Heal v Sydney Flames Basketball Pty Ltd
[2024] FCA 401
•19 April 2024
FEDERAL COURT OF AUSTRALIA
Heal v Sydney Flames Basketball Pty Ltd [2024] FCA 401
File number(s): NSD 98 of 2023 Judgment of: HALLEY J Date of judgment: 19 April 2024 Catchwords: INDUSTRIAL LAW – general protections – adverse action – workplace rights – whether employee had or exercised workplace rights – whether alleged workplace rights were workplace rights within the meaning of s 341(1)(c) of the Fair Work Act 2009 (Cth) (FW Act) – consideration of the meaning of “complaint” or “inquiry” an employee is “able to make” “in relation to” their employment – some alleged complaints and inquiries found to be the exercise of a workplace right within the meaning of s 341(1)(c) of the FW Act – whether employer took adverse action against employee – where employee was suspended from employment – suspension and related actions constituted adverse action within the meaning of s 342 of the FW Act – whether adverse action taken because of the exercise of workplace rights – reverse onus of proof under s 361(1) of the FW Act – evidence of decision makers as to reasons for taking adverse actions accepted – where satisfied none of the established adverse actions were taken because of the exercise of any of the established workplace rights – reverse onus discharged – general protections claims dismissed
INDUSTRIAL LAW – alleged contravention of FW Act for failing to provide employee records pursuant to reg 3.42 of the Fair Work Regulations 2009 (Cth) (FW Regulations) – where pleaded contravention of reg 3.42(1) for failing to provide employee records pursuant to the employee’s requests – where employee records were provided – where employee instead advanced contravention of reg 3.42(3) concerned with time frame for providing employee records – where reg 3.42(1) and reg 3.42(3) are different civil penalty provisions – where employer contends employee should not be allowed to advance claim for contravention different to his pleaded case – where employee did not seek to amend pleadings – employee held to pleaded case – contravention not established
INDUSTRIAL LAW – alleged contravention of FW Act for failing to provide payslips pursuant to s 536(1) of the FW Act – where contravention admitted by the employer – penalties for contravention to be determined
CONTRACTS – breach of contract – where employee entitled to “sponsorship income” under employment contract for sponsorships “procured” by the employee – where employee claims he procured two sponsorships – where employee claims employer breached the contract by failing to pay to him the sponsorship income – consideration of the meaning of “procure” and whether sponsorships were “procured” by the employee – where necessary to construe meaning in the context of the employment contract as a whole and the surrounding circumstances known to the parties – where satisfied that employee procured the sponsorships – employee entitled to sponsorship income – breach of contract claim established
Legislation: Fair Work Act 2009 (Cth) ss 94, 340, 341, 342, 360, 361, 387 and 536
Fair Work Regulations 2009 (Cth) regs 3.42 and 4.01A
Workplace Health and Safety Act 2011 (NSW)
Cases cited: Alam v National Australia Bank Ltd (2021) 288 FCR 301; [2021] FCAFC 178
Australian and International Pilots Association v Qantas Airways Ltd [2006] FCA 1441
Australian Building and Construction Commissioner v Hall (2018) 261 FCR 347; [2018] FCAFC 83
Australian Municipal, Administrative, Clerical and Services Union v Commissioner of Taxation [2022] FCA 1225
Automotive, Food, Metal, Engineering, Printing and Kindred Industries Union v Visy Packaging Pty Ltd (No 3) (2013) 216 FCR 70; [2013] FCA 525
Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500; [2012] HCA 32
Cohen v iSoft Group Pty Ltd (2013) 298 ALR 516; [2013] FCAFC 49
Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (2015) 230 FCR 298; [2015] FCAFC 25
Construction, Forestry, Mining and Energy Union v De Martin & Gasparini Pty Ltd (No 2) [2017] FCA 1046
Construction, Forestry, Mining and Energy Union v Pilbara Iron Company (Services) Pty Ltd (No 3) [2012] FCA 697
Construction, Forestry, Mining and Energy Union v Rio Tinto Coal Australia Pty Ltd (2014) 232 FCR 560; [2014] FCA 462
CPSU, The Community and Public Sector Union v Telstra Corporation Limited [2000] FCA 844
Crossing v Anglicare NSW South, NSW West & ACT [2021] FCA 1112
Cummins South Pacific Pty Ltd v Keenan (2020) 281 FCR 421; [2020] FCAFC 204
CXC Consulting Pty Ltd v Commissioner of State Revenue [2013] VSC 492
Ermel v Duluxgroup (Australia) Pty Ltd (No 2) [2015] FCA 17
HRC Hotel Services Pty Ltd v Chief Commissioner of State Revenue [2018] NSWSC 820
Jones v Queensland Territory Admissions Centre Ltd (No 2) (2010) 186 FCR 22; [2010] FCA 399
Klein v Metropolitan Fire and Emergency Services Board [2012] FCA 1402
Messenger v Commonwealth of Australia (Represented by the Department of Finance) [2022] FCA 677
Nearfield Ltd v Lincoln Nominees Ltd [2007] 1 All ER (Comm) 441; [2006] EWHC 2421 (Ch)
Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; [2004] HCA 35
Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1; [1998] HCA 30
PIA Mortgage Services Pty Ltd v King (2020) 274 FCR 225; [2020] FCAFC 15
Police Federation of Australia v Nixon (2008) 168 FCR 340; [2008] FCA 267
Qantas Airways Limited v Australian Licensed Aircraft Engineers Association [2012] FCAFC 63
Qantas Airways Ltd v Transport Workers Union of Australia (2023) 412 ALR 134; [2023] HCA 27
Reardon Smith Line Ltd v Hansen-Tangen [1976] 1 WLR 989; [1976] 3 All ER 570
Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 240 CLR 45; [2002] HCA 5
Sayed v Construction, Forestry, Mining and Energy Union [2015] FCA 27
Serpanos v Commonwealth of Australia [2022] FCA 1226
Shea v TRUenergy Services Pty Ltd (No 6) [2014] FCA 271
The Environment Group Ltd v Bowd [2019] FCA 951
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52
Transport Workers Union of Australia v Premier Motor Service Pty Ltd [2015] FCA 650
Treasury Wine Estates Vintners Ltd v Pearson (2019) 268 FCR 12; [2019] FCAFC 21
Victoria (Office of Public Prosecutions) v Grant [2014] FCAFC 184
Walsh v Greater Metropolitan Cemeteries Trust (No 2) (2014) 243 IR 468; [2014] FCA 456
Whelan v Cigarette & Gift Warehouse Pty Ltd [2017] FCA 1534
Wong v National Australia Bank Limited [2022] FCAFC 155
Yu v Act Education Directorate [2022] FCAFC 110
Division: Fair Work Division Registry: New South Wales National Practice Area: Employment and Industrial Relations Number of paragraphs: 382 Date of hearing: 30 June, 3-6, 11 July, 7 August 2023 Counsel for the Applicant: Mr G Fredericks Solicitor for the Applicant: Khan Law & Associates Counsel for the Respondent: Mr P Moorhouse with Mr J Simpkins Solicitor for the Respondent: Ovartis Lawyers ORDERS
NSD 98 of 2023 BETWEEN: SHANE HEAL
Applicant
AND: SYDNEY FLAMES BASKETBALL PTY LTD (ABN 96 641 606 046)
Respondent
ORDER MADE BY:
HALLEY J
DATE OF ORDER:
19 APRIL 2024
THE COURT ORDERS THAT:
1.Judgment in favour of the applicant with respect to the breach of contract claims pleaded in paragraphs 74 and 77 of the statement of claim and the admitted failure to provide payslips claim pleaded in paragraphs 67 to 69 of the statement of claim.
2.The amended originating application and the statement of claim otherwise be dismissed.
3.The applicant and the respondent are to confer and seek to reach agreement on a proposed form of orders to give further effect to these reasons for judgment, including a timetable for the provision of submissions and any further evidence on penalty with respect to the admitted payslips claim, failing which the parties are to exchange short written submissions in support of the orders they seek, by 4.30 pm on Friday, 3 May 2024.
4.The matter be listed for a case management hearing on a date and time that is convenient to the parties and the Court in the week commencing 6 May 2024 to resolve any outstanding issues with respect to the further orders to give effect to these reasons for judgment.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
HALLEY J:
A. INTRODUCTION
[1]
B. FACTUAL BACKGROUND
[10]
B.1. The parties
[10]
B.2. Suspension and Investigation of Mr Heal
[14]
C. WITNESSES
[58]
C.1. Mr Heal’s witnesses
[58]
C.1.1. Overview
[58]
C.1.2. Mr Heal
[59]
C.1.3. Mr Heal’s other witnesses
[62]
C.2. Sydney Flames’ witnesses
[67]
C.2.1. Overview
[67]
C.2.2. Management witnesses
[68]
C.2.3. Player witnesses
[77]
D. GENERAL PROTECTIONS CLAIMS
[82]
D.1. Statutory provisions and legal principles
[82]
D.1.1. Workplace rights statutory provisions
[82]
D.1.2. Meaning of workplace right
[84]
D.1.3. Adverse action statutory provisions
[89]
D.1.4. Meaning of adverse action
[95]
D.1.5. Assessing whether certain conduct amounts to adverse action for a prohibited reason
[98]
D.2. Determination of general protection claims
[102]
D.3. Initial Workplace Rights
[106]
D.3.1. Overview
[106]
D.3.2. First Workplace Right (Alleged Playing Schedule Complaint)
[107]
D.3.3. Second Workplace Right (Alleged Jackie Young Complaint)
[119]
D.3.4. Third Workplace Right (Alleged Meg Jeffers Complaint)
[141]
D.3.5. Fourth Workplace Right (Alleged Victoria Denholm Complaint)
[149]
D.3.5.1. Conversation between Victoria Denholm and Mr Heal
[151]
D.3.5.2. Conversation between Mr Heal and Mr Pongrass
[158]
D.4. Initial Adverse Actions
[169]
D.4.1 The relevant decision makers
[177]
D.4.2. The Decision Makers’ stated reasons
[182]
D.4.3. Mr Heal’s challenge to the Decision Makers’ reasons
[187]
D.4.4. Consideration
[196]
D.5. Further Workplace Rights
[210]
D.5.1. Overview
[210]
D.5.2. Fifth, Sixth and Ninth Workplace Rights (Investigation Inquiries)
[211]
D.5.3. Seventh Workplace Right
[229]
D.5.4. Eighth Workplace Right
[231]
D.5.5. Tenth Workplace Right
[233]
D.6. Further Adverse Actions
[235]
D.6.1. Overview
[235]
D.6.2. Fifth Adverse Action
[236]
D.6.2.1 Relevant decision maker
[243]
D.6.2.2 The decision maker’s stated reasons
[245]
D.6.3. Sixth and Seventh Adverse Actions
[247]
D.6.3.1. Relevant decision maker
[253]
D.6.3.2. The decision maker’s stated reasons
[260]
D.6.3.3. Mr Heal’s challenge to the decision maker’s reasons
[264]
D.6.3.4. Consideration
[265]
D.6.4. Eighth and Ninth Adverse Actions
[271]
D.6.4.1. Relevant decision maker
[281]
D.6.4.2. The decision maker’s stated reasons
[284]
D.6.5. Tenth Adverse Action
[288]
D.6.5.1. Relevant decision maker
[298]
D.6.5.2. The decision maker’s stated reasons
[300]
D.6.6. Eleventh Adverse Action
[304]
D.6.6.1. Relevant decision maker
[317]
D.6.6.2. The decision makers’ stated reasons
[318]
E. OTHER ALLEGED FW ACT CONTRAVENTIONS
[322]
E.1. Failure to provide payslips
[322]
E.2. Failure to provide employee records
[324]
F. ALLEGED BREACHES OF CONTRACT
[339]
F.1. Construing contractual terms
[339]
F.2. Breach of Contract claims
[341]
F.2.1. Architectural Signs sponsorship
[349]
F.2.2. Workplace Law sponsorship
[353]
F.2.3 Mr Heal’s submissions
[364]
F.2.4. Sydney Flames’ submissions
[368]
F.2.5. Consideration
[373]
G. DISPOSITION
[382]
A. INTRODUCTION
The applicant, Shane Heal, is a very well known Australian basketball player and coach. He was the Head Coach of the team known as the Sydney Flames (Team) for the 2022/23 season. The Team plays in the Australian Women’s National Basketball League (WNBL).
