McPARLAND v Origin Oz Holdings T/A Nuline Glass

[2019] FCCA 1534

FEDERAL CIRCUIT COURT OF AUSTRALIA

McPARLAND v ORIGIN OZ HOLDINGS T/A NULINE GLASS & ORS

[2019] FCCA 1534

Catchwords:

INDUSTRIAL LAW – Contraventions of provisions of FWA – breach of contract of employment by original employer – transfer of employment – terms on which contract of employment transferred – termination of second employment – adverse action – whether adverse action causative of financial loss – whether compensation payable for distress, hurt and humiliation as a result of termination of employment – whether applicant had common law cause of action in tort or for breach of contract of employment for reasons unrelated to adverse action – pecuniary penalties to be imposed by reason of contraventions.

Legislation:

Corporations Act 2001 (Cth) s.109X(1)(a).

Fair Work Act 2009 (Cth) ss.44(1), 117, 323(1), 340(1), 341(1)(c), 342,

545(2)(b), 550.

Federal Circuit Court Rules 2001 (Cth) r.6.08(2)(a), 16.05(2)(h).

Cases cited:

Equuscorp Pty Ltd & Anor v Glengallan Investments Pty Ltd (2004) 218 CLR

471.

Finucane v New South Wales Egg Corporation (1988) 80 ALR 486.

Maybury v Atlantic Union Oil Co Ltd (1953) 89 CLR 507.

Mainteck Services Pty Ltd v Stein Heurtey SA & Anor (2014) 89 NSWLR 633.

Browne v Dunn (1894) 6 R 67 (HL).

New South Wales Police Force v Winter [2011] NSWCA 330.

Curwen & Ors v Vanbreck Pty Ltd (2009) 26 VR 335.

Toll v Alphapharm Pty Ltd & Ors (2004) 219 CLR 165.

Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153

Mushroom Composters v IS & DE Robertson Family Trust [2014] NSWSC 164

Board of Bendigo Regional Institute of Technical and Further Education v

Barclay (2012) 248 CLR 500

Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2014]

HCA 41

March v E & M, H Stramare Pty Limited & Anor [1990-1991] 171 CLR 506

Applicant:

Dean McParland

First Respondent:

Origin Oz Holdings T/a Nuline Glass (abn 152 700 420)

Second Respondent:

Benjamin Young / Benny lau

Third Respondent:

Sydney sunny Glass pty ltd

Fourth Respondent:

SHENQIANG CHI

Fifth Respondent:

tonshend capital pty ltd

Sixth Respondent

Sampau lau

File Number:

SYG 2912 of 2017

Judgment of:

Judge Egan

Hearing date:

30 April 2019, 1, 2 May 2019, 20 May 2019

Date of Last Submission:

20 May 2019

Delivered at:

Cairns

Delivered on:

5 June 2019

REPRESENTATION

Counsel for the Applicant:

Mr D. Pritchard SC & Mr T. Glover

Solicitors for the Applicant:

Harmers Workplace Lawyers

Counsel for the Third and Fourth Respondent:

Mr W. Chan

Solicitors for the Third and Fourth Respondent:

Cathay Lawyers

IT IS ORDERED THAT:

(1)     The lawyers for the parties:

(a)       forthwith cause a copy of these reasons and orders to be served upon the first respondent.

(b)      confer for the purpose of preparing draft orders, consonant with the reasons for judgment, for the Court’s consideration within seven days of the making of these orders

(2) The Court will further hear the parties as to the imposition of any pecuniary penalty arising out of a contravention or contraventions of provisions of the FWA as found by the Court.

(3)     Each party shall have liberty to apply on the giving of two days’ notice, each to the other.

1. FEDERAL CIRCUIT COURT

OF AUSTRALIA

AT Sydney

SYG 2912 of 2017

Dean McParland

Applicant

And

Origin Oz Holdings T/a Nuline Glass (abn 152 700 420)

First Respondent

Benjamin young / benny lau

Second Respondent

sydney sunny glass pty ltd

Third Respondent

SHENQIANG CHI

Fourth Respondent

TOWNSHEND CAPITAL PTY LTD

Fifth Respondent

SAMPAU LAU

Sixth Respondent

REASONS FOR JUDGMENT

Introduction

1.      At the time of commencement of the hearing on 30 April 2019:

a)        The applicant was represented by Mr Pritchard of Senior Counsel and Mr Glover of Junior Counsel.

