Makdessi v Millennium Security Specialist Services Pty Ltd - [2025] NSWPICPD 3

DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY A MEMBER
CITATION:	Makdessi v Millennium Security Specialist Services Pty Ltd [2025] NSWPICPD 3
APPELLANT:	George Makdessi
RESPONDENT:	Millennium Security Specialist Services Pty Ltd
INSURER:	QBE Workers Compensation (NSW) Limited
FILE NUMBER:	A1-W9195/23
PRESIDENTIAL MEMBER:	Acting Deputy President Geoffrey Parker SC
DATE OF APPEAL DECISION:	20 January 2025
ORDERS MADE ON APPEAL:	1. The Member’s Certificate of Determination dated 27 February 2024 is revoked. 2. I determine that the respondent’s defence under s 11A of the Workers Compensation Act 1987 fails. 3. The matter is remitted for determination by an alternative Member of the Commission in accordance with these reasons.
CATCHWORDS:	WORKERS COMPENSATION – section 11A of the Workers Compensation Act 1987 – reasonableness of action of the employer following instruction from third party shopping centre – whether there was a proper basis for the Member determining the reasonableness of the employer’s action in suspending the worker in response to the demand of the third party – Jeffery v Lintipal Pty Ltd [2008] NSWCA 138 considered and applied
HEARING:	On the papers
REPRESENTATION:	Appellant:
Mr J Malouf, counsel
Law Partners Personal Injury Lawyers
Respondent:
Mr F Doak, counsel
Hicksons Lawyers
DECISION UNDER APPEAL:	Makdessi v Millennium Security Specialist Services Pty Ltd [2024] NSWPIC 88
MEMBER:	Ms C McDonald
DATE OF MEMBER’S DECISION:	27 February 2024

INTRODUCTION

This is an appeal from a Certificate of Determination dated 27 February 2024.
The Commission made an award for the respondent.
The appeal, comprising 18 grounds, seeks to have the Certificate of Determination revoked and in its place an award for the appellant for weekly benefits as claimed.
For the reasons that follow, the appeal is allowed and the Certificate of Determination dated 27 February 2024 is revoked.
The defence under s 11A is re-determined by me. The appellant’s psychological injury was not caused by reasonable action taken or proposed to be taken by the respondent with respect to transfer or discipline.
The matter is remitted to a different non-presidential Member for determination consistent with these reasons.

BACKGROUND

The appellant was employed by Millennium Security Services Pty Limited (Millennium), the respondent, as a security guard at the Stockland Shopping Centre Merrylands.
There was a robbery at the shopping centre. At the direction of Stockland, Millennium suspended the appellant and his fellow employee, Mr Dimian, pending investigation of the events. The investigation exonerated the appellant. However, Stockland gave a further direction that the appellant was not to be re-employed at the Merrylands premises. The appellant alleged psychological injury on 18 February 2023. The respondent conceded injury.
The issues before the Personal Injury Commission (Commission) were:
(a) whether Millennium had made out its defence under s 11A of the Workers Compensation Act 1987 (the 1987 Act), and, if not,
(b) the period for which Mr Makdessi was incapacitated for work.
The Member determined the first issue against the appellant and did not make any determination on the issue of incapacity.

THE MEMBER’S REASONS FOR DETERMINATION

To gain an understanding of the Member’s reasons I set out briefly her summary of the evidentiary materials acknowledging that the appellant disputes in multiple respects the Member’s factual conclusions.
The Member quoted the injury as pleaded by the appellant in the Application to Resolve a Dispute (ARD). Because it is of some significance to the way in which the Member approached her determination of the matter, I set the pleading out:
“The [appellant] was employed as a security officer for the Respondent and was based at Stockland Mall, Merrylands NSW. The [appellant] was accused of being complicit in a robbery offence in the mall. The [appellant] was suspended with pay while an investigation was conducted without fair due process/opportunity to respond.
While the employer had exonerated him (without a formal apology [or] acknowledgement of harm), the [appellant] continued to be ostracised by the subject employer with the [appellant] being deemed ‘a risk’ on site/premises.
As a result of the accusations and demonisation he underwent, the [appellant] sustained psychological injury.”
The date of injury nominated by the appellant in the ARD was 18 February 2023. The precise date of injury alleged in the ARD was of significance to the Member’s reasoning.
Mr Makdessi reported to Majed Homsi, the site manager, and Mikhail Fajloun, the account Manager.
The Member summarised the relevant portion of the evidence from Mr Makdessi and Mr Dimian, a fellow security officer. She set out the evidence of Dr Latif, Mr Alameddine, a psychologist, and Dr Anand, a psychiatrist. She noted the claim form and its description of the events.
The Member thereafter summarised the evidence of the respondent.
She noted:
“A s 78 notice dated 14 June declined the claim on the basis that the injury was … predominantly caused by reasonable action, taken or proposed to be taken with respect to discipline and transfer under s 11A. The decision was confirmed in a review decision dated 19 October 2023. A further notice was issued on 20 October 2023 setting out Millennium’s case in detail. The statements on which Millennium relies were attached to that notice.”[1] (my emphasis)
[1] Makdessi v Millennium Security Specialist Services Pty Ltd [2024] NSWPIC 88 (reasons), [32].
The Member noted from an undated letter offering employment to Mr Makdessi:
(a)    the letter required Mr Makdessi to work at Stockland Merrylands “or any other location as directed by the company in accordance with operational requirements”;
(b)    Mr Makdessi’s employment was subject to a probationary period of six months during which Millennium could terminate his employment on one week’s notice if it was not satisfied for any reason, and
(c)    the offer letter referred to Millennium’s Code of Conduct and said that Millennium has “the right to suspend you from duties” when “necessary to adequately investigate allegations, or suspicion of misconduct, or impropriety against or involving you.”[2]
[2] Reasons, [33].
Mr Fajloun provided a statement dated 9 June 2023 in which he said that about 17 February 2023 Walid Farhat (a Stockland manger) advised him that following investigation into a break and enter at a retailer in the shopping centre, it was discovered that CCTV cameras were non-operational at the time of the break in. Mr Farhat told Mr Fajloun that his credentials had been used by someone other than himself to alter the CCTV recording time.
Mr Fajloun went to the shopping centre and met with representatives of Stockland. He said:
“During the meeting we were advised that there was footage of the claimant George, other guards Nabil, Fitzy and Majed entering and leaving the office on the dates and during the time range. George Makdessi and Nabil had been in the office when the cameras were altered. George left the office for a period and Nabil was in the office alone.”[3]
[3] Reasons, [35].
Mr Farhat contacted Mr Fajloun and said that Stockland head office had asked that “George and the other guard” be stood down pending the investigation. Mr Fajloun said:
“After the phone call was concluded I called George and the other guard into the office with Majed as their direct line manager and updated them as to where we were up to in the investigation. I prefaced my conversation with an explanation that Millennium was obliged contractually to adhere to the requests of the client and that policy and procedures underpinned any action taken or proposed to be taken by myself at the request of the client. I then advised them that the client had communicated an instruction that they be stood down with full pay pending the outcome of the investigation. … The guards confirmed understanding of the procedures that were to be followed and commented that they were aware it was company protocol and procedure we had to follow as part of our contract with Stockland. I also told them they could call me at any time if they needed to talk and reminded them of support via the Assure helpline.
On Monday the 20th February I sent the allegation notice out as had been discussed. The notice was issued the next business day rather [than] the same day as I was conscious of the next day being a weekend. Having regard to the guards’ welfare, the notice was sent on the Monday and the Assure Helpline support outlined which provided counselling services.”[4]
[4] Reasons, [37].
Mr Fajloun sent an email to Mr Makdessi dated 18 February 2023 headed “Notice of Stand Down (with pay) pending investigation into alleged misconduct.” The email provided:
“Hi George,
Please be advised as of 18.02.23 you have been stood down with pay from Stockland Merrylands pending an investigation relating to a CCTV matter.
You will receive allegations notice via email; you will be provided a reasonable period to formally respond to the allegation put to you.
I have attached Millenniums EAP support program for your support.”[5]
[5] Reasons, [39].
The original letter of 20 February 2023 was not in evidence.
Mr Fajloun said that on 24 February he met with Mr Makdessi and Mr Dimian and offered to place them at another site so they were active until the matter was resolved. He agreed that training would be required because they were moving from a retail setting to a corporate office. Mr Makdessi declined the offer.[6]
[6] Reasons, [40].
Mr Swain was the Head of Business Au NZ/Security Services for Millennium.
The Member said:
“Mr Swain said that Stockland management alleged that Mr Makdessi and another employee had tampered with CCTV system on site, and specifically that Mr Makdessi had altered the operating times of the camera system. Because that was a serious allegation, Millennium was obliged to investigate and investigation was undertaken commencing on 17 February 2023. He said that Mr Makdessi and Mr Dimian were stood down on full pay and formal notice of the allegations was provided on the first available business day of 20 February 2023. After the investigation Millennium was not able to substantiate the allegations and sought that Mr Makdessi return to the site but Stockland’s internal risk committee determined to instruct Millennium to remove Mr Makdessi and the other employee from the site permanently.”[7]
[7] Reasons, [43].
Later the Member quoted Mr Swain as follows:
“... Our clear direction to Stockland was that both employees should be returned to the site but ultimately it is their decision as to who works on their properties and as they are our client, with ownership of the property and it is incumbent on Millennium that we honour our contract and their decision to exercise rights under the contract of services where reasonable.”[8]
[8] Reasons, [45].
The Member said:
“On 6 March 2023 Mr Swain wrote to Mr Makdessi confirming that a Formal Allegations Notice was provided on 20 February 2023. An incomplete copy of the original version is attached to the factual investigation report and includes an allegation of further access to the administrator’s credentials on 9 February 2023.”[9]
[9] Reasons, [50].
Subsequently, Mr Swain wrote to Mr Makdessi confirming Mr Makdessi’s statement that he was not at work on 9 February 2023 and that the letter had been amended.
Importantly, Mr Swain said:
“On the point of your question below. A clear and formal reference has been made to the contract clause of the binding service agreement between both parties, section 3.5, and has been applied within the letter.
… I informed you our client’s risk committee (Stockland Risk Committee) independently reviewed the matter and their clear decision and direction to Millennium was to remove you from Stockland Merrylands based on their risk assessment.
Given they are a risk committee and engaged to review the commercial risk of activities on Stockland owned and managed properties, I in fact educated you on the role and purpose for that committee and that the decision to remove you was from that committee, this is standard commercial practice.”
The Member quoted from the medical evidence relied upon by the respondent. Dr Young, psychiatrist, diagnosed an Adjustment Disorder. He said:
“The whole and predominant cause of the condition are the accusations that have been made against [the appellant] and the subsequent suspension and proposed redeployment.”[10]
[10] Reasons, [57].
Dr Young was of the opinion that Mr Makdessi could return to employment at a different worksite with a different employer.
The Member summarised the submissions of the parties which need not be noted in these reasons.