On 16 January 2023, Mr Heal’s employment as the Head Coach of the Team was suspended by his employer, the respondent, Sydney Flames Basketball Pty Ltd (Sydney Flames). He was suspended pending the outcome of an independent investigation commissioned by Sydney Flames into complaints from members of the Team about his conduct and behaviour towards them.
Mr Heal contends that the decisions by Sydney Flames to suspend him and take other alleged adverse action against him as an employee were due to his exercise of certain alleged workplace rights. Sydney Flames contends that the decision to suspend Mr Heal was taken because of the complaints it had received from members of the Team and the other alleged adverse actions were taken for reasons other than any alleged exercise of any workplace rights by Mr Heal.
The two principal claims that Mr Heal advances against Sydney Flames in these proceedings are:
(a)a general protections claim under the Fair Work Act 2009 (Cth) (FW Act) that Sydney Flames took adverse action against him (Initial Adverse Actions) because of, or for reasons including, that Mr Heal had or exercised certain workplace rights prior to the suspension of his employment with Sydney Flames (Initial Workplace Rights); and
(b)a general protections claim under the FW Act that Sydney Flames took adverse action against him (Further Adverse Actions) because of, or for reasons including, that Mr Heal had exercised the Initial Workplace Rights and/or exercised certain workplace rights after the suspension of his employment with Sydney Flames (Further Workplace Rights).
In advancing his general protection claims, Mr Heal did not seek to challenge the veracity of the complaints made by Team members about his conduct and behaviour. Rather, he advanced the claims on the basis that the complaints as notified to Sydney Flames management could not explain, or at least were not the operative reason for, the decisions made by Sydney Flames to take the Initial Adverse Actions or the Further Adverse Actions. Mr Heal claimed that in substance the players’ complaints were used as a smoke screen to hide the real reasons for the adverse actions taken against him, namely his exercise of the Initial Workplace Rights and the Further Workplace Rights.
Mr Heal also advances the following claims against Sydney Flames in these proceedings:
(a)a contravention of the FW Act by Sydney Flames’ failure to provide employment records to Mr Heal in accordance with reg 3.42(1) of the Fair Work Regulations 2009 (Cth) (FW Regulations), (Employment Records Claim);
(b)a contravention of the FW Act by Sydney Flames’ failure to provide payslips to Mr Heal in accordance with s 536(1) of the FW Act (Payslips Claim); and
(c)breach of contract claims for entitlement to commission under Mr Heal’s employment contract, on revenue which Sydney Flames received from sponsors which Mr Heal claims that he procured (Breach of Contract Claims).
The Payslips Claim is admitted by Sydney Flames.
For the reasons that follow, I have concluded that the general protections claims and the Employment Records Claim must fail but that Mr Heal has been successful on the Breach of Contract Claims and the admitted Payslips Claim.
Contrary to the case advanced by Mr Heal, I accept that the decision to suspend Mr Heal as Head Coach of the Team was taken because of the complaints that the players had made to senior management of Sydney Flames about him, not because of his exercise of any alleged workplace rights. Further, I am satisfied that the other alleged adverse actions taken against Mr Heal were taken for reasons other than any alleged exercise by him of a workplace right.
B. FACTUAL BACKGROUND
B.1. The parties
Mr Heal is a very experienced basketball player and coach. He played professional basketball in national basketball leagues and associations between 1988 and 2008 and represented Australia as a member of the Boomers at the Olympic Games in 1992, 1996, 2000 and 2004. In the period since 2009, Mr Heal has coached professional male and female basketball teams in national leagues and associations.
With effect from 12 March 2021, Mr Heal was employed by Sydney Flames as the Head Coach of the Team. He was employed pursuant to a written employment agreement for a three year term that was due to expire on 12 March 2024 (Contract).
The sole shareholder of Sydney Flames is Hoops Capital Pty Ltd (Hoops Capital). In or about June 2020, Hoops Capital acquired Sydney Flames. Hoops Capital also owns Sydney Kings Basketball Club Pty Ltd (Sydney Kings). Paul Smith is a Director of Hoops Capital. Mr Smith is also the Chairman of Sydney Flames, and the Chairman and co-owner (through another company he controls) of Total Sports & Entertainment Pty Ltd (TSE). TSE owns 60% of the shares of Hoops Capital.
Since about March 2022, companies controlled by the Denholm family (and sometimes referred to as companies within the “Wollemi Capital group”) have held an approximately 30% financial interest in Hoops Capital.
B.2. Suspension and Investigation of Mr Heal
The following summary of the events giving rise to the suspension of Mr Heal and the subsequent investigation into his conduct is taken from the facts agreed between the parties in the statement of agreed facts and evidence given by Sydney Flames witnesses that was not challenged, or barely challenged, by Mr Heal. To the extent that there was any challenge to that evidence, I have accepted the evidence because I am satisfied that it was consistent with contemporaneous documents and corroborated by the evidence of other witnesses. I have not included in this summary, the evidence given by Sydney Flames’ witnesses that was subject to any substantive challenge by Mr Heal.
In late August 2022, Mr Heal had a telephone conversation with Mr Pongrass about the 2022/23 playing schedule for the Team. This conversation is alleged by Mr Heal to constitute a complaint with respect to the first workplace right he has raised in these proceedings (Alleged Playing Schedule Complaint).
In late November 2022, Mr Heal discussed with Mr Pongrass the possibility of making an offer to an American basketball player, Jackie Young, to play for the Team. Sydney Flames did not ultimately make an offer to Ms Young. These conversations are alleged by Mr Heal to constitute a complaint with respect to the second workplace right that he has raised in these proceedings (Alleged Jackie Young Complaint).
On 7 January 2023, Mr Heal had a telephone conversation with Mr Pongrass regarding signing Meg Jeffers to replace an existing player, Rachel Maenpaa. This conversation is alleged by Mr Heal to constitute a complaint with respect to the third workplace right he has raised in these proceedings (Alleged Meg Jeffers Complaint).
On 7 January 2023, the Team lost a game in Perth against the Perth Lynx. Following the game, the Team, other than Mr Heal’s daughter, Shyla Heal, had dinner together. Mr Heal and the other coaching staff were not present. During the dinner, each of Kiera Rowe, Hannah Sjerven and Tiana Mangakahia stated that they were struggling with or upset by Mr Heal’s conduct towards them. All of the players present said that they wanted Sydney Flames’ management to be made aware of the way Mr Heal was acting. The Team captain, Keely Froling, agreed that she would call Victoria Denholm.
At the Team’s training on the morning of 9 January 2023, being the first training after the loss to the Perth Lynx, Victoria Denholm had a conversation with Mr Heal regarding the game, during which she asked him “what’s going to change”.
As Victoria Denholm was walking out of the “PCYC” building where the Team had trained on 9 January 2023, she had a brief conversation with Ms Mangakahia, during which Victoria Denholm observed that Ms Mangakahia looked upset. Victoria Denholm asked if Ms Mangakahia was okay, to which she responded with words to the effect of “not really”. Victoria Denholm and Ms Mangakahia subsequently exchanged text messages and arranged to speak later that afternoon.
Later that day, Ms Froling sent a message to Victoria Denholm asking if they could “chat through some things”. When Victoria Denholm and Ms Froling spoke that afternoon, Ms Froling told Victoria Denholm that a number of the players had complaints about Mr Heal, and were happy for Ms Froling to raise those complaints with Victoria Denholm. In the course of that conversation, Ms Froling said words to the following effect:
The team morale is so bad, its terrible …
Kiera had a panic attack at the game on Saturday …
… Hannah has said that she has been struggling with mental health issues and depression …
… I have even been on the receiving end myself in Adelaide …
Robyn Denholm, Victoria Denholm’s mother, was present in the Wollemi Capital group office at the time that Victoria Denholm had her telephone call with Ms Froling. After the call, Victoria Denholm told her mother some of what she had been told by Ms Froling. Robyn Denholm was told that a number of players were apparently distressed or upset by Mr Heal’s conduct towards them.
Victoria Denholm also spoke with Ms Mangakahia that afternoon. Ms Mangakahia told her that she was “getting torn to shreds by Shane in film sessions and things like that” and was “in a really bad place”. Ms Mangakahia said that the way Mr Heal talked to her was “degrading”, and that he was “continuously targeting me in film sessions”.
After Victoria Denholm had informed Mr Pongrass of the complaints that had been raised with her, she and Mr Pongrass spoke with Mitchell Fuller, the Team’s manager and strength and conditioning coach. During the conversation, Mr Fuller stated that there were problems with the Team’s morale, and with Mr Heal’s behaviour towards some players, and gave examples. Mr Fuller stated that “some players are struggling” and “a couple of players are talking about quitting the team over their treatment by Shane”.
That night, Victoria Denholm informed Mr Smith that a number of players had approached her to raise concerns about Mr Heal’s treatment of them, without identifying the players or the specific complaints. She said that she and Mr Pongrass would try and find out more.
On 9 or 10 January 2023, at a training session for the Team, Mr Heal raised with Mr Pongrass the “what’s going to change” conversation that he had with Victoria Denholm. This conversation is alleged by Mr Heal to constitute a complaint with respect to the fourth workplace right he has raised in these proceedings (Alleged Victoria Denholm Complaint).
On 10 January 2023, Mr Pongrass met with Ms Froling at a café. He spoke with her for about an hour. Ms Froling again indicated that a number of the players were comfortable with her coming forward on their behalf. She said that some players were “really struggling” and “on the verge of leaving”. Ms Froling listed a number of incidents where she considered that Mr Heal had acted towards players in a bullying or belittling way. Ms Froling “teared up” during the discussion. Ms Froling told Mr Pongrass about complaints made by Ms Sjerven, Ms Mangakahia, and Ms Rowe, and her own experiences of Mr Heal’s conduct.
Again, Mr Smith was informed shortly thereafter, but without giving the names of the players who had complaints about Mr Heal’s conduct. He was told that one player had a panic attack during a game, another player was experiencing mental health issues, and another player had been yelled at. Mr Smith stated that the matter needed to be investigated further and something needed to be done about the situation.
On 11 January 2023, Mr Pongrass received a phone call from a player agent who represented two of the Sydney Flames players. The player agent said that he wanted to make sure that Sydney Flames (or at least Mr Pongrass) was aware of the players’ complaints against Mr Heal and were managing those complaints appropriately.