b)        The first respondent (‘Nuline’) did not appear, and was unrepresented, notwithstanding that it had been given due notice of the fact that the matter had been listed for hearing to commence on 30 April 2019, and further, notwithstanding the fact that it failed to respond to the matter being called three times in the court precincts before the start of the hearing. Such notice was established as follows:

i)           the affidavit of Roslyn Cosgrave affirmed 30 April 2019 (‘Cosgrave Affidavit’), which proved service of various documents identified as Group A documents on 12 September 2018, and other documents identified as Group B documents (including the orders of Judge Smith dated 16 November 2018 setting down the matter for hearing). Group A documents were served on 12 September 18 and Group B documents were served on 29 March 2019; and

ii)          the affidavit of Zebediah Holmes-Baer affirmed 24 April 2019 (‘Holmes-Baer Affidavit’), which proved service of various documents including the proposed Second Further Amended Statement of Claim and the Court Book (Exhibit 1) on 24 April 2019.

iii) Service of the documents identified in the Cosgrave Affidavit and the Holmes-Baer Affidavit was effected on Origin Oz by each deponent sending a copy of the documents by post to 15 McCabe Street, North Fremantle in the State of Western Australia, being the registered office of Origin Oz pursuant to ASIC records. That was a permitted method of serving a document on a corporation pursuant to section 109X(1)(a) of the Corporations Act 2001 (Cth) and Rule 6.08(2)(a) of the Federal Circuit Court Rules 2001 (Cth)(‘the Rules’).

c)        The third respondent (‘Sunny Glass’) and the fourth respondent (‘Sunny Chi’) were each represented by Mr Chan of Junior Counsel.

d) It was noted that the claims made in the initiating application against the second and fifth respondents had been dismissed by order of His Honour Judge Smith made on 2 March 2018. (An order was made by the Court on 1 May 2019 pursuant to Rule 16.05(2)(h) of the Rules whereby it was made clear that the order of His Honour Judge Smith made on 2 March 2018 was a dismissal of the claims made in the initiating application filed on 18 September 2017 against the second and fifth respondents.)

e)        It was noted that on 15 October 2018 His Honour Judge Smith ordered that judgment be entered in favour of the applicant as against Nuline on all questions of liability relating to the allegations at paragraph 29 of the further amended statement of claim, namely that Nuline had breached its employment contract with the applicant in failing to pay to the applicant his base salary and superannuation entitlements.

2.      On 1 May 2019, by reason of the bankruptcy of the sixth respondent, it was ordered that the claims made against the sixth respondent in the initiating application filed on 18 September 2017 be dismissed. The making of such order was supported by counsel for the applicant.

3.      The applicant seeks relief pursuant to the claims made in the Second Further Amended Statement of Claim (‘2^nd FASC’) filed on 30 April 2019 as follows:

a)        As against Nuline:

i) underpayment of wages in breach of contract and in breach of section 323(1) of the Fair Work Act 2009 (Cth)(‘FWA’); and

ii)          failing to transfer certain shares to Mr McParland in breach of contract in the alternative to the Share Claim against Sunny Glass.

b)        As against Sunny Glass:

i) underpayment of wages in breach of contract and in breach of section 323(1) of the FWA;

ii)          failure to transfer certain shares to Mr McParland in breach of contract (‘Share Claim’);

iii) termination for a prohibited reason in contravention of section 340(1) of the FWA; and

iv) failure to provide notice of termination in contravention of sections 117(1) and 117(2) of the FWA;

c) As against Sunny Chi, for his involvement in contravention of the provisions of s 340(1) of the FWA.

Applicant’s employment with Nuline

4.      The applicant, Dean McParland, is 49 years of age. He commenced employment with Nuline on or about 23 March 2015 in the capacity of a general manager, Nuline being a company then carrying on business under the name or style of “Nuline Glass”.

5.      Sunny Glass and Sunny Chi conceded in the chronology filed on their behalf on 10 May 2019 that the applicant had been employed by Nuline on 23 March 2015 pursuant to a written contract and a collateral oral share contract.

