GDP Property Services v Dwinger (Civil)
[2016] VMC 12
•16 August 2016
IN THE MAGISTRATES’ COURT
OF VICTORIA
AT MELBOURNE No E10999223
BETWEEN:
GDP PROPERTY SERVICES PTY LTD Plaintiff
-and-
LEE DWINGER Defendant
MAGISTRATE: Ginnane
WHERE HELD: Melbourne
DATE OF DECISION: 16 August 2016
MEDIUM NEUTRAL CITATION: [2016] VMC012
REASONS FOR DECISION
APPEARANCES Counsel SolicitorsFor the Plaintiff Ms Symon KR Legal
For the Defendant Mr Levine J Kotsifas & Associates
Introduction
1.The plaintiff sues the defendant in debt arising from the breach of contract. The plaintiff employed the defendant as the Head of Operations of its Building Maintenance Unit[1] Division (BMU) with the title of Service /Maintenance Manager. There are two employment agreements entered into between the parties. Also in writing is a credit card procedure and conditions of use policy. The plaintiff claims that the employment agreements included an implied obligation of good faith. The express written terms of the first employment agreement included that the plaintiff would reimburse the defendant all reasonable, pre-approved expenses incurred by the defendant in the course of his duties with the plaintiff on the production of legitimate tax receipts, vouchers or proof of payment. The plaintiff provided the defendant with a credit card. Credit card purchases could be reconciled by the plaintiff on a real time basis upon the provision of receipts by the relevant staff although reconciliation was usually undertaken on a weekly basis.
[1] A (BMU) is an automatic, remote-controlled, or mechanical device, usually suspended from the roof, which moves systematically over some surface of a structure while carrying human window washers or mechanical robots to maintain or clean the covered surfaces
2.The first agreement included the provision to the defendant of a vehicle allowance which although not specified in the agreement was, I was told in evidence, subsequently settled upon in amount of $15,000 per annum. The evidence of whether or not that allowance included fuel was uncertain. Both the defendant and the plaintiff’s principal witnesses expressed disparate understandings on that point. Part of the claim includes fuel purchases. I am not satisfied that the plaintiff has established that the fuel purchases were unauthorised purchases for personal use and did not have a work related value that ought reasonably be seen as attributable to his duties as opposed to an unauthorised personal acquisition sounding in debt.
3.The first employment agreement was dated 18 December 2012 and signed by the defendant on 19 December 2012 with employment scheduled to commence on 7 January 2013.
4.The defendant’s position carried with it a high degree of autonomy.
5.In January 2014 a further employment agreement was negotiated. The further agreement was in the nature of a short term retention contract. It came about because the defendant had notified the plaintiff of his intention to resign his employment and commence employment with a competitor. In light of this the plaintiff negotiated the further contract. The evidence was that the further agreement was struck between the defendant and the plaintiff’s Nada Matijevich. The defendant characterised the further agreement as one in which he began negotiations with an ambit amount of $4,000 per week, anticipating the need to negotiate down from that amount but instead, and to his surprise, he found that the sum was agreed to by the plaintiff.
6.The arrangement was beneficial to both the plaintiff and the defendant. It was beneficial to the defendant because the further agreement provided a generous payment of $4000 per week less any applicable tax for the period from 31 January 2014 to 28 February 2014. It was beneficial to the plaintiff because it was afforded a period of time in which to secure the employment of a suitable replacement for the defendant. I was told by the plaintiff that the defendant’s particular skill set associated with BMU’s was scarce and securing a replacement for him was not thought likely to be straightforward.
7.The further agreement is to be found in a letter dated 23 January 2014. It imposed an express obligation on the defendant to act in good faith with the plaintiff’s best interests at all times during the further period. Thus the good faith obligation was an express contractual term in the further agreement and not an implied obligation as is the case under the first agreement although the good faith term is also said to prevail pursuant to the plaintiff’s credit card policies. The further agreement also provided that if at any time prior to 28 February 2014 the defendant’s employment was terminated summarily the defendant would not be entitled to the additional payments of $4,000 and any of the amounts paid to the defendant would become repayable to the plaintiff. Thus such an amount would comprise a debt recoverable by the plaintiff from the defendant.
8.In North East Solutions Pty Ltd v Masters Home Improvement Australia Pty Ltd [2016] VSC 1 Croft J considered an express obligation to act in good faith. Under a written contract, North East Solutions agreed to build a Masters store for Woolworths. The contract included an express term of good faith where the contract could only be terminated if the “parties, acting reasonably and in good faith, were unable to resolve” their differences in relation to constructions costs. Croft J ruled in favour of the plaintiff and found that given the surrounding context, the expressed obligation of good faith was clear and had a “sensible and ascribable meaning. His Honour quoted Sir Anthony Mason’s depiction of the concept of good faith to include three related notions, namely “an obligation on the parties to cooperate in achieving the contractual objects (loyalty to the promise itself); compliance with honest standards of conduct; and compliance with standards of conduct that are reasonable having regard to the interests of the parties”[2]. Woolworths’ conduct lacked good faith as it acted with “extraneous objects in mind” which were not fully disclosed to the plaintiff (plans for another location and undisclosed construction-cost budgets). The obligation required this information to be shared to enable both parties to resolve their differences.
[2] Sir Anthony Mason, “Contract, Good Faith and Equitable Standards in Fair Dealing” (2000) 116 Law Quarterly Review 66
9.The breach of good faith relied on by the plaintiff in this proceeding is predicated on alleged impugned communications with an existing client of the plaintiff and said to have amounted to serious misconduct justifying the defendant’s summary termination of employment as well as a breach of the credit card policy. For the reasons that follow I am not satisfied of the proof of the impugned conduct involving the defendant and a client of the plaintiff amounted to serious misconduct and thus it is unnecessary for me to determine the scope and application of the express term of good faith arising under the further agreement or the implied obligation said to have reposed in the first agreement in the manner alleged. The conduct alleged against the defendant in relation to purchases can stand or fall independent of the credit card policy.
10.The plaintiff summarily terminated the defendant’s employment on Sunday 23 February 2014 by a voice mail message left on the plaintiff’s mobile phone by Grant Tisdall, director of the plaintiff.
11.The plaintiff had made two payments of $4,000 on 11 February and 18 February 2014 which amounts less tax results in a claim for recovery by way of a debt of $5,356.14[3]. For the reasons that follow I am satisfied the defendant is liable to the plaintiff for that sum.
[3] See paragraph 7 of Amended Complaint
12.The plaintiff relies upon two categories of serious misconduct by the defendant said to justify his summary termination. The misconduct relates to alleged unauthorised spending by the defendant in the form of purchases for personal and private use that were falsely attributed to legitimate contracts for works undertaken by the plaintiff for various clients at various sites related to the provision of BMU services. Furthermore, it relies on a conversation in February 2014 that took place between the defendant and a client of the plaintiff in which it is alleged that the defendant told the client he would provide a quote for works to its BMU when he commenced with his new employer. So put, the plaintiff alleges, this conduct amounted to serious and repudiatory conduct by the defendant evincing an intention on his part to no longer be bound by the obligation of good faith to act in the best interests of the plaintiff at all times.
13.I am satisfied that the plaintiff has established a sufficiency of matters arising under the first category of conduct relied upon by way of serious misconduct to justify a summary termination of the defendant’s employment ( see, for example, Rankin v Marine Power International Pty Ltd )[4] but not the second. I am satisfied that the defendant knew at all relevant times that he was acting in an unauthorised fashion and dishonestly by making numerous purchases for personal use or intended personal use and attributed the cost of such purchases to various jobs contracted by the plaintiff with clients. As Gillard J said in Rankin [at 250]:
“The authorities do establish that the employee’s breach of contract must be of a serious nature, involving a repudiation of the essential obligations under the contract or actual conduct which is repugnant to the relationship of employer employee, before an employer may terminate the contract summarily. Isolated conduct usually would not suffice …The circumstances do not have to be exceptional, but nevertheless, must establish that the breach was of a serious nature”.
[4] (2001) 107 IR 117
14.The fact that the plaintiff may not have been aware of the full extent of the defendant’s conduct at the date of termination is not a disentitling fact that precludes such reliance at a later date: Shepherd v Felt and Textiles Australia Pty Ltd (1931) 45 CLR 359 at 377-378 per Dixon J).
15.The defendant made admissions which I have concluded have established dishonesty by him. I have also reached that conclusion independently of the defendant’s testimony and based on my assessment of the evidence of purchases made by him. In light of the defendant’s evidence and concerns I raised about it, his counsel requested, and I granted, a certificate under s 128 of the Evidence Act 2008.
The standard of proof
16.Section 140 of the Evidence Act 2008 provides that in civil proceedings the standard of proof is the same as it is at common law, the balance of probabilities. The Evidence Act 2008 also incorporates the principle from Briginshaw v Briginshaw (1938) 60 CLR 336 that a court may take into account the nature and gravity of the subject matter when deciding whether the standard of proof is met. This standard of the balance of probabilities applies to the facts which a party has a legal burden of proving.
Matters of consider when determining proof
17.Section 140(2) requires a court to consider the following matters when determining whether a case is proved on the balance of probabilities:
a. the nature of the cause of action or defence; and
b. the nature of the subject matter of the proceeding; and
c. the gravity of the matters alleged.