Mr Pongrass told Mr Smith of that call shortly afterwards. Mr Smith considered that once he had been made aware that an agent wanted something to be done about Mr Heal’s conduct towards some players, it was apparent to him that something had to be done as the matter had “escalated” and he understood that some of the players had taken the issue outside of the Team.
Victoria Denholm and Mr Smith both spoke to Robyn Denholm at this time about what Sydney Flames should do in response to Mr Heal’s alleged conduct. Robyn Denholm’s view was that Sydney Flames should arrange for an independent investigation of the allegations. In her view, an appropriate way to deal with workplace complaints was to arrange an independent investigation into whether the allegations had occurred.
On 15 January 2023, Mr Smith met with Victoria Denholm and Mr Pongrass during a break in a Sydney Kings game being played at Qudos Bank Arena. They discussed what steps to take in response to the allegations regarding Mr Heal. Mr Smith stated that Sydney Flames should conduct an independent investigation. There was also some discussion of logistics, and of contacting Nikki Town, of Ovartis Lawyers, to progress the matter.
On 16 January 2023, Sydney Flames requested that Mr Heal attend a meeting with Mr Smith. The meeting occurred later that day. At the meeting, Mr Heal was told that allegations had been made about his behaviour towards players, and that an independent investigation would be carried out, and that he was stood down with pay while the investigation occurred. He was also:
(a)told that he must not attend the workplace or contact any Team members or employees; and
(b)given a letter confirming that he was suspended from duty pending an investigation.
On 17 January 2023, Victoria Denholm and Mr Pongrass announced to the Team at a training session that Mr Heal was on personal leave for a period of time and Shelly Gorman was stepping in as interim Head Coach.
That evening, Mr Heal received an email from Jessica McLaughlin of Ovartis Lawyers informing him that she would be conducting the investigation.
On 18 January 2023, Mr Heal, through his lawyers, Khan Law, sought amongst other things, particulars of the allegations.
On 20 January 2023, Sydney Flames, through its lawyers Ovartis Lawyers, provided Mr Heal with the complaints, and informed Mr Heal that all parties, including him, were required to maintain strict confidentiality in relation to the investigation and the complaints (Ovartis letter). Sydney Flames also asked Mr Heal for his response to the complaints and explained the investigation process.
Later that day, Mr Heal, through his lawyers, requested further particulars of the complaints.
On 24 January 2023, Sydney Flames, through its lawyers, provided some additional particulars of the complaints.
On 27 January 2023, Mr Heal, through his lawyers, provided a written response to the allegations, and also provided additional information. Mr Heal also lodged and served a Fair Work Commission (FWC) application for an order to stop bullying.
On 3 February 2023, Sydney Flames received a copy of the report prepared by Ms McLaughlin (Investigation Report).
Later that day, Mr Smith sent Mr Heal a letter informing him of the findings made in the Investigation Report and confirmed that Sydney Flames had accepted the findings.
On the same afternoon, Mr Heal, through his lawyers, sought certain undertakings from Sydney Flames, including that it would not terminate his employment.
On 4 February 2023, Mr Smith sent Mr Heal a letter dated 3 February 2023 asking him to show cause as to why his employment should not be terminated (Show Cause letter).
On 5 February 2023, Sydney Flames, through its lawyers, gave an extension of time for Mr Heal to respond to the Show Cause letter and stated that it did not intend to provide Mr Heal with a copy of the Investigation Report.
On 6 February 2023, Mr Heal, through his lawyers, raised concerns about the investigation and asked for a copy of the Investigation Report.
On 7 February 2023, Sydney Flames, through its lawyers, refused to provide a copy of the Investigation Report and asked Mr Heal to respond to the Show Cause letter.
On 7 February 2023, Mr Heal commenced the current proceedings. An order was made that Sydney Flames could not terminate Mr Heal’s employment prior to 15 February 2023.
On 10 February 2023, Sydney Flames, through its lawyers, again requested that Mr Heal provide a response to the Show Cause letter.
On 13 February 2023, Mr Heal provided a response to the Show Cause letter and requested his employment records.
On 14 February 2023, Sydney Flames issued a media statement. On the same day, Mr Heal also issued a media statement through his Manager, David Wolf.
On 15 February 2023, Sydney Flames gave an undertaking not to terminate Mr Heal’s employment prior to the last day of the hearing as to liability.
On 20 February 2023, Sydney Flames provided Mr Heal with, amongst other things, a copy of all of his payslips up to that time.
On 8 March 2023, Mr Heal made a further request for his employment records, in particular his annual leave records.
On 9 March 2023, Mr Pongrass emailed Mr Heal directing him to take annual leave immediately.
On 14 March 2023, Sydney Flames provided Mr Heal with his annual leave records.
There was subsequently further correspondence in relation to the direction to Mr Heal to take annual leave, including a further direction on 14 March 2023 and a revised direction on 28 March 2023.
C. WITNESSES
C.1. Mr Heal’s witnesses
C.1.1. Overview
In addition to his own evidence, Mr Heal relied on evidence from his daughter Shyla Heal, his two assistant coaches and his sports agent. Each gave affidavit evidence and was cross examined.
C.1.2. Mr Heal
Mr Heal was extensively cross examined.
Sydney Flames submits that I should not accept Mr Heal’s evidence to the extent that it contradicts the evidence of its witnesses. I accept that at times Mr Heal’s evidence in cross examination contradicted his pleaded case, his affidavit evidence or earlier evidence he had given in cross examination. At other times he resisted, at least initially, making concessions in cross examination when his evidence was clearly contradicted by contemporaneous documents, such as whether he introduced a sponsor, Shane Koelmeyer to Mr Nicholls and whether he was given any opportunity to provide any feedback on the playing schedule for the Team.
Ultimately, I was satisfied, however, that inconsistencies in Mr Heal’s evidence were more likely attributable to poor recollection and a propensity for exaggeration and over confidence rather than untruthfulness or evasion. I therefore treated Mr Heal’s evidence with some caution but generally accepted that he was genuinely attempting to give truthful evidence to the best of his recollection. Where his evidence conflicted with the evidence of Sydney Flames’ witnesses, I resolved these inconsistencies by reference to contemporaneous documents, the apparent logic of events and the extent to which Mr Heal’s evidence may otherwise have been corroborated by other witnesses.
C.1.3. Mr Heal’s other witnesses
Shyla Heal has been a professional basketball player since 2017. She joined the Team on or about 28 April 2021, and signed a mutual release agreement with Sydney Flames on 31 January 2023 to join Townsville Fire for the remainder of the 2022/23 season. The last training session she attended with the Team was on 17 January 2023. Ms Heal is Mr Heal’s daughter.
Shelly Gorman was employed as one of three assistant coaches of the Team from about October 2021 for the 2021/22 season and one of two assistant coaches for the 2022/23 season. She was a professional basketball player from 1986 to 2002. She played 321 games for the WNBL and represented Australia at three Olympic Games. At the time of giving evidence, she was the Head Coach of the Sydney Comets which compete in the National Basketball League 1, a competition run in the WNBL offseason within New South Wales.
William Granger started working with Sydney Flames at the beginning of the 2021/22 season. In his previous role as a community development manager and subsequently as an assistant coach of the Team, he compiled a series of video clips for the purpose of discussing player performance and giving feedback to players. As an assistant coach of the Team, he attended video sessions that were primarily led by Mr Heal and would sometimes lead discussions on defensive player strategies in the 2022/23 season.
David Wolf is an accredited sports agent and Director of Closer Sport, a sports management agency. Mr Wolf has been Mr Heal’s agent since June 2013. He represented Mr Heal in respect of all coaching, media and ambassador matters and also represented Ms Heal and a number of other players in the Team during the 2022/23 season.
There was no challenge to the credit of Mr Heal’s other witnesses and I accept each was giving evidence truthfully to the best of their recollection.
C.2. Sydney Flames’ witnesses
C.2.1. Overview
Sydney Flames relied on the management and player witnesses identified below. Each gave affidavit evidence and was cross examined.
C.2.2. Management witnesses
Paul Smith is the chairman and co-owner (through other companies he controls) of Sydney Flames. Mr Smith is also a director of Hoops Capital, which acquired Sydney Flames in June 2020, and chairman of and owner (through other companies he controls) of TSE.
Victoria Denholm has been the President of Sydney Flames since 4 December 2022. Victoria Denholm is also a director and part owner of each of Wollemi Capital Nominee Co Pty Ltd (Wollemi Capital Nominee) and Wollemi Capital Group Pty Ltd (Wollemi Capital Group). She attended Team training sessions approximately once a week and travelled with the Team for some games from early November 2022.
Christopher Pongrass has been the CEO of Sydney Flames since 31 May 2022. Mr Pongrass has also been the CEO of the Sydney Kings since March 2019. Mr Pongrass was part of the management team of Sydney Flames with Victoria Denholm. He had substantial involvement in the construction and negotiation of the roster for the Team prior to and during the 2022/23 season. He was involved in preparing and managing the player budget for the Team, which included the total expenditure on player wages, benefits, and compliance with the WNBL salary cap.
Sean Nicholls is the CEO of Hoops Capital. In his capacity as the CEO of Hoops Capital, he has responsibility for commercial and business matters affecting Sydney Flames.
Robyn Denholm is a director and part owner of each of Wollemi Capital Nominee and Wollemi Capital Group. Robyn Denholm does not have a management role with either Sydney Flames or Hoops Capital. Robyn Denholm is the mother of Victoria Denholm.
Mitchell Fuller was the strength and conditioning coach and Team manager during the 2022/23 season. Mr Fuller had previously been an intern with the Sydney Kings.
Julian O’Brien has been the Director of Communications and Media for Sydney Flames via his engagement with Hoops Capital since September 2021.
Mr Heal submits that the evidence given by Sydney Flames’ various witnesses in their respective affidavits “did not survive cross-examination and cannot be regarded as being a credible explanation of events, who were the decision makers and what were the reasons of those decision makers”. In context, this was a criticism principally directed at the evidence of Mr Smith, Robyn Denholm, Victoria Denholm and Mr Pongrass. In essence, Mr Heal submits that their evidence that the decision taken to suspend Mr Heal could not rationally be explained by the players’ complaints about the conduct of Mr Heal and rather the complaints were used by them as a smoke screen to disguise the fact that they had decided to suspend Mr Heal and take adverse action against him because of the workplace complaints that he had made. Each was pressed hard in cross examination on their reasons for suspending Mr Heal and taking other adverse action and the extent of their individual involvement in the decisions to take adverse action against Mr Heal. For the reasons that I explain below in accepting their evidence, I am satisfied that their evidence was consistent with the apparent logic of events, contemporaneous documents and was not relevantly shaken in cross examination.
I was otherwise satisfied that the management witnesses of Sydney Flames, as identified above, were giving truthful evidence to the best of their recollection. To the extent that it conflicted with the evidence of Mr Heal and any of his witnesses, I determined any conflict by reference to the apparent logic of events, contemporaneous documents and the extent to which the evidence was corroborated by other witnesses.
C.2.3. Player witnesses
Tiana Mangakahia is a professional basketball player. She was contracted to play for the Team for the 2022/23 and 2023/24 seasons. She was one of the members of the Team that made complaints about Mr Heal’s conduct.
