, at some stage during the employment of the husband of the appellant, he had a conversation with his wife about the capacity to obtain and sell cannabis.

50. And in any event, whenever the conversation took place, counsel emphasised that, in accordance with his concession, the appeal is to be understood as being from a finding of true inadvertence, nothing more.

51. As for the second impugned fact, it was said to be captured by the same concession.

52. Finally, as for the third, it was said that the portion of the reasons immediately preceding [124] shows that there was a plethora evidence for that proposition.

Determination

53. Speaking generally, I accept the basal proposition of counsel for the appellant that a factual finding for which there is absolutely no evidence can be characterised as an error of law.

54. And as for the first impugned fact regarding chronology, it does seem that an error was made by the Commissioner in referring to the husband of the appellant as having told her things at one stage, when he was employed by one company, as opposed to at another stage, when he was in fact employed by another company.

55. Contrary to the submission of counsel for the appellant, however, I consider that that incorrect statement of fact in the reasons is of no great moment, and certainly should not lead to the appeal being upheld. And I say that appreciating his point that there was a significant difference in times with regard to when the husband of the appellant was employed by one company or the other.

56. I take that view for the simple reason that, with regard to all grounds, I consider that the Commissioner accepted the correctness of the assertions of the appellant: she did not know about the activities of her husband. So much may be seen from the reasons in support of the findings that allegations (2), (5), and primary allegation (1) had not been sustained.

57. In similar vein, secondary allegation (1) was not upheld on the basis of a rejection of the position of the appellant about any matter of fact. Indeed, secondary allegation (1) embraced her assertion that she knew nothing of the activities of her husband. As I have said, I approach the finding with regard to secondary allegation (1) as a determination that, even accepting that she knew nothing of the dealing in a prohibited drug, still and all that state of mind – true inadvertence – constituted misconduct for the purposes of the Act.

58. Because I believe that the factual error was of no moment with regard to the allegation that was actually upheld against the appellant by the Commissioner, I reject this part of the ground.

59. As for the second impugned fact, in light of the joint position of counsel at the hearing, it falls away as irrelevant. It is true that wilful blindness is surely a more “active” state of mind than true inadvertence. But I repeat: counsel for the Department conceded that the appeal should be determined on the basis that the Commissioner found nothing more than true inadvertence.

60. As for the third impugned fact, this part of the ground does not need to be discussed in detail. That is because the extract that I have provided shows that there was an abundance of evidence to support the finding made in [124].

61. In short, I reject the first ground.

Second ground – failure to apply the appropriate “standard”?

Submissions of the appellant

62. Counsel for the appellant submitted that the “Briginshaw standard of proof” should have been applied by the Commissioner with regard to the adverse determination. It was accepted that the Commissioner twice referred to that decision of the High Court of Australia when recounting the submissions of counsel for the appellant. It was also accepted that subsequently, at [110], the Commissioner said that the matter would be decided according to “the requisite standard”. But it was submitted that the “leap of reasoning” with regard to secondary allegation (1), and the absence of reference to the standard in the portions of the reasons that I have extracted, strongly suggest that the relevant principles had not been applied.

Submissions of the Department

63. Counsel for the Department accepted that, despite the fact that the rules of evidence did not apply before the Commissioner, it was appropriate for the the “Briginshaw standard” to be applied in a practical sense.

64. But he submitted that, if one reads the reasons for decision as a whole, it was indeed applied by the Commissioner. He relied upon the explicit and implicit references to it by the Commissioner, and he submitted that the approach of the Commissioner to findings of fact at [126] was an example of its application.

Determination

65. I accept that it is appropriate to adopt the need for a state of comfortable satisfaction and the cautious approach that have together come to be known as the “Briginshaw standard of proof” in proceedings such as those before the Commissioner, even if the rules of evidence do not strictly apply: see Bronze Wing International Pty Ltd v Safework NSW [2017] NSWCA 41.

66. In my opinion, however, the principles discussed in Briginshaw were indeed applied by the Commissioner. I say that for the following reasons.

67. First, the principles were expressly referred to more than once in the reasons. At paragraphs [73] and [82], the Commissioner referred to the submission of counsel for the appellant that that was the appropriate standard. And subsequently, at [110], the Commissioner spoke explicitly of “the requisite standard”. The inference is irresistible that the Commissioner was there referring to the standard of proof to which counsel for the appellant had invited him, and to which the Commissioner had previously made reference on two occasions in the reasons.

68. Secondly, the determinations made by the Commissioner in favour of the appellant with regard to allegations (2) and (5), and primary allegation (1), focusing as they did on factual matters, and contrary as they were to the findings of the investigator, strongly support the proposition that the principles were actually applied by the Commissioner in practice.

