Jason Low v Rich Corporation Pty Ltd T/A Property Buyer
[2021] FWC 2293
•9 JULY 2021
| [2021] FWC 2293 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Jason Low
v
Rich Corporation Pty Ltd T/A Property Buyer
(U2020/11923)
COMMISSIONER MCKENNA | SYDNEY, 9 JULY 2021 |
Application for an unfair dismissal remedy.
[1] Jason Low (“the applicant”) has made an application, pursuant to s.394 of the Fair Work Act 2009 (“the Act”), in which he seeks an unfair dismissal remedy concerning his dismissal by Rich Corporation Pty Ltd T/A Property Buyer (“the respondent”). The applicant was dismissed by the respondent against the background of circumstances involving concern by the applicant about commission-related matters and concern by a director and secretary of the respondent company, Richard Harvey (who is also employed as the Chief Executive Officer of the respondent), about the way the applicant dealt with those concerns.
Preliminary matters
[2] As to preliminary matters, there were no issues, and I otherwise find: the application was made within time; the applicant is a person who was protected from unfair dismissal; and the dismissal did not involve a case of genuine redundancy. The respondent is a small business, so consideration of the Small Business Fair Dismissal Code (“the Code”) arises for consideration as a preliminary matter. The respondent has objected to the application having regard to the operation of the Code. The objection was outlined in short form in the initial Form F3 – Employer response to unfair dismissal application, as follows:
“1. The Respondent is a small business employer and as such has complied with the Small Business Fair Dismissal Code; as the employer held a reasonable belief that the Applicant’s conduct was sufficiently serious to justify immediate dismissal.”
[3] As to the dismissal and the respondent’s objection, the Code reads as follows:
“Summary dismissal
It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.
Other dismissal
In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.
The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.
The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer's job expectations.
Procedural matters
In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.
A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to the Fair Work Commission, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.”
General background
[4] The respondent is a property buyer business, which acts as buyers’ agents for clients who are buying and selling property. The respondent had, around the time of the dismissal, about five employees (and a further five contractors). The applicant commenced employment with the respondent on 1 May 2011. Most recently before the dismissal, the applicant was employed by the respondent on a full-time basis as a Senior Buyer’s Agent. The applicant was remunerated on a commission-only basis pursuant to the Real Estate Industry Award 2020. The applicant said that under his employment contract, which was in evidence, he was “entitled to 40% commission for Company Lead sales and 50% for a Buyer’s Agent generated lead.” The question of commissions is obviously a matter of particular importance to an employee whose remuneration is on a commission-only basis. As it happens, the respondent’s business was not doing well financially around the time of the dismissal in 2020, as evidenced by the fact the respondent was JobKeeper-eligible. During the period of months preceding the dismissal, the applicant was in receipt only of JobKeeper payments, and a small monthly retainer paid by the respondent for a period of time, to support his family with five children. The applicant described matters as follows:
“c. I was relying upon Rich Corporation to pay the fair and honest amount for commission on development sites. I understood the commissions would be fewer in terms of the number of sales, but the quantum of the commission would be higher than a general property sale.”
[5] Shortly stated, as to matters preceding the dismissal as it related to dispute about commissions, around June 2019 the applicant located a property in Turramurra (“the Property” or “Turramurra”) as a potential development site – which was sent to him by a real estate agent (Carl Ferris of McConnell Bourn). Issues that subsequently arose in relation to the Property led the applicant to consider, among other matters, he had not been fairly remunerated in terms of commission. Following upon, among other matters, the exchange of various strongly-worded communications, the applicant was summarily dismissed by Mr Harvey on 14 August 2020.
[6] By way of greater elaboration, the applicant introduced the Property to the respondent through Liam Bradbery, a Site Analyst and fellow employee of the respondent. At that time he located the Property, the applicant was employed within the respondent’s Development Division - before he later changed employment roles in about January 2020 to become a Senior Buyer’s Agent to cover Sydney’s Eastern Suburbs. The Director of the Respondent’s Development Division is Daichi Somehara.
[7] While Mr Somehara holds the title of Director of the respondent’s Development Division, the evidence indicated he is not an employee of the respondent and was not an employee around the time relevant to the dismissal of the applicant – notwithstanding the applicant’s understanding, as reflected in his written evidence, that Mr Somehara was an employee of the respondent. Moreover, although Mr Somehara’s business title is that of “Director”, he is not a director of the respondent in a corporations-type sense of the word. Mr Somehara and Mr Harvey are business partners of some description, it appears. Mr Somehara otherwise appears to have an independent contractor-type role in the work he undertakes with, or for, the respondent and/or Mr Harvey personally, pursuant to “a separate agreement” with Mr Harvey.
[8] The exact nature of Mr Somehara’s association with the respondent was unclear on the evidence. Mr Somehara’s own evidence was: “I suppose I direct the division”, by looking after day-to-day operations - but he no longer manages or supervises employees of the respondent given there is no one in the Development Division apart from himself. At the time of the dismissal, Mr Somehara was not the applicant’s supervisor or manager. Regardless of the exact status of Mr Somehara’s arrangements concerning work undertaken by him relevant to the respondent, the evidence indicated he is, or was, effectively a decision-maker within the respondent’s business – relevantly including in relation to matters concerning the applicant’s commissions. Certainly, there was no evidence that Mr Harvey countermanded anything that Mr Somehara said or did in relation to the applicant (except, perhaps, that Mr Somehara suggested in one of his emails to the applicant that he would have taken “actions” against the applicant but for discussions between Mr Harvey and Mr Somehara).
[9] The Property had a sale range of $3m-$4.5m. The applicant described matters in the following way:
“18. In July 2019 it became evident that Mr Somehara was of the belief that this deal “stacked” meaning that there was profit to be made.
19. I was led to believe by Mr Somehara that a joint venture agreement with Westbrook Capital (PropertyBuyer client) (Mark McFarlane-Director) and the vendors of [the Property] was going to be entered into.
20. Mr Somehara had a strong relationship with Mark McFarlane and therefore I was led to believe that everything was under control.
21. I understood from team discussions that an arrangement had been struck with the vendors of the property, and at that time it was purely with Propertybuyer client (Westbrook Capital) and that the deal was moving forward with having the block subdivided and then sold by an agent in which time the vendor and Westbrook capital would be paid and PropertyBuyer as a separate entity and would be renumerated in the typical way at 2% of the sale price with the potential of upside under an option/joint venture arrangement.
22. That was the last that I had heard or knew about the deal.”
[10] Approximately one year after the applicant initially had located the Property, the applicant sent emailed correspondence on 15 June 2020 to Mr Harvey 1 which read:
“Hi Rich,
Just confirming that I was the one that originally found [the Property]. So I am assuming that I will be still receiving my comms for this deal. As a heads up, this doesn’t qualify for my full 40% this was verbally agreed with Daichi [Somehara] at 25%
Many thanks”.
[11] Later that same day of 15 June 2020, Mr Somehara sent an email to the applicant and Mr Bradbery advising that the commission for the Property for the respondent was $20,000, being an email which, like the applicant’s email to Mr Harvey, made reference to the figure of 25 per cent (rather than the employment agreement-specified 40 per cent). That is, Mr Somehara’s email read:
“No problem, I think that’s when Liam [Bradbery] you were getting 5% as well?
The amount of commission to Propertybuyer is $20,000 inc GST, so 25% would be $5,000 and 5% would be $1,000.
We’re hoping the settlement would occur in 3-5 months so the payment will be made then.
Kind Regards,
Daichi Somehara
Director - Development Division”.
[12] Given there was much reference in the proceedings to the percentage of commission concerning the Property, it is relevant to note that, in this email to Mr Harvey, the applicant personally referred to an agreement between himself and Mr Somehara concerning the Property. That oral agreement between the applicant and Mr Somehara stood separately from what was in the signed employment agreement between the applicant and the respondent. It is unclear on the evidence how this agreement came about between the applicant and Mr Somehara. 2 Separately, the respondent submitted in the proceedings that because the applicant had transferred (at his own request) from the respondent’s Development Division in January 2020 to the Eastern Suburbs Senior Buyer’s Agent role - some months before the disputed commission deal was settled - this prima facie excluded him from any commission on the Property. It was unclear on the evidence what the exact position was in such respects, but it appears from the emailed communications that the applicant, Mr Harvey and Mr Somehara proceeded on the basis that it was a 25 per cent arrangement concerning the Property rather than a 40 per cent arrangement. This was so even though there was no evidence of any change to the employment agreement that applied between the applicant and the respondent, and Mr Somehara was neither the employer of the applicant nor an employee of the respondent.
[13] In a team meeting on 22 June 2020, the applicant and several other of the respondent’s team members were told by Mr Harvey that the Property was sold for $3.6m – in circumstances where the respondent’s commission is generally two per cent plus GST of the purchase fee. During this team meeting, Mr Harvey also said the commission concerning the Property was $90,000. The applicant said he did not immediately address the commission amount as settlement was a couple of months away, whereupon payments were then to be made to him. It may be noted that Mr Harvey could not recall having said to the applicant during the team meeting that the sale price for the Property was $3.6m; he could not recall the exact sale price of the Property when giving evidence in the proceedings; and he could not recall that the sale price was in the range of $3.8m rather than the $3.6m he advised to the applicant (among others) at the team meeting.
[14] In early-to-mid July 2020, the applicant viewed a document which was located on the “S drive” on the respondent’s computer systems. The applicant had been alerted to the existence of the document on the S drive by another employee. At the time the employee alerted the applicant to the document on the S drive, the applicant promised not to reveal that employee’s identity “for fear of retribution”. That person in question is now no longer employed by the respondent, and the applicant identified in his cross-examination the name of the former employee who alerted him to the document located on the S drive. The S drive was accessible to all employees of the respondent, with (possibly) two exceptions 3. It appears that it was Mr Harvey who personally stored the document on the S drive, but this was effectively a storage/filing error on Mr Harvey’s own part because it was not consciously intended by him that the document would be generally accessible to employees of the respondent.
[15] The document viewed by the applicant on the S drive was titled “Deed of Annulment” (“the Deed”) and a date indicated it was a June 2020 document. The Deed concerned the terms of the dissolution of a joint venture agreement in relation to the subdivision and development of the Property. The Deed was expressed to be between the owners of the Turramurra property (“the Property Owners”) and a corporate entity, 22 Charlton Ave SPV1 Pty Ltd, which I will generally refer to as per its abbreviation in the Deed, namely, the “22CA” company. The Deed set out the background as follows:
“BACKGROUND
A. The parties entered into a Joint Venture Agreement (the JVA) on 13 November 2019 in relation to the subdivision and development of [Turramurra address] (the Property).
B. 22CA paid to [the Property Owners] the sum of $120,000.00 in consideration for [the Property Owners] entering into the JVA. Such sum remains the property of [the Property Owners].
C. Part of the development process agreed to be undertaken by 22CA was the approval of a development application by Ku-Ring-Gai Council (the Council) to consent to the subdivision of the Property into two lots (the DA).
D. 22CA has expended certain monies pursuant to the terms of the JVA as part of its obligation to develop the Property.
E. The parties have agreed to dissolve and/or annul the JVA on the terms set out herein.” (bold and underline in original)
[16] Relevantly, under the Deed, the Property Owners agreed to pay to the 22CA company a total of $420,000 as follows: (a) $20,000 upon the exchange of counterparts of the Deed; and (b) $400,000 at settlement of the sale of the Property to a third party.