Findings and reasons

Under the heading “Findings and reasons” the Member initially directed herself as to the relevant legislation and controlling authorities. Firstly, she set out s 11A(1); secondly, she quoted from Northern NSW Local Health Network v Heggie,[11] the decision of Sackville AJA at [59] and at [61]–[64]; thirdly, she referred to ss 42 and 43 of the Personal Injury Commission Act2020 (the 2020 Act), quoting from s 43(1) and (2); and fourthly, the Member referred to the decision of Spigelman CJ in Department of Education and Training v Sinclair[12] at [96]–[97].
[11] [2013] NSWCA 255 (Heggie).
[12] [2005] NSWCA 465; 4 DDCR 206 (Sinclair).
She said that “[h]aving considered all of the evidence together, including both the statements and the correspondence in the Reply, I find that the factual matrix is as set out below.”[13]
[13] Reasons, [100].
As these findings are of importance in understanding the Member’s reasons, I set them out in detail:
“101. On or about 17 February, Mr Farhat told Mr Fajloun that during an investigation into a break-in at one of the shops in the centre, it was discovered that the relevant CCTV cameras were not working. Mr Farhat told Mr Fajloun that his credentials had been used to alter the CCTV recording times, and it was done by someone other than himself. It was suggested the security team may have been involved, so that Mr Fajloun spoke to Mr Swain.
102. … Mr Fajloun was told that Mr Farhat had logged into the computer about the time the cameras were down and remained logged in so that someone else could have had access to the relevant systems.
103. … Mr Fajloun was told that Mr Makdessi, Mr Dimian and some other guards were in the office at the relevant time and that Mr Makdessi and Mr Dimian were there when the cameras were altered.
104. …
105. After the meeting Mr Fajloun received an email from Stockland, confirming what was discussed. The statement says that the email was attached but it was not. … The reference to it in the statement suggests that it should have been attached but its omission is not fatal because there is ample evidence of the reason why the next steps took place.
106. ….
107. Later that day, Mr Fajloun was told by Mr Farhat that Stockland required that Mr Makdessi and Mr Dimian be stood down. He then had a conversation with Mr Farhat, Mr Swain and Mr Pierce. After that conversation he called Mr Makdessi and Mr Dimian into the office through Mr Homsi.
108. Mr Makdessi and Mr Dimian were locking up the top level of the shopping centre together when Mr Dimian was contacted by Mr Homsi, their manager. Mr Homsi may well have told them they were being stood down. Whether he said that or not, they then attended a meeting with Mr Fajloun and Mr Homsi. I consider that the purpose of the phone call was to ask Mr Makdessi and Mr Dimian to go to the meeting. When the men were together and the meeting they were both to attend was to take place imminently, I do not consider it unreasonable that only Mr Dimian received a phone call or, given that a meeting had already taken place earlier in the day, that any material breach of confidentiality occurred.
109. …
110. On the following day [18 February 2023] Mr Makdessi received an email from Mr Fajloun with details of Millennium’s Employees Assistance Program (EAP). He did not receive formal notice of the allegations at that time. Mr Fajloun said the formal notice was not sent until the Monday out of concern for the guards’ welfare. … The email … clearly says that the formal notice will be provided. On Friday 17 February, Mr Makdessi knew what the broad allegations were and knew that he had been stood down with full pay. The email provided written confirmation of the standing down and details of the EAP so that he could seek assistance to deal with them.”
The Member found that the letter of 20 February 2023 did not make any allegations about Mr Makdessi on 9 February 2023.
The Member said:
“115. Mr Makdessi sought medical attention on 20 February 2023. Dr Latif’s notes describe symptoms of a psychological injury and medication was prescribed. …
116. Mr Fajloun said that he met Mr Makdessi and Mr Dimian on 24 February. …
117. I accept Mr Fajloun’s explanation that the offer was made from a perspective of concern. As he said, Mr Makdessi was still in the probationary period and because of the nature of the allegations there was no obligation to do so. … Given the investigation and the nature of Stockland’s allegations, Millennium would be unlikely to offer a job in a retail location. Importantly however, Millennium allowed Mr Makdessi to remain on full pay while the investigation was concluded and did not seek to force him to take another role.”
There was some confusion as to two versions of a letter dated 6 March 2023. Dealing with the final version the Member found:
“122. The final version of the letter does not say that Mr Makdessi was removed because he was a risk but because of a decision by Stockland. Mr Swain’s email suggests that Mr Makdessi sought that the reference to being a risk be included and Mr Swain declined. The letter confirms the allegations were not reasonably substantiated and that no formal disciplinary action would be pursued by Millennium.
123. The letter informed Mr Makdessi of his redeployment and he was again offered the services of the EAP. It seems clear he did not use that service. Mr Makdessi then saw Dr Latif again and was provided with a certificate stating that he had no current work capacity. He sought to access annual leave and has not returned to work.”
The Member noted that there was no dispute that Mr Makdessi had suffered a psychological injury. She said:
“125. … it is necessary to consider the medical evidence to determine when Mr Makdessi suffered that injury because that impacts which conduct of Millennium I should have regard to. Mr Makdessi pleaded that the injury occurred on 18 February 2023 though he also implicated later events. He pleaded that the injury was caused by the accusation and by being ostracised by his employer. Mr Dimian said that the allegations made at the meeting with Millennium affected Mr Makdessi ‘almost instantly’.”
The Member said:
“127. Two entries in Dr Latif’s notes are relevant to determining when Mr Makdessi suffered injury and his is the only contemporaneous evidence. All of the other evidence was prepared after the completion of a series of events which took place in a short time frame.
128. … On 20 February 2023, Dr Latif recorded that Mr Makdessi suffered psychological symptoms as a result of being accused of tampering with cameras and being implicated in theft. Dr Latif prescribed medication at that first consultation, suggesting that he viewed Mr Makdessi’s condition as serious. There was no reference to capacity for work but no certificate of capacity was required at that time, Mr Makdessi being stood down on full pay. The note confirms that Mr Makdessi suffered injury and the reasons for it.”
The Member concluded:
“132. I am satisfied that Mr Makdessi suffered injury on 18 February 2023 as a result of being stood down pending investigation of allegations made against him. That finding is consistent with the facts relied on in the claim form Mr Makdessi later completed.”