Keely Froling is a professional basketball player. She was contracted to play for the Team for the 2021/22 and 2022/23 seasons. She was the co-captain of the Team during the 2021/22 season and the captain of the Team during the 2022/23 season.
Ms Froling only provided an affidavit for Sydney Flames after the hearing had commenced. I granted leave for her affidavit to be relied upon because I was satisfied that her evidence was important, there was no undue prejudice to Mr Heal and she had provided a reasonable explanation for her delay in coming forward. She explained that she had not previously been prepared to provide an affidavit because of her family’s close connection to Mr Heal. Ms Froling had known Mr Heal all her life, and her father and Mr Heal are longstanding friends. She also confirmed that this was the reason that she had not agreed to be interviewed by the independent investigator in relation to the investigation into Mr Heal’s conduct.
The evidence of Ms Froling was important because she provided an independent and compelling account of the player complaints that she had conveyed to Mr Pongrass about Mr Heal’s conduct and behaviour.
There was no challenge to the evidence of Ms Mangakahia and Ms Froling and I accept both were giving evidence truthfully to the best of their recollection.
D. GENERAL PROTECTIONS CLAIMS
D.1. Statutory provisions and legal principles
D.1.1. Workplace rights statutory provisions
Section 340(1) of the FW Act provides:
340 Protection
(1) A person must not take adverse action against another person:
(a) because the other person:
(i) has a workplace right; or
(ii) has, or has not, exercised a workplace right; or
(iii)proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right; or
(b)to prevent the exercise of a workplace right by the other person.
Note: This subsection is a civil remedy provision (see Part 4-1).
Section 341(1)(c)(ii) of the FW Act provides:
341 Meaning of workplace right
Meaning of workplace right
(1) A person has a workplace right if the person:
…
(c) is able to make a complaint or inquiry:
…
(ii)if the person is an employee–in relation to his or her employment.
D.1.2. Meaning of workplace right
In the context of s 341(c)(ii) of the FW Act, (a) a “complaint” is a “communication which, whether expressly or implicitly, as a matter of substance, irrespective of the words used, conveys a grievance, a finding of fault or accusation”, and (b) the “grievance, finding of fault, or accusation must be genuinely held or considered valid by the complainant”: Shea v TRUenergy Services Pty Ltd (No 6) [2014] FCA 271 at [29] (Dodds-Streeton J); Serpanos v Commonwealth of Australia [2022] FCA 1226 at [84] (Snaden J); PIA Mortgage Services Pty Ltd v King (2020) 274 FCR 225; [2020] FCAFC 15 at [137] (Snaden J), [26] (Rangiah and Charlesworth JJ); Alam v National Australia Bank Ltd (2021) 288 FCR 301; [2021] FCAFC 178 at [59] (White, O’Callaghan and Colvin JJ). Further, the term “complaint” has been said to connote “an expression of discontent which seeks consideration, redress or relief from the matter about which the complainant is aggrieved”: Alam at [59]; Cummins South Pacific Pty Ltd v Keenan (2020) 281 FCR 421; [2020] FCAFC 204 at [13] (Bromberg J).
A person has, and therefore may exercise, a right to complain or inquire in relation to their employment if that complaint or inquiry is one that they are “able to make” under s 341(1)(c) of the FW Act. In Shea, Dodds-Streeton J considered the meaning of “able to make” in s 341(c) at [625]:
[T]he requirement that the complaint be one that the employee is “able to make” in relation to his or her employment suggests that there are complaints which the employee is not able to make in relation to his or her employment. The ability to make a complaint does not arise simply because the complainant is an employee of the employer. Rather, it must be underpinned by an entitlement or right. The source of such entitlement would include, even if it is not limited to, an instrument, such as a contract of employment, award or legislation.
In Messenger v Commonwealth of Australia (Represented by the Department of Finance) [2022] FCA 677, Snaden J said the following in relation to the statutory meaning of being “able to make” in s 341(1)(c) at [150]:
I am bound in any event by what successive full courts have now made clear: in order that a complaint or inquiry made in relation to employment might qualify as the exercise of a workplace right, an employee must first demonstrate that it was made in the exercise of, or otherwise to protect or vindicate, some right or entitlement conferred upon them, whether instrumentally or otherwise. It is not sufficient that a complaint or inquiry is made simply because the employee feels (with good justification or otherwise) that he or she has something about which to complain or inquire.
A complaint is “in relation to … employment” if the subject matter about which a complaint is made concerns an aspect of employment: Serpanos at [89]. There must be a relationship between the subject matter of the complaint and the complainant’s employment: Alam at [74]; Whelan v Cigarette & Gift Warehouse Pty Ltd [2017] FCA 1534 at [33]-[34] (Collier J). A complaint can be directly or indirectly related to its maker’s employment: Construction, Forestry, Mining and Energy Union v Pilbara Iron Company (Services) Pty Ltd (No 3) [2012] FCA 697 at [64] (Katzmann J); Shea at [631]. A connection between a complaint and employment will likely exist in circumstances “where the subject matter of the complaint raises an issue with potential implications for the complainant’s employment”: Walsh v Greater Metropolitan Cemeteries Trust (No 2) (2014) 243 IR 468; [2014] FCA 456 at [42] (Bromberg J).
For the purposes of s 341(c)(ii), the “potential implications” test is not without qualification. In cases involving senior management employees, the “potential implications” test may be of little utility as their conduct will likely always have potential employment ramifications: The Environment Group Ltd v Bowd[2019] FCA 951 at [126] (Steward J); Serpanos at [86]. In Bowd, Steward J said at [126]:
[I]n the case of a CEO, the complaint must be one directed at or concerned with that person’s employment in a substantive way. In that respect, observing the required nexus may be direct or indirect, may not greatly assist. It must, as a matter of substance, be about that CEO’s employment.
D.1.3. Adverse action statutory provisions
Section 342(1) of the FW Act sets out in tabular form the circumstances in which a person is taken to have engaged in adverse action against another person. Item 1 in s 342(1) provides that adverse action is taken by an employer against an employee if the employer (a) dismisses the employee, (b) injures the employee in his or her employment, (c) alters the position of the employee to the employee’s prejudice, or (d) discriminates between the employee and other employees of the employer.
It is sufficient that a proscribed reason is one of multiple reasons for adverse action taken against a person: s 360 of the FW Act.
Section 361(1) of the FW Act reverses the normal onus in civil proceedings, and provides:
If:
(a) in an application in relation to a contravention of this Part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and
(b) taking that action for that reason or with that intent would constitute a contravention of this Part;
it is presumed that the action was, or is being, taken for that reason or with that intent unless the person proves otherwise.
Subsection (1) does not apply in relation to orders for an interim injunction.
Although the applicant benefits from the reverse onus provision in s 361(1) of the FW Act, they must still factually establish that they had exercised a workplace right. In Yu v Act Education Directorate [2022] FCAFC 110, the Full Court of this Court found at [38] (Thomas, SC Derrington and Halley JJ):
What remained in dispute was whether … had established that she had exercised, or proposed to exercise, a workplace right. If that were established, it was then for the Directorate to establish that whatever adverse action it took was not because of the exercise, or proposed exercise, of a workplace right …
It has been said that it will be extremely difficult to displace the statutory presumption in s 361(1) of the FW Act if no direct testimony is given by the decision maker acting on behalf of the employer: Victoria (Office of Public Prosecutions) v Grant [2014] FCAFC 184 at [32] (Tracy and Buchanan JJ). Direct testimony from the decision maker, however, is not a necessary pre-condition for the discharge of the statutory presumption. It is possible that the alleged reason as to why adverse action was taken may be negated on the applicant’s own evidence: Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (2015) 230 FCR 298; [2015] FCAFC 25 at [192] (Logan, Bromberg and Katzmann JJ); Cummins South Pacific at [84] (Bromberg J).
D.1.4. Meaning of adverse action
The meaning of “injures” in s 342(1) includes causing an “injury of any compensable kind” and “is concerned with an actual adverse effect, usually by the loss or alteration of a legal right, in the position of an employee, in [their] capacity as an employee”: Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1; [1998] HCA 30 at [4] (Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ); CPSU, The Community and Public Sector Union v Telstra Corporation Limited [2000] FCA 844 at [20] (Finkelstein J); Crossing v Anglicare NSW South, NSW West & ACT [2021] FCA 1112 at [12] (Abraham J); Transport Workers Union of Australia v Premier Motor Service Pty Ltd [2015] FCA 650 at [34] (Perry J).
Altering the position of the employee to the employee’s prejudice is a broad additional category of adverse action which covers not only legal injury but “any adverse affectation of, or deterioration in, the advantages enjoyed by the employee before the conduct in question”: Australian Municipal, Administrative, Clerical and Services Union v Commissioner of Taxation [2022] FCA 1225 at [362] (Jagot J); Premier Motor Service at [33]; Australian and International Pilots Association v Qantas Airways Ltd [2006] FCA 1441 at [15] (Tracey J) .
Prejudicial alteration of an employee’s position may occur even though the employee suffers no loss or infringement of a legal right: Qantas Airways Limited v Australian Licensed Aircraft Engineers Association [2012] FCAFC 63 at [31] (Gray, North and Besanko JJ). It will occur if the prejudicial alteration of an employee’s position is real and substantial rather than merely possible and hypothetical. The employee, individually speaking, must be in a worse situation after the relevant conduct than before it and the deterioration must have been caused by the employer’s conduct: Klein v Metropolitan Fire and Emergency Services Board [2012] FCA 1402 at [86] (Gordon J).
D.1.5. Assessing whether certain conduct amounts to adverse action for a prohibited reason
In Construction, Forestry, Mining and Energy Union v De Martin & Gasparini Pty Ltd (No 2) [2017] FCA 1046, Wigney J summarised the relevant principles for determining whether conduct amounts to adverse action in the context of s 340 and cognate provisions in the FW Act:
[297] First, the question is one of fact: Barclay at [41], [45], [101]; BHP at [7].
[298]Second, the question is why the adverse action was taken: Barclay at [5], [44]. The focus of the inquiry is the reason or reasons of the relevant decision-maker: Barclay at [101], [127], [140], [146]; BHP Coal at [7], [19], [85]. More particularly, the question is whether the alleged prohibited reason was a "substantial and operative" reason for taking the adverse action: Barclay at [56]-[59], [104], [127]; or an operative or immediate reason: Barclay at [140].
[299] Third, the test does not involve any objective element: Barclay at [5], [44]. The focus of the inquiry is the reason or reasons of the relevant decision-maker: Barclay at [107], [121], [129]; BHP Coal at [9]. To speak of objectively obtained reasons risks the substitution by the court of its view, rather than making the finding of fact as to the true reasons of the decision maker: Barclay at [121], BHP Coal at [9].
[300]Fourth, the inquiry is not concerned with mere causation, in the sense that it is not sufficient that there is factual or temporal connection between the relevant protected workplace rights and the adverse action: BHP Coal at [18]-[20]. Any such connection, however, may necessitate some consideration as to the true motivation or reasons of the decision-maker: BHP Coal at [22].
[301]Fifth, the question must be answered having regard to all of the relevant facts and circumstances and the inferences available from them: Barclay at [25], [127]; BHP Coal at [7].