[17] On the (partially-completed) signature page of the Deed, Mr Harvey’s name and signature were affixed indicating that he had executed the Deed in the capacity of “Director” of the 22CA company. The Deed contained a clause by which the parties agreed to keep the contents of the Deed confidential.
[18] As to the Deed, the applicant submitted:
“19. Given the long history of employment with the Respondent, the Applicant’s senior role in the property development team, and the fact that the Applicant was the locator of the Property, it was important for the Applicant to be aware of this Deed as it was related to the sale of the Property and the commission amount received by the Respondent for its sale.
20. It appeared that the Respondent intended to conceal the Deed from the Applicant because the Deed mentioned a much higher commission for the sale of the Property, namely $420,000.00, as opposed to $20,000.00 advised by Mr Somehara.
21. The Applicant was entitled to seek information relative to his commission particularly where a significant discrepancy was evidence.”
[19] In such respects, the respondent submitted:
“[A.1.(c)] As an employee of Propertybuyer, the Applicant was not entitled to be privy to the business arrangements of other entities, as claimed in his witness statement … no more than he would be entitled to access to bank accounts, investment portfolios or other confidential information.”
[20] The respondent further submitted:
“[C.9] The Respondent does however submit, in opposition to the statements made in the Applicant’s submissions … that the Deed of Annulment (The Deed) did not refer to commission at all, and it therefore appears the Applicant is confused as to the nature of the business dealings which operate outside his role and position as an agent, his duties and entitlements under the employment contract and these proceedings generally.
10. The Deed was between two parties, being the owners of a property and a joint venture investment corporation. Neither of these parties are the employer of Mr Low, and Mr Low had no connection with anything relating to that matter. Contrary to the Applicant’s assertion, the Deed was not “a company document”
11. Mr Low was neither an investor in the development site, or an owner or director of the property or incorporated entities involved in the development. He carried no risk or exposure and was not “in theory a part owner”. The Respondent rejects this statement entirely. Mr Low was an employee of Rich Corporation Pty Ltd, trading as Propertybuyer, and had no other interests in any external dealings.
12. The Applicant acknowledges in their witness statement … that the accessed Deed had a confidential nature to it, by the fact that an unnamed employee notified him of the deed but made him promise not to disclose.” (bold not reproduced)
[21] Upon viewing the Deed, the applicant was deeply concerned that he was, in effect, being short-paid on commissions to which he considered he was otherwise rightly or fairly entitled in his employment with the respondent, given it was he who had located the Property at a time when he had worked within the respondent’s Development Division. The applicant described his reaction as follows:
“39. After discovering this document I was unsure as to what to do, I was torn as to bring it to Mr Harvey’s attention.
40. For approximately one month the whole situation started eating away at me causing me to become very depressed in the belief that I had been so loyal to Mr Harvey but in return he had conducted himself in a clandestine way by defrauding me through the opening up of a separate company to receive the bulk of the commission.
41. Mr Somehara and Mr Harvey were double dipping on the commission within two companies with Westbrook Capital. This was in serious breach of my contract.”
[22] Under the employment agreement between the applicant and the respondent, the applicant would have had a presumptive entitlement to 40 per cent of the total commissions received by the respondent given he was the locator of the Property, albeit, as noted earlier, it appears to be common ground there was an agreement in the case of the Property that the applicant would receive a 25 per cent commission given what had been written in the earlier emails.
[23] Mr Harvey’s evidence was that on 7 August 2020, a confirmatory email was sent by him to the applicant about a $20,000 commission which followed-upon a conversation in which the commission was explained to the applicant. The email was not put into evidence in the respondent’s case and the manner of the description was not elaborated by Mr Harvey in his evidence. On the other hand, the applicant’s evidence was that it was he who decided to raise the matter with Mr Harvey during an otherwise routine one-on-one telephone meeting between them on 11 August 2020. The applicant recounted the aspect of the conversation concerning the Property in his written evidence as follows:
“[Applicant]: Rich, what was the fee for [Turramurra]?
[Mr Harvey]: You’ll have to ask Daichi for the exact breakdown.
[Applicant]: Oh Ok then, I need to address something with you. In that meeting which was on the 22nd of June, [an employee] asked you what was the fee for [Turramurra]. Seven people heard you say that it was $90,000. That’s interesting cause you say it’s $90,000, Mr Somehara says it’s $20,000 and I am now looking at a deal [sic; deed] of annulment to say that you have opened up a second company who is to receive $420,000.
[Mr Harvey]: I don’t like your tone.
[Applicant]: Well I am sure you can understand why I have this tone when it appears that Liam [Bradbery] and I have been ripped off.
[Mr Harvey]: Good bye I am ending this call.” (italics in original)
[24] The effect of the applicant’s evidence was that he had tried to resolve matters concerning the commission “one-on-one” in this telephone meeting with Mr Harvey, but “it went nowhere”. The applicant said he was “really shocked” by the fact that Mr Harvey “just hung up on me” and that Mr Harvey had said to the applicant that he did not like the sound of the applicant’s “tone”. The applicant was cross-examined about his telephone conversation on 11 August 2020 with Mr Harvey, in which the applicant had first raised the question of commissions with Mr Harvey – and in which Mr Harvey had said to the applicant “I don’t like your tone” and then hung-up:
“Do you see that set out there? That’s your summary in effect of a conversation?---That’s right, correct.
Your tone was aggressive, correct?---No, I wouldn’t say it was aggressive at all.
Was it conciliatory in the same sense as your text?---I wouldn’t necessarily say it was conciliatory, but I just wanted an explanation as to why they opened up the second company.
Do you accept that you were being offensive?---No, I wouldn’t say that I was being offensive. We were having a one-on-one. I said, Rich, can you explain this to me. I said you said in front of everybody in the team meeting it was $90,000 commission. Daichi says $20,000, and I’m looking at a deed of annulment which is $420,000. I said can you just explain that to me.
Do you accept that you could not hide your disappointment, sadness or disbelief?---Yes. I was very sad.
And disappointed?---Very disappointed.
And disbelieving?---Yes.”
[25] On the applicant’s description, following this telephone conversation, Mr Harvey then “got Daichi on to me”.
Written communications on Tuesday, 11 August 2020
[26] What followed after the telephone meeting between the applicant and Mr Harvey on Tuesday, 11 August 2020 included communications involving a strongly-worded text and a series of emails from the applicant – and strongly-worded emails in reply from Mr Somehara (mostly), as well as a smaller number of emails from Mr Harvey to the applicant. The communications also included a formal warning from Mr Harvey to the applicant. Most, if not all, of the emails were, in the end, copied to all the team members of the respondent.
[27] Mr Harvey did not know how the applicant had obtained the Deed or otherwise had knowledge of its contents, albeit in circumstances where it was Mr Harvey who had personally stored a copy of the Deed on the commonly-accessible S drive in the respondent’s computer systems. The applicant did not want to disclose the name of the employee who had alerted him to the existence of the Deed on the S drive. Leaving to one side the issue of questions put to the applicant about how he had obtained the Deed, the evidence indicated that, somewhere around this approximate time, the respondent had been scammed through some form of breach of its computer system, resulting in financial losses of $20,000. As such, there was heightened concern about security within the respondent’s operations, collaterally including concern by Mr Harvey and Mr Somehara as to how the applicant had a copy of the Deed.
[28] It is apposite to reproduce in full the wording of the ensuing (singular) text message and (multiple) emails to contextualise what was said, and the full flavour of it. Much of what was written by the respective authors in the communications was self-evidently quite unedifying (with the exception of a number of sensible emails sent by another administrative employee to the applicant, Mr Somehara and Mr Harvey).
[29] All the following communications are set out in the form in which they were written by the authors, albeit there was colour highlighting in some of the communications which has not been reproduced or otherwise noted in the decision. The communications have not been edited in the decision to correct typographical errors, spelling errors, etc. Moreover, in the emails by the applicant, Mr Somehara and Mr Harvey, most of the emails had signature block-type details at the foot of the emails which are not reproduced.
[30] After the applicant had broached the matter of commissions with Mr Harvey during their telephone meeting on 11 August 2020, which had ended with Mr Harvey hanging-up, the applicant sent a text message to Mr Harvey. That text message read:
“Rich,
I’m now sitting outside feeling not anger, not bitterness nor regret, but utter sadness, disbelief and disappointment..
I looked up to you for over 9 loyal years and as one of your highest ever revenue earners, I always saw you as a spirit that was truthful, honest, ethical and moral in every sense of the word..
That was your main selling point being the President of REBA [Real Estate Buyers Agents Association of Australia] (The One person that had the highest upstanding, Ethics and Values in the Buyers Agency Industry)
However when I saw that Deed of Annulment and the content and finally your signature, my heart sunk.. (Regardless of whether it was the correct document or not)
The fact that you signed that document with it’s contents, I was close to vomiting and being physically sick..
I had to do a double take for days.. Eventually, I realised that you betrayed and cheated your team in a premeditated fashion especially both Liam [Bradbery] and I and in effect the entire PropertyBuyer team...(You were blatantly lying to all of us at that team meeting ) and that hurts!!
I’m shocked and surprised that you continually protect a man who has given you nothing in terms of results and furthermore has put you in this untangled mess that you find yourself in..
Further to this, I maintain that he is corrupt, dishonest, deceitful untruthful and devilish.. And if history reveals you are now falling into the same dishonest unethical trap and behaviour that he displays..
His treatment of Liam [Bradbery] has at times been barbaric and disgraceful. Again he’d be sacked with he’s bullying ways if there was a HR present but there’s not
His manner with clients and agents has often been deplorable.
If there was a HR department and all employees were interviewed they would all give evidence that they have witnessed behaviour that is sackable..and has forced them to be in a toxic workplace.. Don’t just ask me
Mr Somehara has delivered nothing but has taken everything out of the soul of PropertyBuyer including your credibility and your good name including your Ethics and morality
As a friend, I am deeply concerned in the future for your business and everything you have worked for..”.
[31] There was no evidence of any reply from Mr Harvey to the applicant concerning the preceding text message. It may be inferred, however, that Mr Harvey advised Mr Somehara that the applicant was aware of the Deed and/or showed the text message to Mr Somehara, i.e., Mr Somehara was later to make reference to “your lame SMS” in an email to the applicant. On 11 August 2020, Mr Somehara sent an email to the applicant, copied to Mr Harvey. That email read:
“Dear Jason,
As the director of the Development Division it has come to my attention that you have recently engaged in a potential misconduct that I believe requires immediate attention and potential disciplinary action. Without being provided with any explanation from you I have no choice but to assume that you have illegally obtained our privileged and confidential document which was the Deed of Annulment relating to [the Property].
I have provided you with an opportunity to have an open discussion with me during the business hours on 10th August 2020 but you have refused to do so and the reason you have provided was unreasonable and unacceptable. I called you this morning but still have no luck in connecting. As a result at my sole discretion I have decided to take the following actions. Do not take this up with Rich as he would not be able to help you.
(1) Review of your commission on [the Property].
You had a verbal agreement with me in relation to the commission amount you are entitled to receive on [the Property] which you claim to have introduced to Liam [Bradbery] through [real estate agent] Carl Ferris. To the best of my knowledge our agreement was as follows:
(a) Provided that you were still working in the Development Division, I will give you a 25% share in the buying commission that Propertybuyer receives from the client, even if this was a deal that came through myself. For you to qualify you must have remained in the Development Division as the only reason you are entitled to the 25% was on the basis that you are also bringing in commission to the Division which I can equally benefit from by receiving a share in your commission to compensate for what I have given you.
(b) If you seek [Liam Bradbery’s] assistance in running feasibility etc you must pay 5% of your share to him out of your 25% share.