Under the heading “Were Millennium’s actions reasonable?” the Member set out her dispositive findings on the s 11A issue.
She concluded that Mr Makdessi’s injury was “wholly caused by action with respect to discipline”.[14]
[14] Reasons, [133].
She said:
“136. I accept that at the time Millennium knew that an investigation was to be carried out. When the shopping centre owner requested that Mr Makdessi be stood down, Millennium did so.
137. The contract between Millennium and Stockland is not in evidence. Ideally it would have been but its omission is not fatal. Common experience informs me that the services of Millennium would have been provided under a detailed, written contract and that there would have been a commercial as well as a likely contractual imperative for it to comply with the requests of Stockland. The reference to ‘client requests’ in the section of the terms of employment in the Code of Conduct dealing with site allocations supports that.
138. Mr Malouf said that … Millennium cannot rely on its contractual obligation alone to prove that its conduct was reasonable. …”
The Member set out passages from Jeffery v Lintipal Pty Limited[15] and concluded:
“141. There is no evidence of an improper motive on the part of Millennium. For contractual and commercial reasons its representatives considered they were required to comply with a direction from Stockland that Mr Makdessi be stood down while an investigation took place. It is difficult to see how there was any way Mr Makdessi could have continued to perform his role at the shopping centre when the issue to be investigated was whether security guards had been involved in a security breach where CCTV cameras were turned off at around the time a break in took place in one of the shops in the centre. I am satisfied that Millennium’s conduct in acting on Stockland’s direction was objectively reasonable based on the information it had at the time.
142. I am satisfied that Mr Fajloun met with Mr Makdessi to explain the allegations and to explain that he was to be stood down. Millennium stood Mr Makdessi down on full pay and offered the assistance of the EAP. The allegations were conveyed late on Friday and formalised on Monday. Those steps were also reasonable in the circumstances and sought to take account of Mr Makdessi’s needs as well as Millennium’s position.
143. Millennium relied on both discipline and transfer in its decision notices. On the basis that Mr Makdessi had suffered injury before the offer of a transfer was made, it is not necessary for me to consider subsequent events. However, I do not accept Mr Malouf’s submission that it was unreasonable to offer Mr Makdessi a job 22.8 km away. Part 22 of Millennium’s Code of Conduct sets out the terms and conditions of employment. The passage with respect to site allocations quoted relied upon by Mr Makdessi says that Millennium will ‘where possible’ consider a worker’s residential address but that ‘operational requirements, client requests and company workload’ may require work at another location. It does not bind Millennium to provide work at the closest site to a worker’s home nor is the transfer necessarily unreasonable because Mr Makdessi did not want to take it.
144. For those reasons, I find that Mr Makdessi suffered a psychological injury on 18 February 2023 and that the injury was wholly caused by reasonable action with respect to discipline. I make an award for the respondent.”
[15] [2008] NSWCA 138 (Jeffery), per Basten JA, Hodgson JA.

THRESHOLD MATTERS

The Application to Appeal was lodged within 28 days of the Certificate of Determination.
The respondent does not dispute that the amount in issue in the proceedings exceeds the threshold sum prescribed by s 352(3) of the Workplace Injury Management and Workers Compensation Act1998 (the 1998 Act).

ON THE PAPERS

The respondent considers the appeal to be capable of being determined without resort to an oral hearing. The appellant submits that the appeal ought to proceed to an oral hearing where the numerous issues can be ventilated in real time by reference to the evidence.
Section 52(3) of the 2020 Act, together with Procedural Directions PIC2 and WC3 provide that I may be satisfied that the documents and the submissions of the parties provide me with sufficient information so that the appeal can be determined on the papers without holding any formal hearing.
Notwithstanding the appellant’s request for an oral hearing, I am satisfied that the documents and the submissions of the parties provide me with sufficient information and assistance to enable me to determine the matter on the papers without holding any conference or formal hearing. I propose to proceed accordingly.

NATURE OF THE APPEAL

The appeal is pursuant to s 352 of the 1998 Act. Subsection (5) is as follows:
“(5) An appeal under this section is limited to a determination of whether the decision appealed against was or was not affected by any error of fact, law or discretion, and to the correction of any such error. The appeal is not a review or new hearing.”
It is important to appreciate that the jurisdiction conferred is to identify and correct error. In Branir Pty Limited v Owston Nominees (No 2) Pty Limited[16] the following observation occurs:
“… in that process of considering the facts for itself and giving weight to the views of, and advantages held by, the trial judge, if a choice arises between conclusions equally open and finely balanced and where there is, or can be, no preponderance of view, the conclusion of error is not necessarily arrived at merely because of a preference of view of the appeal court for some fact or facts contrary to the view reached by the trial judge.”
[16] [2001] FCA 1833; 117 FCR 424, [28].

GROUNDS OF APPEAL

The appellant relies on 18 grounds of appeal. He says in paragraph [28] of his submissions:
“Overall, the common thread in the errors was a failure to properly apply the test under s 11A which creates a positive onus on the Respondent to prove reasonableness.”
The 18 grounds of appeal are as follows:
Ground 1: A failure to respond to a clearly articulated argument regarding Stockland’s actions.
Ground 2: A failure to follow authority of a superior court.
Ground 3: Made an error of law and fact in determining that the allegations about 9 February 2023 appeared for the first time in the letter dated 6 March 2023 (reasons [114] and [121]).
Ground 4: Made an error of law in failing to determine that it was unreasonable for the appellant to have been accused of doing something he could not have possibly done.
Ground 5: Made an error of law in determining that the email missing from Mr Fajloun’s email was not fatal to the defence (reasons [97], [98] and [105]).
Ground 6: Made an error of law in determining that Mr Fajloun’s failure to comply with his own procedure was nonetheless reasonable (reasons [110]).
Ground 7: Made an error of law in not determining that sending the email on 18 February 2023 was unreasonable (reasons [110]–[112]).
Ground 8: Made an error of fact and law in determining that the services of Millennium would have been provided under a detailed, written contract and that there would have been a commercial as well as a likely contractual imperative for it to comply with the requests of Stockland (reasons [137]).
Ground 9: Made an error of fact and law in determining that the formal allegations notice was probably drafted or checked by the respondent’s HR department (reasons [112]).
Ground 10: Made an error of fact in determining that the appellant was first put on notice of the allegations in a meeting/failed to determine that the appellant in fact first became aware of being stood down via phone contact made to Mr Dimian by Mr Homsi (reasons [108]–[109]).
Ground 11: Made an error of law in determining that it was reasonable for Mr Homsi to tell Mr Dimian that he and the appellant were being stood down (reasons [108]–[109]).
Ground 12: Made an error of law in failing to respond to a clearly articulated argument in relation to Millennium’s investigation of the allegations prior to stand down.
Ground 13: Made an error of fact and law in determining that the appellant’s injury was caused by reasonable conduct in relation to discipline alone and not transfer (reasons [143]).
Ground 14: Made an error of law in failing to respond to a clearly articulated argument in relation to transfer and the policies in place (reasons [143]).
Ground 15: Made an error of law in failing to respond to a clearly articulated argument in relation to transfer and the correspondence from Stockland.
Ground 16: Made an error of law in failing to respond to a clearly articulated argument in relation to transfer and providing the appellant any opportunity to respond.
Ground 17: Made an error of fact and law in determining that given the investigation and the nature of Stockland’s allegation, Millennium would be unlikely to offer the appellant a job in a retail location (reasons [117]).
Ground 18: Made an error of fact and law in incorrectly applying s 11A and the relevant authorities.

SUBMISSIONS

Appellant’s submissions generally

The appellant commences his submissions with the proposition that:
“The sole issue in dispute was whether or not the Respondent Employer had a defence to the claim under s 11A of the [1987 Act].”[17]
[17] Appellant’s submissions, [2].
However, that is to ignore the fact that depending on the determination of the first issue which related to s 11A, the Member was required to determine any award which needed to be made because as I see it there was no agreement before the Member as to the period for which Mr Makdessi was incapacitated for work (see reasons [3]).
The appellant submits that s 11A is a disentitling provision and that an employer who wishes to rely on it carries the onus of establishing the defence.[18]
[18] Citing Pirie v Franklins Limited [2001] NSWCC 167; 22 NSWCCR 346 and Sinclair.
Further the appellant submits that it is necessary to look at the entire process to see if the action was reasonable within s 11A.[19] The appellant submits that that includes looking at circumstances surrounding the action both before and after the action.
[19] Citing Sinclair.
The appellant quotes from the decision of Sackville AJA in Heggie at [58]–[59].
He cites Jeffery for the proposition that “reasonableness is not proven by an employer simply because [the employer] complies with its contractual obligations to a third party.” There follow quoted passages from the decision of Basten JA at [44] and [47] in Jeffery.
In addition, the appellant submits that it is not enough that the employer has complied with its own protocols; those protocols must be objectively reasonable. He cites Trustees of the Roman Catholic Church for the Diocese of Maitland-Newcastle v Broad.[20] Determining whether an action is reasonable under s 11A is not, so it is submitted “a value judgement” but rather an objective assessment of the employer’s actions and the weighing of the rights of the employees against the objective of the employer. It has been found, so the appellant submits, that an employer did not act reasonably when it failed to follow its own procedures.
[20] [2008] NSWWCCPD 139.