[302]Sixth, direct testimony from the decision-maker as to why the adverse action was taken is capable of discharging the burden imposed by s 361: Barclay at [45], [71]; BHP Coal at [38]. However, declarations that the action was taken for an innocent reason may not discharge the onus if contrary references are available on the facts: Barclay at [54], [79], [141]. The reliability and weight to be given to such evidence must be assessed having regard to the overall facts and circumstances: Barclay at [127].
[303]Seventh, it is not necessary for the decision-maker to establish that the reason for the adverse action was entirely disassociated from the relevant protected workplace right: Barclay at [62].
Assessing whether a particular reason was an operative or immediate reason for an adverse action calls for an inquiry into the mental processes of the person responsible for that action. It is appropriate to further interrogate the mental processes of persons whose contribution to that conduct rose beyond some threshold level: Serpanos at [103] and [123]. This threshold level has been described as “indispensable”, “material”, “significant”, “plainly important”, “major”, “substantial” or “essential”: Serpanos at [123]; Wong v National Australia Bank Limited [2022] FCAFC 155 at [82] (Katzmann, Charlesworth and O’Sullivan JJ). Nothing in the FW Act requires the Court to search for “unconscious elements” in the impugned reasoning of persons in the position of the decision maker: Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500; [2012] HCA 32 at [146] (Heydon J).
Actions that have been found to amount to adverse action in the context of s 342(1) of the FW Act include (a) the suspension of an employee’s employment: Barclay at [116]; Bowd at [166], (b) undertaking an investigation into an employee’s conduct, although an investigation undertaken in “good faith and on a proper prima facie evidentiary basis” may not amount to adverse action: Jones v Queensland Territory Admissions Centre Ltd (No 2) (2010) 186 FCR 22; [2010] FCA 399 at [80] (Collier J); Automotive, Food, Metal, Engineering, Printing and Kindred Industries Union v Visy Packaging Pty Ltd (No 3) (2013) 216 FCR 70; [2013] FCA 525 at [103] (Murphy J); Police Federation of Australia v Nixon (2008) 168 FCR 340; [2008] FCA 267 at [48] (Ryan J), and (c) issuing an employee with a show cause letter: Sayed v Construction, Forestry, Mining and Energy Union [2015] FCA 27 at [163] (Mortimer J, as her Honour then was).
In Serpanos, Snaden J stated at [124]-[125]:
124… A respondent may rebut the statutory presumption for which s 361(1) provides by leading evidence as to why it engaged in the conduct that an applicant seeks to impugn. The question for determination starts and ends with whether, in fact, those reasons actuated that conduct. It is not necessary for a respondent to prove that the reasons for which it did were procedurally or substantively fair: Khiani v Australian Bureau of Statistics [2011] FCAFC 109, [31] (Gray, Cowdroy and Reeves JJ). At issue is simply whether they were, in fact, the reasons that animated that conduct.
125That is an inquiry in two parts: first, where nominated reasons matters of opinion or belief that formed in the mind of the respondent (or, in the case of bodies corporate, those of its relevant human agents); and, second, did they positively inspire the respondent then to engage in the relevant conduct? If both questions are answered in the affirmative (and if there be no other reasons for which the relevant conduct was engaged in), it is irrelevant that the respondent’s reasons might be impugned as unfair or illogical or otherwise liable to criticism. A claim under Pt 3-1 of the FW Act “… is not a broad inquiry as to whether the applicant has been subjected to a procedurally or substantively unfair outcome”: Ermel v Duluxgroup (Australia) Pty Ltd (No 2) FCA 17, [48] (Bromberg J).
D.2. Determination of general protection claims
For each of Mr Heal’s general protections claims against Sydney Flames, the Court must determine:
(a)whether each exercise of a workplace right occurred as alleged by Mr Heal;
(b)whether each alleged workplace right was a workplace right within the meaning of s 341(1)(c) of the FW Act;
(c)whether each instance of alleged adverse action occurred;
(d)whether each instance of alleged adverse action was adverse action within the meaning of s 340 and s 342(1) of the FW Act;
(e)the decision maker(s) with respect to each instance of alleged adverse action; and
(f)the reasons for the decision maker(s) taking each instance of alleged adverse action having regard to s 360 and s 361 of the FW Act.
Consistently with the reasoning of the Full Court in Alam, Mr Heal bears the onus of establishing the existence of each contested workplace right and each instance of adverse action in contest and it is only then that the reverse onus with respect to the reasons for the decision being taken to pursue the adverse action arises.
In sections D.3 and D.4 below, I address the general protection claims directed at the Initial Adverse Actions taken by Sydney Flames culminating in the decision to suspend Mr Heal as the Head Coach of the Team.
In sections D.5 and D.6 below, I address the general protection claims directed at the Further Adverse Actions alleged to have been taken by Sydney Flames after the decision was made to suspend Mr Heal as the Head Coach of the Team.
D.3. Initial Workplace Rights
D.3.1. Overview
Mr Heal alleges that he exercised four workplace rights prior to the decision taken by Sydney Flames to suspend him as an employee and instruct Ovartis Lawyers to conduct an independent investigation into the complaints that the players had made against him.
D.3.2. First Workplace Right (Alleged Playing Schedule Complaint)
Mr Heal alleges that in late August 2022, in a conversation with Mr Pongrass, Mr Heal raised concerns about the Team’s playing schedule and not being consulted about it. Mr Heal submits that this constitutes the exercise of a workplace right within the meaning of s 341(1)(c) of the FW Act.
Both Mr Heal and Mr Pongrass gave evidence that in or about late August 2022, following the release of the final playing schedule for the 2022/23 WNBL season, there was a telephone conversation between them in relation to the Team’s playing schedule. It was common ground that during the call (a) Mr Heal said words to the effect that the Team was playing a lot of games on the road and that he referred to the challenges of playing many away games at the start of the season, (b) Mr Heal asked about the availability of the Quay Centre (Sydney Flames’ home venue) and why Sydney Flames did not arrange more “double headers” at Qudos Bank Arena, and (c) Mr Heal did not use the word “complaint” or any similar term.
Mr Pongrass gave evidence that he had a number of communications with Mr Heal regarding the schedule for the Team including a conversation in late August 2022 but that he does “not recall the specific words that were used”. He acknowledged that Mr Heal raised issues with the difficulties arising from the schedule and they discussed the issue of playing double headers with the Sydney Kings.
In his first affidavit, Mr Heal stated that during his conversation with Mr Pongrass he said words to the following effect:
I would have liked to have been part of the process with you and the front office in establishing the schedule and evaluating ways to get a more favourable draw. I should have been consulted or involved.
Mr Heal accepted, however, in cross examination, that in the course of his conversation with Mr Pongrass, he did not say anything to the effect that he “would have liked to have been involved” or he “should have been consulted”. Mr Pongrass also denied that Mr Heal had said anything in the course of their telephone conversations to the effect that he “would have liked to have been involved” or he “should have been consulted”.
That Mr Heal did not raise such concerns is consistent with the following matters.
First, Mr Heal was in fact consulted about the Team’s proposed schedule for the 2022/23 season. In the period between 12 July 2022 and 22 August 2022, Mr Pongrass provided Mr Heal with a copy of a draft schedule and stated that he was “keen to get your thoughts”, Mr Heal provided feedback which was taken into account in an email sent by Mr Pongrass to the head of Competition and Events at Basketball Australia. Mr Pongrass provided Mr Heal with an updated revised schedule and they exchanged emails in which Mr Heal expressed disappointment with the schedule and Mr Pongrass stated that was “the best we could get” and Mr Pongrass emailed Mr Heal the final version of the revised schedule, which he had received from the WNBL.
Second, Mr Heal accepted in cross examination that he had provided feedback on the playing schedule to Mr Pongrass, at least with respect to the significant amount of travel proposed for the Team by the WNBL, and that Mr Pongrass had regard to that feedback.
Third, as Mr Heal acknowledged, the playing schedule was determined by the WNBL. Mr Heal also accepted that it was a “really complex and difficult job”, it was affected by venue availability and Sydney Flames did not have control of the Team’s home venue. Whether Mr Heal or Mr Pongrass’ input was accepted by the WNBL is a very different question to whether Mr Heal had any input in the preparation of the playing schedule.
For these reasons, I do not accept that Mr Heal said anything to Mr Pongrass that could be characterised as a complaint or grievance about the playing schedule for the Team for the 2022/23 season.
Given that finding, the Alleged Playing Schedule Complaint could not qualify as a complaint falling within the meaning of s 341(1)(c) of the FW Act as it did not constitute a grievance, finding of fault or accusation.
Further, and in any event, I am not satisfied that the determination of the Team’s playing schedule was an issue that was directed at or concerned with Mr Heal’s employment in a substantive manner. Mr Heal accepted in cross examination that he was never responsible for the Team’s playing schedule. Therefore, any complaint that Mr Heal had about the Team’s playing schedule would not be a complaint “made in the exercise of, or otherwise to protect or vindicate some right or entitlement”: Messenger at [150].
D.3.3. Second Workplace Right (Alleged Jackie Young Complaint)
In or about late November 2022, Mr Heal alleges that he had a conversation with Mr Pongrass, after he had refused Mr Heal’s recommendation to make an offer to American basketballer, Jackie Young. Mr Heal states that he “expressed a concern” in that conversation to the effect that as Head Coach, he expected that he would decide on players to scout and recruit and that the refusal to make an offer to Ms Young would affect the Team’s performance and, in turn, his role as Head Coach. Mr Heal submits that this conversation constitutes the exercise of a workplace right within the meaning of s 341(1)(c) of the FW Act.
The Sydney Flames’ player wages budget was governed by the WNBL salary cap system set out in the WNBL Collective Bargaining Agreement (CBA) and a total payment policy agreed between Basketball Australia and the Australian Basketball Players Association (WNBL salary cap). As a member of Basketball Australia, Sydney Flames is required to comply with the WNBL salary cap.
The WNBL salary cap for the 2022/23 season included the following provisions:
(a)a ceiling on total player payments for each team of $430,000 (excluding superannuation), other than payments made to a local (Australian or New Zealander) “marquee player”;
(b)if the ceiling was exceeded, a team was required to pay a “Luxury Tax” to Basketball Australia;
(c)a “marquee player” could be paid outside of the salary cap but with an amount of $66,500 per annum (excluding superannuation) being attributed to the team’s salary cap regardless of the amount that the marquee player was actually paid; and
(d)each teams’ roster could include up to two restricted (or international) players.
For the 2022/23 season, the Sydney Flames’ “marquee player” was Ms Heal.
Mr Heal largely accepted in cross examination, and I am satisfied that:
(a)while Mr Heal had primary responsibility for scouting and recruiting players, he was not solely responsible for recruiting players for the Team;
(b)Mr Heal’s role in recruiting players was not unrestrained – he was subject to budget restraints including the WNBL salary cap; and
(c)the final decision as to whether Sydney Flames would recruit a particular player lay with Mr Smith.
Mr Pongrass used a spreadsheet, which displayed all player wages and other player expenses, to assist with determining wages when negotiating and determining offers to players as part of the overall Team budget and keeping the Team budget within the WNBL salary cap. Mr Pongrass shared the spreadsheet with Mr Heal who also used that spreadsheet to maintain an awareness of the Team’s budget.
In May 2022, Sydney Flames made an offer to sign Ms Young, for an amount of $140,000 gross, plus a car, accommodation and agent’s fees, for the 2022/23 WNBL season. If Ms Young had accepted the offer, she would have been the highest paid Sydney Flames player during the 2022/23 season.