When you first claimed that you have introduced the site to the Development Division although you technically have not qualified for (a) because you no longer work in this division, purely out of our goodwill we decided to still pay you some share in the commission. However, I am absolutely offended that you have gone and obtained our privileged document, potentially illegally, to slap it in my face. Therefore, I am no longer willing to give you any share in the commission, unless you can prove to me that you had not illegally obtained the Deed of Annulment.
You are now officially instructed that you are no longer permitted to contact any client in the Development Division, with an exception of [firm of architects] ONLY in relation to wrapping up the existing deal at [address of a property]. Needless to say, if you attempt to make contact with any stakeholders relating to [the Property] transaction there will be serious consequences.
As you can imagine I am very disappointed in what you have done and had Rich not talked me out of it I was prepared to take further actions but since he has I will give you one last chance to explain yourself. If I don’t hear from you by the close of business tomorrow which is 5pm Wednesday 12th August 2020 my decision will be final.
Unless proven otherwise, please take this email as an official warning for illegally getting your hands on our privileged document. This email is confidential between me, Rich and yourself and if we find out that you have shared any part or whole of this email with anyone else in the Propertybuyer team there will be a second warning issued.
Kind Regards,”. (underline in original)
[32] It may be recalled that the applicant had located the Property and, at this point, had conflicting information as follows:
• Mr Harvey indicated in the team meeting the commission was $90,000 on a $3.6m transaction;
• Mr Somehara indicated in an email the commission was $20,000 of which the applicant would receive $5,000 (and Mr Bradbery would receive $1,000 4);
• the Deed indicated a payment of $420,000 to the 22CA company, being a document which the applicant had accessed on the commonly-accessible S drive and which was signed by Mr Harvey in the capacity as a director of the 22CA company.
[33] As noted earlier, Mr Somehara was not an employee of the respondent and he did not have any formal supervisory or managerial authority concerning the applicant around the time preceding the dismissal. Regardless, as shown in the full text of the email above, Mr Somehara wrote to the applicant in terms which included the following:
• it had come to Mr Somehara’s attention that the applicant had recently engaged in a potential misconduct that required immediate attention and potential disciplinary action;
• absent any explanation from the applicant, Mr Somehara had no choice but to assume the applicant had illegally obtained “our privileged and confidential document”, being the Deed relating to the Property;
• Mr Somehara had provided an opportunity to the applicant to have an open discussion with him on 10 August 2020 5, but the applicant had refused to do so and attempted telephone contact from Mr Somehara had been unsuccessful.
[34] Mr Somehara’s email advised the applicant that “As a result at my sole discretion I have decided to take the following actions” (underline in original). Mr Somehara further advised the applicant: “Do not take this up with Rich as he would not be able to help you.” Mr Somehara’s email then set out matters concerning commission on the Property, arising from his description of the verbal agreement between them concerning the Property. Mr Somehara advised that as the applicant no longer worked within the respondent’s Development Division “technically” he had no entitlement to commission, but that “purely out of our goodwill we decided to still pay you some share in the commission.”
[35] Mr Somehara’s email continued that he was “absolutely offended” that the applicant “obtained our privileged document, potentially illegally”, to “slap” it in his face. Mr Somehara added that he was no longer willing to give the applicant any share in the commission concerning the Property, unless the applicant could prove to him that he had not illegally obtained the Deed. Mr Somehara further “officially instructed” the applicant that he was no longer permitted to contact any client in the Development Division, subject to certain exceptions; and that if the applicant attempted to make contact with any “stakeholders” relating to the Property “there will be serious consequences.”
[36] Mr Somehara expressed his disappointment “in what you have done”. Mr Somehara advised that if Mr Harvey “had not talked me out of it”, Mr Somehara was prepared to take “further actions”, but since as Mr Somehara and Mr Harvey had discussed matters, Mr Somehara gave the applicant “one last chance to explain yourself”, adding that if he did not hear from the applicant by 5.00pm the following day, 12 August 2020, “my decision will be final.”
[37] Mr Somehara advised that, unless proven otherwise, the email served as “an official warning for illegally getting your hands on our privileged document.” In closing, Mr Somehara advised that the email was confidential to himself, Mr Harvey and the applicant – adding that “if we find out that you have shared any part or whole of this email with anyone else in the Propertybuyer team there will be a second warning issued.”
[38] A few minutes later, at 12.28pm, the applicant responded with an email which read simply: “What a joke”. The applicant followed-up with another email to Mr Somehara (also sent to Mr Harvey) at 12.54pm which read:
“Hi Daichi,
I specifically had in writing from Rich that I was going to be paid for what I was owed as it relates to development sites as part of the development team in which case he said yes .. So in theory I am part owner 6 of [the Property] I am still an employee of propertybuyer so I am totally entitled to be privy to all aspects of this deal that includes supplementary documents.. As director of development you should be ashamed of yourself with your clandestine behaviour especially as it relates to Liam [Bradbery]. I don’t take threats likely nor will I be told who I am to speak to about this matter. As it stands it’s common knowledge within the company that you have partaken in fraudulent activities..
Kind Regards, ”.
[39] In turn, Mr Somehara sent an email at 2.11pm to the applicant (and to Mr Harvey), which read:
“Hi Jason,
How many times do I have to say all your enquiries on [the Property] has to comes through me? If you keep on going back to Rich of course you’re not going to get anything explained, this is my deal you should know this.
Good luck convincing anyone with your logic but as far as the commission goes and how it’s calculated we are 100% legit so I don’t care how much noise you make we have nothing to hide.
In case you haven’t realised your method counts and you shouldn’t need me to tell you this, you can’t illegally obtain privileged document full stop.
I’m asking you to prove me wrong, I’m happy to answer all your questions and explain it to you and I’ll be open for a proper chat, but not until you disclose how and who you got that document from and if it was obtained illegally then apology for it.
You have not been screwed over you are completely misinformed and being offered to be informed, but you are in trouble because of your lapse in judgement, that’s all. I’m very not happy champ.”.
[40] Next, at 2.50pm, the applicant sent an email to Mr Somehara (and Mr Harvey), which read:
“You are not happy champ??..
There are more smoking guns than a Clint Eastwood western.. Start proving me wrong by showing me time stamped documents NOW of the agreements and signatures of the clients and have Rich sign them for the authenticity .. Not tomorrow not in 2 hours time NOW so you can show me legally how your grand total sum of $20,000 on a$3.6mill was arrived at.. That’s a .55% fee .. Who charges that and why would Rich ever agree to such a low fee.. We are paid 2.2%. It’s that simple.. You can’t produce the documents. I have been asking for them for close to three hours. I would love to be proven wrong so I can have this sour, sour taste washed out of my mouth..
Produce convincing evidence and I will be the first to say sorry for doubting you in addition to your explanations of the below
I need evidence and you can’t produce it.. The deed of annulment and Rich’s signature that’s self explanatory.. 22CA To get from $420,000 to $20,000 that has me scratching my head but you say it’s the wrong document. Would the lawyer who wrote this be prepared to say that this is the wrong document?
The constant suggestion of $90k as well with 7 witnesses for that..
Please explain and don’t make me out to be the criminal in all of this.. If anyone else was in my position they would be demanding the same ..Start sending me all of the evidence. I found the deal and therefore I am privy to how you calculated the commission.
PS I know Mary was involved in this so was GDS. Please don’t bring them into this as I have a relationship with both of them.” (uppercase in original)
[41] At 6.39pm, Mr Somehara sent an email to the applicant which read:
“Jason it’s the principle. I can’t make any precedence of someone getting what they want through backdoor way, not even once. You need to understand that I’m suspecting your move was super dodgy and if you do that to shove it in my face of course it will push me over the line. I’m not a pushover dude.
I actually agree with you 100% how you are confused as to why $420k gets down to $20k, I really do. I think Rich triggered your alarm by saying the commission was $90k in the team meeting in the first place although I know he said that because that’s all the rest of the Propertybuyer team needed to hear to serve the purpose, but he should have pulled you aside and explain a bit more.
However the fact is very simple and the commission is legitimately $20k and I’m very happy to explain everything to you very transparently and accurately, but you must first tell me how you got your hands on the Deed of Annulment. Imagine if I got in touch with your bank or accountant to falsely obtain your financial records to make a point on something, are you going to sit there and let it slide? I am a commission paying client of Propertybuyer in this transaction and when was the last time it was ok for you to obtain their privileged information without their consent?
If you do honestly tell me how you got your hands on our privileged document and promise you will never ever do it again this one time and only one time I will let it slide and give you all the explanation you need and if you are still not convinced after that then go make your move, but you need to confess first otherwise my decision is final and you can't do anything about it.
Regarding Mary and GDS, Mary is our client before she is to you, you were only introduced to her through us and I will ask you not to contact her as I am going to consolidate her contact only to myself. I spoke to her today and she is thinking twice about buying commercial property so I am taking this client away from you. For GDS, again they are our client before they are yours so you can still contact them but that will still be a development division transaction.
Kind Regards,”. (underline in original)
[42] At 9.00pm, the applicant sent a further email to Mr Somehara, which read:
“Daichi,
Stop your nonsense and show me the legal agreements/ contracts with signatures that will justify your comms fee of $20k it’s not that hard.. Why can’t you produce it?? Why can’t you produce it? You would shut me up right now if you presented it.. Put an end to it now.. All I’m asking for are contracts surely you have access to them?
Kind Regards,”.
[43] At 9.23pm, the applicant sent a further email to Mr Somehara (copied to Mr Harvey) which read:
“Any sensible rational person would get that contract and smack me right across the face like a wet fish with it.. To shut me up.. I’ve given you 6 hours to produce it and still nothing ..
That’s what I would have done if I was clean.. produce the document immediately 6 hours ago and hit you with it.. But still nothing.
Your noise is not washing with me..
Prove me wrong Daichi you have access to all the files send me the agreement now so I can see that you haven’t shafted us. Make me look like a muppett and a fool I welcome it..
I’m prepared for it I want it ..cause it will make me feel so much better and in front of the team it will be an example of me totally unassuming the information..and I will be forever forgiving of mistaking your honour!
Do it now! We are all waiting for it
Kind Regards,”.
[44] At 10.49pm, Mr Somehara sent a further email to the applicant (copied to Mr Harvey) which read:
“Jase it’s called the pecking order. I’ve asked you to confess where you obtained the Deed of Annulment and if you don’t then you can’t get what you want.
Whether if you like it or not this is my gig and this is how it’s going to go I’m sorry.
This conversation is over mate if the next email from you does not state exactly how and who you have obtained the Deed of Annulment from and that you will never do it again I guarantee you my decision won’t be reversed.
Jase, one last email.”.
[45] At 11.22pm, the applicant sent a further email to Mr Somehara (copied to Mr Harvey) which read:
“Daichi,
I have countless emails about your requests of where that Deed of Annulment came from..(You seem very nervous?)
Why does this deed of annulment cause you so much stress? (there seems to be a repeated pattern of your concern and stress)
Please Daichi what is it about this document that stresses you, please tell me?”.
[46] At the cusp of midnight on 11/12 August 2020, the applicant sent a further email to Mr Somehara (copied to Mr Harvey) which read:
“Pecking order young son ..
If you had proof of me being wrong that part of the Pecking order is where you would stand up as a man and put this to rest right now, but you cant do it so you cant prove your $20k fee.. Show your agreements.. You are just a little boy, playing little games.. Be a man and face the truth and stop hiding behind your lies and deception and your greed.