Respondent’s submissions generally

The respondent submits:
“The allegation of injury was not disputed. However, the respondent relied on s 11A of the [1987 Act] as a complete defence to the worker’s claim on the ground that the injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by the [respondent] with respect to discipline.”[21]
[21] Respondent’s submissions, [11].
However, whilst the Member determined the case on the basis that the question was limited to “discipline”, that was a misstatement of the case advanced by the respondent. At reasons [60] the Member said this:
“Mr Doak said that Millennium relied on actions with respect to discipline and transfer. He said there was no contest on the issue of causation, and that the medical evidence was in agreement that the whole or predominant cause of Mr Makdessi’s injury was disciplinary action and transfer, being the proposed redeployment.” (My emphasis)
That submission accorded with the respondent’s s 78 notice dated 14 June 2023.
It accorded with the Member’s continued understanding of the position adopted by the respondent. It was, however, contrary to the finding made by the Member at reasons [132] and [143]. The consequence of that determination by the Member was that the question as to the actions required to be reasonable to make out the defence was limited to the question of “discipline” without any consideration of the proposed transfer.
Ground 13 of the appeal specifically complains about this matter.
The respondent submits that the findings and determinations made by the Member were “plainly open to her on the evidence and disclose no error”. The respondent further submits that:
“The statutory scope for appeals, where they are largely based on factual findings, means that as long as the factual finding was open on the evidence, the weight and analysis given to which being matters within the discretion of the member, there is no ‘error’. Rather, as in this case, there is an attempt to conduct a rehearing of the matter on appeal.”[22]
[22] Respondent’s submissions, [17].
The respondent cites Raulston v Toll Pty Limited[23] at [19] to the effect that factual findings which were made by a member will be upheld unless shown to be wrong. The respondent further cites Fox v Percy[24] that findings of fact will not be disturbed on appeal provided they had rational support in the evidence. Even if the appellant can show that a different view of the evidence was available, even a preferred or more probable view, that does not mean there is an error.

Ground 1: A failure to respond to a clearly articulated argument regarding Stockland’s actions

Ground 2: A failure to follow authority of a superior court

[23] [2011] NSWWCCPD 25.

[24] [2003] HCA 22; 214 CLR 118.

Appellant’s submissions

The appellant contends that the Member had to consider the actions of Stockland (in ordering that the appellant be stood down and transferred) in order to determine whether the actions of the respondent were reasonable. The appellant submits that this was because the respondent’s case was and always had been that it was acting on the instructions of Stockland. Thus the relationship and interactions between Stockland and the respondent were fundamental in determining whether the respondent acted reasonably.
The appellant submits that the respondent failed to put into evidence the following:
(a)    the contract between Stockland and the respondent;
(b)    statements from anyone employed by Stockland;
(c)    any written correspondence between Stockland and the respondent including an apparent written notice referred to at Reply, p 23, and
(d)    the email from Stockland to Mr Fajloun which recorded what was discussed in the meeting and included the periods where the footage had been altered with corresponding times where footage showed the guards accessing the security office where the system is located.
The appellant submits that absent that evidence, any evidence of the reasonableness of Stockland’s conduct and its interactions with the respondent, the Member could not find the respondent’s conduct was reasonable.
The appellant submits that the Member did not consider the reasonableness of Stockland’s conduct. It is submitted the Member did not follow the judgment of Basten JA. The submission is that consideration of the action of Stockland was mandatory under s 11A. The Member therefore erred in law in failing to respond to the clearly articulated argument put by the appellant and failing to provide reasons as to why she did not engage with this submission.

Respondent’s submissions

The respondent characterises the appellant’s submission under Ground 1 as a complaint that the Member failed to consider the reasonableness of the Stockland conduct which, according to the appellant, was a mandatory consideration applying the reasoning of Basten JA in Jeffery. As part of his complaint the appellant asserts that the Member failed to engage with the appellant’s submission.
The respondent submits:
“The Member clearly engaged with the issue raised in the appellant’s submissions and also responded to … the respondent’s submissions on this issue. The Member addressed the issue at paragraphs [137] to [142] of the decision.”[25]
[25] Respondent’s submissions, [21].
In relation to Ground 2 the respondent says that no legal principle or ratio is identified by the appellant as binding on the Member. The appellant also fails to identify in his submissions in support of this ground any part of the judgment of Basten JA that stands for the proposition advanced by the appellant. The passage from his Honour’s judgment set out at paragraph [139] of the reasons amply demonstrates that the appellant’s contention is incorrect.

Appellant’s submissions in reply

The appellant submits in reply that the respondent has not identified any part of the decision where the Member considered the reasonableness of Stockland’s conduct. The appellant maintains that nowhere did the Member consider the reasonableness of Stockland’s conduct. Moreover she never provided reasons as to why she did not follow Basten JA’s decision.

Consideration

The appellant’s essential complaint in these two grounds of appeal is that absent the material identified at paragraph [71] above, the Member did not have any proper basis for determining the reasonableness of Millennium’s action in suspending the appellant in response to Stockland’s demand. In addition, the appellant complains that the Member did not correctly apply the decision of Jeffery.
For the reasons that follow, these challenges to the Member’s decision are upheld.
The Member’s findings relevant to these two grounds of appeal are at reasons [137] and [141], quoted above.
Mr Makdessi was in fact suspended by Millennium in response to Stockland’s direction on two occasions, namely:
(a) initially from 18 February 2023 while the investigation took place (see reasons [39] and [107]), and
(b) after Mr Makdessi and Mr Dimian had been exonerated pursuant to clause 3.5 of the agreement between Millennium and Stockland (reasons [43], [45] and [53]). On this occasion Millennium wanted the appellant to return to the Merrylands site but it followed the direction from Stockland to exclude the appellant from the site.
The respondent, who carried the onus, did not introduce the facility service contract or any part of it. There is no explanation from Millennium as to why the contract was not tendered. There was no evidence to support the Member’s conclusion that contractually Stockland was authorised to give directions to Millennium with which Millennium was obliged to comply.
The Member recognised the absence of the contract. She relied on what she said was “common experience” to conclude that “there would have been a commercial as well as likely contractual imperative” for Millennium to comply with the requests of Stockland.[26] Her conclusion was not based on evidence and should not have been reached.
[26] Reasons, [137].
In South Western Sydney Area Health Service v Edmonds,[27] McColl JA (agreed to by Giles and Tobias JJA) said at [127]:
“While the Commission may inform itself on any matter in such manner as it thinks appropriate and as the proper consideration of the matter before it permits (s 354(2)), r 70 of the Workers Compensation Commission Rules 2003 provides that when informing itself on any matter, the Commission is to bear in mind the principles that evidence should be logical and probative, should be relevant to the fact in issue and the issues in dispute, that evidence ‘based on speculation or unsubstantiated assumption is unacceptable’ and that ‘unqualified opinions are unacceptable’.”
[27] [2007] NSWCA 16; 4 DDCR 421.
Section 354(2) of the 1998 Act is the equivalent of s 43(2) of the 2020 Act. Workers Compensation Commission rule 70 is now reproduced in the Personal Injury Commission Rules 2021 at rule 73. Rule 73(c) provides:
“73 Guiding principles for applicable proceedings
The appropriate decision maker for applicable proceedings must, when informing itself or themselves on any matter in the proceedings, have regard to the following principles—
…
(c) evidence based on speculation or unsubstantiated assumptions is unacceptable.”