18.In assessing the nature of the cause of action or defence, the court may take into account the gravity of the consequences which flow from a particular finding (Morley v Australian Securities & Investments Commission [2010] NSWCA 331 at [742]). Thus, the graver the consequences of a particular finding, the stronger the evidence needs to be in order to conclude that the allegation is established on the balance of probabilities (Morley v Australian Securities & Investments Commission [2010] NSWCA 331 at [746]). The three matters specified in s140 (2) do not exhaustively state the matters the court may take into account when deciding whether a matter is proven on the balance of probabilities. A court may, for example, take into account the inherent unlikelihood of the alleged conduct, and common law principles concerning weighing evidence (Qantas v Gama (2008) 167 FCR 537 at [138] per Branson J).
19.Where a civil proceeding involves allegations of criminal conduct the standard of proof remains the balance of probabilities. Judicial statements that clear, cogent or strict proof is required to establish serious matters such as fraud do not address the standard of proof. Instead, such statement reflects the conventional view that people do not ordinarily engage in criminal conduct and courts should not lightly make such findings: Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449 at 449-450.
20.Similarly, in a civil proceeding involving circumstantial evidence to prove allegations of dishonesty, it is not necessary to exclude all other rational explanations. The direction applicable, for example, in criminal cases that the prosecution must exclude all rational explanations consistent with innocence is a function of the higher standard of proof and does not apply in civil proceedings (see Chong v CC Containers Pty Ltd [2015] VSCA 137 at [52]-[54]).
Section 140(2) and the common law
21.Section 140(2) reflects the principles Dixon J set out in Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-362 that “reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequences of the fact or facts to be proved. The seriousness of the allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding” are relevant to deciding whether a matter is proved on the balance of probabilities (Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Competition and Consumer Commission (2007) 162 FCR 466).
Standard of proof and “actual persuasion”
22.The standard of proof on the balance of probabilities requires the court to reach a state of “actual persuasion of the occurrence or existence of the fact in issue before it can be found” (NOM v DPP [2012] VSCA 198 at [124. A ‘[m]ere mechanical comparison of probabilities independent of a reasonable satisfaction will not justify a finding of fact” (NOM v DPP [2012] VSCA 198 at [124]. Under s140, a party will not have proven its case if the likelihood of the plaintiff’s case and defendant’s case is perfectly balanced (Carney v Newton [2006] TASSC 4 at [61]). Similarly, a plaintiff will not succeed merely be establishing that his or her case is more likely than the defendant’s. The plaintiff must show that his or her case is more likely than not (Jackson v Lithgow City Council [2008] NSWCA 312 at [9]-[10] per Allsop P.
Standard of proof for inferences
23.This proceeding does in some instances involve findings arrived at by reason of circumstantial evidence. When a plaintiff’s case relies on circumstantial evidence and because it bears the burden of proof, it must establish that the more probable inference supports the case alleged. The court cannot choose between several, equally likely, possibilities where the competing possibilities can only be resolved by conjecture (Jackson v Lithgow City Council [2008] NSWCA 312 at [9] per Allsop P. I am satisfied in regard to those findings made by me on particular invoices that in such instances, the plaintiff has discharged this obligation.
Methodology applied
24.The format I have adopted in these reasons is to set out the significant evidence of each witness together with cross examination and examination if any. I will then deal with the respective submissions of law. I will then make my findings and lastly set out the invoice and amounts I am satisfied represent a debt due by the defendant.
25.It is as against these legal and evidentiary precepts that I now address the witness evidence.
The witness evidence
26.Andrew Fraser gave evidence in chief. He is employed by Knight Frank. He gave his occupation as a Senior Facilities Manager. He said the plaintiff is a contractor who provides maintenance work to Knight Frank. He said that on 18 February 2014 he had a conversation with the defendant. He asked him “how he was going” with his employer and the defendant told him that he was leaving the plaintiff’s employ. He said the defendant told him that there were some issues with the BMU’s that would require rectification work. Fraser asked if a quotation could be provided at his earliest convenience. The defendant said that because he was leaving he would pass on the request and if Fraser wished he could provide another quote from his new employer. The defendant gave Fraser his card and told him his phone would remain the same. As events transpired a second quotation was not sought from the defendant. In cross examination Fraser agreed with the characterisation of counsel for the defendant that BMU’s are complex units in their operation and maintenance. Fraser agreed that there was nothing unusual in the fact that the defendant was handing the matter of a quotation over to his successor. He agreed that the defendant did not identify his new employer. He said that he ran into Tisdall a week or so after the conversation and he commented to him “in an offhand manner” that the defendant was going to arrange a price from his new employer at some stage. He said he did not agree that the defendant told him that if more than one quote was required it could be provided by him. This is the ambit of the evidence relied on by the plaintiff in support of one of the two grounds of serious conduct that warranted the summary termination of the defendant’s employment. In my judgment it must fail.
27.Nada Matijevich is a consultant. Between 2012 and 2014 she was employed by the plaintiff. She was the General Manager of the plaintiff with responsibilities of managing the company. She described Tisdall as managing the construction side of the business which encompassed BMU machinery.
28.She identified the contract of employment made between the plaintiff and the defendant dated 18 December 2012. That agreement referred to the provision of the plaintiff’s Employee Handbook and Employee Code of Conduct. She said that the HR manager was the person who most likely conducted the induction. She said there was an employee induction check list that was completed indicating that the defendant was furnished with the plaintiff’s applicable policies and procedures. She was asked about her knowledge of the defendant’s entitlement to a motor vehicle allowance of $268 per week. She said she “thought this amount was in addition to his base salary”.
29.Matijevich said the key purchasing system utilised by the plaintiff was the “SimPro” purchasing and stock software system, and although I was not informed much if at all about the technical aspects associated with it, nonetheless it operated in a manner designed to generate a job order or job number that would be given to the supplier with purchases being either delivered to the plaintiff or being collected, for example, by the defendant. If delivered to the plaintiff it would generally be to the workshop at rear of the plaintiff’s reception. She said someone in the position of the defendant could do a manual order. She said a credit card was issued to senior level staff including the defendant to cover emergency purchases “when time was critical”. She said it was meant to be used as “a last resort”. The terms of use do not contain such a restriction.
30.Matijevich said that the defendant was lax in complying with the provision of purchase receipts and that it was necessary for “Anna” who handled credit card reconciliations to chase up the defendant for the information to meet the reconciliation requirements used by the plaintiff. Anna did not give evidence. Matijevich believed the extent of the credit limit was $3,000 limit and no more than $1,000 per day. The limit was not expressed in the conditions of use or any written directive identified in evidence.
31.Matijevich said that in about mid October 2013 she was undertaking a usual reconciliation and identified invoice no 40. She identified the presence of certain purchases that she had regarded as out of order and they were:
· Paint pots x 3 for $1.74 each
· Decking oil applicator $14.95
· Dulux wash&wear low sheen paint at $69.95
· Deck clean $35.76
32.She said she spoke with Tisdall to ask if the purchases could be legitimate, that is, if they could have any apparent connection with work relatedness. She said, Tisdall was unable to say.
33.She said that when the credit card statement came in covering the period from 5 November 2013 she reviewed invoices applicable to it and came across invoice 39 dated 15 November 2013 being the receipt for the purchase of sunglasses for $284.90 and a cleaning kit for $24.95. It too raised concerns.
34.She spoke as well with the defendant. She said that she sat down with him on 17 November 2013 “and there were a number of invoices I went through”. The invoices she recalled specifically were invoices 38, 39 and 40.
35.She said the defendant told her that the materials were for use at a job site at 100 Queen Street at which a deck was being constructed around a BMU. In regard to the sunglasses, he said his own sunglasses had been broken on the job and the purchase was a replacement. She said after the defendant had been terminated his sunglasses were located in a drawer and the extent of the breakage was limited to the lens having popped and she was able to put it securely back in.
36.Matijevich spoke to another employee David Lopes who had worked on the job at 100 Queen Street. He said that that decking had not been a requirement at about the date of the purchases rendering in her mind the legitimacy of the purchases questionable.
37.Matijevich said she subsequently reviewed invoices attached to the January 2014 credit card statement.
38.She said that after her conversation with the defendant in mid-October 2013 “we kept an eye on him”.
39.Matijevich could not recall any other meeting with the defendant about the invoices until the exit interview with the defendant and Tisdall on Monday 24 February 2014.
40.She said Anna was involved in the process of putting together the invoices which she discussed with the defendant on 17 November 2013.
41.Matijevich said after her November 2013 conversation with the defendant Tisdall took over the matter. She said she conveyed to him certain of the apparent irregular purchases.
42.Matijevich was referred to Document 64 consisting of a National Australia Bank transaction report. There were three entries identified being a purchase of $289.30 “Skyways Hotel” and a Coles Express Purchase of $116.31 and a City of Melbourne parking expense of $11.00. She said she had a conversation with the defendant about the use of fuel. She said the defendant told her he was filling up his wife’s car with diesel on the credit card. She said she told him that he should not be fuelling up wife’s car. To the proposition made by the defendant in his notice of defence that he came to her on occasions to obtain pre-approval for credit card use, Matijevich said that the defendant asked if he could take the team for drinks and nibbles as a team building exercise on 20 December 2013 and it was approved. Matijevich said this was the only occasion her approval was sought by the defendant or given by her. I accept her evidence.