Why can you produce an agreement. It’s now been 12 hours.. Cause you don’t have one to give and you call that pecking order.. Corrupt and inept and a liar is what you are until proven wrong…Be a man and hit me with that agreement now and I will respect you..”.
Communications on Wednesday, 12 August 2020
[47] It appears there was a telephone discussion between the applicant on the morning of Wednesday 12 August 2020, although the detail of what was said was not in the evidence. A discussion having occurred that morning is referenced in an email sent by Mr Harvey to the applicant at 10.19am on 12 August 2020 and also in other emails sent by the applicant, such as where the applicant referred to Mr Harvey having described matters on the telephone seeking to explain his reference (in the team meeting) to $90,000 commissions on the Property. Mr Harvey’s 10.19am email to the applicant (which was not copied to Mr Somehara) read:
“Jason
As discussed just now I would sincerely like to explain the structure of the deal so you fully understand the JV. It is a very different scenario to usual buy process for dev clients
you said you went digging- but I simply want to know where you found the deed there is nothing to hide with that doc it was an essential part of deal.
but for the sake of getting Daichi of his high horse and getting a resolution and paying your comms please email back where you got it
thanks.
Kind regards,”.
[48] At 11.56am, the applicant sent an email to Mr Harvey (copied to Mr Somehara), which read:
“Rich,
Please don’t insult my intelligence. You don’t have to be a lawyer to arrive at the conclusion of what your intentions were by signing this document. As I said, I am bitterly disappointed in your clandestine, under handed, unethical behaviour, you should have known better than to attempt to cheat your own staff..
As it relates to where I got the document from, that will remain confidential, as discussed it’s there with one glaring focal point. Your signature. I have further documents and information about this deal from a source outside of propertybuyer so I am waiting for you and Daichi to come clean with further details.
You said on the phone that the $90k was profit not comms.. Rich please, when asked the question what was the fee…you know the difference between what is a FEE and what is PROFIT go back to Daichi to get your story straight because it’s now becoming comical.
$420k page 2 of annulment (first attachment)
When asked the question what was the comms numerous times and with (7) witnesses your response was $90k comms and now you say that you meant profit.
$20k comms to propertybuyer (Second attachment)
It was never about the money, it was about you being fair to your staff and not cheating them of all their hard work.. As for Daichi he’s only on his high horse because he’s been exposed for being the fraudulent employee that he is. Neither you nor him could produce an agreement yesterday to justify the $20k and still as of 12/08/20 11.54am, nothing..
Rich keep your DIRTY money. It stinks and I don’t want any of it.. Give all my share to Liam [Bradbery] $5k.. Liam now gets $6k
I’m over talking about it. And I’m over dealing with the “Shonkiness” and the fraudulent behaviour of the both of you.” (uppercase in original)
[49] Thus, at this point, the applicant had advised Mr Harvey that he did not want any of the money concerning the Property and, otherwise, he was “over talking about it”. Matters, potentially at least, might have rested at that point given the applicant’s emailed advice to Mr Harvey about not wanting any of the money and that a total of $6,000 from the respondent’s commission of $20,000 should be given to Mr Bradbery. However, at 12.36pm, Mr Somehara sent an email to the applicant (and to Mr Harvey), which read:
“Jason,
Wow, really? I was in the middle of writing an email to give you everything you asked for as Rich told me you confessed the source of the document. All you had to do was not talk, now I’m going to ask you to confirm it before I send you the email.
I understand you want me to give you explanations, you said you have asked me to produce documents. Up until this time you never bothered coming to talk to me to ask the details in the first place, then one day you come punch me from behind out of nowhere with your lame SMS and an email ordering me to send you documents, using my privileged document which of course got me very suspicious of you that you compromised the system.
The documents, explanations and actions you want me to take has always been available to you, all you had to do was ASK, instead you came swinging at me and that is the only reason why you are not getting what you want before you making amends. This is my gig and I’m not going to make a single precedence of a staff taking the wrong approach and still getting what they want.
The “correct version of the Deed” is identical in content to what you have anyway, it just has all completed signatures of all parties and is dated. It might be hard to process it because you are fuming, but you are the only one who’s in the wrong here. Not us. I know you talk to other members in Propertybuyer telling them all your stories but eventually they will find out from us the truth with evidence.
If your pride is getting in the way then wait until they find out and ask them to explain for you, in the meantime I’m sure Liam [Bradbery] would be super happy to receive a “$5,000” commission instead of $1,000. But if you can grow up and acknowledged that you simply took the wrong approach, just confirm where you sourced the Deed from to prove that you have not committed a crime then we’ll also show you we did not commit one either. Simple. Then if you are happy with the explanation then take your comm after knowing that you were never screwed over. Otherwise I would take up your offer officially and let Liam know of his payday.
Kind Regards,”.
[50] At 12.40pm, the applicant sent an email to Mr Somehara (and to Mr Harvey), which read:
“Stop giving me words and show me legal documents and attachments NOW.. Shut this conversation down now… I’m waiting for the drum roll of your $20k calculation fee.. I’m awaiting to have that pie thrown in my face.. Please Daichi throw it now and we can shake hands and I can say I was the dick”. (uppercase in original)
[51] At 12.44pm, the applicant sent an email to Mr Somehara (and to Mr Harvey), which read:
“PRODUCE THE SIGNED AGREEMENT THAT LEADS TO YOUR FAMOUS $20K FEE”. (uppercase in original)
[52] At 1.25pm, the applicant sent an email to Mr Somehara (and to Mr Harvey), which read:
“As per below
“Rich told me you confessed the source of the document” That’s interesting because I would swear on the Bible that I did not and I would not disclose how I retrieved that document..
Daichi here is yet another lie.. I swear on my 5 children’s grave I gave Rich no such information. Daichi your credibility is now paper thin. Like I am waiting for your signed documents for your $20k fee.. I’m awaiting what Rich’s response is of where I received that document.. Come on mate tell me that.. Or now you are making Rich out to be the liar..”.
(increased font size, underline and bold in original)
[53] It may be noted that the applicant in fact never “confessed the source of the document”. The effect of the evidence of Mr Somehara was that the “confession” comment arose from Mr Harvey having intimated to him that the applicant may have accessed the Deed on the S drive. Given Mr Somehara’s evidence in such respects, it may be inferred that Mr Harvey was by then aware the Deed was on the commonly-accessible S drive, albeit that is not to say Mr Harvey was aware that the applicant had actually sourced the Deed from that S drive.
[54] At 1.36pm, the applicant sent an email to Mr Somehara (and to Mr Harvey). This email was also blind copied to three employees of the respondent and, it appears, may have contained the longer chain of preceding emails. The email read:
“Daichi,
Read your emails I said keep your dirty money, pay Liam [Bradbery] $6k.
Stop emailing me cause it’s now harassment
you keep digging yourself deeper (my tip to you is stop)..
One day if you gain respect from the company and it’s employees your nick name of Dodgy Daichi will be removed..
j”.
[55] At 3.50pm, Mr Harvey sent an email to the applicant (and to Mr Somehara), which read:
“Hi Jason
Please keep emails professional. There is really no need for this vitriol.
Daichi will provide a very clear explanation of how the Joint Venture was structured and how the attendant commission is calculated.
But carrying on like a pork chop does not help.
I believe I may have made a mistake calling the 90k “revenue” a “commission” at the team meeting - or maybe you interpreted it that way? Whatever the case, it is clearly outlined in the feasibility spreadsheet.
But first, we do require a clear explanation of how you came across the Annulment Deed? Just for our curiosity (and again there is nothing to hide in this document!)
Kind regards,”. (bold in original)
[56] It may be reiterated, at this juncture, that the applicant’s evidence was that Mr Harvey had stated in a team meeting that the Property sold for $3.6m and that the commission was $90,000. Mr Somehara acknowledged as much given he sent an email to the applicant which relevantly read: “I think Rich triggered your alarm by saying the commission was $90k in the team meeting in the first place although I know he said that because that’s all the rest of the Propertybuyer team needed to hear to serve the purpose, but he should have pulled you aside and explain a bit more. … However the fact is very simple and the commission is legitimately $20k …”. Then, in what was the latest email from Mr Harvey, he was suggesting to the applicant that the applicant may have misinterpreted what he said at the team meeting. That is, Mr Harvey’s email read: “I believe I may have made a mistake calling the 90k ‘revenue’ a ‘commission’ at the team meeting - or maybe you interpreted it that way?”. It cannot be left unremarked that Mr Harvey wrote to the applicant requesting that he keep emails professional and, within that same email, wrote to the applicant that “carrying on like a pork chop does not help.”
[57] In his evidence, Mr Harvey explained as follows as to the reference to “curiosity” in the preceding email:
“… Were you concerned about how Mr Low acquired the annulment deed just for your own personal curiosity?---Yes, I was.
When you [say] personal curiosity what do you mean?---Well, I was curious to know how he came across the deed, because it was a very - the way in which that deed was - you know, the way in which that deed was - just how he got it, I just wanted to know how he got it at the end of the day. What else was he poking around trying to find.
Was it a serious issue or was it a matter of mere curiosity?---It wasn’t just curiosity.”
[58] At 4.10pm, the applicant sent an email to Mr Harvey (and to Mr Somehara), copied to Mr Bradbery (the employee the applicant said should receive his share of the commission), which read:
“Hi Rich,
I no longer need to discuss anything further as it relates to [the Property].
Liam [Bradbery] is to receive a $6k fee as a commission..
I have chosen to receive $0
Leave it at that
Thank you”.
[59] The applicant described in his cross-examination that the preceding email was to defuse matters. Once again, matters, potentially at least, might have rested at that point. However, on 12 August 2020, at 4.27pm, Mr Harvey sent an email to the applicant which, in turn, set-out the text of an email that had been drafted by Mr Somehara. I have italicised and indented the text written by Mr Somehara, as set out within Mr Harvey’s own email, so as to differentiate what was written by Mr Harvey and what was written by Mr Somehara:
“Jase
this is the email that Daichi had written as the full explanation but he didn’t want me to send it until you advised the source of the doc. So putting that aside, I am sending this email from Daichi below to you in confidence so you are see the full picture.
Jason
First of all development division commission hasn’t always been a flat 2% as you’re aware, in fact some of them are quite complex you were explained clearly how they work on both Carlisle Crs and Ocean St option renos.
For Ocean St
Investor spent $140,000 on reno, sold for $2,725,000 and made $340,000 in revenue. Investor’s net profit was $140,000 which is equivalent to 100% in ROI and Propertybuyer made $60,000 in commission.
Propertybuyer commission was equivalent to 2.2% of the property price which is the result adjusted commission rate. The ratchet clause on the commission fluctuated between 0.0% to 4.4%.
For [the Property]
Investor spent $240,000 on DA, sold for $3,880,000 and made $420,000 in revenue, paid $90,000 to Westbrook. Investor’s net profit was $70,000 which is equivalent to 29.16 % in ROI and Propertybuyer made $20,000 in commission.
Propertybuyer commission was equivalent to 0.5% of the property price which is the result adjusted commission rate. The ratchet clause on the commission fluctuated between 0.0% to 4.4%.
For [the Property] Rich [Harvey] and Daichi [Somehara] are also the Investor, the client. We took out the loan of $200,000 ourselves and returned $240,000 including the interest. We did all the work, took all the risk for the development so the development profit is calculated separately to Propertybuyer commission.