Furthermore, there was no evidence from Stockland as to why it adopted the approach that it did after the appellant was exonerated.
In the absence of the contract, or any evidence as to Stockland’s investigation, the Member’s conclusions were based on speculative and unsubstantiated assumptions that there was a commercial and contractual imperative on Millennium to comply with the requests of Stockland. Her conclusion as to the reasonableness of the employer’s action was not based on the evidence and must be set aside.
The Member relied on her reading of Jeffery and, in particular, the passages from Basten JA quoted in her Statement of Reasons. The Member appears to have taken from the decision of Jeffery as determinative the statement that in the “absence of improper motive” on the part of Millennium, there was no need to make further enquiry as to Stockland’s actions.
In Jeffery, Mr Jeffery, a school cleaner, was transferred at the direction of the principal of the school. The Deputy President treated the direction by the principal as being effectively determinative.
Hodgson JA, who agreed with Basten JA, “subject to what he said below” and substantially agreed with the reasons of Rein J, said:
“The question whether or not the school’s direction itself was reasonable is a factor relevant to the question whether or not the transfer was ‘reasonable action taken … by or on behalf of the employer’; but in my opinion, it would not be essential in this case [my emphasis] for the respondent to prove that the direction given by the school was reasonable action taken by the school. The issue is the reasonableness of action taken by or on behalf of the employer [emphasis in original]; and even if the Deputy President was not affirmatively satisfied that the school’s direction was objectively reasonable action taken by the school, he still could be satisfied that the respondent’s action in transferring Mr Jeffery was reasonable action taken by or on behalf of the employer.”[28]
[28] Jeffery, [3].
His Honour gave an example of what he had in mind in the following paragraph:
“Such a finding could for example, in my opinion, conceivably be open on the basis that the respondent reasonably saw the direction as based on reasonable concerns of the school which either were adequately investigated [my emphasis] or were such that it was unlikely they could be allayed by further investigation, and reasonably considered transfer as an option carrying little detriment to the worker while resolving a situation of concern and conflict. I am not asserting that it would be sufficient that the transfer appeared reasonable to the employer [emphasis in original]. The assessment of reasonableness is an objective one for the Commission; but in my opinion it is the reasonableness of action taken by or on behalf of the employer that is in issue, not the reasonableness of action taken by any other person.”[29]
[29] Jeffery, [4].
It is plain from the example given by Hodgson JA that his Honour was not suggesting there should be no consideration of the actions and motives of the third party in giving the direction. His Honour was saying that provided the concerns of the school were “adequately investigated” or unlikely to be allayed by further investigation, then that transfer was a reasonable option. That is quite different from what occurred in the present matter where Mr Makdessi was excluded by Stockland without any consideration of the reasons for Stockland’s directions.
When he was excluded on 18 February 2023, so far as the evidence went there was no explanation for why he and Mr Dimian were suspended but others apparently in the same position were not. Stockland persisted in the demand that the appellant not return to the Merrylands site even though the appellant had been exonerated. There was no evidence before the Member from which to judge the reasonableness of Millennium acceding to Stockland’s demands on either occasion.
Nor does the judgment of Basten JA, properly understood, support the Member’s conclusion. His Honour said:
“… Section 11A is a provision which removes a right to compensation otherwise available in respect of a psychological injury arising out of or in the course of employment. It is concerned with reasonable action on the part of an employer which may have such a consequence. The reasonableness of the action should properly be assessed by reference to the facts giving rise to the transfer, rather than the contractual relationship between the employer and a third party. The contractual relationship is not, of course, irrelevant: it may mean that the conduct of the third party becomes a relevant factor in assessing the reasonableness of the transfer.”[30]
[30] Jeffery, [44].
After the paragraph quoted by the Member, Basten JA said this at [48]:
“Against this approach it may be argued that a reasonable contractual arrangement, which devolves part of the responsibility on to a third party, may leave the employer in an invidious position where, in the case of an unreasonable direction, it will either incur liability to its employee, or will incur liability to the third party for breach of contract. However, that concern cannot override the clear statutory purpose requiring that the reasonableness of the transfer be judged in accordance with the circumstances involved. The practical answer is that an employer which accepts a contractual obligation to deal with its employees at the behest of a third party might be expected to negotiate an indemnity if, acting in accordance with its contract, it may incur a statutory liability to an employee.”
The third member of the Court, Rein J, noted that the entire contract between the employer and the Department of Education had not been placed before the Deputy President and nor before the Court of Appeal. There were however extracts of the contract. His Honour said:
“82. In coming to a view as to whether an employer has acted reasonably in taking action against an employee, in my opinion the following are matters that could properly be taken into account:
(1)the nature of the complaints made and the material available to support them;
(2)the express contractual arrangements between the third party and the employer, and whether there was an implied term requiring any rights given to the third party to be exercised only on proper grounds;
(3)whether there was a proper basis in fact for the third party’s direction;
(4)whether the employer’s relevant officers believed on reasonable grounds that there was a proper basis for the third party direction;
(5)what steps if any, were practically available to the employer to either prevent the third party from issuing a direction or to persuade the third party to withdraw the direction; and what steps were taken;
(6)the seriousness of the action to be taken i.e. transfer as opposed to dismissal;
(7)the form of the investigation by the third party or the employer and of the communication to the employee of complaints and of the action determined to be taken;
(8)whether there existed other factors extraneous to the direction from the third party that led the employer to take the impugned action, that were not reasonably taken into account;
(9)the condition of the contract between the employer and the employee.
83. … In my view, an employer, in acting upon such a direction where no reasons are given and without any knowledge itself of the reasons, at least in the absence of an express acknowledgement by an employee as part of the employment contract that that could occur, would not be acting reasonably vis-à-vis the employee. On the other hand, I think that it is not unreasonable to have regard to the views of the third party when the third party, and not the employer, has the main or only significant contact with the employee and is best placed to investigate complaints or conduct and where the third party has provided information to the employer as to its reasons for requiring transfer or other action.”
His Honour later said:
“85. In the judgments of Hodgson JA and Basten JA can be discerned two differing views on how reasonableness is to be determined in circumstances where the employer has agreed to accept a direction from a third party as to action to be taken against an employee. Basten JA is of the view that an employer cannot establish reasonableness pursuant to s 11A unless it establishes that the third party has acted reasonably and Hodgson JA is of the view that the employer’s conduct can be reasonable even if the third party has not acted reasonably, provided the employer has itself acted reasonably in assessing the validity of the direction by the third party.”
Whatever tension there may be between the decisions of the various members of the Court of Appeal in Jeffery, the judgments neither separately nor together support the approach of the Member in the circumstances present in Mr Makdessi’s case.
In the absence of evidence as to the contract, the Member could not have formed a proper view as to the contractual basis for the direction given by Stockland to Millennium. In the absence of evidence from Stockland or Millennium as to the considerations relied on by Stockland for its directions to Millennium, the Member could not have formed a conclusion as to the reasonableness of Millennium’s conduct in initially suspending the appellant or subsequently excluding him from the Merrylands site.
Grounds 1 and 2 of the appeal are upheld.

Ground 3 – Made an error or law and fact in determining that the allegations about 9 February 2023 appeared for the first time in the letter dated 6 March 2023 (reasons [114] and [121])

Appellant’s submissions

The appellant firstly submits that the matter was not actually in contention. The respondent did not submit that the 20 February 2023 letter did not contain allegations about 9 February 2023. For the Member to decide this was a matter she needed to determine resulted in a failure to afford the appellant procedural fairness. It was not raised at the hearing.
Secondly, it subverts the evidentiary burden placed on the respondent in s 11A cases.
The formal allegations notice of 20 February 2023 was not in evidence. Accordingly, the Member could not assess whether the accusations made and the manner in which they were made was reasonable if the letter was not in evidence.
On the evidence before the Member, it was clear that the only finding open to her was that the letter of 20 February 2023 did contain allegations about 9 February 2023. This follows from a reading of the 6 March 2023 letter.
On the respondent’s evidence it is clear that the notice of 20 February 2023 contained an allegation of misconduct on 9 February 2023.

Respondent’s submissions

The respondent submits that in considering whether the respondent had made out its defence under s 11A, the Member was required to determine whether the actions of the respondent were either the whole or predominant cause of the appellant’s psychological injury and whether those actions were reasonable.
The statement of Mr Fajloun referring to the letter and the evidence of the appellant in response were both in evidence before the Member. It was open and proper for her to consider that evidence and the issue of the allegation in relation to the allegation regarding 9 February when determining the issue of reasonableness of the respondent’s action.
The appellant submits the Member could not make a finding the notification of the appellant of the allegations made against him by the respondent was reasonable unless the specific details in the letter were in evidence. The respondent says, the submission overlooks the fact that the appellant responded to the letter. The Member found that the appellant’s response to the letter demonstrated that the allegations were brought to his attention and furthermore that he was able to respond to them.
The appellant’s complaint that the Member erred in finding that the letter dated 20 February 2023 did not contain reference to an allegation made about 9 February 2023 is misconceived.
The reference to the allegation about 9 February in the letter dated 6 March does not establish that the allegation was included in the original letter. The Member set out her reasons for finding that the allegation about 9 February was not included in the letter dated 20 February 2023 at paragraph [144] of the reasons.