43.Matijevich agreed the further agreement was made at a point in time after plaintiff was aware of these irregularities in the defendant’s conduct.
Cross-examination
44.Counsel for the defendant posed a series of questions to Matijevich in regard to the integrity and rigour of the system used by the plaintiff to reconcile purchases before on charging the cost of the same to a contracted party. The plaintiff used receipts when allocated job numbers to charge clients the costs of purchases.
45.Matijevich acknowledged that in June 2013 that the defendant had expressed a desire to resign and that she had had been deputised to speak with him in an effort to persuade him not to do so, an effort in which she was successful, if only for a relatively short further period.
46.Matijevich said she was unaware of any irregularities in relation to purchases until sometime in November 2013. She accepted that she did not technical knowledge to be able to form an opinion on her own if certain items of purchase could legitimately be associated with work undertaken in connection with BMUs.
47.She was asked about storage space made available for tools. She was asked if she agreed that on occasion tools were permitted to be stored at an employee’s home due to a lack of storage space at the plaintiff’s premises. She did not believe they would be kept at home but said that some workers “would have tools in their utes and so go with them”, that is to say, take them to the particular job site at which they were working. She said that employees are meant to be responsible for tools they take out. She was asked if she was aware if tools would on occasions be exchanged between employees. She said tools could be borrowed as between employees. She said she “possibly” had some knowledge of thefts of tools having occurred from employee’s vehicles.
48.Matijevich said she was aware of the existence of a tools register. She said the defendant was asked on occasions to update the register but he had not done so. No register was produced in evidence.
49.Matijevich disagreed that in the course of her discussion with her the defendant he had offered to pay for the purchase of the sunglasses.
50.Matijevich was asked if she was aware of complaints made by the defendant of undue interference by Tisdall with the work of technicians. She said an agreement was reached in June 2013 that limited Tisdall’s interference in the work of technicians. She accepted that all employees working in the BMU had left within a period of months of Tisdall taking over the company.
51.The defendant’s earlier intention to resign resurfaced in January 2013 when he told Matijevich that he “had a better offer”. The defendant was persuaded to stay for a period of 4 weeks to enable a replacement BMU manager to be found.
52.Sally Tisdall, the Human Resources manager of the plaintiff took over the review in relation to the defendant’s purchases. Matijevich said that “Sally was doing some other investigation”. Sally Tisdall did not testify.
53.In regard to the use of motor vehicles Matijevich agreed that the defendant might have told her that he used two vehicles one being a petrol engine and another being a diesel vehicle.
54.Matijevich was asked about the exit interview conducted with the defendant that she attended. She said that a number of items were returned in accordance with a request made for the defendant to do so. She said she was tasked with a reconciliation of tools and property. She said the defendant said there were a number of items at building sites that he could direct us to. Matijevich said she had no knowledge whether any property was retrieved from these sites.
55.Although Matijevich was directed to many of the invoices and gave evidence about them it is no criticism of her to say that nature of her work was such that much of her evidence as to their possible legitimate application for the work undertaken by the plaintiff was speculative.
56.I have already set out her view about the sunglasses and cleaning kit reflected in invoice 39.
57.Invoice 40. Matijevich could not say immediately recall why she thought the purchase of paint pots and paint seemed “odd”. It was put to her that a deck surrounding a BMU at 100 Queen Street needed to be painted. Matijevich then said that the description of the paint as a low sheen Dulux brand seemed incongruous for an industrial application. She could not however comment on whether such paint might be suitable for the touch up of machinery or equipment.
58.Matijevich had no recollection of a conversation with the defendant in regard to the spac filler, rivets and like items the subject of a challenged purchase but said that in any event she did not think those items stood out or, in other words, that she thought there was anything irregular about them on their face. However, she entertained some reservations about purchases of treated pine and their possible application in a BMU job.
59.Matijevich was not re-examined.
Matthew Tisdall
60.Tisdall is a director of the plaintiff. He said his involvement with the plaintiff commenced approximately 6 years ago. He said the BMU division had a full time complement of staff of 4 or 5. He said the plaintiff “control 30 or 40 machines across various sites that we quote for in terms of ongoing service and undertake ad hoc repairs”.
61.He said the 100 Queen Street, Melbourne site consisted of 2 very large BMUs. He said the plaintiff had obtained a large contract to refurbish the units and this job was upwards of $500,000. He said the plaintiff “allocated a lot of resources to it”. The site had a small store room in which various items could be stored.
62.Tisdall said that there was no written protocol in place at the relevant time frame in regard to purchasing tools.
63.In response to a suggestion by the defendant that it was common practice for tools to be stored at employee’s home, Tisdall said it was “rubbish”. He said the plaintiff maintained a large storage area. He said he knew of two tradesmen with their own tools which they kept locked in their vehicles but that no tools are stored at worker’s homes as it is impractical.
64.In regard to motor vehicles Tisdall said there were 3 utilties that were made available to staff for use within the BMU division. He said he was aware the defendant’s remuneration included a motor vehicle allowance. Sally Tisdall told him “at some stage” that the defendant had tendered some credit card fuel purchase invoices. She told him that the defendant’s interpretation was that the plaintiff was to pay for fuel on top of the vehicle allowance. Tisdall said that at the time I had to just “roll with that though I didn’t want to so I didn’t confront it head on”. He said he regarded it as “a failure on my part to ensure the paperwork was tight and the position had been clarified”.
65.Tisdall was directed to the further agreement dated 23 January 2014. He said that in early 2014 he spoke with the defendant in the boardroom. The defendant said he was leaving. Tisdall responded with “okay”. He said to the defendant that it could only mean that he was going to the plaintiff’s principal competitor Promax, a business Tisdall said had been commenced by his “ex business partner”. Tisdall said the defendant’s intention to resign “would leave me in hot water as I had no technical expertise and nor do the people working under him and there were two large projects on foot”. As a result he asked the defendant if he would stay. The defendant said “he would not want to leave us in the lurch”.
66.Tisdall said he left it to Nada Matijivich to arrange the deal. He said he had concerns about the defendant in the performance of his role but that “I had my hands full on a day-to-day basis”. He said when he heard the defendant had asked for $4,000 per week he thought the figure was “obscene”. He told Nada, “that’s crazy” but he “had no choice”. The further agreement was executed.
67.He said that a week or so before terminating the defendant’s employment he spoke with Andrew Fraser and learned that the defendant had been “spruiking”. He said as well that Dimitri Kallagianis, an employee of the plaintiff, telephoned him on the Friday prior to the termination and told him that he had seen the defendant at Bunnings with a trolley full of gear and he was speaking about Promax.
68.After he spoke to Kallagianis “we went through all the credit card purchases”. He said it was apparent that “we had been stooged”. He said it was over the weekend after speaking with Kallagianis that he made a detailed examination of the credit card statement of purchases. He telephoned the defendant on the Sunday and when his phone defaulted to message he said that his employment was terminated and that he was required to attend an exit interview the following day.
69.Tisdall agreed he had previously been told about the sunglasses purchase. He said he told Nada “to gently ask him why because he might have a reason”. He said he told her that “we need to tell the defendant that such conduct is not kosher”.
70.Tisdall said he “had driven some work in relation to purchases”.
Specific purchases
71.Tisdall was directed to specific invoices collated as part of the process of investigation.
72.In regard to invoice 3 dated 8 April 2013 comprising a Milwaukee Combination purchased for $679.00 he said he had never seen the item and it was too expensive a purchase without prior approval and, in any event, purchases were to be Makita brand because the parts are interchangeable enabling them to be readily exchanged as between workers. He said this purchase receipt was discussed at the exit meeting and the defendant said that the item could be located at 100 Queen Street. Tisdall said it was not found at 100 Queen Street.
73.Invoice 16 dated 3 July 2013 consists of a stud finder and a BAHCO 94 piece socket combination set $424.00. He said this was something appropriate for DIY but would not have use on a BMU site. He said the invoice was raised at the exit interview but he could not recall any explanation offered by the defendant for the purchase.
Witness interposed
74.The plaintiff interposed Kallagianis. He was employed by the plaintiff for a period of 22 months that overlapped with the defendant’s employment. He testified about a conversation he had with the defendant on Friday 21 February 2014 at Bunnings in Port Melbourne. He said the defendant told him that he had resigned from the plaintiff and had stayed on “with an extra penalty”. He told Kallagianis he had done some business development for Promax. He said the defendant had a shopping cart and told him that he was spending on the plaintiff’s credit card “because he only had a short time to go”. Kallagianis said he contacted Tisdall and told him about the purchases and said that it might be worthwhile having a look at the credit card statement. He recalled items of purchase included tape, hinges and a cordless power tool.
75.Under cross-examination Kallagianis was asked about his recollection of the events of the day. He could not say if the Bunnings meeting occurred in the afternoon or the morning. He said however that he saw the defendant making purchases. He said the power tool raised suspicion because the brand was not the type he recalled was used at the plaintiff. He agreed that he did not work on BMUs and also agreed that he could not comment on whether or not purchases such as hinges might be capable for use for flaps on a BMU. He was uncertain if the tape was insulation tape but said he “thought it was double sided tape”. Kallagianis was not re-examined.