69. Thirdly, it would surely have been oddly inconsistent for the Commissioner to have applied the principles with regard to all other allegations, but to have disregarded them with regard to secondary allegation (1). In other words, I consider that the absence of specific reference to the principles in the extract that I have provided above is of no moment.

70. Fourthly and finally, I respectfully think that the ground is inapposite with regard to secondary allegation (1) – as I have said, the only allegation that was ultimately established to the satisfaction of the Commissioner – in any event.

71. That is because that allegation proceeded on the assumption that the position of the appellant was to be accepted: she had no knowledge of the unlawful activities of her husband. It can be seen that the finding with regard to secondary allegation (1) is that, even accepting her factual assertions, nevertheless, in the evaluative judgment of the Commissioner, the appellant committed misconduct for the purposes of the Act.

72. The assessment on the part of the Commissioner that the appellant did so was an exercise in statutory interpretation, combined with an evaluative or normative judgment about the “culpability” of her lack of knowledge of the criminal conduct of another, and the consequences that that conduct had for her child. It was not an acceptance of alleged facts, on any standard of proof, that were contrary to the assertions of the appellant. I repeat: the Commissioner accepted the assertion of the appellant about a matter of fact; namely, her state of mind of complete lack of knowledge about what was occurring in the family home.

73. In short, I do not accept that, in dismissing the appeal, the Commissioner committed any legal error with regard to the principles discussed in Briginshaw. For a number of reasons, I am affirmatively satisfied that that “standard of proof” was indeed applied, to the extent necessary, in the determination of the appeal.

74. This ground is rejected.

Third ground – inadvertence in private life as misconduct?

This ground calls for interpretation of s 69, Part 5 of the GSE Act. It is as follows:

69 Misconduct – Public Service and other prescribed government sector employees

(1)    In this section:

government sector agency means:

(a)   a Public Service agency, and

(a1)   that part of the NSW Police Force comprising administrative employees under the Police Act 1990, and

(b)   any other government sector agency prescribed by the regulations for the purposes of this section.

misconduct extends to the following:

(a)   a contravention of this Act or an instrument made under this Act,

(b)   taking any detrimental action (within the meaning of the Public Interest Disclosures Act 1994) against a person that is substantially in reprisal for the person making a public interest disclosure within the meaning of that Act,

(c)   taking any action against another employee of a government sector agency that is substantially in reprisal for a disclosure made by that employee of the alleged misconduct of the employee taking that action

(d)   a conviction or finding of guilt for a serious offence.

The subject matter of any misconduct by an employee may relate to an incident or conduct that happened while the employee was not on duty or before his or her employment.

serious offence means an offence punishable by imprisonment for 12 months or more (including an offence committed outside New South Wales that would be an offence so punishable if committed in New South Wales).

(2)   The person who exercises employer functions in relation to an employee of a government sector agency is responsible for dealing with any misconduct by that employee in accordance with this section.

(3)   The government sector employment rules may deal with the following:

(a)   misconduct by employees of government sector agencies,

(b)   the procedural requirements for dealing with allegations of misconduct by employees of government sector agencies (consistently with procedural fairness).

(4)   If, in accordance with those rules, there is a finding of misconduct by an employee of a government sector agency, the person who exercises employer functions in relation to the employee may take any of the following actions:

(a)   terminate the employment of the employee (without giving the employee an opportunity to resign),

(b)   terminate the employment of the employee (after giving the employee an opportunity to resign),

(c)   impose a fine on the employee (which may be deducted from the remuneration payable to the employee),

(d)   reduce the remuneration payable to the employee,

(e)   reduce the classification or grade of the employee,

(f)   assign the employee to a different role,

(g)   caution or reprimand the employee.

(5)   Proceedings and actions under this section may be taken or continued despite the employee resigning or otherwise ceasing to be an employee of the agency concerned. Any such action may be expressed to be a termination of employment even if the person has ceased to be an employee.

(6)   This section does not apply to that part of the NSW Police Force comprising police officers or to any employees of a government sector agency excluded from this section by the regulations.

Submissions of the appellant

75. A degree of helpful refinement of the submissions of both counsel took place of hearing. At its closure, I understood the submissions of counsel for the appellant regarding this ground to be the following.

76. First, the conduct or states of mind of the appellant in her personal life or home life could not found a finding of “negligence” on the part of the Commissioner.

77. Secondly, a finding of inadvertence cannot constitute misconduct for the purposes of s 69, especially inadvertence away from one’s work about something that occurs away from one’s work.