Appellant’s submissions in reply

The respondent totally misconceived the appellant’s submissions and never actually canvasses the core allegation. No response is warranted save to say that the submission that the letter dated 6 March erroneously referred to the inclusion of an allegation about 9February 2023 in the original allegation sent to the appellant on 20 February 2023 is entirely unsustainable when the original letter was not in evidence and the onus was on the respondent.

Consideration

The Member makes the point at [114] of the reasons that in Mr Makdessi’s response letter he did not make reference to the 9 February 2023 allegations. He said he was accused of two things – accessing Mr Farhat’s credentials and making changes to the CCTV recordings.
The Member drew the logical inference that in his response to the allegations notice dated 20 February, Mr Makdessi would, if the notice had included an allegation as to the events having occurred on 9 February 2023, have said he was not at work on that occasion.
The Member says at reasons [121]:
“I doubt that the allegations about 9 February were in the letter dated 20 February. If they were it is likely Mr Makdessi would have responded to them at that time. That suggests that the allegation about 9 February appeared for the first time in the letter dated 6 March. When it was drawn to his attention, Mr Swain apologised and the letter was amended promptly.”
The inference was available on the material. No error has been demonstrated.
Ground 3 of the appeal is not made out and is dismissed.

Ground 4 – Made an error of law in failing to determine that it was unreasonable for the appellant to have been accused of doing something he could not have possibly done

Appellant’s submissions

The appellant submits, following on from his submissions in relation to Ground 3, that the fact that he was accused of interfering with the cameras on 9 February 2023 when he never worked on that day prevents the respondent’s action being regarded as reasonable. This is because the appellant submits that the most cursory investigation would have immediately revealed to the respondent that the appellant did not work on 9 February 2023 and therefore was not involved in any misconduct on that date.

Respondent’s submissions

The respondent submits that there are two responses to the appellant’s complaint:
(a) as the Member found at paragraph [114], the appellant’s responses to the letter of 20 February 2023 did not raise any issue about an allegation that he tampered with the CCTV cameras on 9 February 2023;
(b) even if the appellant was correct that the content of the respondent’s letter dated 6 March 2023 supported a finding that the original letter to the appellant referred to events of 9 February, the respondent maintains that it does not follow that such an inference (had it been made) would render the respondent’s conduct unreasonable.

Consideration

The reasoning process exhibited by the Member on the issue of 9 February 2023 is logical and available on the evidence. Even if, as the respondent submits, the 9 February accusation had been included in the notice of allegations dated 20 February, that would not have made the investigation or the investigative process unreasonable.[31] It is the course of the conduct as a whole that is to be assessed, even if some aspects of the investigation and discipline are not reasonable.

Ground 5 – Made an error of law in determining that the email missing from Mr Fajloun’s email was not fatal to the defence (reasons [97], [98] and [105])

[31] Sinclair, [97].

Appellant’s submissions

The appellant submits that the Member mischaracterised the relevant email. The Member said the email confirmed what was discussed in a meeting between Stockland and the people from the respondent. The appellant submits that this is simply inaccurate. Mr Fajloun says that it also contained “periods where the footage had been [altered] with corresponding times where footage showed the guards accessing the security office where the system is located”. The appellant submits that “the missing email contains the most fundamental information in this case – and that is when the cameras were apparently accessed and by whom.”
It was not possible for the Member to find that the respondent acted reasonably when this email was inexplicably missing from the evidence. The Member erred at law.

Respondent’s submissions

The respondent submits that this ground of appeal does nothing more than repeat the submissions made at the hearing. The respondent submits that the Member addressed the submission at paragraphs [98] and [99] of the decision where she correctly stated “the absence of a document does not, of itself, connote unreasonable conduct.” This is plainly correct as the question of reasonableness is to be determined at the time of the respondent’s action, not based on whether it can produce documents during legal proceedings commenced and heard well after those events.

Appellant’s submission in reply

The appellant submits that the respondent ignores entirely the submission made by the appellant.

Consideration

I detect no error in the Member’s reasoning with respect to this issue. Contrary to the appellant’s submission, the absent document does not affirmatively establish what its contents might have been. What was discussed in the meeting between Stockland and Millennium together with what may or may not have been shown on the CCTV footage cannot be established by a document not before the Commission.
Ground 5 of the appeal is dismissed.

Ground 6 – Made an error of law in determining that Mr Fajloun’s failure to comply with his own procedure was nonetheless reasonable (reasons [110])

Appellant’s submissions

The appellant submits that the email of 18 February 2023 sent by Mr Fajloun was not referred to in Mr Fajloun’s statement. The issue therefore becomes, as submitted by the appellant to the Member, how she could be satisfied that sending this email on 18 February 2023 was reasonable given Mr Fajloun’s own evidence. The sending of this notice breached Mr Fajloun’s own procedure and belief that doing so on the weekend could have a negative effect on the appellant’s welfare. This was not reasonable.

Respondent’s submissions

The respondent submits that the assertion that Mr Fajloun breached his own procedure is without foundation. Had Mr Fajloun not communicated the fact that the appellant was to be stood down pending an investigation, that would presumably have formed the basis of an argument that the respondent had not acted reasonably in failing to communicate the fact to the appellant. The email dated 18 February 2023 was in evidence. It communicated to the appellant that he had been stood down with pay pending an investigation. Mr Fajloun had already spoken to the appellant about the substance at a meeting with the appellant on that date. The appellant’s assertion that by sending the email to the appellant the respondent’s actions were unreasonable is without merit.

Appellant’s submissions in reply

The appellant asserts that Mr Fajloun did not comply with his own procedure.

Consideration

The ground of appeal is without merit and for the reasons advanced by the respondent, which I adopt, is rejected.

Ground 7 – Made an error of law in not determining that sending the email on 18 February 2023 was unreasonable (reasons [110]–[112])

Appellant’s submissions

The appellant submits that this submission follows Ground 6 and that the email was not reasonable because it was against Mr Fajloun’s own procedure and because it contained no substantive information, simply that the appellant was being stood down pending an investigation into alleged misconduct.

The appellant was left guessing about numerous things, not the least of which were precisely what he was actually accused of doing, what was the misconduct, and this was not clarified until at least, at the earliest, 20 February 2023.

Respondent’s submissions

The respondent submits that this ground of appeal does not identify any error. It restates the submission made at the hearing. The appellant is cavilling with the finding made by the Member rather than identifying any error.

Appellant’s submissions in reply

The appellant submits that it has identified an error of law which has not been engaged with by the respondent.

Consideration

The process occurred over a period from 17 February 2023 to at least 20 February 2023. It is plain that in the discussion on the evening between the appellant and the respondent’s representatives the nature of the accusations were made available to the appellant at least in a general way.
At reasons [37], the Member records the discussion with the appellant. There may have been some merit in this complaint if all that was done on 18 February 2023 was the sending of the email but in fact it was preceded by a discussion in which the process was explained.
Ground 7 of the appeal is dismissed.

Ground 8 – Made an error of fact and law in determining that the services of Millennium would have been provided under a detailed, written contract and that there would have been a commercial as well as a likely contractual imperative for it to comply with the requests of Stockland (reasons [137])

Appellant’s submissions

The issue was clearly not a matter upon which it was open to the Member to take judicial notice.
The appellant refers to Strinic v Singh[32] at [60]–[65].
[32] [2009] NSWCA 15 (Strinic v Singh).

Respondent’s submissions

The respondent refers to r 73 of the Personal Injury Commission Rules. The respondent submits that Strinic v Singh cited by the appellant in support of its submission is not on point. The respondent submits that the approach taken by the Member in drawing a conclusion about the nature of the commercial relationship between the respondent and Stockland is consistent with the approach to making findings considered by President Phillips in Chubb Fire & Security Pty Limited v Trad at [93]–[98].[33]
[33] [2023] NSWPICPD 79.

Appellant’s submissions in reply

The idea that fundamental matters of fact such as the contents of a contract could be construed as matters upon which a decision maker could take judicial notice is fatally flawed.

Consideration

The issues relevant to this ground of appeal have been fully canvassed under the headings of Grounds 1 and 2.
The Member erred her in her assumptions as to the contents of the contract. I agree with the respondent’s submission that Strinic v Singh was not on point. But the reality is the Member was not provided with the contract document and her conclusions as to what it may or may not have stipulated were not supported by evidence.
Ground 8 of the appeal is upheld.