Ms Young rejected the offer. Mr Pongrass was told that there was no point making another offer, as she had received a far higher offer. Mr Heal understood that she had accepted a “far more lucrative” offer elsewhere.
On 17 November 2023, Mr Heal exchanged WhatsApp messages with Ms Young’s European agent. Mr Heal was told by the agent that Ms Young “maybe will” become available. Mr Heal’s immediate response to the agent was:
It’s not the right fit for what we need but we love Jackie here as you know.
Later that day, Mr Heal sent a WhatsApp message to Mr Pongrass to the effect that he had been told that Ms Young was about to become available.
That night, Mr Heal sent WhatsApp messages to Ms Young’s agent asking for “the best figure for us” and for a “ball park” figure that Ms Young would accept.
On 18 November 2023, Mr Pongrass responded to Mr Heal with a WhatsApp message in the following terms:
Interesting.
But that would involve cutting Jocelyn?
And cost wise, my guess is she would be absurdly expensive.
Mr Heal then responded to Mr Pongrass’ WhatsApp message, in which he referred to a proposal to cut Hannah Sjerven (not Sydney Flames’ other international player, Jocelyn Willoughby), and concluded:
It would be unlikely we can get her but the advantage we have after a bad euro experience is maybe she takes an Aussie season to be happy? Just putting it out there.
Between 18 and 21 November 2022, Mr Heal and Ms Young’s agent exchanged further messages on WhatsApp, including the following messages:
Mr Heal:Management are intrigued by Jackie. Our coaches love her. The budget is spent so we need to know what the number is they would have to spend? We also have to pay tax for being over the salary cap. ???
…
Ms Young’s agent: … She has a 150,000$ offer from a European team … plus needs 1-2 more weeks rehab.
…
Mr Heal:That’s fine mate. What’s her injury and reason for the agreed split in Turkey? Is that 150k US net?
…
Ms Young’s agent: I think it’s more 125k with strong bonuses.
On 21 November 2022, Mr Heal sent an email to Mr Pongrass and Victoria Denholm with a screenshot of the messages from Ms Young’s agent showing her apparent salary expectations of USD “$125k [net] with strong bonuses”.
Following these email and text exchanges, Mr Heal and Mr Pongrass had a conversation in which:
(a)Mr Heal asked whether Sydney Flames might try to recruit Ms Young, to which Mr Pongrass responded that Sydney Flames was not able to pay the US$125,000 that Ms Young was looking for;
(b)Mr Heal asked whether Sydney Flames could make an offer within budget, to which Mr Pongrass responded that there was no or insufficient funds available within the Sydney Flames budget or within its WNBL salary cap; and
(c)Mr Heal suggested cutting Ms Sjerven from the Team’s roster in order to have sufficient funds to recruit Ms Young.
Mr Heal accepts that he did not use the word “complaint” or any similar word or expression during his conversation with Mr Pongrass.
Mr Heal gave evidence that during his conversation with Mr Pongrass, (a) he stated that given the Team’s losses, Sydney Flames really needed to sign a player of Ms Young’s quality and the owners and management of Sydney Flames would be prepared to increase their budget to sign her, and (b) Mr Pongrass told him that he did not want to cut Ms Sjerven because it “would cause problems with Hannah’s agent”. Mr Pongrass denied that he said words to that effect, and instead, said that he replied that any savings from Ms Sjerven’s salary would not come close to what Ms Young was asking for.
Mr Heal may well have been disappointed at being told by Mr Pongrass that Sydney Flames was not able to make an offer to Ms Young and was not prepared to cut Ms Sjerven. I do not, however, accept that it is plausible that Mr Heal was genuinely surprised or upset. Mr Heal knew prior to the conversation that the Team’s salary cap was exhausted and he had told Mr Pongrass that it was unlikely that they could get Ms Young. Mr Heal had acknowledged that he was just “putting it out there”, Ms Young was seeking far more than the salary that the Sydney Flames had been prepared to pay prior to the commencement of the 2022/23 season and the salary paid to Ms Sjerven was significantly less than what Ms Young was requesting.
More significantly, I do not accept that the Alleged Jackie Young Complaint was a complaint directed at or concerned with Mr Heal’s employment in a substantive manner. The recruitment (or not) of a new player did not directly affect or pertain to the terms of Mr Heal’s employment or directly affect his remuneration. Mr Heal’s Contract may have included responsibility for “the management of playing roster”. There is, however, a distinction between “managing a playing roster” and recruiting players for potential selection on the playing roster. Mr Heal was responsible for selecting the team for each game. A responsibility to manage a playing roster did not confer on Mr Heal control over the recruitment of players or gave him the right or responsibility of making the final determination as to which players were recruited by Sydney Flames.
Any alleged complaint about Sydney Flames’ decision not to recruit or make an offer to Ms Young was not “made in the exercise of, or otherwise to protect or vindicate some right or entitlement”. Mr Heal had no right or entitlement to require an offer to be made to Ms Young (or any player), particularly in circumstances where it is common ground that the player budget was exhausted at that time and any offer to Ms Young would be an “exceptional circumstance” that required the owners to commit to a large additional salary amount.
I am satisfied that the Alleged Jackie Young Complaint is therefore not the exercise of a workplace right within the meaning of s 341(1)(c) of the FW Act.
D.3.4. Third Workplace Right (Alleged Meg Jeffers Complaint)
Mr Heal alleges that in a discussion with Mr Pongrass, Mr Heal expressed a concern that the failure to recruit Ms Jeffers would have a negative impact on the Team’s performance, that he requested that the decision not to contract her be reviewed, and that he should be permitted to manage the Team within the budget parameters. Mr Heal submits that this constitutes the exercise of a workplace right within the meaning of s 341(1)(c) of the FW Act.
Ms Jeffers was a young player who was training with the Sydney Flames but was not contracted. Rachel Maenpaa was a more experienced player who was on a game-to-game contract with the Sydney Flames.
It was not in dispute that Mr Heal suggested to Mr Pongrass on 7 January 2023 that Sydney Flames sign Ms Jeffers to replace Ms Maenpaa and that Mr Pongrass rejected the idea because of the “locker room” experience of Ms Maenpaa, as a veteran basketballer.
Mr Heal also accepted that he didn’t use the word “complaint”, or “grievance”, or anything to that effect, that he did not say that he wanted something further done about signing Ms Jeffers and that he did not take the issue any further.
Mr Heal gave evidence, disputed by Mr Pongrass, that (a) Mr Pongrass had told him that Ms Maenpaa could not be replaced as she was a close friend of Victoria Denholm and (b) he had stated to Mr Pongrass, words to the effect that “[a]s Head Coach, I should really be allowed to manage the Team”.
Even if Mr Heal’s evidence was accepted on this issue, I am not satisfied that the Alleged Meg Jeffers Complaint was directed at or concerned with Mr Heal’s employment, as Head Coach of the Team, in a substantive manner. As I have stated above at [138], his contractual responsibility for the “management of playing roster” was concerned with player selection for games, not the employment of new players or the termination of contracts for existing players. Similarly, the stated responsibility in his Contract for “all aspects of team performance” was directed at the performance of the Team in the WNBL, not decisions on player recruitment and termination.
Nor am I satisfied that the Alleged Meg Jeffrers Complaint was a complaint that was “made in the exercise of, or otherwise to protect or vindicate some right or entitlement” of Mr Heal. Mr Heal had no right or entitlement to require an offer to be made to Ms Jeffrers, or any other player.
I am satisfied that the Alleged Meg Jeffers Complaint is therefore not the exercise of a workplace right within the meaning of s 341(1)(c) of the FW Act.
D.3.5. Fourth Workplace Right (Alleged Victoria Denholm Complaint)
Mr Heal alleges that on 9 January 2023, he complained to Mr Pongrass about a confrontation which he had with Victoria Denholm. Mr Heal submits that this constitutes the exercise of a workplace right within the meaning of s 341(1)(c) of the FW Act. Mr Heal contends that the significance of the confrontation needs to be assessed in the light of alleged comments made to him by Victoria Denholm in December 2022 on a number of occasions to the effect that she did not support the Team having a male coach and she did not think that it was appropriated that middle aged men work in women’s sport.
Mr Heal submits that the relevant “source of entitlement” upon which the complaint must be founded, is his entitlement to a safe workplace which includes the entitlement not to be bullied, as underpinned by the Workplace Health and Safety Act 2011 (NSW) and as an implied term of Mr Heal’s Contract.
D.3.5.1. Conversation between Victoria Denholm and Mr Heal
Both Mr Heal and Victoria Denholm gave evidence about a conversation that they had at a Team training session on 9 January 2023, following the Team’s loss to the Perth Lynx.
Mr Heal gave the following account of the conversation with Victoria Denholm in his affidavit evidence:
92.Following the video session, and as the players and I were walking from the video session upstairs at the PCYC to the warm-up area to start the practice session, Ms Denholm approached me and we had a conversation to the following effect:
Ms Denholm: What’s going to change?
Me: What do you mean?
Ms Denholm: What is going to change? That result [against Perth] is unacceptable.
Me:We will continue to show videos and then drill on court and go through the process needed to keep improving.
Ms Denholm: That’s not good enough- what’s going to change?
Me:It’s too late to change the roster now. We had our chance to sign the best player in the league from last year [Jackie Young] and we missed it.
Ms Denholm: Would Jackie [Y]oung have stopped Lauren Sherf from scoring?
Me:Maybe not but she would have helped us score more points and given us a chance to win.
At this point in the conversation, Ms Denholm’s phone rang and she answered it and left.
(Confrontation).
93.During the Confrontation, Ms Denholm spoke in an aggressive tone.
94.The Confrontation was visible to the Assistant Coaches and they were in the near vicinity. The Team was warming up in the gym next door to the court and they were finishing their warm up and starting to come back to the court during the exchange.
95.I was upset by this conversation as it made me feel that I did not have the support of the management of the Sydney Flames to perform my role and that I was being undermined by the management of the Sydney Flames.
Victoria Denholm’s recollection of her conversation is substantially consistent with Mr Heal’s recollection. In her affidavit, she gave the following account of the conversation:
44.Following this film session, I walked downstairs with Mr Heal towards the training court, and we had a conversation during which words to the following effect were spoken:
I said: What happened in Perth? It seems like déjà vu.
Mr Heal said: You saw the film – it’s just defensive breakdown after breakdown. I keep trying to drill into them but the talent on the team just isn’t there.
I said:We were in that game in the first half. I can understand the frustration – but what’s going to change? It’s frustrating we keep losing games like that.
Mr Heal said: Well, I keep showing them the film and trying to drill it into them on the court to understand where they keep making mistake after mistake in missed rotations and bad decisions.
I said:I’ll defer to you on the plays and the basketball side of the conversation, but I feel like if it’s mental lapses – there has to be something you can do. You’re a coach – you’ve been in hard situations as player – how can you coach them differently? How can you change what you’re saying to them to get through to them? Maybe trying something different will help. You know what they say about doing the same thing over and over and expecting a different result.
Mr Heal said: No it’s just about drilling it into them and getting them to learn it. They’re all young and we don’t have the experience.
I said:Is it a leadership problem? Can we play Ness or some of our veterans in those key moments?