78. Thirdly, inadvertence to something in the private life of a person may lead others to query the appropriateness of that person for his or her employment. That may especially be the case if that employment requires careful advertence to matters. But doubts about the appropriateness of a person for his or her employment are not equivalent to misconduct by that person for the purposes of his or her employment.

79. Fourthly, it is true that s 69(1) explicitly extends the definition of misconduct to a number of acts or circumstances. But what was found against the appellant here falls within none of them. And whilst it is true that the definition of misconduct is not closed by that extension, there is nothing to suggest that Parliament intended that extension to capture inadvertence in one’s private life.

80. Fifthly, the structure of the GSE Act itself suggests that inadvertence in one’s private life cannot constitute misconduct. In particular, s 68 speaks of conduct that is “unsatisfactory performance”, which is certainly a lesser standard than misconduct. Counsel submitted that inadvertence that occurred at work could perhaps constitute unsatisfactory performance, but not misconduct. If that be the case, he submitted, it is inconceivable that inadvertence away from work could constitute misconduct leading to termination.

81. Sixthly, it is true that in Pillai v Messiter [No 2] (1989) 16 NSWLR 197 at page 200 Kirby P made reference to the possibility of gross negligence at work constituting misconduct. And it was accepted by counsel that that approach of Kirby P had been adopted to a degree in a single judge decision of the Supreme Court of Queensland: Mathieu v Higgins& Anor [2008] QSC 209. But counsel made the point that, in each of those cases, the approach was taken that, for gross negligence to constitute misconduct (in those different statutory contexts), it would need to be something well beyond the tort of negligence: Kirby P at page 200B, Samuels JA (Clarke JA agreeing) at page 210G of Pillai, and Daubney J at [26] of Mathieu. Here, something less than tortious negligence – true inadvertence, not in the context of work – was relied upon to find misconduct.

82. Seventhly and finally, counsel emphasised that inadvertence is different from, and lesser than, negligence. In using the latter word, the Commissioner was surely doing so colloquially. As was agreed between the parties, the finding made against the appellant was that she was sincerely inadvertent to something going seriously wrong in her private life. And yet her employment has been terminated on the basis that she has committed misconduct. That outcome, counsel submitted, simply cannot be legally correct.

Submissions of the Department

83. By the conclusion of the hearing, I understood the submissions of counsel for the Department to be able to be summarised as follows.

84. First, s 68 is speaking of unsatisfactory performance that can lead to termination. Section 69 is speaking of misconduct that can lead to termination. It is noteworthy that the definition of the latter concept is explicitly extended by its definition in s 69 (1). That extension can hardly be relied upon by the appellant as some sort of limitation of the concept.

85. Secondly, s 69 is clear on its face: the necessary misconduct need not occur at work, and can occur in one’s private life.

86. Thirdly, in Pillai at page 200, Kirby P spoke of whether gross negligence could constitute misconduct. The learned President said “[o]n the other hand gross negligence might amount to relevant misconduct, particularly if accompanied by indifference to, or lack of concern for, the welfare of the patient”.

87. Counsel submitted that that shows that, in some circumstances, negligence at work can indeed constitute misconduct. If that is the case, bearing in mind the clarity of the last few words of s 69(1), there is no reason why negligence, or inadvertence, away from work could not also constitute misconduct.

88. Fourthly and finally, counsel for the Department was unable to take me to any decision of the IRC, or of this Court, that supported the proposition that inadvertence in one’s private life can constitute misconduct for the purposes of this section. But I understood his position to be that an absence of authority could hardly be adversely determinative of a perhaps novel question of statutory interpretation.

Determination

89. The first part of the ground can, with respect, be promptly rejected. That is because, as can be seen from the extract above, the concluding portion of s 69(1) of the GSE Act is as follows: “The subject matter of any misconduct by an employee may relate to an incident or conduct that happened while the employee was not on duty or before his or her employment.”

90. Contrary to the submission of counsel for the appellant, in my opinion it is clear that physical acts and concomitant mental states, committed or adopted whilst one is away from work, certainly can constitute misconduct.

91. The appeal in my opinion turns on the second part of this ground: whether or not a state of inadvertence, which occurs in one’s private life, to the criminality of another, can constitute misconduct for the purposes of the statute.

92. In my opinion, there are a number of reasons why it cannot do so.

93. First, unaided by a definition in the statute of the concept of misconduct, I approach the task of interpreting the use of that word within s 69 by considering its text, its context, and its purpose.

94. As for its text, the word “misconduct” as a matter of English usage certainly almost always captures a sense of physical or mental activity. It does not usually capture doing nothing or knowing nothing.