Ground 9: Made an error of fact and law in determining that the formal allegations notice was probably drafted or checked by the respondent’s HR department (reasons [112])

Appellant’s submissions

The appellant submits that there was no evidence or submissions made to support the finding at reasons, [11]. He goes on to cite Strinic v Singh.

Respondent’s submissions

The respondent submits that the appellant has not demonstrated how the comment made by the Member amounted to an error that was material to her decision that the actions of the respondent were reasonable. The point being addressed by the Member was that the respondent sent the letter to the appellant on 20 February 2023 setting out the allegations against him. That fact was not in issue in the proceedings.

Appellant’s submissions in reply

Again this finding of fact is entirely unsustainable based on no evidence. The respondent does not engage with the submissions.

Consideration

The comment by the Member was of no significance to her findings. She did not make a finding that the HR department drafted or checked the formal notice. Her speculation was no more than irrelevant musing.
Ground 9 is rejected.

Ground 10 – Made an error of fact in determining that the appellant was first put on notice of the allegations in a meeting/failed to determine that the appellant in fact first became aware of being stood down via phone contact made to Mr Dimian by Mr Homsi (reasons [108] to [109]).

Appellant’s submissions

The Member erred in failing to accept and deal with the uncontested evidence of the appellant and also Mr Dimian, which confirmed that the very first time the appellant was put on notice of any allegations of wrongdoing and stand down was when Mr Homsi contacted Mr Dimian by phone when Mr Dimian was in the appellant’s presence.
The Member erred in failing to find that the appellant in fact first became aware of being stood down and any potential misconduct when Mr Dimian was contacted via phone by Mr Homsi in the appellant’s presence.
The appellant submits that even if a meeting was held, there is no evidence from the respondent which details what was said to the appellant and in the presence of whom. The appellant quotes part of the statement of Mr Fajloun. This is set out by the Member at reasons [37].

Respondent’s submissions

The respondent submits the appellant does not identify a proper ground of appeal in Ground 10.
The respondent submits further that any failure by the Member to refer to evidence as to whether the appellant was present when Mr Dimian was contacted by telephone would not support a finding that the respondent’s conduct was unreasonable.

Appellant’s submissions in reply

The appellant submits how the appellant first came to know of the standing down was crucial.

Consideration

I have some difficulty understanding the gravamen of the appellant’s complaint. The Member was required to consider all of the relevant conduct, some aspects of which might not have been reasonable.
This is not to say that the fact that Mr Dimian received the phone call requesting his and the appellant’s attendance was unreasonable. Furthermore the passages at reasons [108] and [109] are really summaries of the evidence rather than findings of significance.
The complaint is that the Member did not make a finding, but the appellant has not established that the Member was required to make a finding as to when the appellant first received notice that he was to be stood down. She was required to determine whether the respondent’s conduct over all was reasonable, not whether any particular aspect of the interaction was reasonable.
The Member says that she did not consider it unreasonable that only Mr Dimian received a phone call and that the phone call was to ask Mr Makdessi and Mr Dimian to go to the meeting.
At the meeting Mr Fajloun told them they would be stood down on full pay. It is not appropriate to dissect and parse the Member’s reasons in this manner. The Member was required to consider what happened on the evening of 17 February 2023, not part of the evening.
Ground 10 of the appeal is rejected.

Ground 11 – Made an error of law in determining that it was reasonable for Mr Homsi to tell Mr Dimian that he and the appellant were being stood down (reasons [108] to [109])

Appellant’s submissions

At the hearing, the appellant clearly contended that it was improper for the respondent to have told the appellant of his standing down through a co-worker and third party, Mr Dimian.
The Member erred in failing to make this finding. Her reasons as to why this was not unreasonable were because a prior meeting disclosed the allegations and so there was no breach of confidentiality.

Respondent’s submissions

The respondent submits that in Ground 11 the appellant cavils with the Member’s decision without identifying any error.

Appellant’s submissions in reply

The appellant submits the respondent has failed to engage with the submission of an error of fact.

Consideration

The appellant provides no basis for suggesting that the manner in which the appellant was informed of the fact that he was being stood down had any causative impact. And as a practical matter the appellant and Mr Dimian were both to be stood down for the same reason, namely, that Stockland was conducting an investigation and had directed that they both be excluded.
Communicating that piece of information to the appellant in a non-confidential way may have been unfortunate if Mr Dimian was not to suffer the same fate but, given that both workers were together at the time and both were to be excluded and suspended for the same reason, the Member’s conclusion that this was not unreasonable was open and available on the material.
Ground 11 of the appeal is rejected.

Ground 12 – Made an error of law in failing to respond to a clearly articulated argument in relation to Millennium’s investigation of the allegations prior to stand down

Appellant’s submissions

The appellant advanced an argument that the Member could not be satisfied of reasonableness because the respondent failed to provide any evidence about what investigation steps took place prior to standing the appellant down besides relying on Stockland’s representation.

Respondent’s submissions

The respondent repeats the submissions made in response to Ground 11.

Appellant’s submissions in reply

The appellant makes no submissions in reply.

Consideration

For the reasons given in relation to Grounds 1 and 2, this ground of appeal is made out.

Ground 13 – Made an error of fact and law in determining that the appellant’s injury was caused by reasonable conduct in relation to discipline alone and not transfer (reasons [143])

Appellant’s submissions

The respondent’s defence is and was that the injury was caused by discipline and transfer, not one or the other. The respondent nailed its colours to the mast so to speak. A reading of the treating medical evidence confirms that the matters in relation to the discipline and transfer both had an impact on the appellant’s injury.
The Member committed error when she determined that the appellant suffered injury before the offer of transfer was made so that it was not necessary for her to consider subsequent events. This was erroneous for several reasons:
(a)    because the evidence plainly disclosed the transfer issue played a significant part in the appellant’s injury;
(b)    because causation was not actually in dispute and to ascribe a date to a psychological injury for the purpose of confining arguments against the defence is arbitrary and ignored the evidence, and
(c)    most importantly, because the respondent’s whole case and supporting evidence required a consideration of the transfer issues in order for the Member to be satisfied of the whole and predominant cause.

Respondent’s submissions

The respondent says that this ground of appeal is obscure. It says the appellant’s complaint is that the Member’s consideration with respect to (whether) the transfer was reasonable amounts to error. However no error is identified and the ground of appeal should be rejected.

Appellant’s submissions in reply

There are no reply submissions in this ground of appeal.

Consideration

I noted at paragraph [64] above that the Member found the relevant “action” by the employer to be limited to disciplinary action concluded by 18 February 2023. This was different from the action contended for by the respondent in the case before the Member which was action in respect of the “discipline and transfer” of the worker.
The consequence of the Member’s finding was that she was not required to make findings with respect to the further actions of the employer after 18 February 2023. The enquiry as to reasonableness was necessarily constrained.
As the Member did not inform the parties that she proposed to proceed as she did, the parties were given no opportunity to make submissions on the issue of whether the reasonableness enquiry should be limited to the events before 18 February 2023.
In effect, the Member departed from the basis on which the parties conducted the case. This resulted in two errors.
Firstly, the Member constrained the reasonableness enquiry. In Sinclair, Spigelman CJ said this:
“With respect to s 11A, his Honour had ‘difficulty’ with the Arbitrator’s narrow definition of ‘action with respect to discipline’, however his Honour considered that nothing turned on this as the Arbitrator went on to find that the Appellant’s actions were unreasonable. His Honour was correct to doubt the Arbitrator’s reliance on Chenhall. That case involved the determination of whether an injury arose out of ‘reasonable disciplinary action’. Those words are necessarily narrower than the words presently applicable – ‘reasonable action with respect to discipline’: see also Ritchie v Department of Community Services (1998) 16 NSWCCR 727 at [45]. The conclusion in Chenhall that the statutory foundation there under consideration does not extend to the investigatory process does not apply to the Act. The formulation in s 11A extends to the entire process involved in, relevantly, ‘discipline’ including the course of an investigation.”[34]
[34] Sinclair, [35].
Secondly, the Member denied the parties procedural fairness because she departed from the basis upon which the parties had chosen to fight the action: Seltsam Pty Ltd v Ghaleb[35] where Ipp JA said:
“These cases illustrate the general principle that although the basis on which the parties conduct a trial does not bind the judge, if the judge contemplates determining the case on a different basis he or she must inform the parties of this prospect so that they have an opportunity to address any new or changed issues that may arise.
A failure so to inform the parties will ordinarily result in a denial of procedural fairness. A new trial will be ordered if a party is not afforded a fair trial in circumstances where a properly conducted trial might possibly have produced a different result. It will not ordinarily be necessary to lead evidence to prove that the denial of procedural fairness had the potential to affect the outcome; in most cases the facts will speak for themselves.”[36]
[35] [2005] NSWCA 208 (Seltsam v Ghaleb).
[36] Seltsam v Ghaleb, [78]–[79].
Notwithstanding the denial of procedural fairness, for the reasons that follow a new trial on the issue of the s 11A defence is not required.[37] I have re-determined the s.11A defence below.
[37] Seltsam v Ghaleb, [79], [224]–[225].
Firstly, because the appellant succeeds in the appeal on Grounds 1 and 2, it would be unfair to him to permit the respondent with a further opportunity to contest the s 11A issue.
Secondly, I do not see that the appellant would have conducted his case in any different manner had the Member alerted him to the prospect that she would proceed as she did.
Thirdly, in terms of “practical fairness”, as a result of the appeal the appellant has succeeded, and the respondent has failed to prove that its actions were reasonable.
Ground 13 of the appeal is established.