When we first took on [the Property] it was still in the rising market and was expecting $800,000 in revenue instead of $420,000. Our ratchet clause was based on that so at $420,000 we’ve unfortunately hit the lower end of the ratchet clause which is fair enough considering we’ve got struck by the pandemic. In fact if I went strictly with the ratchet clause it would have been $10,000 so we actually bumped it up to $20,000.
So in a nutshell you were misinformed that the commission to Propertybuyer was $90,000, it was the revenue to the Investor of which $20,000 was paid out as commission and $70,000 to be kept as development profit.
Kind Regards,
Daichi Somehara
Kind regards
[Mr Harvey’s signature block details]”.
(bold and underline in original).
[60] The applicant’s evidence was that he did not understand what was meant in the email by “profit”, as any funds received from the sale of the Property were, he said, “commission”. Moreover, Mr Somehara was taken in cross-examination to the explanation written by him as set out in the italicised text in the preceding email. Part of what was written by Mr Somehara, and provided by Mr Harvey to the applicant by way of explanation, was, the cross-examination of Mr Somehara elicited, just inaccurate or misleading, or both (and Mr Harvey, in turn, may be taken to have known, or should have known, that parts of the email he sent to the applicant were just inaccurate or misleading, or both).
[61] As to what is set out above by way of explanation provided to the applicant, Mr Somehara’s evidence included:
• To the extent the text of the email identified that Mr Harvey and Mr Somehara were “the Investor”, Mr Somehara’s evidence was notwithstanding his own use of the word “Investor”, that “I should have said developer.”
• To the extent the text of the email identified that “Investor spent $240,000 on DA”, Mr Somehara said that, yes, he and Mr Harvey had spent $240,000 on “the whole process” of the development application. He explained as follows as to the whole process:
“The - the whole process of getting the DA approval, but not just that, that’s only a part of it. There is a principal that needed to be returned. There was an interest that needed to be paid to the investor Mary. I’m sorry, this $240,000 is inclusive of 120 grand that was paid upfront to the vendors; $80,000 for the actual DA itself, and $40,000 as an interest payment. So they’re all costs of work.”
• To the extent the text identified that “We [Mr Somehara and Mr Harvey] took out the loan of $200,000 ourselves and returned $240,000 including the interest”, Mr Somehara’s evidence was that Mr Harvey was not a party to the loan agreement and that the “We” was “referring to I suppose myself and Mark [McFarlane]”, and was “not inclusive” of Mr Harvey – and that was so notwithstanding that Mr McFarlane’s name or the 22CA company name did not otherwise appear anywhere in text.
•
[62] The following exchange occurred in cross-examination of Mr Somehara in the course of being asked about the explanation set out in the email that he had drafted and which had been cut-and-pasted into Mr Harvey’s email to the applicant:
“… So I suggest to you that that sentence there, “We took out the loan of $200,000 ourselves”, there is no reference to Mark McFarlane, no reference to Charlton Ave SPV1 Pty Ltd, was deliberately misleading?---I strongly object. It’s not misleading, it’s an explanation, and I’m not under oath, I’m not under any obligation to be 100 per cent accurate. It’s merely an email. So I don’t see where you’re - what you’re trying to derive from me, but - - -.”
[63] The cross-examination of Mr Somehara also involved questioning about Mr Harvey’s involvement in the development of the Property, as follows:
“…You in your personal capacity separately entered into an agreement with three other people, including Mr Harvey, to share in the profits received by 22 Charlton Ave SPV1 Pty Ltd from the sale of that property, correct?---On record I think it’s two, isn’t it, not three other people.
Are you saying it’s two other people?---No, two - no, two as in myself and Mark. That’s what’s on the deed. So anything between myself and Rich and Mark that’s – that’s a separate agreement I believe. So just to correct your question I have - - -
No. Sorry, could you listen to the question I’m asking you. There was a separate agreement between yourself and three other people, including Mr Harvey, to share in the profits to 22 Charlton Ave SPV1 Pty Ltd from the sale of 22 Charlton Avenue, Turramurra. Is that correct?---There was an agreement between not all four of us. There was an agreement as it says on the record between I suppose Mark [McFarlane] and myself. Rich and I have verbal agreements where we share whatever we make 50/50, and not just specifically for Charlton, but it’s just our business relationship.
So the agreement you say verbal between yourself and Mr Harvey was that you would share 50 per cent of what you received in relation to the sale of 22 Charlton Avenue, Turramurra?---We’d share. So if I make something Rich gets half. If Rich makes something I get half.
Rich makes something in what context, what do you mean by that?---Any development work that we do together.
All right. Did you have a specific verbal agreement in relation to 22 Charlton Avenue, Turramurra?---No.
…
…When the property was sold how much money did 22 Charlton Ave SPV1 Pty Ltd receive from that sale?---We received a revenue of $420,000. Now, you’ve asked when we received profit - - -
… Of that $420,000 that was received by 22 Charlton Ave SPV1 Pty Ltd how much of that was personally received by you?---Personally received by me, not including Rich?
Yes, that is the meaning of personally received by you?---Okay. I'm just trying to remember. So what’s 420 take 280, that’s - not 280, sorry, 420 takes 240, that’s 180, minus that 20 grand commission, that’s – it’s probably - I think it was August last year.
…
And how much was it, sorry, I didn't catch that?---It was just short of - does it have to be very specific or rough numbers?
No, you can give me an approximate?---Probably about 40 grand, 30 to 40.”
[64] At 6.13pm on 12 August 2020, the applicant sent an email to Mr Harvey and Mr Somehara. The applicant blind copied the email to five or six 7 other employees of the respondent (which apparently had below it the entire email chain that I have reproduced above, or at least some of the emails). The applicant’s email read:
“Gents,
I haven’t bothered to read all that tripe below.. It means absolutely nothing to me ..
Just pay Liam [Bradbery] $6K..
And Daichi you’re a bully, the way you have treated Liam in the past is deplorable and unconscionable and a sackable offence. I don’t tolerate bullies and therefore I don’t tolerate you.
I have a great sense of humour..
I shared that email of yours (attached) to perhaps 50 people and we all had a great laugh..
I read it now and I just can’t stop laughing..
Where’s that second warning champ? Director of the Development Division?.. What about the third and forth, fifth and sixth, what are you going to do.. sack me?
I have told everyone I know how dodgy you are, ripping off a man who has bent over backwards for you.. You should be ashamed of yourself.. Liam has been nothing but devoted and loyal to you.. And At the first turn you shaft him!! That’s not Liam talking that’s me.. So take it up with me cause Rich obviously wont.
j”. (bold and underline in original).
Communications on 13 August 2020
[65] On Thursday, 13 August 2020, at 5.27am, the applicant sent an email to Mr Harvey which read:
“Rich,
You have known me for 9 years. As you know this is totally out of character for me to act like this, and yours and Daichi’s secret deal has lead me to “corporate insanity”.
First with the fact that we were told it was a
a. $20k fee from Daichi then for you to say
b. it’s a $90k fee in public numerous times but then that it was actually meant to be profit.
c. Then the discovery of a deed annulment which was totally incongruent with a) and b)
d. Daichi has not disclosed or produced any signed Buyers agreements JV agreements, % splits and full clarification
e. Daichi taking legal action in relation to this matter is certainly a consideration.
f. My employment agreement states 40%”. (bold and underline in original)
[66] At 11.35am, the applicant sent a further email to Mr Harvey which read:
“Hi Rich,
As discussed I just said that all of the comms was going to Liam [Bradbery] this whole sorry saga had left a very sour taste in my mouth... If I wanted to keep digging I would but I am not.. I maintain that Daichi is dishonest, untrustworthy, deceptive and is a terrible manager to Liam, he’s behaviour is atrocious.. I maintain that the way this has been gone about is rotten to the core.. And I can’t be persuaded otherwise
If I wanted to keep digging I would then say now show me the invoices for the DA that amount to $240k? and all of the other charges that you are talking about.. Open up the book to reveal the entire money trail...I find it hard to believe that the DA cost $240,000. When GDS fee was somewhere in the vicinity of $18,000.. That is one very expensive DA just to subdivide.
I am going to leave it at this.. As you can see I am just one very disgruntled propertybuyer employee and I am sure you can see why.. Nobody wants to be cheated, deceived and lied to ..”.
[67] Mr Harvey later (at 2.42pm) sent an email to the applicant (copied to Mr Somehara) with the subject-line “Warning”. The correspondence included a “formal warning”. It read:
“Hi Jason,
I am very disappointed in your behaviour about this. It is entirely inappropriate and unprofessional to distribute our discussion to other people about this issue. You said you distributed to 50 People and laughed about it!!
You are breaching our company code of conduct in the way you are handling this issue.
I refer you to your employment agreement:
“You acknowledge that propertybuyer is concerned to protect its sensitive and confidential information, its intellectual property, and reputation and will do everything in a professional manner to uphold its reputation”
Distributing those email is undermining our reputation when you have incorrectly understood the situation and you are not treating information in a confidential way when requested.
I have asked where you got a specific document and you refused to answer.
You have refused to listen to the explanation of how the commission is calculated in this specific instance.
I am in no way trying to “rip you off” or deceive you. You have mis-understood and mis-interpreted the figures. Daichi has the entire spreadsheet to show you how this works. The $240k you refer to below is not the DA cost. It is the repayment to the investor.
Because you have acted in highly unprofessional manner I am compelled to give you a formal warning and instruct you NOT to send any emails about this issue to other team members or external parties.
Kind regards,”. (bold and uppercase in original)
[68] Mr Harvey noted the applicant said he had distributed the email to 50 people and had laughed about it. This was not challenged in the applicant’s case – except to the extent it was submitted that Mr Harvey could not have taken the statement by the applicant seriously. There was, of course, reference to this in one of the applicant’s own emails. The applicant’s evidence in such respects was as follows:
“And [y]ou did in fact say to Rich, prior to your dismissal, that you had sent the deed of annulment to some 50 people?---Prior to that, yes. The tongue in cheek - when this first happened, I didn’t realise it was so - it was so serious. It would have been the Tuesday, in response to Daichi’s email. Because I was thinking at the time, I thought to myself, “I can’t believe that I’m seeing this. Both you and Rich have gone off and opened up a second company. Because I’ve managed to find out and uncover this document, which is obviously breached my contract and it’s defrauded me, you’ve got the audacity to start accusing me and threatening me.”
[69] The applicant’s case contended that Mr Harvey did not take the 50 people comment seriously and, specifically, because that matter featured in the warning letter preceding the dismissal, reliance could not then be placed on this matter in connection with the subsequent summary dismissal (but I do not accept that is the case given all that unfolded).
[70] On 13 August 2020, at 6.14pm, Mr Harvey sent an email to employees of the respondent, attaching a copy of the respondent’s Code of Conduct, which read:
“Hi Team
Some of you may have received an email (or emails) from Jason alleging that Daichi and I were engaged in deceptive or unethical dealings with a property development deal.
I can assure this is most certainly NOT the case! I am extremely disappointed in his behaviour and the way he has reacted to this situation which is totally inappropriate and unprofessional.
Daichi and I have a business relationship and undertook a Joint Venture subdivision with Westbrook Capital.
Jason has misconstrued and mis-understood how the joint venture works, and has claimed that a deed he obtained “proves” duplicity. Again this is totally incorrect. Without going into all the details in this email, Jason is disputing the quantum of the Commission owed. As you all know, I am a very fair and reasonable person and will not withhold unduly.
With Jason’s rant I have been compelled to issue him with a warning today to desist from sending further emails which only serves to undermine the integrity of the team and the business. I will not tolerate insubordinate behaviour.