76.The evidence led from Kallagianis was not probative. His evidence that the defendant said he was spending because he only “had a short time to go” is not evidence itself of wrongdoing. The fact was that the defendant did only have a short period of time left in employment and he testified under cross examination that it was because he knew his employment was soon to expire that he took the opportunity to make purchases of items for use on jobs.
The continuation of Tisdall’s evidence
77.When recalled to continue his evidence- in-chief Tisdall was asked about invoice 18 dated 14 August 2013. He said the item of most concern was the “Stand Power Tool” for $149.00. He said he had never seen it and he said it was an “odd purchase” to make, although why it was odd, Tisdall did not say. He said he discussed it with the defendant at the exit interview who said it could be found at 100 Queen Street along with the grinder. He said he doubted if he asked the defendant about the other items on the invoice. He said he went to the site but found nothing to match the items. He accepted that other people could have had access to the store room at the Queen Street site.
78.Invoice number 23 dated 4 September 2013 consists of a Bunnings invoice. He said that on reviewing the invoice he found it “strange” because it consisted of purchases of interior paint and allen key sets and he “had no idea what that could be used for”. As to the floor leveller he said it was not something that would be used on site for a BMU project. He said the same in respect of the pointing trowel.
79.He was directed to invoice number 24 dated 11 September 2013 comprising a purchase of a multi-fold ladder at the cost of $99.00. Tisdall said it was a ladder suitable for domestic use and not one would that would be suitable for use on site.
80.Invoice 26 dated 15 September 2013 consists of a Bunnings receipt for purchases in the amount of $373.76 consisting of paint purchases and white oak moulding wall trim, lamb’s tongue moulding, dressed premium grade pine and marine grade hardwood. He said these had no relation to the scope of works undertaken on sites.
81.Invoice 27 is a receipt for the purchase in the amount of $59.00 of a Makita brand vacuum cleaner. Tisdall said that the plaintiff “does not have vacuum cleaners like this”.
82.Invoice 43 is a receipt dated 29 October 2013 in the amount of $849.00 for a laser level and tripod. Tisdall said he “knew he had been taken for a ride when he saw these purchases”. He said the defendant told him the items were located at 100 Queen Street. Tisdall said they were not.
83.Invoice 39 consists of a Bunnings invoice dated 5 November 2013 for $271.02. Tisdall said the items appeared to be carpentry items and he did not see them as having application for the BMU project at 100 Queen Street. He said there is no decking at 100 Queen Street. He said the defendant told him the items were at 100 Queen Street. Tisdall said they were not.
84.Invoice 40 is a Bunnings invoice dated 17 November 2013 in the amount of $230.22 which comprises deck clean, low sheen white paint, decking applicator and paint pot samples, rivets and adhesives. Tisdall said that the defendant said the items were used at 100 Queen Street. Tisdall did not accept that explanation.
85.Invoice 33 is a Coles Express receipt for the hire of a trailer dated 16 November 2013. Tisdall said the defendant told him that he had hired a trailer because it was used at the Edgewater Towers project and work on a BMU unit for which parts needed to be cut up and taken away. Tisdall said the answer was “possibly legitimate” but not the fact that the deposit had not been recovered. He said he definitely had a problem with the deposit not being recovered.
86.Invoice 43 is a further Bunnings invoice dated 30 November 2013 for purchases of 500 decking screws and screwdriver bits in the sum of $127.96. Tisdall regarded the screwdriver bits and associated items associated as consistent with someone “undertaking a good deal of decking work”.
87.Invoice 46 from “AutoBarn” for $153.99 consisting of engine oil and a Ryco filter and the purchases also had no apparent connection with work.
88.Invoice 50 consist of various consumable items in the sum of $224.61. Tisdall said he didn’t know what the items were for. He said the defendant is not an electrician. He said the purchases included irrigation fittings and there was no need for them on any project associated with the plaintiff’s work.
89.Invoice 62 from Total Tools consists of a torque wrench valued at $159.00
90.Invoice 58 comprises an invoice from Dick Smith consisting of the purchase of a walkie talkies and a tune cast for smart phone and an apple lightning pin adapter. The defendant told Tisdall that the walkie-talkies were purchased for 100 Queen Street and the pin adapter was a personal purchase as was the tune cast. Tisdall said the walkie talkies would not have been allowed on site because of the existing security in place at 100 Queen Street.
91.Invoice 63 comprises a Bunnings invoice dated 21 February 2014. Tisdall said the highlighted items were delivered on site but that this account was disputed by Tisdall who said David Lopes had stated that he had not taken receipt of the items.
92.Invoice 49 a fuel purchase record dated 24 December 2013. Tisdall said the defendant did not have a diesel car but he was aware that his wife did. He said that suspicion arose because of multiple fuel purchases that were made close together in time. He said the defendant told him at the exit interview that he sometimes uses his wife’s car. Tisdall said he told the defendant that was a lie because he had only seen him drive his wife’s car once. Tisdall said the defendant altered his story to that of having filled up staff cars with diesel.
93.Tisdall denied that the defendant had ever volunteered to accompany Tisdall to 100 Queen Street to verify the presence there of the items he had identified.
Tisdall cross-examined
94.Tisdall said it was about a week after the exit interview that he attended on site at 100 Queen Street.
95.Invoice 3 dated 8 April 2013 in the amount of $679 was for the purchase of a Combo Kit. Tisdall said he looked for the Milwaukee drill prior to the defendant’s termination. He said the purchase stood out because it was Milwaukee brand. He maintained it was not subsequently located at the plaintiff’s premises.
96.Tisdall was asked about the existence of the asset register. He said one existed and that it was the defendant’s task to keep it up to date and that “we had complained of his failure to keep the tool register up-to-date”. I am not satisfied that the plaintiff established that such a responsibility formed part of the defendant’s duties.
97.Invoice 16 consists of the purchase of a socket set and a Bosch stud finder and Tisdall was told that the defendant would say that purchase was required in order to find electrical cable in a wall cavity and that the tool was used by an electrician named Steve Marathi. Tisdall was unable to comment on the veracity of that assertion.
98.Tisdall said that the defendant had no authority to purchase tools without his authority. He was asked about the credit card procedures in place and it was suggested to him that procedures do not require prior approval. I do not accept that the plaintiff has established that such a requirement existed and it is not expressed as a requirement in the credit card policy.
99.It was put to Tisdall that the plaintiff should have ensured that work tools be stored under lock and key. Tisdall said the warehouse is not locked and he said there were various places in which tools could be kept including service vehicles, his office area and the BMU lockable cabinet. Tisdall denied that the defendant was entitled to take tools home. He disagreed that it was “very rare” to leave tools on site but he acknowledged that tools were left on site at 100 Queen Street. He also accepted that the secure area at 100 Queen Street could be accessed despite the presence of “high level of security”. In regard to the register he said its use did not require the signing in and out of tools.
100.In regard to invoice 18 comprising a Bosch grinder Tisdall was unable to say if the receipt for purchase had been allocated as a cost against any particular job charged by the plaintiff.
101.As to invoice 23 Tisdall was asked if he agreed, that with the exception of paint, the items were used by David Lopes for work at 750 Burke Street. Tisdall said, “I don’t believe that is true”. However, he was unable to say that he checked to see if the purchases other than the paint were allocated to the job site at 750 Burke Street.
102.In relation to invoice 24 for the purchase of the ladder, it was suggested to Tisdall that the defendant purchased the ladder for use on jobs because not all employees had a ladder that could be placed in their vehicles and a ladder of this type was needed so it could be carried upstairs on job sites when required. Tisdall said that it would not be possible to use such a type of ladder because it did not meet OH&S requirements. He said he would never have allowed it to have been used at the plaintiff headquarters. He acknowledged that on occasions ladders are misused. He said he had never seen it at the plaintiff’s headquarters but had seen it in a Facebook photo posted by the defendant at his defendant’s home.
103.Invoice 27 comprises a Makita vacuum cleaner. Tisdall was asked if he was aware that the defendant would say maintained it had been purchased for Nathan, Tisdall said all he could recall was that the defendant told him he had given it to David Lopes. Tisdall said he was confused about this item.
104.Invoice 43 concerns the purchase of a laser level and tripod and the defendant’s account was that it was purchased for work in building platforms at 100 Queen Street. Initially Tisdall said, “I don’t know” and then said “it is a lie”. He was asked if it was not the case the platforms need to be level for which such a purchase would make sense. He agreed but said that the type of laser level purchased could not be used to achieve that end because of Occupational Health & Safety difficulties in finding the level. He was unable to say when the platform was constructed other than to say that it was constructed before the defendant’s employment concluded.