Ground 14 – Made an error of law in failing to respond to a clearly articulated argument in relation to transfer and the policies in place (reasons [143])

Appellant’s submissions

At the hearing the appellant specifically referred to the respondent’s policies and procedures. These included the crucial clause at 4.1 and 4.2 of the Code of Conduct. Missing from the evidence of the respondent was proof that the respondent considered the appellant’s residential address and what site was closest to his home.

Respondent’s submissions

The respondent submits that the appellant fails to identify an error and that he is simply cavilling with the Member’s conclusion.

Consideration

I accept the respondent’s submission. The material was before the Member. There is no basis for the submission that the Member failed to consider it or indeed for the submission that the respondent in making its offer to the appellant of work at a different place failed to have regard to its own procedures.
Ground 14 of the appeal is dismissed.

Ground 15 – Made an error of law in failing to respond to a clearly articulated argument in relation to transfer and the correspondence from Stockland

Appellant’s submissions

The appellant submits that the Member could not make a finding of reasonableness in relation to the transfer for the reason that the written notice and contract between Stockland and the respondent was not in evidence. The Member was therefore absolutely uninformed as to what the written notice and what section 3.5 of the contract said, the procedure it created and the matters relevant to the consideration under it.

Respondent’s submissions

The respondent submits that Ground 15 again fails to properly disclose an error of fact, law or discretion. The appellant’s submission fails to articulate in what respects the findings in the determination made by the Member constitute error.

Consideration

For the reasons given in relation to Grounds 1 and 2, this ground of appeal is made out.
The respondent did not adduce evidence of the facilities management contract between it and Stockland Property Management Pty Limited. It was not open to the Member to speculate as to what clause 3.5 might in fact have provided.
Ground 15 of the appeal is established.

Ground 16 – Made an error of law in failing to respond to a clearly articulated argument in relation to transfer and providing the appellant any opportunity to respond

Appellant’s submissions

The appellant made a submission that the appellant was never provided with an opportunity to respond to the action taken in relation to transfer. There was no evidence from the respondent that it invited him the opportunity to respond to the transfer. It was simply done. The transfer was not reasonable.

Respondent’s submissions

The appellant’s submission in support of this ground of appeal is misconceived. The appellant asserts that a failure by the respondent to consider the action taken in respect of or in relation to transfer in some way made the respondent’s action offering to relocate the appellant unreasonable.
The Member found that the appellant suffered a psychological injury as a result of being stood down pending investigation of the allegations against him. The Member’s reasons for making that finding are set out in the preceding paragraphs at reasons [125]–[131]. No challenge is made by the appellant to that finding. Given the absence of any challenge to that finding, it is not open to the appellant to assert error by the Member to make the finding with respect to transfer.

Consideration

The difficulty with the Member’s approach was that she found the action to be limited to the disciplinary process without having regard to the basis on which the parties contested the matter, namely, “discipline and transfer”. As indicated above, the Member was required to inform the parties that she intended to depart from the manner in which the case had been conducted before her before doing so.
That she failed to do so meant there was a denial of procedural fairness.
Ground 16 of the appeal is allowed.

Ground 17 – Made an error of fact and law in determining that given the investigation and the nature of Stockland’s allegation, Millennium would be unlikely to offer the appellant a job in a retail location (reasons [117])

Appellant’s submissions

The appellant submits there was no evidence or submissions made by the Member upon which the Member could make the finding.

Respondent’s submissions

The respondent submits that the appeal does not disclose any material error. The complaint made by the appellant about the comment made by the Member at paragraph [132] of the reasons regarding the respondent as being unlikely to offer the appellant alternative work in a retail setting does not demonstrate error in the Member’s finding that the actions of the respondent with respect to discipline were not reasonable.

Consideration

As the respondent’s submission makes clear, because the Member defined the relevant action to be “discipline”, she did not address the prospect that in placing the appellant at another site the respondent had failed to act reasonably.

Had she addressed that question she would have found, as the appellant submits, that there was no evidence to support the proposition that it was reasonable for the respondent to exclude the appellant from work in a retail setting. Furthermore, the appellant had been exonerated. There seems to be no reason why the appellant would not be a suitable candidate for work in a retail setting.
Ground 17 of the appeal is upheld.

Ground 18 – Made an error of fact and law in incorrectly applying s 11A and the relevant authorities

Appellant’s submissions

The appellant submits the overwhelming impression is that the Member simply found that in exercising its contractual duties the respondent acted reasonably. It is submitted this is the inescapable conclusion.
This is an impermissible basis for the finding of reasonableness under s 11A. Reasonableness is not proven by an employer simply because it complies with its contractual obligations with a third party.
The appellant submits that the respondent failed to discharge its onus of proving reasonableness. Particularly, it failed to adduce evidence as to the following:
(a)    the formal allegations notice of 20 February 2022 (sic);
(b)    the contract between Stockland and the respondent;
(c)    any statements from anyone employed by Stockland;
(d)    any written correspondence between Stockland and the respondent including an apparent written notice referred to at reply p 23;
(e)    any evidence about how the respondent came to its decision about the appellant’s transfer;
(f)    the email from Stockland to Mr Fajloun which recorded what was discussed at the meeting and included the periods when the footage had been altered with corresponding times where the footage showed the guards accessing the security office where the system is located, and
(g)    any evidence about what Millennium actually did by way of investigation as opposed to Stockland.

Respondent’s submissions

The respondent submits that Ground 18 of the appeal is merely a repetition in summarised form of grounds of appeal already raised by the appellant. It does not identify any further basis of error asserted to have been made by the Member and should be rejected accordingly.

Consideration

Ground 18 of the appeal does not identify a ground of appeal. It merely says that the appellant is disappointed with the result.
When the submission is considered, the respondent is correct; all of the matters raised are covered by other grounds of the appeal. Ground 18 of the appeal could have been used as a compendious collection of material in support of the principal ground upon which the appeal succeeded, namely, that there was no proper evidentiary basis for the determination of reasonableness.
Ground 18 in the appeal takes the matter no further than Grounds 1 and 2. To this extent, Ground 18 is redundant and is dismissed.

Re-Determination section 11A defence

There was no evidence to support the Member’s finding that the actions of suspending the appellant on 18 February 2023 pending investigation and excluding the appellant from the Merrylands site after he had been exonerated was reasonable.
The respondent carried the onus of proof of the defence under s 11A. The respondent did not tender the contract between Millennium and Stockland and failed to adduce evidence as to what motivated Stockland to give Millennium the directions concerning the appellant that it did. The absence of such evidence precludes a conclusion that Millennium acted reasonably in following Stockland’s demands initially to suspend the appellant and subsequently to exclude him from the Merrylands site: Jeffery. It follows that the defence under s 11A fails.
The defence under s 11A is re-determined by me. I find the appellant’s psychological injury was not caused by reasonable action taken or proposed to be taken by the respondent with respect to transfer or discipline.
The Member did not determine the question of incapacity. It follows that there needs to be a further hearing limited to the issue of incapacity and the quantum of any award that might be made in favour of the appellant. I remit the matter for determination by an alternative Member of the Commission accordingly.

DECISION

The Member’s Certificate of Determination dated 27 February 2024 is revoked.
I determine that the respondent’s defence under s 11A of the 1987 Act fails.
The matter is remitted for determination by an alternative Member of the Commission in accordance with these reasons.

Geoffrey Parker SC

ACTING DEPUTY PRESIDENT

20 January 2025