I will refer everyone to our Propertybuyer Code of Conduct (see attached) that you all received when you were first employed and expect everyone to abide by this wholeheartedly – myself included.
The objective of this code of conduct is to promote and encourage a high standard of ethical practice by propertybuyer in their dealings with other team members, other agents and their employees and members of the public. By following this code you will not engage in conduct that is detrimental to the reputation brand or interest of propertybuyer or the buying agency profession.
Kind regards.” (bold and italics in original)
[71] At 6.20pm, the applicant sent an email to Mr Harvey, which was copied to eight individuals (including Mr Somehara) with respondent-specific email addresses 8. That email read:
“Rich don’t discredit my good name and have Daichi reveal right now all of the relevant agreements and signed documents NOW to deduce his $20k fee..NOW
Kind Regards,”. (uppercase in original)
[72] At 6.34pm, the applicant sent an email to Mr Harvey, which was copied to eight individuals (including Mr Somehara) with respondent-specific email addresses. The email read:
“Rich,
To show the team I have done nothing wrong or underhanded here is what they want to see.. Yours and Daichis underhanded deal.. That was kept away from propertybuyer.. Signature page 5”.
[73] At 7.38pm, Michelle Derderyan, who is the Executive Assistant to Mr Harvey, sent an email to the applicant, Mr Harvey and Mr Somehara. That email contained the following, sensible wording:
“Rich / Daichi / Jas
Can I suggest you guys set up a meeting and talk it through together either face to face or zoom?
This is getting out of hand and it will keep going around and around on email.
This is no one else’s business other than the three of you so please all sit down and work it out.
Just had to add my two cents worth before this goes any further.
We are all adults.
Kind Regards
Michelle Derderyan
[telephone number]”.
[74] At 7.43pm, Mr Somehara sent an email to the applicant (and Mr Harvey), which was copied to seven individuals with respondent-specific email addresses. That email read:
“Jason,
As you have been instructed multiple times you are to take this up with me not Rich, I’m not going to let you take advantage of Rich’s generosity and forgiveness. I understand you’re seeking shelter with Rich but sorry he can’t help you, I’m doing this on my sole discretion.
You are again ordered not to involve other people in the team the way you have been, I know you are feeding them with your fabricated stories but learn your boundaries please don’t involve people who’s doing the right thing in your own mess.
Kind regards,”.
[75] At 7.48pm, Mr Somehara sent an email to Ms Derderyan, which read:
“Hi Michelle,
I am so sorry that you had to be copied in in these emails, I hope by you clearly stating your discomfort the offending would stop.
Rest assured we are doing everything we can to contain the situation but if you still feel that you are being involved in this against your will please do let myself or Rich know, we want you to be treated fairly and will do everything we can to protect physically and mentally safe workplace for you.
Kind regards”.
[76] At 7.55pm, Ms Derderyan, sent an email to Mr Somehara, copied to the applicant and Mr Harvey, which (again sensibly) read:
“I think its absolutely ridiculous having these emails going to the whole team.
This is between the 3 of you and it is so unprofessional.
I would like to keep the team at least semi motivated in this difficult time. Covid is tough for everybody, things are a bit different now.
This is not helping.
Kind Regards
Michelle Derderyan
[telephone number]”.
[77] At 8.01pm, Mr Somehara sent an email to Ms Derderyan, which read:
“I know and I have no excuse for this, I’m so sorry you don’t deserve this. As I wrote in the previous email I won’t include you in the correspondences anymore, if Jason keeps sending you email please report to us.
Kind regards”.
[78] At 8.08pm, Ms Derderyan sent an email to Mr Somehara, copied to the applicant and Mr Harvey, which read:
“I am disappointed by these emails. I truely am.
It feels like I am watching my kids fight except they are [ages of children].
Jason please stop cc’ing the team in on the emails. Leave everyone out of it.
Kind Regards
Michelle Derderyan
[telephone number]”.
[79] At 9.48pm on 13 August 2020, the applicant sent an email to Mr Somehara and Mr Harvey, copied to seven individuals with respondent-specific email addresses. It at least appears from Exhibit 9 that this was the email which attached a copy of the Deed, albeit it may have been attached to an earlier email - and it had also earlier been blind copied to a smaller group. The email read:
“Daichi,
Rich now that you have brought us in.. Daichi Stop your talk and reveal all your agreements .. It’s now been what 4 days ..You have nothing and everyone is watching.. Show your hands to the team and make me the fool!!!Come on mate I dare you.. cause you have nothing!!”
[80] As to the circulation of the Deed, the applicant’s written evidence was:
“73. … Right then after all that I had been through my perceptions of being betrayed, deceived, defrauded, gagged and supressed. I have now been made out to be the villain in order to make their problems go away and to cover up for what they did.
74. That is when I defended myself by requesting not to rubbish my good name and that’s when I sent the deed of annulment to the team to show them where my gross misconduct was coming from.
75. I had no idea or warning that Mr Harvey was going to bring this out into the ‘public arena’ in the way that he did on that Thursday evening.”
[81] The applicant elaborated matters in the following way in his cross-examination when asked who he had sent the Deed:
“Okay, on the last day when Rich - and I was so confused as to why he did this - On Thursday he sent an email to the entire team to say that I’d breached Propertybuyer's code of conduct, and I thought to myself - at the time I thought to myself you have to be kidding me. You’ve opened up a second company; you’ve funnelled away the bulk of commission away from Propertybuyer, and you’re displacing your misdeeds on me, as if to say I’m the villain. And yes, and then I thought to myself okay, maybe I’m going to get sacked right now, and so I said this is what it’s all about, and the people that were actually on that email trail, I just cc’d it.”
[82] As to the circulation of the Deed, the applicant further explained:
“I did. I did, because I just thought to myself, I can’t believe it; you’ve opened up a second company; you’ve defrauded both Liam [Bradbery] and me, and you’re accusing me of gross misconduct. I would have thought as a manager you would just take ownership and say, you know what, we did the wrong thing; we did the wrong thing, so let’s see if we can work it out. I was working with Rich for nine-and-a-half years, you know, and at the time I just felt utter betrayal …”.
[83] As to the team members to whom the applicant sent the email with the Deed after Mr Harvey had sent his own email to those individuals indicating the applicant had breached the Code of Conduct, the applicant said:
“… I have known these people for years and years. I didn’t want them to not know exactly what had gone on. I was thinking to myself, Rich, if you’re prepared to actually bring that out (indistinct), which is just what - all along you just tried to keep me quiet. Of course I’m going to defend myself to say well this is what all the fuss is about.”
[84] The applicant’s evidence was that at about 7.45pm that same evening, he logged-off from his computer. At some point later that evening (which must have been after Ms Derderyan’s emails seeking that the copying of emails to team members cease and the email the applicant nonetheless subsequently sent at 9.48pm on 13 August 2020), the applicant attempted to log-on again and realised that his Outlook had been disconnected by an IT employee.
Other evidence as to emails and related matters
[85] Evidence was given by Ms Derderyan to the effect that emails had been going back and forth between Mr Harvey, Mr Somehara and the applicant, and then the applicant copied the entire team in on all emails. Ms Derderyan said of the emails that they “were getting too much and very repetitive”. Ms Derderyan explained that the emails that were going around were by Mr Somehara and the applicant, so her email “was more towards them” than to Mr Harvey.
[86] Among other matters, Ms Derderyan said “the whole team was being subjected to the situation”. Ms Derderyan considered it was making everyone feel uncomfortable and not something that everyone wanted to be involved in; she said it made “everyone in the team on edge and worried about things.” For her own part, Ms Derderyan considered, and I accept her evidence, that the “situation could have been handled differently, professionally and without the involvement of the team.”
Dismissal – 14 August 2020
[87] Mr Harvey said in his evidence that “due to the serious nature” of the confidentiality breach and the applicant’s “rash actions about this issue”, he had to take “swift and decisive action to stop the damaging emails and protect the reputation of the business and the morale of the team, and unfortunately terminate his employment summarily.”
• When Mr Harvey was asked about having earlier given evidence that the Property was the only development deal that had been subject to a joint venture arrangement, Mr Harvey said that with other clients of the respondent, a similar commission arrangement had been used, a sliding scale. Mr Harvey could not recall how many clients, but it was probably three or four other development clients.
• Mr Harvey said that the $20,000 that was received by the respondent was paid by the special purpose vehicle and that came out of the $180,000 that was split between the four individuals. In the result, the amount actually received was subject to a deduction applied to that in order to pay the respondent $20,000. In response to a question “So you didn’t actually receive $45,000?”, Mr Harvey’s answer was “Well, these are approximate numbers.”
• Mr Harvey agreed he represented to the applicant that of the money that had been invested in this development deal, payments were made in respect of a development application (“DA”), and that the money that the investor (Ms Zlomislic/Pawn Pty Ltd) put into the opportunity was used to fund a DA. When it was put to Mr Harvey that he had represented to the applicant that the DA cost approximately $200,000, Mr Harvey said “I don’t recall. Mr Somehara was across all the numbers. So there were consultants, DA fees. There was a range of costs that were required” and he otherwise could not recall the cost of the DA and did not see it as that was Mr Somehara’s “domain”.
• Mr Harvey agreed that the names and contact details of the Property Owners was confidential information (confidential to the respondent). He also said it was the responsibility of the applicant “to bring development deals to the Propertybuyer division”. Here, Mr Harvey agreed, the development deal that eventuated was the result of contact by Mr Somehara with the Property Owners – and the agreement which ensued was between the Property Owners and the 22CA company (not the respondent) of which Mr Somehara was a director.
[100] Although Mr Harvey suggested in his evidence that an agreement existed between himself and Mr Somehara in relation to the matter of the Property, being an agreement by which, his evidence confirmed, he had received approximately $45,000, it transpired there was, in fact, no written agreement in such respects. As such, there was nothing documented in evidence as to how it came to pass that Mr Harvey received approximately $45,000 in relation to the 22CA company profit from the Property, and in circumstances where Mr Harvey was neither a director nor a shareholder of that company. To reiterate, in such respects, the applicant had located the Property in his employment with the respondent. Mr Somehara set-up the 22CA company using the information about the Property which the applicant had provided to the respondent, for its purposes. Mr Harvey thought he was a director of the 22CA company and had intended to be a shareholder, but he was not a director and never became a shareholder. Regardless, Mr Harvey received approximately $45,000 under the undocumented agreement between himself and Mr Somehara concerning the Property sourced by the applicant.
[101] Aspects of Mr Harvey’s evidence were, I consider, unsatisfactory in response to various questions put to him. Bearing in mind that this case relevantly turned on matters including the reason why the applicant was concerned about the commission he was to receive apropos the Property in connection with what led to the summary dismissal, Mr Harvey’s evidence was characterised by numerous answers to the effect that he did not know and/or could not recall. As to the answers which were the effect that he did not know, but the detail would be known by Mr Somehara, aspects of Mr Somehara’s evidence were also, I consider, unsatisfactory.
[102] Mr Somehara confirmed that in October 2019 he established the 22CA company, of which he is a director, secretary and shareholder (and Mark McFarlane is the only other director and only other shareholder). Mr Somehara denied that Mr Harvey was initially also going to be a director and shareholder of the 22CA company (contradicting Mr Harvey’s evidence, at least as to him effectively intending to become a shareholder). Then, when Mr Somehara was asked if he ever had any conversations with Mr Harvey about Mr Harvey becoming a director and shareholder of the 22CA company, Mr Somehara’s evidence was: “Not that I remember.”