Mr Heal said: I would love to play Ness – but she’s shooting at 9%. She can’t be on the floor in crunch time.
I said:Is Rachel an option?
Mr Heal said: No Rachel is the worst WNBL player I’ve ever seen. She has no leadership and struggles to just get up and down the court. I was thinking of giving Meg Jeffers a go – she’s not WNBL ready either but Rachel is terrible.
I said:I understand, but there has to be something we can do. I know you want to win as much as I do!
45. At this point in the conversation, the players had completed their warm-ups and Mr Heal walked over to start practise and I walked over to the side of the court to sit in the stands and watch practice.
46.I do not believe that at any point during the conversation described in paragraph 44 above I raised my voice, or used an aggressive tone, or acted in an aggressive manner towards Mr Heal. I also did not say words to the effect of “the result against Perth is unacceptable” or “that’s not good enough”.
In cross examination, Mr Heal accepted that Victoria Denholm did not raise her voice or make any aggressive gestures during that conversation, and he did not feel intimidated physically by Victoria Denholm. He maintained his affidavit evidence, however, that she used “an aggressive tone”.
An “aggressive tone” may be conveyed by a voice being raised or making aggressive gestures. Having observed both Victoria Denholm and Mr Heal in cross examination, I conclude that it is more likely that the tone used by her in the conversation, irrespective of whose recollection of the specific words that was used was more accurate, was more in the nature of an exasperated and frustrated tone, rather than an aggressive tone.
I am otherwise satisfied that there are no material differences between their respective recollections of the conversation. In particular, I do not see any substantive difference between on the one hand, “the result against Perth is unacceptable” and “that’s not good enough”, and on the other hand, “[w]hat happened in Perth? It seems like deja vu.”, “I can understand the frustration – but what’s going to change? It’s frustrating we keep losing games like that.”, “[y]ou’re a coach – you’ve been in hard situations as a player - how can you coach them differently?” and “I understand, but there has to be something we can do. I know you want to win as much as I do!”.
Mr Heal’s complaint, however, was more directed at feeling undermined and insecure because Victoria Denholm came from a powerful and wealthy family with a significant financial interest in Sydney Flames and considerable influence over its operations.
D.3.5.2. Conversation between Mr Heal and Mr Pongrass
In his first affidavit, Mr Heal gave evidence that as soon as the training session on 9 January 2023 had concluded, he approached Mr Pongrass, who had been sitting in the stands and watching the session and had a conversation to the following effect:
Me:Victoria came up to me prior to the practice session we’ve just finished and spoke to me aggressively, asking “What is going to change? That result [against Perth] is unacceptable.” I don’t think it’s acceptable for her to speak to me like that, particularly not right before a practice session. It’s really unprofessional.
Mr Pongrass: She’s just emotional mate. She just wants to win.
Mr Heal also gave evidence in his first affidavit that he was upset because:
I had been thinking about the Confrontation, both in terms of the aggressive manner in which Ms Denholm had acted and the words that she had said, throughout the practice session. I continued to feel undermined and that my job was under threat.
Mr Pongrass maintains that the conversation with Mr Heal must have been on 10 January 2023 because his schedule indicated that he was not at training on 9 January 2023 and he recalls that at the time of the conversation, he was aware of the player complaints against Mr Heal. Mr Pongrass gave the following account of his conversation with Mr Heal in his affidavit:
Mr Heal said: “I had a weird conversation with Vic about the Perth game. She kept asking me ‘what are we going to change’.”
I said:“She is very passionate, she wants to win, as we all do in this industry. She wants to find ways to correct why we are losing, it's her first year as President and she obviously really wants to succeed.”
Mr Heal was informed by Sydney Flames in its opening outline of submissions that reg 3.42(3) was a different regulation and was not pleaded. Mr Heal, however, did not make any application to amend his statement of claim to include an alleged contravention of reg 3.42(3).
Sydney Flames submits that it is not “necessarily correct that Sydney Flames would not be prejudiced if there was now an amendment to allow Mr Heal to allege a contravention of reg 3.42(3)”. It submits that reg 3.42(3) is concerned with the time within which employee records must be made available or provided where employee records are “kept at the premises at which the employee works”. It submits that a different provision, reg 3.42(4), and a different obligation applies where employee records are not kept at the premises. While it seems clear that Mr Heal’s leave records at least were kept as part of an electronic database, Sydney Flames submits that it has not had a chance to consider or lead evidence as to whether that means that the records were kept at the premises at which Mr Heal works.
I do not accept the contention by Mr Heal that a breach of reg 3.42(3) is also a breach of reg 3.42(1), or that the timeframe in reg 3.42(3) should be read into reg 3.42(1). The structure of reg 3.42, the note under each individual provision, and the table in reg 4.01A, all make it clear that each of regs 3.42(1), 3.42(2), 3.42(3) and 3.42(4) are separate civil penalty provisions, each with its own specified maximum penalty.
The text of reg 3.42(1) makes it clear that it is directed at making employee records available for inspection and copying on request, not with the timeframe within which that must be done. It is only reg 3.42(3) and reg 3.42(4) that deal with the timeframe within which records must be made available for inspection and copying.
For the foregoing reasons, Mr Heal should be held to his pleaded case. I am satisfied that the evidentiary issues raised by Sydney Flames would need to have been addressed before the Court could determine whether reg 3.42(3) had been contravened. Moreover, the issue was expressly brought to Mr Heal’s attention in opening submissions and no application was made to amend the pleading or to introduce new evidence. Rather, Mr Heal made the forensic decision to contend that a breach of reg 3.42(3) could also arise from a breach of reg 3.42(1) or the timeframe in reg 3.42(3) should be read into reg 3.42(1).
F. ALLEGED BREACHES OF CONTRACT
F.1. Construing contractual terms
The meaning of a contract is to be determined objectively: Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; [2004] HCA 35 at [22] (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ); Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52 at [38]-[41] (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ). The construction of a contract must be determined by what a reasonable person in the positions of the parties would have understood its terms to mean.
The process of construing terms in a commercial document or contract involves consideration not only of the text of the documents, but also of the surrounding circumstances known to all the parties, as well as the purpose and object of the transaction: see Cohen v iSoft Group Pty Ltd (2013) 298 ALR 516; [2013] FCAFC 49 at [35] (Rares, Cowdroy and Kerr JJ). The Court’s knowledge of the purpose of a contract presupposes knowledge of the genesis of the transaction, the background, the context, and the market in which the parties are operating: Reardon Smith Line Ltd v Hansen-Tangen [1976] 1 WLR 989; [1976] 3 All ER 570 at 573-574 (Lord Wilberforce); Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 240 CLR 45; [2002] HCA 5 at [10] (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ). The Court should read the contractual agreement as a whole and construe it in accordance with established principle: Treasury Wine Estates Vintners Ltd v Pearson (2019) 268 FCR 12; [2019] FCAFC 21 at [73] (Rares, Perry and Charlesworth JJ).
F.2. Breach of Contract claims
Mr Heal no longer presses the claim for income from acting as Coaching Director of Sydney Flames academy.
Mr Heal’s remaining contract claim is that he procured two sponsorships for the Sydney Flames, being the Architectural Signs sponsorship and the Workplace Law sponsorship and is therefore entitled to sponsorship income pursuant to the terms of his Contract. Mr Heal therefore claims that Sydney Flames breached the Contract by failing to pay him the commission to which he was entitled referable to the sponsorship income.
Mr Heal’s entitlement to a commission on sponsorship income turns on whether sponsorship revenue or value-in-kind sponsorship has been “procured” by him in accordance with cl 3(c) of his Contract. Clause 3(c) provides:
Sponsorship income. During the Employment Term, Employee shall be eligible to receive up to (i) 20% share of incremental net cash sponsorship revenue, and (ii) 10% share (non-cash benefits) of value-in-kind sponsorships that has a meaningful value, that has been procured for both Sydney Flames or Sydney Kings by the Employee or The Closer Group.
The definitions of “procure” in the Macquarie Dictionary (9th ed, 2023) relevantly include:
1. To obtain or get by care, effort or the use of special means …
2. To effect; cause; bring about …;
The definitions of “procure” in the Oxford English Dictionary, quoted in CXC Consulting Pty Ltd v Commissioner of State Revenue [2013] VSC 492 at [70]-[73] (Ginnane J) (together with the Macquarie Dictionary definitions referred to above), relevantly include:
To obtain; to bring about.
…
4a. To bring about, cause, or produce, esp with care or effort; to cause to be done.
In HRC Hotel Services Pty Ltd v Chief Commissioner of State Revenue [2018] NSWSC 820 at [118], Ward CJ in Eq (as her Honour then was) said that “procure” should be given its ordinary meaning of “obtain”.
In Nearfield Ltd v Lincoln Nominees Ltd [2007] 1 All ER (Comm) 441; [2006] EWHC 2421 (Ch) at [37] and [97], the English High Court considered the meaning of a contractual promise by a company to “procure the payment” of a loan, and held that the normal meaning of “procure” was “see to it”, such that the defendant was liable to “see to it” (or obtain or ensure) that a third party repaid the loan and was liable to pay corresponding damages if the third party did not repay the loan.
As such, the issue is whether Mr Heal can be said to have procured the sponsors in the sense of having obtained or brought about the sponsors, including by the use of care or effort or the use of special means.
F.2.1. Architectural Signs sponsorship
Mr Heal introduced the managing director of Architectural Signs, Millar McCowan, to Mr Nicholls. Mr Heal had met Mr McCowan through basketball. Mr Heal informed Mr Nicholls that Mr McCowan may be interested in sponsoring the Sydney Flames and asked Mr Nicholls to give Mr McCowan a call. Mr Heal accepted that he played no role in the negotiations of the sponsorship arrangement after he had made the introduction to Mr Nicholls.
After that introduction, Mr Nicholls had a telephone conversation with Mr McCowan, as well as email exchanges on 30 November 2021 and 2 December 2021, and then provided Mr McCowan with an “initial proposal” giving an indication of the sponsorship exposure that Architectural Signs’ name and logo could receive. It is apparent from the initial conversation and Mr McCowan’s email of 2 December 2021 that Mr McCowan initially had a budget of “about $10K”, but Mr Nicholls persuaded him to accept the minimum package of $25,000, including $15,000 in sponsorship in kind (referred to in Mr McCowan’s email as “contra”).
Mr Nicholls then met with Mr McCowan at a double header game on 5 December 2021, and they discussed various sponsorship options. In subsequent emails, Mr McCowan sought to clarify some parts of the sponsorship arrangement, and Mr Nicholls then provided him with a proposed partnership agreement.
On 15 December 2021, Mr Nicholls and Mr McCowan exchanged further emails, discussing free tickets to be provided as part of the sponsorship, and Mr McCowan then confirming that he had posted the signed sponsorship agreement.
F.2.2. Workplace Law sponsorship
The circumstances in which Sydney Flames obtained the Workplace Law sponsorship can be summarised as follows.
On 4 May 2022, the principal of Workplace Law, Shane Koelmeyer, sent an email to Mr Smith introducing himself.
Mr Koelmeyer then sent a subsequent email to Mr Smith asking to speak to him upon learning that another law firm was no longer “a partner” of Sydney Flames and Sydney Kings.