105.Invoice 39 relates to the purchases that the defendant it was said would say amounted to material used to fashion up a device to assist remove the BMU for its 10 year inspection located at Little Lonsdale Street. Tisdall said he thought it would be a very unusual use of the materials and he could not comprehend why one would not use jacks and steel trolleys. It was put to him that a jack would be used to lift the unit but pine would be placed underneath to stabilise it. Tisdall said that there already was a pallet of blocks of timber that could have been used for that very purpose so purchasing three metre lengths of hardwood pine struck him “as a ridiculous suggestion”. In relation to screws Tisdall said he did not accept the proposition that the defendant had made the purchases to form up some device in order to give effect to enable the inspection of the unit in Little Lonsdale Street to be examined.
106.Invoice 40 is for the purchase of steel rivets and screws and paint pots and it was suggested that these were used for various jobs. Tisdall said this would not be the case and indeed he was unaware of any unit that was painted. He said if rusted was present it would need to be sanded down and painted with appropriate paint and not with wash and wear paint.
107.Invoice 46 consists of an invoice from Auto Barn. When it was suggested to Tisdall that the oil purchased was for use for service at 390 Saint Kilda Road and 140 William Street, he said the oil was engine oil used for motor vehicles and could not be used on a BMU.
108.In regard to invoice 50 and the proposition that the purchases were made for use at Freshwater Place, Tisdall said he had formed the view that these items were used at the defendant’s home and that there had been no job number allocated to the purchases recorded in the invoice. He said there had been a complete electrical upgrade to the BMU at 80 Collins Street but it was unusual the defendant who is not an electrician would make them and as well the purchases were made from Bunnings and not Middendorp electrical supplier from whom the plaintiff obtain beneficial pricing. He also said the batteries are not purchased wholesale by the plaintiff.
109.Invoice 62 is for the purchase of a torque wrench retrieved by the police from the defendant’s home. Instead the plaintiff produced at the exit interview a magnetic drill.
110.Invoice 58 comprises the invoice for the purchase of walkie-talkies which the defendant’s evidence was that they were for use on site at 100 Queen Street. Tisdall said they were not suitable for use on the site. To the proposition that they were placed in the back storage area of the plaintiff premises on the top shelf, Tisdall said this was not the case and they have never been seen.
111.Invoice 63 consists of a Bunnings trade invoice. To the defendant’s contention that he purchased the items for repairs undertaken on site at 100 Queen Street and other items for the use by technicians on other jobs, Tisdall said he did not believe this to be the case.
112.Tisdall was quizzed about the vehicle allowance and fuel purchases. He was asked if it were not the case that the plaintiff was given use of a vehicle and provided with a fuel allowance. Tisdall said the plaintiff only had a car allowance but then said he could not remember. He was asked if it was the case that it was agreed that the plaintiff could charge fuel on the company fuel card. Tisdall disagreed.
113.Tisdall was questioned about his conduct and it was put to him that his style of management had led to the departure of virtually all staff within a short period of time. The relevance of his management style was not explored further nor explained or pursued as having a bearing on the case and I give it no work to do in the resolution of the matter.
114.Tisdall was asked about his relationship with Knight Frank. It was suggested that there was no overriding contract arrangement between the plaintiff and Knight Frank for BM use but rather it was a job by job arrangement. No evidence was led by the plaintiff of the existence of a commercial arrangement. The question I presume was directed at laying the groundwork for a submission that in the event that the facts gave rise to a risk that if the plaintiff’s conversation with Fraser were found to carry the adverse implications suggested by the plaintiff, then nonetheless the defendant’s conduct in any event was benign. For reasons that will become apparent later in my decision, the question does not arise for determination.
115.Tisdall said that his review of the defendant’s purchases “really got underway on the weekend after he received the phone call from Dimitri” about the meeting with the defendant at Bunnings. Tisdall said that on Sunday, 23 February 2014 he telephoned the defendant. He said he left a voicemail message to advise him that he was terminated with immediate effect and told that he was required for an interview at 9.00 am the next day.
116.Tisdall did not dispute that the exit interview with the defendant lasted approximately 90 minutes.
117.Tisdall said notes were taken by his wife of answers to questions put to the defendant in relation to a list of items identified from purchase invoices. He said his wife made extensive notes. He said he could not recall if he saw a print out of her notes at any stage.
118.Tisdall said that 100 Queen Street was the only location he physically inspected to see if any of the items identified by the defendant were present. He could not recall if the defendant offered to accompany him to any particular worksite or to walk with him around the plaintiff’s factory to pinpoint the whereabouts of purchases.
119.Tisdall was asked whether all receipts but for invoice 64 in the amount of $11.00 and fuel purchases had been identified and allocated to various jobs numbers. He said he could only report on what purchases had been allocated to particular job numbers.
120.I am satisfied that Tisdall’s oversight of the defendant’s quotations was scant. Indeed I am satisfied that it is unlikely he checked individual quotations. Tisdall said so long as there was a job number allocated to a purchase they were not subject to a qualitative or independent verification. That is not surprising as the plaintiff was entitled to rely on the integrity of the defendant. However, in circumstances such as these in which the plaintiff seeks to recover amounts on the basis that the expenditures were illegitimate, the requisite degree of evidentiary satisfaction is required to be adduced by the plaintiff and if its own internal auditing is lacking, that is a problem of its own making and which the court cannot make good by way of generalised findings.
121.Tisdall was not re-examined.
David Lopes testifies
122.Lopes is a Fitter & Turner employed by the Plaintiff and works as a BMU technician. He identified the following sites at which work was being undertaken by the plaintiff being:
·100 Queen Street
·484 St Kilda Road
·536 Little Lonsdale Street
·750 Collins Street
123.Lopes said he knew the defendant who was his direct report.
124.Lopes said that in the period 2013/2014 the work that was being performed at 100 Queen Street occupied approximately 2 or 3 days per week. He said that a team comprised 4 employees. Lopes said that expensive tools used on site were located in a lockable shed on site. He said he never found the storage space at 100 Queen Street insufficient.
125.Lopes said was not aware of any allowance for tools to be stored at an employee’s home and tools purchased by him were never delivered to his home.
126.Lopes was directed to various invoices:
·Invoice 23 - He disputed that the Dulux paint would be a type having application in the works undertaken at 100 Queen Street because the type of paint mix used for such applications is “like an automotive paint to resist weather”.
·Invoice 27 - He said he knew nothing about the Makita vacuum cleaner.
·Invoice 36 – Lopes evidence of certain of the purchases reflected in the invoice gave some credence to the defendant’s account that work done at 484 St Kilda Road was required as a result of a door that had been broken off its hinge.
·Invoice 39 – In regard to the contention that the treated pine was used for a job at 535 Little Collins Street in jacking up and moving a heavy BMU for service and repair, Lopes disputed pine of the identified dimensions would have such application.
·Invoice 43 - In relation to the impugned purchase of the rotary laser level and tripod Lopes said that he had no memory of seeing the items at any of the plaintiff work sites attended by him in in the relevant period. Furthermore, he testified that in his experience there would not be any use for either.
·Invoice 58 – This purchase relates to the Uniden brand walkie talkies. Lopes said the security on the Queen Street site was supplied and he had no recollection of seeing them on site elsewhere.
·Invoice 46 – This relates to a purchase of engine oil. To the contention that the engine oil would have had application in connection with servicing of a BMU, Lopes disputed this and said hydraulic or gear oil would be used and not engine oil designed for use in piston engines. He also said he could not contemplate a legitimate work use for a Ryco filter. He said backup generators were diesel fuelled but in any event they fell outside the remit for services performed by the plaintiff.
·Invoice 63 – the witness said he had no recollection of seeing the same on any of the defendant work sites.
Lopes cross-examined
127.Lopes agreed that he was issued with a credit card by the plaintiff for work related purchases. Lopes agreed there were occasions that he took tools home in his work ute but he refuted the suggestion put to him by counsel for the defendant that he ever stored them at his residence. His evidence of practice therefore was consistent with Tisdall’s evidence.
128.Much of the cross examination of Lopes concentrated on the reliability of his observations. He was asked if tools were borrowed as between staff members. He agreed that tools were left on site. He said he was on site at 100 Queen Street from 7.45 am to 4.00pm of a day. He said the defendant would come and go. Lopes said his work centred on mechanics and hydraulics and “Nathan” was an electrician and there was an apprentice and also “Justin” who assisted with mechanicals.
129.Lopes agreed that there were occasions during which other team members were not in his line of sight and therefore he could not give an absolute account that would exclude irregularities in relation to the taking of tools by other staff.
130.As regards the purchases the subject of invoice 36 it was suggested he could not say categorically that the items were not put to legitimate use. He accepted that broad statement of the limits of his observations.
131.In relation to the engine oil purchase referred to in invoice 46 he was not able to comment one way of the other of the contention that it had been purchased for use at 114 William street because of the need to immerse parts in an oil contained in a 2 ½ metres squared pan inside BMU but said:
“These are items that I would not in the ordinary course find unusual to be located on site”
132.In re-examination, Lopes said he was not on site at the time of installation of the platform at 100 Queen Street.
The defendant’s case
133.The defendant adduced evidence from Damien Mullins, who is an engineer by qualification and who was employed by the plaintiff for a period of 3 months. He said he knew the defendant who had been his manager during his employment with the plaintiff. He said he worked on the 114 William Street site in February 2014. He worked initially on the BMU for mechanical and maintenance related matters. He said that “basic maintenance” was undertaken on the unit commencing 18 February 2014 and concluding on 20 February 2014.