[103] Mr Somehara’s evidence was that the decision to start the 22CA company was a decision that he and Mark McFarlane made together, but it was not just the two of them. When asked who else was involved in the decision, Mr Somehara responded “Probably that’s – that’s my private - well, what do you call it, confidential, isn’t it, it’s my business matter.” When pressed about the matter, Mr Somehara (eventually) said he had discussions about the commencement of the 22CA company with Mr Harvey and Mr McFarlane. Mr Somehara indicated that he “probably” gave Mr Harvey updates and some reports about what he was doing. As to “the deal itself”, the evidence was that it was all up to Mr Somehara; he made the day-to-day decisions and there was no “massive involvement” from Mr Harvey. Mr Somehara said these conversations occurred both before and after the establishment of the 22CA company.
[104] After much back and forth in cross-examination (including instruction from me to answer questions put to him), the effect of Mr Somehara’s evidence was that he found potential addresses and development site properties from “… real estate agents, direct to vendors, and in many different ways”. Mr Somehara later said he would discuss those properties and addresses with Mr Harvey about whether they would be suitable to recommend to clients and/or for development by him or Mr Harvey.
[105] Mr Somehara said that Mr Harvey’s name and signature in the “Director” section of the signature page of the Deed was a “simple error” because Mr Harvey was not and has never been a director of the 22CA company; the Deed (in the same terms as that signed by Mr Harvey) was signed by Mr Somehara and Mr McFarlane, because it was they who were the directors of the 22CA company.
[106] Against the background of what was set out in the Deed as to a payment of $120,000 to the Property Owners, Mr Somehara explained that money was borrowed from Ms Zlomislic. Part of the development process agreed to be undertaken by the 22CA company was the approval of a development application by Ku-Ring-Gai Council to consent to the subdivision of the property into two lots. As to the development application, Mr Somehara “outsourced, employed a town planner” to do that work with payment made by the 22CA company. Mr Somehara said the cost of preparing this development application that eventually was approved was “From memory I think it was anywhere between 60 to 80 grand I’d say”.
The dismissal
[107] Against the background of what had unfolded preceding the summary dismissal, Mr Harvey’s evidence as to that dismissal was as follows:
“I terminated Mr Low for three reasons: 1) breach of confidentiality; 2) insubordination; and 3) creating significant dissent. The breach of confidentiality was the fact that he said in an email, ‘I’ve sent the deed of annulment to over 50 people and had a good laugh about it.’ Now, for me, that was the straw that broke the camel’s back.
…
I did give him a warning for that conduct prior to that - - -
…---So, sending out a confidential deed like that one is absolutely a breach of trust.”
[108] In later evidence, Mr Harvey explained it was the matter concerning sending information to 50 people that was “the primary breach of confidentiality” and later clarified “Well, I’m not referring to any secondary, that was the one” – relevantly, thereby, this was the matter of breach of confidentiality as referred to by Mr Harvey in the dismissal letter. Mr Harvey said that a number of factors led to the summary dismissal, including the 50 people matter/comment being the “straw that broke the camel’s back”, elaborating “That was what I considered as serious misconduct”. Mr Harvey took this matter seriously because the applicant said that this is what he had done:
“I had no idea who he’d sent it to, but I took it seriously. He put it in writing. Am I, as a director, to dismiss that? I have to take steps to protect my company.”
[109] It is unclear if the applicant actually sent emailed information to anyone outside the respondent’s business. Regardless, the applicant personally indicated that he had taken the step of sending information to 50 persons - which inherently meant individuals outside the business given it had only about five employees (being information which involved or concerned not only the commissions dispute but also the Property Owners, who were clients of the respondent). Mr Harvey did not immediately dismiss the applicant over this matter/comment about 50 people; rather, it was addressed initially in the formal warning letter, being a warning letter which also unambiguously instructed the applicant not to send any (further) emails about the issue to other team members or external parties.
[110] The submissions for the parties concerning the Code each particularly referred to Pinawin T/A RoseVi.Hair.Face.Body v Edwin Domingo 12. Other cases were referred to, including Ryman v Thrash Pty Ltd13. Drawing from the principles derived from those authorities, I turn first to the matters addressed in Mr Harvey’s letter in which he outlined the reasons for the dismissal.
Ground 1: You have breached confidentiality by sending the Deed of Annulment to other parties - this is a serious breach of confidentiality and your employment agreement.
[111] The Deed is a document which contains a clause reading:
“10 CONFIDENTIALITY
10.1 Both parties agree to keep the contents of this Deed confidential and not to disclose the content thereof unless compelled to do so in a Court of Law.
10.2 Further both parties agree that neither party shall communicate in a disparaging or any manner the facts and circumstances that form the basis of this Deed unless so required by a Court of Law.”
[112] Thus, the Deed is, by operation of its clause 10, a document that is confidential as between the Property Owners and the 22CA company.
[113] The Deed was inadvertently stored or filed by Mr Harvey on the S drive of the respondent’s computer systems; it is unclear how Mr Harvey came to have the Deed given the confidentiality clause, given he was not one of the Property Owners and given he was neither a director nor a shareholder of the 22CA company. It may be inferred that Mr Harvey had the Deed because he thought at the time of signing that he was a director of the 22CA company, given his erroneous signing of the Deed in the capacity of a director and/or because of the arrangements he otherwise described between himself and Mr Somehara concerning informal or undocumented profit sharing.
[114] The applicant was privately or secretly informed by an employee that a copy of the Deed was on the S drive, albeit it is otherwise common ground that the S drive was accessible to all or most team members. Nonetheless, the fact that Mr Harvey had inadvertently stored a copy of the confidential Deed on the S drive did not diminish the fact this was a confidential document, that is, confidential to the Property Owners and the 22CA company. As outlined earlier, it is unclear who, if anyone, outside the business that the applicant may have provided with information concerning the Property. Regardless, it is clear from the face of the applicant’s own email correspondence that he personally advised that he had disseminated information in such respects. That is, the evidence indicated that the applicant sent an email with text including: “I shared that email of yours (attached) to perhaps 50 people and we all had a great laugh”. The applicant now comes before the Commission saying that what he personally conveyed in such respects was, for example, a “tongue in cheek” comment. However, what the applicant wrote spoke for itself and it is not surprising that Mr Harvey took at face value what had been written personally by the applicant. I do not accept the applicant’s description of this comment as being (or, perhaps more relevantly, as being intended to be received by his employer as) “tongue in cheek” or having any similarly benign intent or connotation given the tenor of the communications generally.
[115] Moreover, following the formal warning, the applicant circulated the Deed and at least some parts of the preceding email chain/s to team members. Following the formal warning, the applicant did not circulate the Deed to employees for a purpose that was specific to business operations of the respondent; he circulated the document and at least part of the email chain/s to his team members for his own purposes. That is, the applicant did this in furtherance of his concerns about the amount of money he and/or Mr Bradbery were given to understand they would receive in connection with the Property from the commission to the respondent, coupled with his concern about the actions of Mr Harvey and Mr Somehara in connection with the Property. In particular, and the applicant’s evidence emphasised this matter, he was concerned that Mr Harvey determined to send an email to team members about the respondent’s Code of Conduct when, for his own part, the applicant was deeply concerned about the conduct of Mr Harvey and Mr Somehara themselves in relation to their own dealings concerning the Property. 14 The applicant’s case contended that his email to team members was effectively in response to Mr Harvey’s Code of Conduct-related email and otherwise sent as a type of reply-all in a type of reputational “self-defence”. Regardless, in so doing, the applicant disregarded the instruction he had been given in the formal warning – and he did so on more than one occasion.
[116] Even if it were accepted that the applicant may not have disseminated information to 50 people prior to the formal warning (the evidence, other than the applicant having written he had done this, was unclear), I find that, following the formal warning, the applicant did breach confidentiality by sending a copy of the Deed to all (or most) team members together with part or parts of correspondence in the preceding email chain/s and additional new emails. Those team members of the respondent were not directly personally and/or professionally involved in the arrangements concerning the Property, dispute about the commissions concerning the Property or similar.
[117] In relation to the foregoing matters, it may be accepted that the applicant engaged in “a serious breach of confidentiality” as outlined in the dismissal letter.
[118] The Property Owners were clients or customers of the respondent. The employment agreement between the applicant and the respondent read, in part:
“(f) Confidential Information means all information, except to the extent that it is generally available to the public (other than due to a breach of this Agreement), of which You become aware or generate in the course of, or in connection with, employment with the Employer, of a commercial, operational, technical or financial type relating to:
(1) the Employer or a related entity (as that term is used in the Corporations Act 2001) to the Employer; and
(2) any customer or client of the Employer,
and includes without limitation, each of the following:
A information which the Employer identifies as confidential;
B information which a reasonable person in Your position should understand is confidential;
C trade secrets and intellectual property;
D agreements, arrangements or terms of trade with clients, customers and suppliers or prospective clients, customers or suppliers;
E names, addresses (including email addresses), phone numbers and all other contact information of sellers, buyers, prospective sellers and buyers, any property owner (including their employees, contractors and representatives) on whose behalf a property is managed by the Employer;
…
P customer/client details and records including, but not limited to, all personal and financial information revealed by customers/ clients; and
Q …”.
[119] Clause 4.1 of the employment agreement dealt with the applicant’s duties. Clause 4.1(d) provided that the applicant must “comply with all lawful orders and instructions given by the Employer”. Clause 13.1 of the employment agreement dealt with “Confidential Information”. It read:
“13.1 You agree that at all times both during Your employment with the Employer or after the termination of Your employment with the Employer, You will:
(a) use Confidential Information for the sole purpose of performing Your Duties with the Employer;
(b) keep confidential all Confidential Information, other than Confidential Information You are required to disclose in the course of Your normal Duties, that is or has become public knowledge (other than as a result of a breach of confidentiality by You), or that You are required by law to disclose;
(c) immediately notify the Employer of any suspected or actual unauthorised use, copying or disclosure of Confidential Information;
(d) provide assistance reasonably requested by the Employer in relation to any proceedings the Employer may take against any person for unauthorised use, copying or disclosure of Confidential Information; and
(e) within 24 hours of Your termination of employment for any reason, delete all copies of Confidential Information on all devices belonging to any entity other than the Employer (including ipads, smartphones and desktops). If required by the Employer, you will provide written confirmation of having done so …”.
[120] The manner in which the applicant dealt with the Deed, in circulating it to team members in the way he did and the purpose/s he did, was, as set out in Ground 1 of the dismissal letter, a serious breach of the employment agreement. That is, the applicant had sourced the Property in the course of his employment and was expecting a share of commissions from the respondent in connection with the Property (greater than the admittedly-conflicting amounts that were subsequently advised to him). The applicant accessed the Deed, which was on the S drive on the respondent’s computer systems, by virtue of being an employee of the respondent and by virtue of having team member-only access to the S drive. The applicant did not email a copy of the Deed to other employees for any purpose that was connected with the performance of his duties (or the performance of other team members’ duties); he did so for his own purposes, which were retaliatory-type.
Ground 2: “You have breached company confidence and trust. It is a serious misconduct to create dissent amongst team members by continuously sending emails about a private issue to the entire team with unfounded allegations, and unprofessional and vitriolic language.”