On 14 June 2022, Mr Smith and Mr Koelmeyer spoke, and discussed a potential sponsorship. After the call, Mr Smith sent the following email to Mr Koelmeyer introducing him to Mr Nicholls, and referring to putting a “package” together for Mr Koelmeyer:
Thanks Shane [Koelmeyer]
We will get a package and some options put together. In copy is Sean Nicholls who heads up our basketball business.
I appreciate the feedback.
Best regards
Paul
On 15 June 2022, Mr Smith sent the following email to Mr Koelmeyer, introducing Adam Zammit, Hoops Capital’s Commercial Director:
Hi Shane [Koelmeyer]
Just a further follow up/intro.
Adam Zammit heads up commercial for Hoops Capital, and will be able to facilitate a package for your consideration.
Keep me posted if you need anything else.
Thanks
Paul
Mr Heal was introduced to Mr Koelmeyer by Ben Madgen, a mutual friend and former Sydney Kings player.
On 23 June 2022, Mr Heal had a telephone conversation with Mr Koelmeyer and they then exchanged the following texts:
Hi Shane - thanks for the chat today.
Really useful information about the Flames & WNBL. Genuinely love how & what you are building ... it certainly fits with what we are all about.
Cheers,
Shane Koelmeyer (Workplace Law)
PS. Apologies if I sounded like Darth Vader - I was in the middle of walk & didn't want to miss the call.
Haha. All good and great to chat.
Hope you guys jump on board and are part of the build and journey.
Cheers. Shane [Heal]
On 23 June 2023, Mr Koelmeyer also sent an email to Mr Smith and Mr Zammit in the following terms, after his discussion with Mr Heal earlier that day:
Hi Paul and Adam,
Super busy time for all of us I know, so following on from my phone messages, just wanted to ask if you could put a proposal to me around being a/the major partner of the Flames.
I believe in teams/clubs retaining the integrity of their name so not interested in naming rights like Brydens.
Having spoken to Shane Heal (Ben Madgen kindly introduced me) there's a strong connection with what our firm is about and how/what Shane is building with his team. I think we could add value and help him, the team and the organisation with its female program.
I have no idea what $ you are after for the Flames major sponsor - it could well be out of our budget but let’s see.
Cheers,
Shane [Koelmeyer]
On 16 August 2022, Megan Trinh, Account Director – Partnerships, Brand and Talent, sent Mr Koelmeyer a draft sponsorship contract for further discussion.
On 19 August 2022, Mr Koelmeyer sent a further email to Mr Heal, in which Mr Koelmeyer noted “[t]hank you for taking the time to chat to me a while back, speaking directly to you and Paul Smith convinced me that we could add value to the Flames program and that there is strong values alignment”.
Workplace Law subsequently entered into a sponsorship of the Sydney Flames for the 2022/23 season.
F.2.3 Mr Heal’s submissions
Mr Heal submits that, the Court needs to consider, not only whether he was the person who first made contact with the sponsors, but the significance of the role that he played in securing the sponsorships for Sydney Flames.
Mr Heal submits that it is plain that, but for his introduction, Architectural Signs would not have become a sponsor of Sydney Flames, and that he “must be regarded as having been critical and key in that process”.
Mr Heal submits, in relation to the Workplace Law sponsorship, that the subsequent text on 23 June 2022 from Mr Koelmeyer to him following their telephone conversation, shows the significance of that meeting to Mr Koelmeyer in deciding that Workplace Law would sponsor Sydney Flames, and that Mr Heal was “critical and key” in that process.
Further, Mr Heal submits it was not within his responsibilities to engage in the transactional and financial aspects of Sydney Flames’ business, and that his responsibility was to use his standing and profile to procure sponsors. He also submits that it would be a perverse outcome if he is denied any resulting benefit from the sponsorships because he was not involved in the negotiating and finalising of the transactional document.
F.2.4. Sydney Flames’ submissions
Sydney Flames submits that the evidence does not establish that Mr Heal “procured”, in the sense of having obtained or brought about, either Architectural Signs’ or Workplace Law’s sponsorship of Sydney Flames.
First, Sydney Flames submits that the concept of “procuring” in cl 3(c) of Mr Heal’s Contract is not satisfied by a “but for” analysis, that is, but for Mr Heal’s introduction, Architectural Signs would not have become a sponsor. It requires that Mr Heal obtained or brought about Architectural Signs as a sponsor, including by the use of care or effort. It submits that the evidence shows that he did not do so, and that it was Mr Nicholls (with, perhaps, others assisting him to prepare relevant documents) who put in the time and effort to convert Mr Heal’s introduction into a sponsorship.
Second, Sydney Flames submits that Mr Koelmeyer’s email of 23 June 2022 to Mr Smith and Mr Nicholls, sent after speaking with Mr Heal, does not say that it was Mr Heal who convinced Mr Koelmeyer to pursue the sponsorship. Rather, the appropriate inference, if any inference can be drawn in the absence of evidence from Mr Koelmeyer, is that Mr Koelmeyer was already pursuing a sponsorship with Sydney Flames prior to his discussion with Mr Heal, and that the discussion with Mr Heal, at best, affirmed his intention to do so. It submits that it is also notable that it was Mr Koelmeyer who sought out and contacted Mr Heal, rather than vice versa. Mr Heal had not known Mr Koelmeyer before that conversation.
Third, Sydney Flames submits that Mr Nicholls and his team subsequently arranged the details of the Workplace Law sponsorship with Mr Koelmeyer, including providing him with a proposed contract, and no doubt at some point preparing the final sponsorship agreement for signing. Sydney Flames submits that Mr Heal accepts that he played no part in subsequently negotiating, arranging or finalising the Workplace Law sponsorship.
Fourth, Sydney Flames submits that notwithstanding that Mr Heal knew that Architectural Signs and Workplace Law had become sponsors, and that he knew about the clause of his employment agreement entitling him to a share of sponsorship income in certain circumstances, Mr Heal never approached anyone within Sydney Flames or Hoops Capital to enquire about the value of either sponsorship to Sydney Flames. Nor did he otherwise make a claim for a share of either sponsorship. Sydney Flames submits that this suggests that Mr Heal understood that he had not played any significant role in obtaining either sponsorship, so as to be entitled to a share of any sponsorship income.
F.2.5. Consideration
Consistently with the principles established in Treasury Wine at [73], it is necessary to construe the language of “procured” in cl 3(c) in the context of Mr Heal’s Contract as a whole and the surrounding circumstances known to the parties. Dictionary definitions may assist in construing words in contracts but they must not be permitted to give rise to constructions that would be inconsistent with these principles. Here, the provisions of Mr Heal’s Contract and the surrounding circumstances known to the parties make plain that Mr Heal was employed as a Head Coach of the Team. In that context “procure” cannot sensibly be construed as requiring Mr Heal to be involved in commercial negotiations leading to the execution of a signed sponsorship agreement. Rather, “procure” must be construed as focusing on who was principally responsible for the sponsor entering into a sponsorship arrangement with the Sydney Flames.
I am satisfied for the following reasons that Mr Heal is entitled to a commission for procuring both the Architectural Signs and Workplace Law sponsorship agreements.
First, Mr Heal’s entitlement to a share of sponsorship income is a matter to be determined objectively in accordance with established contractual principles of construction. The absence of any inquiry by Mr Heal as to the level of sponsorship negotiated with either Architectural Signs or Workplace Law or request for payment of any commission prior to the commencement of these proceedings is of no material probative value. He may well have relatively overlooked or not yet made a claim for his share of the sponsorship income. Further, it was ultimately the responsibility of Sydney Flames under Mr Heal’s Contract for it to make any commission payment to Mr Heal, not for Mr Heal to request payment. It was Sydney Flames that knew the specific value of the sponsorships that were ultimately negotiated, not Mr Heal.
Second, given the surrounding circumstances known to all the parties, in particular, Mr Heal’s commitments as Head Coach and his very high public profile as an international basketballer and more recently as a coach, it can readily be concluded that the objective purpose and object of the procuring sponsorship clause was to provide an incentive for Mr Heal to use his reputation and contacts to attract sponsorship for Sydney Flames. It was not to be construed as requiring him to negotiate the specific commercial terms of any sponsorship that he was instrumental in procuring.
Third, in the case of Architectural Signs, the evidence makes plain that it was Mr Heal who introduced it as a sponsor. The relevant principal of Architectural Signs was known to Mr Heal and it was Mr Heal who suggested to him that he become a sponsor of the Sydney Flames. In that sense, I am satisfied that Mr Heal relevantly “procured” Architectural Signs as a sponsor of the Sydney Flames.
Fourth, in the case of Workplace Law, I am satisfied that Mr Heal was instrumental in procuring the sponsorship. I accept that Mr Koelmeyer was not previously known to Mr Heal but that is not the critical issue for the “procuring” of the Workplace Law sponsorship. It was not so much a question of who introduced Mr Koelmeyer to Sydney Flames, but rather who was instrumental in securing the sponsorship of Workplace Law. The critical significance of Mr Heal’s role in procuring the Workplace Law sponsorship is evident from the texts exchanged between Mr Koelmeyer and Mr Heal on 23 June 2023, the email from Mr Koelmeyer to Mr Smith and Mr Zammit later that day, and the email from Mr Koelmeyer to Mr Heal on 19 August 2023, referred to above.
In his 23 June 2023 text to Mr Heal, Mr Koelmeyer thanked Mr Heal for the telephone call and stated that what Mr Heal had told him was “[r]eally useful information about the Flames & WNBL. Genuinely love how & what you are building ... it certainly fits with what we are all about” (emphasis added).
In his 23 June 2023 email to Mr Smith and Mr Zammit, Mr Koelmeyer stated that after having spoken with Mr Heal, he was satisfied that “there’s a strong connection with what our firm is about and how/what Shane is building with his team. I think we could add value and help him, the team and the organisation with its female program” (emphasis added). The clear inference from the email is that it was only after the conversation with Mr Heal that Mr Koelmeyer made the decision to proceed with the Workplace Law sponsorship.
The significance of Mr Heal’s involvement in procuring the Workplace Law sponsorship was also emphasised in Mr Koelmeyer’s 19 August 2022 email to Mr Heal, in which Mr Koelmeyer thanked Mr Heal “for taking the time to chat to me a while back, speaking directly to you and Paul Smith convinced me that we could add value to the Flames program and that there is strong values alignment” (emphasis added). The suggestion that it was both Mr Heal and Mr Smith that convinced Mr Koelmeyer to proceed with the sponsorship does not preclude a finding that Mr Heal, by his contribution, relevantly “procured” the Workplace Law sponsorship. The sponsorship clause does not require “exclusive” procurement, and such a construction would not readily be inferred, not least because of the difficulty of applying such a construction in a commercial context. In many cases, and certainly in this case, multiple people are involved in identifying, introducing and discussing potential sponsorship arrangements.
G. DISPOSITION
For the foregoing reasons, judgment is to be given to Mr Heal on the breach of contract claims and the admitted payslips claim but the amended originating application and the statement of claim are otherwise to be dismissed. The parties are to confer and seek to reach agreement on the further orders necessary to give effect to these reasons, including a timetable for submissions on penalty for the payslips claim and any other further evidence they might seek to rely upon on penalty, and failing agreement the parties are to file and serve short submissions in support of the further orders that they seek.
I certify that the preceding three hundred and eighty-two (382) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Halley. Associate:
Dated: 19 April 2024
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