134.He said “we reported to Fraser that the unit was working but it required an electrical upgrade.” Mullins said that Fraser then asked for a quotation. He said the defendant told Fraser he was moving on in a couple of weeks but would pass the request on to an appropriate person to action. He said the defendant also told Fraser that a second quote could be requested and he said his phone number was still the same.
135.Mullins was cross-examined. He said that he had left the plaintiff and taken up employment with Promax along with the defendant. He said he was a privy to the conversation but he said he was standing close to the defendant in an open doorway some 2 metres away from the defendant and Fraser. Mullins said that the defendant told Fraser that the quote would be provided from the plaintiff. He said the defendant when referring to his phone number being the same did not mention Promax. Mullins was not re-examined.
Lee Dwinger evidence in chief
136.Lee Dwinger said he met Tisdall on a couple of occasions in January 2013. Discussions touched on the terms and conditions of any employment he might be offered and he mentioned that he had previously been supplied with a company vehicle and fuel was included. Tisdall agreed to match as closely as possible the conditions the plaintiff had with his previous employer. He said he was told that the plaintiff needed to fill the position urgently. He identified the contract dated 19 December 2012. He said that when he commenced employment there were four permanent and two temporary employees in the division.
137.He was asked about the credit card and said that there had not been any discussion in relation to it. He was notified by Sally Tisdall to collect a credit card. He said he signed a form and the card was then supplied to him. He was shown (Exhibit P 2) comprising the credit card terms and conditions. He acknowledged receipt of the document.
138.He said he was told the BMU Division operated according to its own agenda. He said he had been provided with instruction on the SimPro system by his predecessor Glenn Porter.
139.He said problems were encountered with Tisdall’s inability to maintain good morale among the staff of the BMU unit. He said Tisdall had an “army style of management”.
140.He said he decided to resign in January 2014. He was shown (Exhibit P5), the retention contract. He said he made sure that he did not tell any clients that he was leaving with the exception of Andrew Fraser. He said that when he met with him he already knew something of the matter and mentioned that he had heard word that he was leaving the plaintiff. He thought the meeting with Fraser took place on Thursday 20 February 2014. He said their conversation occurred in the basement of 100 Queen Street in company of Damien Mullins. He said that he told Fraser that an electrical upgrade to its BMU would be a good idea. He said he explained what was involved. He said Fraser asked for a quotation. He told Fraser that he would pass on the information “to the next guy”. He said he told Fraser him that if he required a second quote that his phone number would be the same. He said on the Sunday 24 February 2014 he was at church and his phone was on silent. He said at the conclusion of the church service he accessed his messages and the message he retrieved was from Tisdall who advised that he had been summarily terminated and that he was to attend the next day at the plaintiff at 9.00 am to be interviewed.
141.He attended an exit interview the following day in the presence of Nada Matijivic, Sally Tisdall and Graham Tisdall. He said Tisdall pulled out a statement and began to question him about certain purchases. The defendant told Tisdall that some items he asked about were located in the back shelving of 100 Queen Street and that he could show him where they were but Tisdall declined the proposal to accompany him. The defendant said that the majority of the equipment he was questioned about was at 100 Queen Street.
142.He was asked about the use of the credit card. He said if a purchase related to a specific job he would write the job on the receipt. He said receipts went into a folder which he would give to Anna.
143.He said he was not aware of any concerns until Nada approached him and told him that she wanted to go through some of the credit card receipts.
144.He said he was on site at a job at Freshwater Place when the sides of his sunglasses were damaged. He said he added the cost of new pair of sunglasses as a cost to the job and Nada said “that was fine”.
Cross-examination of the defendant
145.He acknowledged that a job card is not a quotation and they are not something produced to a client but rather comprise internal documents. He said the process adopted was that a job card would be created to which a job number was allocated and thereafter the SymPro system takes charge after a quotation has been accepted.
146.He said that the purchase of fuel is not allocated to any particular job at hand.
147.When asked how frequently he attended on the various worksites, he said, “not often”. On the evidence I heard, that self-assessment, seems accurate.
Job Cards
148.The defendant was questioned about the creation of job numbers (Exhibit P10). Tisdall’s evidence had been that when a quote is accepted or “goes live” it is generated in the SimPro system as a “job” or a “job card”.
149.The defendant said that he would attend on-site and “scope out” what was likely required and then log into the system and create a quotation itemising each purchase matter that might be needed such as switches. A description would then be entered onto the system. A quotation was then printed and sent to the client. When accepted a purchase order is received and that too is entered into the Sim Pro system and the job is then created. He said the job card contains “just a basic description”.
150.In relation to motor vehicles he said a Toyota Hi Lux was used most of the time. In July 2013 a Volkswagen diesel was purchased but was largely left at home but if he needed it he would use it. He said he used company vehicles as well. In May 2013 he said he used company vehicle when his vehicle was damaged and he used a company car from another division of the plaintiff. He said company vehicles used diesel and there was also another Toyota Hi Lux within one of the divisions of the plaintiff as well.
151.He was questioned about numerous of the controversial invoices and in particular:
· Invoice 3 for the purchase of a Milwaukee combo set for $679.00. He said he used it for repairs on callouts for clients. He could not recall for which client it had been purchased. He said that at the time of his termination it was in his possession and it was recovered by the police from his home. I am not satisfied and do not accept the defendant’s explanation that he purchased it for a legitimate work related use. I am not satisfied he had any reason for it to be at his home.
· Invoice 12 was not pursued by the plaintiff.
· Invoice 16 comprises the purchase of a Bosch Stud Finder and Bahco 94 piece socket set. The defendant said the item was requested by a contractor electrician Stephen Morata. He said it was required in order to relocate a panel. He said the socket set was purchased for technicians because they complained they had a shortage of tools. He said the socket set was put at the back workshop on site at 100 Queen Street beneath a steel bench. That the socket set was not to be found there does not amount to evidence of an unauthorised purchase. The stud finder was for use in identifying the placement of electrical cables. Kallagianis’s opinion, that if stud finders are required for work on BMU’s then an electrician would use his own, is secondary evidence. I am not satisfied the plaintiff has established that the purchases were not work related. The Facebook photo of a stud finder is equivocal.
· Invoice 18 comprises an invoice for the purchase of a Bosch grinder, Flexovit disc, Flexovit disc cut, Detroit power board and tool box and Bosch blade jigsaw set for $506.50. The defendant said these were common tools that were used on various jobs. He said that initially it was predominantly the case that all tools were given to technicians on site. He said the angle grinder was used for cutting purposes on the work site at Freshwater Place to cut up steel framing. Tisdall’s evidence had been that the defendant said they could be found at 100 Queen Street and they were not and the defendant denied that a Facebook photo posted by him in the course of construction and carpentry works at his home depicted the Detroit power board and stand. I was not satisfied by the defendant’s explanations and I am satisfied on the balance of probabilities that the defendant applied the tools to his own personal use and I am not satisfied by his evidence that they were applied for use on any job site.
· Invoice 21 for the purchase of diesel $111.51. I am not satisfied that the fuel purchases are illegitimate purchases. I exclude them as a debt due to the plaintiff by the defendant.
· Invoice 23 comprising various items such as a Floor leveller, brush pan, a pointing trowel, an allen key set x 2, masonry float, tie down ratchet, 8 litres Dulux Design Stone Paint and 8 litres Dulux Design suede Paint totalling $538.71 and allocated to 100 Queen Street. Dwinger admitted that the paint was purchased for his own use at home but said that the balance of the items were used for work-related circumstances including the purchase of levelling cement which he said he gave to Lopes. I do not accept the defendant’s account and I am satisfied that none of the purchases were legitimate work related purchases.
· Invoice 24 which comprises a multifold ladder for $99.00 which the defendant said was used by “guys on site” and they needed it to get on crossbars and for ease of carriage in vehicles to various job sites. In relation to the suggestion that it was of a type that would amount to an occupational hazard, the defendant said this was the first he had ever heard of it. I am not satisfied it has been established that the ladder was an unauthorised personal purchase. The explanation for its use is logical and Tisdall’s assertions in evidence that it was not a type that complied with OH&S requirements is not evidence of the fact and I accept the defendant’s account that he had no knowledge that it would be non-compliant. On balance, I am not satisfied that it is more probable than not, that the ladder the subject of the purchases is the ladder disclosed in the photograph but even if I am wrong about this, then I reject the account that the purchase was not work related.
· Invoice 26 comprised purchases amounting to $373.76 for moulding wall trims, British paints and Cabot’s Stain & Varnish. The defendant said that the white oak mould trim, the MDF moulding, the pine marine ply board were work-related purchases. He said the balance of the items however were purchased from his own use. He said the paint was used for touch-up jobs. I am satisfied these were all personal purchases and that the defendant is indebted to the plaintiff in regard to the full amount of the purchases.
· Invoice 27 comprising the Makita vacuum cleaner purchase of $59.00 allocated to the Queen Street job. Dwinger said was purchased for Nathan Myszka an electrician who said he needed a small vacuum cleaner to clean up as he worked on site. This explanation was different to Tisdall’s evidence of the defendant’s explanation which was that the vacuum to David Lopes. Lopes denied having been given a vacuum cleaner. I am not satisfied that the plaintiff has proved the unlawfulness of the purchased item by reference alone and reliance on Tisdall’s account of the defendant’s explanation.