[121] I find there were objectively-based grounds for Mr Harvey to indicate in the dismissal letter that the applicant had “breached company confidence and trust”; the contents and tenor of the emails sent by the applicant in such respects speak for themselves. However, contrary to what was written in the dismissal letter, there was no evidence of serious misconduct caused by the applicant creating “dissent amongst team members” as a result of “continuously sending emails about a private issue to the entire team”. Taken at its highest, the evidence of Ms Derderyan as to such matters was: that the emails “were getting too much and [were] very repetitive”; that she personally had sent correspondence sensibly suggesting to the applicant, Mr Harvey and Mr Somehara that they sort matters out between themselves; and, in a hearsay-type way, she suggested that all employees were feeling uncomfortable about being involved in something in which they did not necessarily want to be involved - resulting in employees being “on edge and worried about things.” The matters described in the evidence do not amount to the applicant engaging in “serious misconduct to create dissent amongst team members by continuously sending emails”. However, the emails were, as Mr Harvey wrote, “about a private issue” - namely commissions payable to the applicant and/or Mr Bradbery and the arrangements between the Property Owners and the 22CA company.
[122] I find that the allegations at the core of the applicant’s concerns as disseminated by email/s to team members were not necessarily, as described in the dismissal letter, “unfounded allegations” - but the applicant’s email/s most certainly did include, again as described in the dismissal letter, “unprofessional and vitriolic language”; and the emails setting matters in an unprofessional and vitriolic way were sent to all or most of the respondent’s team members. (As to unprofessional and vitriolic language, the same criticism of course may be made about Mr Somehara’s emails to the applicant - including, but not limited to - Mr Somehara’s strongly-worded, but misplaced, allegations about illegality and the like. Moreover, Mr Harvey’s reference to the applicant carrying on like a “pork chop” was also unprofessional.)
Ground 3: “Insubordination. You continued to send emails about the issue to the team even when I had specifically warned you to stop and you failed to follow a reasonable instruction. You have also refused to comply when asked about where you sourced the Deed.”
[123] At 2.42pm on 13 August 2020, Mr Harvey sent an email to the applicant with the subject-line “Warning”. The emailed correspondence included a “formal warning”, which relevantly read:
“Because you have acted in highly unprofessional manner I am compelled to give you a formal warning and instruct you NOT to send any emails about this issue to other team members or external parties.” (bold and uppercase in original)
[124] The applicant’s evidence was that on 13 August 2020, at 6.14pm, Mr Harvey sent an “email to the entire team to outline how I had engaged in gross misconduct”. As to this, the applicant’s evidence was that this was when he defended himself “by requesting not to rubbish my good name and that’s when I sent the deed of annulment to the team to show them where my gross misconduct was coming from”.
[125] Thus, it is common ground that, following Mr Harvey’s formal warning to the applicant not to send any emails about the issue to other team members or external parties, the applicant subsequently sent emails (and/or the preceding email chain) to all team members including attaching the Deed. The action of sending the email was said by the applicant to have been in response to Mr Harvey having sent his email to all staff about the Code of Conduct. Given it is a matter of common ground that the applicant sent the Deed and further emails to team members after the formal written instruction had been given to him just hours earlier by Mr Harvey, I find the applicant did act in breach of an instruction that had been expressly conveyed to him in the formal warning from Mr Harvey not to send any emails about this issue to other team members (or external parties).
[126] As to the second matter within Ground 3 of the dismissal letter, namely, “You have also refused to comply when asked about where you sourced the Deed”, it is common ground that the applicant refused to advise Mr Harvey (and Mr Somehara before him) how he had obtained a copy of the Deed – even under threat by Mr Somehara of entirely withholding the payment of any commission to the applicant concerning the Property until that information was forthcoming. Despite Mr Somehara’s assertion in an email that the applicant had “confessed the source of the document” to Mr Harvey, the applicant never informed Mr Harvey that he had obtained a copy of the Deed from the S drive, being a drive accessible to most or all employees of the respondent. It would have been open to the applicant to have advised that he obtained the Deed from the commonly-accessible S drive, but he declined to do so – and, it may be noted, this refusal by the applicant to advise that the Deed had been obtained from the commonly-accessible S drive was around the time that there were increased security concerns due to the loss of a significant amount of money following some form of external breach or hacking of the respondent’s computer systems.
Conclusion concerning the Code
[127] To return to the Code, the summary dismissal provisions provide that “It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. …”. I find that each of the three grounds outlined in the dismissal letter has largely or wholly been made out, subject to the provisos I have outlined above.
[128] The applicant’s purposeful actions objectively gave cause for Mr Harvey’s belief on reasonable grounds that the applicant’s conduct was sufficiently serious to justify immediate dismissal. Moreover, matters did not require investigation, i.e., the evidence showed that the matters addressed in the dismissal letter were common ground or otherwise uncontested in the oral or documentary evidence itself. That said, I note the evidence of the applicant in the following respect:
“So it’s correct that what your state of mind might have been on Wednesday was one thing, but completely changed the following day following an assertion regarding the employer’s rights, correct?---Well, at the time I just thought to myself I can’t believe that I’m being accused for gross misconduct when two directors have gone and opened up a second company. So I merely - I mean how else could I have done that? I mean I’d been gagged for long enough. The pressure - I was put in a no-win situation. If I was to say nothing, Daichi and Rich can go and do that again to another employee without any recourse. If I were to say something, I lose my job. If they didn’t open up that second company I’d still have a job at Propertybuyer.”
[129] Regardless of what the applicant expressed in relation to such matters, I find the summary dismissal of the applicant by Mr Harvey/the respondent was Code-compliant.
[130] In view of my finding that the dismissal was Code-compliant, it is unnecessary to deal with all the submissions of the parties advanced on the alternative bases of considerations about a summary dismissal which was found not to be Code-compliant. However, I will add in closing that I am not unsympathetic to some of the applicant’s concerns in relation to the Property, albeit those concerns involved many plainly ill-considered words and actions, as well as some misconceptions (for example, the Deed did not identify “commission” as such). In the end, the applicant had sourced the Property and he had, I consider, a reasonable expectation that the respondent, through his employer Mr Harvey (and Mr Somehara), would be above-board with him about the Property. The applicant opined that he “deserved to know” considering that he was the person who had “actually found the deal”.
[131] With the benefit of hindsight, a better approach may have been for Mr Harvey to have provided the applicant with timely, relevant and correct information; and, equally, it would have been a better approach for the applicant to have adopted a more professional approach to his concerns that he was being “short changed”. Unfortunately, the applicant was given information (to the extent information was in fact contemporaneously provided to him – for aspects of the detail of matters relevantly came about only through Notices to Produce in the proceedings) about the Property that was, at times, conflicting, incomplete and/or wrong. This occurred in circumstances where the applicant was a commission-reliant employee and, as he noted, “was relying upon Rich Corporation to pay the fair and honest amount for commission on development sites.” Moreover, among other matters, it emerged only in evidence in the proceedings that it was Mr Somehara who had determined, acting on the authority, it seems, of Mr Harvey, how much commission would be paid to the respondent concerning the Property. This was in circumstances where Mr Somehara and Mr Harvey otherwise received approximately $45,000 each as a result of the undocumented arrangement or agreement they struck as between themselves concerning the Property in connection with the 22CA company dealings. Last, I note that various questions were put to Mr Harvey by counsel for the applicant which ultimately were not pressed given the repeated objections by counsel for the respondent essentially concerning the privilege with respect to self-incrimination apropos the Corporations Act 2001 (Cth).
Conclusion
[132] Given my findings concerning the Code, an order dismissing the applicant’s application for an unfair dismissal remedy issues in conjunction with these reasons.
COMMISSIONER
Appearances:
R Kumar of counsel for the applicant.
A Smorchevsky of counsel for the respondent.
Hearing details:
2021.
Sydney:
March 11 and 31.
Printed by authority of the Commonwealth Government Printer
<PR728954>
1 Note: the applicant’s evidence incorrectly indicated (at paragraphs 25 and 26 of the evidence-in-chief) that the email was sent to Mr Somehara rather than to Mr Harvey.
2 The opening submissions for the applicant included the following (albeit there was no direct evidence concerning what was described in that submission):
“PN93 Sometime in mid-2019, Mr Low, Mr Bradbery and Mr Somehara had a conversation in which it was agreed that instead of the 40 per cent provided in the commission structure document - clause 3.2.1 of the commission structure document - Mr Low would receive 25 per cent of any payment received by Propertybuyer from the sale of [the Property] and Mr Bradbery would receive 5 per cent. Mr Low understood from subsequent team discussions that Propertybuyer would be remunerated in the typical way in respect of this transaction by receiving payment of approximately 2 per cent of the sale price of the property plus GST.”
3 The evidence was unclear as to whether all employees (and/or independent contractors), as team members, had access to the S drive. The evidence of the applicant and Mr Harvey suggested all employees had access; Ms Derderyan said that two employees may not have had access to the S drive.
4 Note: It appears, at least on Mr Somehara’s description, that the applicant would receive $5,000 and, from that amount, the applicant would pay $1,000 to Mr Bradbery resulting in the applicant receiving $4,000. On the other hand, various emails from the applicant suggested that, at least on the $20,000 figure, he would receive $5,000 and Mr Bradbery would receive an additional $1,000.
5 There was no evidence about any such opportunity being given to the applicant to have a discussion with Mr Somehara about commissions on 10 August 2020. Rather, the evidence indicated that the first relevant communication about commissions (consequent upon the initial emails) was in the telephone meeting between the applicant and Mr Harvey the day following, 11 August 2020.
6 It cannot be accepted that the applicant was a “part owner” of the Property. I take the applicant’s reference to “part owner” to be a reference to proprietorial-type reference to having pecuniary interest in relation to commissions and the like concerning the Property.
7 There are five names with respondent-specific email addresses and one seemingly-generic respondent email address identified as being the “Bcc:” recipients.
8 The applicant originally sent the blind copied email to six respondent email addresses. This later 6.34pm email expanded the copied email recipients to eight respondent-specific email addresses. Given the evidence there were five employees around the time of the dismissal (including Mr Harvey), it appears the email was sent to persons who may have been independent contractors as well as employees working within the respondent’s team.
9 The deed of loan facility was signed by Ms Zlomislic and another director of Pawn Pty Ltd; and, for the 22CA company, by Mr Somehara and Mr McFarlane. Clause 4.4 of the deed of loan facility provided that interest was fixed at $40,000 and would be deducted from the facility at the time of drawdown (i.e., the borrower will drawdown $200,000 but will repay the sum of $240,000 on the repayment date).
10 Exhibit 5 was the subject of a Notice to Produce in the proceedings, namely, “22 Charlton Av SPV1 Pty Ltd Agreement to pay Buying Commission to Property Buyer” signed on 2 December 2019 by Mr McFarlane as “Director 1” and Mr Somehara as “Director 2”. Exhibit 5 set out a “Sliding scale commission for PB [Property Buyer].”
11 I should note that, on the evidence, Mr Somehara never contemporaneously explained matters to the applicant. Taken at its highest, Mr Harvey set-out certain information within his own email dated 12 August 2020 with the advice that “this is the email that Daichi had written as the full explanation but he didn’t want me to send it until you advised the source of the doc. So putting that aside, I am sending this email from Daichi below to you in confidence so you are see the full picture”. It also may be noted this email identified that the Property had sold for “$3,880,000” with a commission to the respondent of $20,000, whereas Mr Harvey had earlier advised the applicant and several other employees during a team meeting on 22 June 2020 that the Property had sold for $3.6m with a commission of $90,000.
12 Pinawin T/A RoseVi.Hair.Face.Body v Mr Edwin Domingo [2012] FWAFB 1359.
13 Ryman v Thrash Pty Ltd [2015] FWCFB 5264.
14 It may be noted that the documentary evidence appears to indicate that the applicant blind-copied the Deed and certain emails to some team members prior to Mr Harvey’s email about the Code of Conduct.
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