6.      The applicant’s pleaded case against Nuline, uncontested at trial as it was, was  set out in paragraphs 5-8 inclusive of the 2^nd FASC as follows:

“Collateral contract to transfer shares to Applicant

5.        On 12 March 2015:

(a) in consideration of the Applicant’s promise to enter into a contract of employment with Origin to become its General Manager and including terms that the Applicant would be paid less remuneration than he was entitled to by reason of his then employment, Origin or alternatively the Sixth Respondent promised to transfer 1,000,000 fully paid shares in Baumart Holdings Limited to the Applicant once that company was listed on the Australian Stock Exchange, and on terms that the Applicant could not trade the said shares for two years during which time they would be held in escrow before being transferred to him, and assured the Applicant that the said promise would be fulfilled; and

Particulars

(i) Email from the Applicant to the Sixth Respondent dated 9 March 2015 (sent 10:28pm).

(ii) Email from the Sixth Respondent to the Applicant dated 12 March 2015 (sent at 11.34am).

(b) in consequence thereof, a contract came into existence between the Applicant and Origin, or alternatively the Sixth Respondent, pursuant to which the Applicant was to enter into a separate employment contract with Origin and Origin, or alternatively the Sixth Respondent, was to transfer to the Applicant 1,000,000 fully paid shares in Baumart Holdings Limited within 2 years of 12 March 2015 in the event that company was listed on the Australian Stock Exchange (Share Contract).

Employment of the Applicant by Origin

6.       On 23 March 2015, in fulfilment of the Applicant’s promise as pleaded at paragraph 5(a) above, the Applicant and Origin entered into a contract of employment whereby the Applicant agreed to perform the position of Origin’s General Manager and Origin agreed to employ the Applicant to perform that position (Origin Employment Contract).

Particulars

The Origin Employment Contract was express and in writing, comprising a document styled “Offer of Employment” signed by the Sixth Respondent as director of Origin and signed by the Applicant on 23 March 2015.

7.       The Origin Employment Contract included terms that:

(a) the Applicant would be paid base salary of $135,000 per annum;

(b) Origin would make superannuation contributions into a complying superannuation fund nominated by the Applicant on a quarterly basis, at a rate of 9.25% of the Applicant’s base salary; and

(c) the Applicant would receive a $500 weekly car allowance.

7A.     In the alternative to the allegation that there was a separate and collateral contract between the Applicant and the First or Sixth Respondent, by reason of the facts, matters and circumstances pleaded at paragraph 5(a) above, there was a further term of the Origin Employment Contract to the effect that Origin, or alternatively the Sixth Respondent, was to transfer to the Applicant 1,000,000 fully paid shares in Baumart Holdings Limited within 2 years of 12 March 2015 in the event that company was listed on the Australian Stock Exchange (Share Term).

8.       In or about March 2017, the Applicant’s employment by Origin came to an end as part of an arrangement between Origin and Sunny Glass whereby Sunny Glass acquired certain rights or interests of Origin, including a lease of premises then occupied by Origin, and offered employment to certain Origin employees.”

7.      The terms of the contract of employment between the applicant and Nuline can be gleaned from an examination of the following:

a)        Email of 9 March 2015 (2.49 pm) sent by Sam Lau from Nuline to applicant with original written contract offer attachment.

b)        Email of 9 March 2015 (10.28 pm) sent by applicant to Sam Lau.

c)        Email of 12 March 2015 from Sam Lau to the applicant.

d)        Varied written offer of employment from Nuline to the applicant executed by Sam Lau on behalf of Nuline and the applicant bearing the date 23 March 2015.

e)        Exhibit 1 – uncontested evidence of applicant contained in paragraphs 6-25 inclusive of the affidavit of the applicant filed on 12 September 2018.

8.      Relevantly, the email from Sam Lau to the applicant on 12 March 2015 provided as follows:

“Hi Dean,

Thank you for your email.

Salary and wages will still be paid fortnightly.

We understand that you will drop more than $20,000 in salary and bonuses to work for Origin Oz. However in return we promised to reward you with 1,000,000 shares of the company once the company is listed on the ASX.

This shares will not be listed under your name and will be escrowed for two years and you will not be able to trade them for that period. This is done to prevent employees taking a quick profit by selling the company shares as soon as they receive them and leave the company.

The main reason that we requested a small drop in your salary but will reward you with a large volume of company shares is that we are looking for a business partner, not only an employee.

We want a business partner who is prepared for the challenge and confident enough to run the business and make the business very profitable.

It is in the best interest of the company to honour our commitment to reward highly capable and motivated senior manager with large volume of company shares. Therefore you can rest assured that we will do what we promised.