· Invoice 43 the laser level and tripod for a purchase cost of $849.00 and allocated to Little Lonsdale Street. Dwinger said in evidence that both purchases were made for work on 100 Queen Street to ensure that the platforms under construction were level. He said he used the spirit level to obtain accuracy with the decking installed on his decking works at his home. A laser level and tripod were found on site at the defendant’s home when police arrived. Lopes testified that on no occasion had he seen a laser or tripod and he also said he was involved in placing platforms on site and they were not utilised in the platform construction. I am satisfied that the plaintiff has discharged its burden of proof in regard to the purchases. I do not accept they were purchased for the allocated job and, moreover, in so far as the defendant testified they had use in making the platforms level at 100 Queen Street, I reject his account and instead prefer the evidence of Lopes who was also involved in the construction of the platforms. I am satisfied the laser level and platform were an unauthorised purchase made by the defendant for his domestic personal use.
· Invoice 39 consists of purchases made on 5 November 2013 at Bunnings Craigieburn (Cup Day) of the purchase of screws, decking quick shot screws, joist protect a deck, treated pine 90 x 90mm in the total amount of $271.02. Dwinger said that the deck screws were needed “because one of the guys required them to put the pieces pine together to create a box” to support the BMU at 533 Little Lonsdale Street. Tisdall testified that in the exit interview Dwinger said the items had been purchased for use at 100 Queen Street. Dwinger said that decking quick shot was an “inadvertent purchase” for his personal use. He said that protect a deck was something he “could have used” at his home but he denied the use of treated pine for the construction of his home deck. Tisdall said there was no decking at 100 Queen Street. Lopes testified on the matter and said that wood of 90 x 90 mm would not be used to support a jack and that wood of 80 x 200mm would be used and timber was brought to site and not purchased. In regard to and the proposition advanced that all of the purchases were associated with the construction of a deck the defendant conceded that the quick shot and joist protector could well have been for personal use. He said that if they were, then they too were inadvertent purchases. I am satisfied the plaintiff has established that the purchases were unauthorised and not acquitted for work related use but rather purchased and used for the defendant’s own consumption and use.
· Invoice 36 comprising a series of item totalling $305.54 and consisting of a Tooglemate ramset packs x 3, gate latch deluxe, gate hinge, anchor wallmate, nails and screws. The purchases were allocated to the 100 Queen Street job. Dwinger said that the items were used at 750 Bourke Street where he said he refitted the hinges to a BMU. I am not satisfied that the balance of purchases may not have been suitable for use on site elsewhere as indeed Lopes largely acknowledged in his evidence.
· Invoice 38 sunglasses I am not satisfied the sunglasses was an impermissible personal purchase. I am satisfied that they were damaged at a work site and it could not be said that the defendant’s attribution of the cost of the purchase of replacement glasses was unauthorised. However the cleaning kit was not of the same category of purchases and should not have been charged. .
· Invoice 40 consists of various purchases totalling $230.22 of steel rivets, metal screws, disposable pain pots x 3, Spakfilla, paint brushes, decking oil applicator, Wash&Wear Dulux interior paint, deck clean. Dwinger said that the decking applicator and deck cleaner was purchased for use at 750 Little Lonsdale Street to remove dust and dirt after David Lopes had finished up his job and for use in picking up dust left over. Other items he thought were purchased for other workers for paint touch up. After questions by me in regard to the purchase of interior paint Dwinger said they “would have been a personal purchase by me”. He agreed that he was doing some work on a deck that was constructed at the home. He was taken to various Facebook photos which were uploaded to his account. I do not accept any part of the defendant’s evidence in relation to these items and I am satisfied they were unauthorised purchases of a personal and domestic nature that in all probability were associated with the defendant’s own use.
· Invoice 33 trailer deposit in the sum of $55.00. I do not regard the defendant’s omission to recover the deposit as more than an oversight and whilst lax practice on his part, is not an expense that should fall into the characterisation of an unauthorised expense incurred for person use I reject the defendant being indebted for that impost.
· Invoice 42 in the sum of $127.96 consisting of decking quick shot screws and screwdriver bits. Dwinger’s evidence was unsatisfactory in regard to this and like purchases I have already addressed. Tisdall said Dwinger told him the purchases had been allocated against 100 Queen Street however Tisdall’s evidence was that no decking had been carried out. Dwinger said in evidence at first that he could not recall the job to which the purchase related but it was “for one of the technicians” but later in cross-examination said that the purchases were for his personal use and by reference to photographs from his Facebook page dated 1 December 2013 identifying that his deck was complete and his concession in relation to the purchases that, “Yes, I could have used them. I would say yes,” I am further satisfied in the conclusion that the defendant is indebted to the plaintiff for the cost of the purchases as they were made for his personal use.
· Invoice 49 for purchase of diesel of $109.68 is not a debt due to the plaintiff by the defendant because as I have already noted the reach of the provision of fuel and /or the exclusion of its purchase being for use in a vehicle that had a work relatedness use has not been established to my satisfaction.
· Invoice 45 for purchase of diesel of $93.48 for the reasons just expressed is not a debt due by the defendant.
· Invoice 46 comprising the purchases from Autobarn of a Ryco oil filter and engine oil in the sum of $153.97. Dwinger’s evidence was that he could not remember the use made of the oil filter. The engine oil however was used for screw feeding immersion for work undertaken at 390 St Kilda Road and 114 William Street. The plaintiff said engine oil would not be used on a BMU. This was not so according to defendant who said for a screw feed unit engine oil was suitable for use. I am satisfied that the plaintiff has established that the Ryco oil filter was not a work related purchase but on the balance of probabilities I am unable to say the same in relation to the engine oil. I will allow the cost of the filter as a debt but not the engine oil.
· Invoice 50 comprises numerous purchases for jobs that Dwinger said were used on a job site at 80 Collins Street and at Freshwater Place despite the purchases being allotted to the job site of 100 Queen Street. Dwinger said the purchases had been requested by an electrician Nathan Myszka. Dwinger did not adduce evidence from Myszka. The items comprised PVC conduit fittings, “C” size batteries, hose clamps, 9V batteries, nail clips, waterproof switches, socket plugs, irrigation pipe and joiners. I did not find the explanation for their use and application as having a work relatedness persuasive and, in any event, the attempt to so characterise the purchases was limited and did not purport to explain all purchased items. Furthermore, the manner of the request made of Dwinger by Myszka was unsatisfactory. Dwinger could not remember whether Myszka gave him a detailed list or whether he had looked at the job and worked out for himself what was required. At another point in his evidence Dwinger said he was simply told what to buy but was not given a list. I do not accept his explanations. I will order the full amount is a debt stemming from purchases made for personal use.
· Invoices 53, 55 & 56 purchases of diesel in the amounts of $101.92, 104.62 & 119.22. I repeat my earlier reasons and findings and exclude these items as a debt due by the defendant.
· Invoice 62 consists of the purchase of a torque wrench in the amount of $159.00. Dwinger said was put to use for work on site as part of work undertaken at 533 Little Lonsdale Street. He said he had it in his car as he did the job himself of tightening up steel bolts on the machine. It was found at Dwinger’s home. I am satisfied it was purchased for a legitimate work use and that its presence at his home is not of itself a sufficient disentitling reason to regard the defendant as having assumed exclusive possession of it for his personal use.
· Invoice 58 dated 28 January 2014 consists of an invoice from Dick Smith invoice. The defendant said the Apple lightning adapter and the tune cast were personal purchases but the walkie-talkies were used for drop testing at 100 Queen Street but they were not allowed to be used and so he kept them in his car and then they were used at 312 St Kilda Road to rescue technicians who were stuck on the BMU. When asked why he made no attempt to bring these personal purchases to the attention of his employer he said, “I didn’t take the time to sit down with Tisdall”. I am not satisfied by the plaintiff’s evidence in relation to the walkie talkies and the fact they were not able to be used at 100 Queen Street is not the same as proof that their intended purpose for purchase or subsequent use by the defendant lacked a work relatedness.
· Invoice 61 was not pursued by the plaintiff.
· Invoice 64 I am unable on the available evidence to make a finding in relation to the alleged illegitimacy of the expenditures.
· Invoice 63 about which the defendant said the majority of the items were purchased for use on-the-job at 100 Queen Street which he delivered personally on-site and the balance he delivered to “Nathan” and “Matthew” each at 80 Collins Street. In cross-examination he said they were made on the Bunnings account and not the company credit card and he said, “these were all legitimate work purchases” and he went on to say that “these items related to a whole lot of work sites”. Nonetheless it was suggested to him that in accordance with the job cards produced by the plaintiff (Exhibit P9) all of the purchases were recorded as allocated to Freshwater Place job site. He was unable to explain why this was the case. In relation to the purchase of garage “sure hooks” they were retrieved by the police at his home. Although I was directed to highlighted purchases in particular, the defendant’s account of the purchases was I found wholly unsatisfactory and his explanations irregular. I am satisfied on the balance of probabilities that the purchases were improper purchases and I am not satisfied the items were purchased for legitimate work related purposes.