95. To give an example, one would hardly speak of a person misconducting himself or herself in a hotel by imbibing and dining on a Saturday evening if he or she physically did nothing wrong, and mentally thought or believed nothing at all about the conduct of others. To be more specific, if such a person were completely inadvertent to the fact that drug deals were going on around him, one would hardly use the word “misconduct” to describe that state of affairs.

96. More fundamentally, to the extent that misconduct is the negative subset of the concept of “conduct”, the latter is surely almost always understood to be actual, or positive, physical activity. Conduct connotes doing something.

97. Furthermore, even if, as a matter of plain English, the concept of misconduct can be expanded to capture a state of mind combined with a physical omission, that should surely be thought of as negligence. And yet, in truth, as I have said more than once, it is agreed that what the Commissioner was speaking of here was true inadvertence, as opposed to negligence, wilful blindness, or any other more “active” state of mind.

98. The Macquarie Dictionary provides two definitions of the noun misconduct:

“1. improper conduct; wrong behaviour.

2. unlawful conduct by an official in regard to his or her office, or by a person in the administration of justice, such as a lawyer, witness, or juror.”

99. The Oxford English Dictionary is more extensive:

“1. a. “In pl. Instances of unacceptable or improper conduct or behaviour.

b. Improper or unacceptable conduct or behaviour. Frequently, esp. in Law (euphem.): adultery or other illicit sexual activity.

2. Bad management; mismanagement; (spec. with regard to official or professional duties) malpractice; culpable neglect.”

100. Nothing in those definitions assists the Department in the resolution of this question. The only possible assistance is to be gained from the reference to “culpable neglect”. But as I have repeatedly shown, the parties were content for me to understand this case as not being about neglect or negligence, but rather true inadvertence.

101. Focusing next on context, it can be seen that the provision under consideration is found within a part of the Act that deals with the sanction to be applied to government sector employees for things done by them that are (for want of a better word) wrongful. Section 68 speaks of unsatisfactory performance. Section 70 speaks of suspension from duty pending a decision regarding misconduct, a criminal charge or corrupt conduct. The sanctions in that part of the statute include, as here, termination of paid employment that will surely be quite valuable. Again, the context of the imposition of serious sanction suggests that inadvertence does not constitute misconduct.

102. As well as that, the preceding section, s 68, speaks of the sanctions for unsatisfactory performance by a government sector employee. The structure of the sanctions show that, as one would expect, Parliament regards misconduct pursuant to s 69 as more serious than unsatisfactory performance pursuant to s 68. That structural aspect shows that misconduct must be understood as something serious; certainly, something more serious than unsatisfactory performance of one’s duties at work. To my mind, that assists the argument of the appellant.

103. Finally as to context, neither counsel suggested that there was anything in the legislative history of the section under consideration that was illuminative.

104. Turning now to purpose, again it can be seen that this is a regime that has punitive features, in that a finding of misconduct can lead to sanction. No doubt, true “negligence” (in the sense of a physical and mental failing in circumstances in which one has a duty not to fail in that way) is sanctioned in certain circumstances, both within the criminal law and outside it. But true inadvertence is surely punished extremely rarely, if at all, especially when it is not combined with physical activity. It is not easy to accept that Parliament intended to sanction a state of true inadvertence; if it did, one might have expected it to say so explicitly.

105. In short, to my mind, each of the text, context, and purpose of s 69 of the GSE Act suggests that true inadvertence in one’s private life is not of itself misconduct for the purpose of one’s employment. In combination, they powerfully suggest that.

106. Secondly, it is true that the concept of misconduct is not defined in the GSE Act, and is in that sense open-ended. It is also true that the section extends the concept to a number of particular circumstances, without being exclusive in that extension. Nevertheless, I think that the nature of the extension is important: it suggests that Parliament regarded the concept of misconduct as not otherwise encompassing those circumstances without the extension. It is also the case, of course, that the appellant falls within none of those circumstances directly or indirectly. Finally, none of those extended circumstances are anything to do with inadvertence in one’s private life.

107. In short, to my mind the extension of the concept of misconduct to be found in the relevant section assists the argument of counsel for the appellant, not the Department.

108. Thirdly, it is noteworthy that counsel for the Department was unable, at my invitation, to provide me with any previous decision whereby, pursuant to the section under consideration or some analogous section in other legislation, true inadvertence in one’s private life has been held to constitute misconduct. And that was in the context that this state of affairs – that is, a person who has serious professional responsibilities founded on advertence nevertheless is inadvertent to something serious in his or her private life– must have arisen hundreds of times in the past.