Best regards

Sam”

9.      The evidence led on behalf of the applicant, as referred to above, established that Nuline and the applicant had agreed to enter into an employment contract, the terms of which were partly in writing and partly oral. Contracting parties are entitled to so arrange their contractual arrangements, as was found by Gleeson CJ, McHugh, Kirby, Hayne and Callinan JJ in Equuscorp Pty Ltd & Anor v Glengallan Investments Pty Ltd at [35] and [36]  where it was said:

“35. Secondly, in the nature of things, oral agreements will sometimes be disputable. Resolving such disputation is commonly difficult, time-consuming, expensive and problematic. Where parties enter into a written agreement, the Court will generally hold them to the obligations which they have assumed by that agreement. At least, it will do so unless relief is afforded by the operation of statute or some other legal or equitable principle applicable to the case. Different questions may arise where the execution of the written agreement is contested; but that is not the case here. In a time of growing international trade with parties in legal systems having the same or even stronger deference to the obligations of written agreements (and frequently communicating in different languages and from the standpoint of different cultures) this is not a time to ignore the rules of the common law upholding obligations undertaken in written agreements. It is a time to maintain those rules. They are not unbending. They allow for exceptions. But the exceptions must be proved according to established categories. The obligations of written agreements between parties cannot simply be ignored or brushed aside.

36. The conclusion that the respondents are bound by the written loan agreements may leave open the possibility that an earlier consensus reached by the parties was in each case a collateral agreement (made in consideration of the parties later executing the written agreement (28)), but that has never been the respondents’ case. In another case it may leave open the possibility that the contract is partly oral and partly in writing (29). But that cannot be so here. The oral limited recourse terms alleged by the respondents contradict the terms of the written loan agreement. If there was an earlier, oral, consensus, it was discharged and the parties’ agreement recorded in the writing they executed (30). It is the written loan agreement which governed the relationship between Rural Finance and each respondent.”

10.    The terms of a contract which is partly in writing and partly oral are to be ascertained from a consideration of the whole of the circumstances in which the agreement was struck. As was said by Lockhart J in Finucane v New South Wales Egg Corporation at 520.45 – 521.10:

“The contract between the Corporation and Finucane was partly oral, partly in writing and partly by conduct, and in the circumstances the court "is entitled to look at and should look at all the evidence from start to finish in order to see what the bargain was that was struck between the parties" J Evans & Son (Portsmouth) Ltd v Andrea Merzario Ltd [1976] 1 WLR 1078 at 1083 per Roskill LJ. The court may have regard to the intentions of the parties by drawing inferences from their words and their conduct in the making of the agreement, having regard also to the subject matter of the agreement and the surrounding circumstances: Allen v Carbone (1975) 132 CLR 528 at 531-2 per Stephen, Mason, Murphy JJ. The court will be prepared to place greater weight on the surrounding circumstances where the statements and actions of the parties have not been merged in a formal document exhaustively setting out. the terms of the bargain: Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 352; 41 ALR 367 at 374-5 per Mason J.”

11.    The fact that the varied written offer of employment from Nuline to the applicant executed by Sam Lau and the applicant on 23 March 2015 (referred to at paragraph 7 (d) above) had, by clause 22 thereof, an “entire agreement” clause, is not determinative. The inclusion of such a clause must be looked at in the context of the overall negotiations between the parties, and is subjugated to the express intentions of the contracting parties where they include, as part of their overall agreement, some other collateral terms freely agreed to between them.  As was said by Dickson CJ in Maybury v Atlantic Union Oil Co Ltd:

“A collateral agreement made in consideration of a main agreement cannot effectively subsist unless it is consistent with the main agreement. Once an agreement is made in writing it is treated, unless the parties are shown otherwise to intend, as the full expression of their obligations. If it is established that the writing was intended to contain only part of a fuller agreement it may be otherwise. That, however, is not the present case. But it may be established that an entirely separate agreement was made by the parties. One of them may give a collateral promise in consideration of the other entering into the principal agreement. But if such a collateral agreement is to have effect as a contract it must be consistent with the provisions of the main agreement, the making of which by the other party provides that consideration. If the promise sought to modify, control or restrict the principal agreement it would detract from the very consideration which is alleged to support the promise.”

12.    Nuline did not contest the applicant’s claims at trial concerning what constituted the terms of the contract of employment between him and Nuline. The third and fourth respondents did not seriously contend that the applicant’s employment contract was otherwise than as claimed by the applicant.