The inadvertent purchases
152.I am satisfied the defendant has on a number of occasions acted dishonestly. I am satisfied that in the course of his employment with the plaintiff he made purchases that he knew were not permitted and that he made purchases with the plaintiff issued credit card for purchases he intended for his personal use and that he hid these unauthorised purchases by allocation them and the costs of their purchase to various legitimate jobs the plaintiff was contracted to perform.
153.The defendant was asked how he came to make inadvertent purchases of the paint items identified in invoice 23. He said he recognised after making the purchase that it was not permitted but that there were lots of items in the trolley that day. Why this volume of purchases amounted to a mitigating fact was not explained. He accepted that he did not tell his employer of the inadvertent mistake and he allowed the cost of his personal purchases to be billed as against the client job allocated. He said that over the course of 2013 he was painting his home in Craigieburn and he purchased the paint for that reason.
154.At no stage prior to testifying did the defendant admit having made unauthorised personal purchases that he charged to his employer’s clients. Indeed not only was the notice of defence silent on the matter but instead pleaded [paragraph 7] that:
“…The Defendant otherwise denies that he is indebted to the plaintiff in the sum of $8,234.53 as this sum relates to various expenditures incidental to the Defendant carrying out his duties whilst in the employ of the Plaintiff. Further, where the Defendant was unsure he sought the advice of his General Manager, Nada Matijevic who consented to and approved certain purchases without the requirement that the Plaintiff be reimbursed”.
155.I reject the defence that the sum of $8,234.53 “relates to various expenditures incidental to the defendant carrying out his duties whilst in the employ of the Plaintiff”. Some did but not the full amount. Furthermore, I reject the defence that “where [Dwinger] was unsure he sought the advice of …Matijevic who consented to and approved certain purchases without the requirement that the Plaintiff be reimbursed”. Save for the specific expenditures about which I have made an express finding and the purchase of the sunglasses by the defendant, I reject the cornerstones of the defence as pleaded and set out above.
156.Dwinger said he was not at the plaintiff’s office often and he was very busy and so he did not raise the purchases with anyone. Once again this explanation is not consistent with his notice of defence which was that the impugned purchases were not personal and otherwise they were authorised.
157.On a number of occasions I asked the defendant how such purchases could be “inadvertent” and why he would have allocated them to a work job? He could only answer, “I made mistakes”. In my judgement they were grave mistakes and they displayed a deliberate course of dishonest conduct calculated to be hidden from detection. I found the defendant’s evidence overall as peculiar and he left me with a strong impression that he did not recognise the seriousness of his misconduct.
158.The defendant was asked about certain items seized by the police from his home and why he had not returned unauthorised purchases to his employer and he said he had been told “not to go anywhere near GDP”. Of course there was no need to go to his employer he could easily have contacted the employer by phone or email or through an intermediary however none of these steps were taken. When asked why he did not gather them and take them with him to the exit interview on the Monday he had no explanation other than “it was inconvenient to go through his garage for every little thing and pack them up and take them in”. Of course, not only did he not return them to the plaintiff on the Monday neither did he disclose their acquisition by him.
Re examination
159.The defendant said his home was built by commercial builders commencing February/March 2013 and it was completed in October 2013. He said he did not do any works on the construction of the building.
Consideration and evaluation of the evidence
160.There is no contest that the defendant was employed by the plaintiff in the role of Operations Manager in charge of the BMU division and its operations and that the work he oversaw covered numerous sites and locales. It is also not controversial that over the period of his employment he signed two letters of employment and he was issued a credit card which terms of use were confined at least to legitimate work purchases.
161.The law provides that if an employee by conduct engages in misconduct that is wholly incompatible with an ongoing employment then he is liable to the sanction of a summary termination of employment for serious misconduct. The relevant part of the retention agreement is expressed thus:
“If at any time prior to 28 February 2014 your employment is terminated summarily, you will not be entitled to any of the extra payments of $4,000 and amounts already paid to you will be required to be repaid to GDP. These payments may be deducted from your final termination payment.
We also take this opportunity to remind you of the obligations imposed on you on signing your contract of employment on 11 September 2012, as detailed in the extract below. I do hope that you will conduct yourself during the remainder of your time with GDP with integrity, ethics and in good faith towards GDP, as GDP has been a generous and accommodating employer towards you throughout your employment period”.
162.I am satisfied that the plaintiff has made good its claim that it terminated the defendant’s employment summarily. The fact that I am not satisfied that the plaintiff has established both grounds on which it relied to justify the summary termination of the employment is not a disentitling consideration.
163.The second matter is the plaintiff’s contention that it is entitled to an award representing the cost of all the purchases made by the defendant on the basis of indebtedness. As attractive a submission as this might appear in light of the admissions made by the defendant in the course of the hearing it warrants some examination.
164.In final address Counsel for the defendant argued that despite the defendant having made admissions of making a number of purchases for his personal use and not having disclosed them to the plaintiff either at the time of their purchase or thereafter, this was not of itself a sufficient evidentiary basis for me to find that all the purchases relied on by the plaintiff were likewise tainted. Counsel submitted that I would need to be satisfied by evidence led by the plaintiff that the each of the purchases of tools and consumables were made by the plaintiff for his personal use. I agree. As more simple an exercise as it would have been to have accumulated all purchases as tainted because of the irregularity and wrongdoing associated with some of them, in my judgment, that would not have been proper. The plaintiff was required to discharge its burden on each matter.
165.Counsel for the defendant further submitted that the plaintiff was required to prove that the work tools were purchased exclusively by the defendant for his own use because otherwise if there was a work component then the amount owed ought to be reduced. I do not accept that submission. The debt is that incurred by the unauthorized purchase and not assessed by some allocation of formula of work versus private usage.
166.Counsel for the defendant submitted that the plaintiff had failed to discharge its evidentiary burden. Counsel pointed out that the plaintiff had produced only David Lopes who worked on site. Lopes gave satisfactory evidence on matters of presence on site and familiarity with works relevantly undertaken and his evidence was probative of a number of matters about which I made findings both favourable and not to the plaintiff. As to Tisdall, it was submitted that he did not possess direct knowledge and hence could not speak as which tools or consumables were put to a legitimate work related use on sites. Counsel for the defendant also submitted that it was a difficult task for the plaintiff to prove the tools never made it to the workplace as no asset register was maintained to identify tools logged in or out and no register was produced by the plaintiff. Counsel for the defendant also submitted that as to the absence of the tools at the workplace the fact that they were not at 100 Queen Street when searched for is neither here nor there because the search only occurred later after there had been an opportunity for access to the premises by others and that I should not arrive at an adverse conclusion. Again the extent of the probative value of Tisdall’s evidence is reflected in my reasons and no finding has been made by reference to one piece of evidence or one testimony in isolation. Counsel also submitted that a complaint levelled at the defendant by the plaintiff that gave rise to a suspicion was the brand of some tools purchased. However, as counsel argued there is no evidence that Tisdall gave any instruction that only Makita branded tools were to be purchased. Whilst Kallagianis appeared to know of Tisdall’s brand preference, that is an insufficient evidentiary basis of itself to conclude therefore that the purchase was not a work related purchase but a purchase made for personal reasons and hence unauthorised.
167.Counsel argued that I should be sceptical in lumping the purchases for screws, for example, at the feet of the defendant. Counsel submitted that I should not assume that the consumables claimed were not purchased for legitimate work related reasons. After all as he pointed out it was not alleged that the defendant did not undertake work in his capacity as BMU manager or that the identified projects were not undertaken in which case, it would go without saying, that consumables would be required for purchase. I accept the logic of this submission but has limited application. First, it is not the case that the schedule of contentious purchases comprise all the consumables or, indeed, all the purchases made by the defendant in the course of his employment with the plaintiff. Rather, as counsel for the plaintiff said the expenditures pursued by way of recovery of a debt are those identified and not all purchases made.
168.Ultimately, I have adopted a number of the submissions made by counsel for the defendant and because of this, these reasons are particularly detailed because, as I expressed to counsel, my tentative view which has proved true, was that each invoice was required to be assessed against the evidence and that the defendant’s admitted wrongdoing in relation to some purchases could not of itself taint all purchases. I have identified each contentious purchase and my reasons for conclusion in relation to the same in the foregoing paragraphs of my reasons. A reconciliation of my findings results in the defendant being indebted to the plaintiff as follows:
Invoice 3 $679.00
Invoice 18 $506.50
Invoice 23 $538.71
Invoice 26 373.76
Invoice 43 $849.00
Invoice 39 $271.02
Invoice 36 $305.54
Invoice 38 $259.95
Invoice 40 $$230.22
Invoice 42$127.96
Invoice 46 $13.99
Invoice 50 $224.61
Invoice 58 $116.96
Invoice 63 $695.83
Total: $5,193.05
169.Therefore, I am satisfied that the defendant is indebted to the plaintiff in the amounts of $5,193.05 plus $5,356.14, and there will be an order in favour of the plaintiff for the sum of $10,549.19 together with interest and costs. I direct that a minute of order in relation to interest and costs be filed within 7 days and in default that the matter be listed for mention at the earliest availability.
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