109. It is true that the decision of the New South Wales Court of Appeal in Pillai spoke of gross negligence, in the execution of his professional duties on the part of a doctor, potentially constituting misconduct for the purposes s 26 of the Medical Practitioners Act 1938 (NSW). But gross negligence (in the true sense) in the performance of one’s professional duties is an entirely different matter from a person in his or her private life being truly inadvertent to a state of affairs, and, as an inevitable result, doing nothing about it. Properly understood, I do not consider that that decision of the New South Wales Court of Appeal assists the Department.

110. In summary, I consider that misconduct must almost always be understood as something that a person engages in actively. Even accepting for the sake of this argument only that, in some circumstances, negligence could constitute misconduct, I resolve the appeal on the agreed basis that the Commissioner did not, in truth, find that the appellant had been negligent; he found that she had been truly inadvertent. Nothing in the orthodox approach to statutory interpretation spoken of repeatedly by the High Court of Australia supports the equivalence of true inadvertence in one’s private life with misconduct for the purpose of one’s employment. Finally, no previous decision in support of that equivalence, whether on the part of the specialist tribunal under consideration or a superior court, was relied upon by counsel for the Department in support of the approach taken below.

111. In all of those circumstances, I consider that the Commissioner committed a legal error in finding that the true inadvertence on the part of the appellant to criminal events occurring around her in her private life could constitute misconduct for the purposes of the Act.

112. It follows that I accept that the appellant has established an error of the kind called for by the appeal-creating provision, and I shall therefore uphold the appeal.

Summary of findings and conclusion

113. My findings may be summarised as follows, in a different order from that which appears above.

114. First, my primary and dispositive finding is that I do not consider that true inadvertence – even inadvertence that could attract opprobrium – in one’s private life to the criminality of another person constitutes misconduct for the purposes of s 69 of the GSE Act. As a result, I consider that the Commissioner committed an error of law in finding to the contrary. On that basis, I propose to uphold the appeal.

115. Secondly, if I be wrong about that, I would not uphold the appeal on the basis that findings of fact were made for which there was simply no evidence. That is because one of the facts relied upon was certainly supported by evidence; one of them to do with chronology was of no moment; and one of them became irrelevant, in light of the concession of counsel for the Department.

116. Thirdly, if I be wrong in my dispositive finding, I would also not uphold the appeal on the basis that the Commissioner failed to apply the principles in Briginshaw when dealing with the sole basis upon which the proceedings at first instance were determined against the appellant. That is because I am affirmatively satisfied that those principles, to the extent that it could be said to have been necessary, was indeed applied to that basis.

117. Separately, I appreciate that some might find this result surprising. I say that because the result is that a person who was found to have failed to protect her four-year-old daughter from exposure to prohibited drugs in their home is not to be sanctioned for professional misconduct, even though she was a person entrusted with the professional care of children at risk, no doubt many of whom were themselves exposed to the dangers of prohibited drugs.

118. But my determination proceeds on the basis of the findings of fact made by the Commissioner, as jointly characterised by the two counsel before me. In accordance with the appeal-creating provision, which limits the appeal to legal questions alone, I have made no new finding of fact about the conduct or state of mind of the appellant. My determination is founded on legal questions; in particular, the true meaning of a section of the statute that Parliament has enacted. If there be disquiet about this outcome, I respectfully think that the solution lies in the hands of Parliament.

Costs

119. Nothing was placed before me to suggest that anything other than the usual order of costs on the ordinary basis following the event should be made.

Orders

120. Finally, with regard to the precise orders that I should make, counsel for the Department said nothing against the order sought in the amended summons that the appeal to the IRC be determined and upheld now by me, if I were against him on the central ground.

121. In other words, counsel for the Department did not submit that, if I were against him, there should be remitter to the IRC for further hearing of the appeal against the determination of the Department.

122. Nor did counsel for the Department oppose the third, ancillary order that was contained in the amended summons. I have nevertheless taken the liberty of amending that proposed order slightly, so as to make it clear that any further orders to be made in accordance with it remain within the discretion of the Commissioner.

123. In light of all of the above, I make the following orders:

1. The appeal of the plaintiff to this Court is allowed.

2. The order of the NSW Industrial Commission (the Commission) dismissing the appeal of the plaintiff to the Commission is set aside.

3. The appeal of the plaintiff to the Commission is allowed.

4. The matter is remitted to the Commissioner for the making of orders pursuant to s 100D(1)(b)-(c) of the Industrial Relations Act1996 (NSW) as the Commissioner sees fit.

5. The Industrial Relations Secretary must pay the costs of the plaintiff of the proceedings before me.

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Decision last updated: 02 February 2018