13.    Based upon the evidence adduced at trial, and further as pleaded in paragraphs 7 and 7A of the 2^nd FASC, the contract of employment between Nuline and the applicant included the following terms:

a)        the Applicant would be paid a base salary of $135,000 per annum;

b)        Nuline would make superannuation contributions into a complying superannuation fund nominated by the Applicant, on a quarterly basis, at a rate of 9.25% of the Applicant’s base salary; and

c)        the Applicant would receive a $500 weekly car allowance.

d)        Nuline would cause 1,000,000 fully paid shares in Baumart Holdings Limited to be transferred to the applicant within two years of the date on which Baumart was listed on the ASX.  Baumart was listed on the ASX on 21 May 2015.

14.    That contract of employment between the applicant and Nuline was subsequently varied to additionally countenance the payment of “a car allowance to cover the costs of obtaining a work vehicle in addition to Dean’s salary”. Such variation was evidenced by a Nuline letter acknowledging the applicant’s status as a valued employee dated 7 January 2016,  and by the applicant’s subsequent acceptance of the allowance, and his use of the allowance, for such vehicle purposes.

15.    His Honour Judge Smith ordered that judgment be entered in favour of the applicant as against Nuline on all questions of liability relating to the allegations at paragraph 29 of the further amended statement of claim.  Those allegations were that Nuline failed, neglected or refused to:

a)        Pay all of the Applicant’s base salary for the period of his employment by Nuline; and

b)        Make all contributions to a complying superannuation fund on behalf of the applicant.

Applicant’s employment with Sunny Glass

16.    It is common ground between the parties that the applicant commenced working for Sunny Glass on or about 15 March 2017.

17.    The applicant’s pleaded case against Sunny Glass as to what relevantly constituted the terms of the contract of employment entered into between Sunny Glass and the applicant is as set out in paragraph 9 of the 2^nd FASC as follows:

“Employment of the Applicant by Sunny Glass

9.        In or about March 2017, in consideration of the Applicant agreeing to be employed by Sunny Glass to perform the position of General Manager, Sunny Glass agreed to employ the Applicant to perform the position of General Manager on the same terms and conditions as the Origin Employment Contract, including the Share Term, (Sunny Employment Contract).”

18.    Nuline and Sunny Chi deny that the employment contract between Sunny Glass and the applicant was as pleaded on behalf of the applicant. Paragraph 9 of the Defence of the third and fourth respondents to the 2^nd FASC is as follows:

As to paragraph 9 of the Second Further Amended Statement of Claim, the Third and Fourth Respondents:

a. denies that the Applicant was employed to the position of General Manager and says that he was employed as a “sales” personnel for the first month, after which he was employed as Deputy General Manager;

b. deny that it was on the same terms and conditions as the Origin Employment Contract as defined and alleged in the Amended Statement of Claim; and

c. further say that the true employment contract between the Applicant and the Third Respondent included terms that:

i. the Third Respondent was to pay the Applicant an annual salary of $100,000 per annum;

ii. the Third Respondent would make superannuation contributions at 9.5%; and

iii. the Third Respondent would reimburse the Applicant for reasonable fuel expenses incurred for work purposes and on presentation of a fuel invoice.

iv. for a fixed term of three months commencing 15 March 2017 to 14 June 2017.

d. denies that the Share Term formed part of the employment contract between the Applicant and the Third Respondent.

Particulars

This was the effect of clauses 3 and 4(d) of the employment contract dated 9 March 2015 signed by the Sixth Respondent and sent to the Applicant.”

19.    For the purpose of considering the oral evidence adduced at trial on the question of what were the terms of the employment contract entered into between Sunny Glass and the applicant, documents of relevance are as follows:

a)        Text messages between Benny Young of Nuline and the applicant on 13 January 2017.

b)        Email exchanges x 2 between Benny Young and the applicant on 2 February 2017.

c)        Deed of Consent to Assignment of Equipment Lease between Baumart Holdings Limited (Lessor), Nuline (Outgoing Lessee) and Sunny Glass (Incoming Lessee) dated 2 March 2017.

d)        Letter/Email from Rob Thrift (Director of Nuline) to the applicant dated 8 March 2017.

e)        Letter/Email from Rob Thrift to the applicant dated 9 March 2017.

f)        Letter/Email from James Liu (Associate General Manager of Sunny Glass) to the applicant dated 14 March 2017.

The Rule in Browne vDunn

20.    Each of the parties who appeared at trial relied upon substantial affidavit material in support of their respective cases. Though it was accepted on behalf of the applicant that the rule in Browne v Dunn  did not have strict primary application because of the filing of extensive affidavit evidence,  it was nonetheless submitted that even where there had been an exchange of affidavits, the rule in Browne v Dunn required cross-examining counsel to put to a witness “the implications which counsel proposed to submit can be drawn from the evidence, if those implications are not obvious from the evidence, or from other pre-trial procedures, or the course of the case. …”

21.    Senior Counsel for the applicant referred the Court to the decision of the Court of Appeal in Curwen & Ors v Vanbreck Pty Ltd (per Redlich & Bongiorno JJA and Hansen AJA) where it was said:

“21. The rule in Browne v Dunn has been expressed as an obligation to put to an opponent’s witness in cross-examination the nature of the case upon which it is proposed to rely in contradiction of the witness’s evidence.¹² It is a rule of law and practice¹³ which requires the cross-examining party to provide the witness with the opportunity to deal with such evidence — or such inferences as may be drawn from the evidence — as the other party proposes to rely upon and which contradict the testimony of the witness.¹⁴

22. It was submitted that the trial judge failed to have regard to the qualification to the rule, that it will not be applied to the detriment of a party where the other party has been given adequate notice of the case that is intended to be put.¹⁵ In support of that qualification, the appellants pointed to the joint judgment of Gummow, Kirby and Callinan JJ in MWJ v R¹⁶ in which it was observed: ¹⁷

…

26. Returning then to the operation of the rule, this court said in Rees v Bailey Aluminium Products Pty Ltd: ²⁴

… The rule rests upon notions of fairness and is designed to give the witness and the party calling that witness an opportunity to meet that challenge. The rule facilitates the tribunal’s assessment of the reliability and accuracy of the witness. Consequently if matters in controversy are not “put” to the witness in cross-examination the tribunal’s capacity to assess the merit of the allegation subsequently to be made and the credit of the witness is likely to be impeded.²⁵

27. If the appellants’ submission is accepted without qualification, the fact that the party calling the witness is on notice that it is intended to challenge the witness’s evidence or impugn the witness or party’s conduct in a particular way means that compliance with the rule in that circumstance is no longer obligatory. But whatever the effect of “notice”, the burden of persuasion as to that fact does not shift.²⁶ It remains upon the party who seeks to establish the allegation. The cross-examiner who because of “notice” refrains from “putting” the allegations to the witness embarks upon a potentially dangerous forensic course.²⁷ The tribunal may not be persuaded of the fact in issue if there is no cross-examination on the issue.²⁸ That risk increases where the party who makes the allegation can adduce no direct evidence as to it and the other party, having adduced no evidence in chief as to the issue, is not cross-examined.

28. The rule facilitates the tribunal’s assessment of the issue. If the tribunal’s capacity to properly assess the merit of the allegation has been impaired because the issue was not explored with the witness, the cogency and weight to be attached to the allegation is likely to be affected.29 As Redlich J stated in Johnson Matthey (Aust) Pty Ltd v Dascorp Pty Ltd: ³⁰

Credit issues need to be identified when the witness is cross-examined and the trial unfolds. The judge’s capacity to assess the credibility of witnesses ought not to be impeded. Any relaxation of the obligation to comply with the rule in Browne v Dunn has the potential to do so, thereby increasing the risk of injustice to a witness or party.

29. Where, because there is “notice”, it is not considered necessary that the witness be cross-examined, the risk arises that the tribunal will not be able to reach an affirmative conclusion on the issue. That is to say, the consequence of the forensic choice to abstain from challenging the witness may leave the tribunal unpersuaded as to the truth of the allegation so that it will decline to reach a conclusion adverse to the witness.”

22.    The Court has had due regard to the above principles when assessing the evidence of the applicant, and other witnesses called at trial, on all issues, including issues of credibility. The Court does not find that any failure on the part of either counsel to specifically cross-examine on any issue has prevented the Court from making all appropriate findings.

Transfer of Operations at Smithfield Factory from Nuline to Sunny Glass

23.    Sunny Glass took over the operations of Nuline at its Smithfield Factory on 15 March 2017. It is not disputed that, prior to 15 March 2017,  Sunny Glass had agreed to have assigned to it the benefit of leases for machinery and equipment owned by Baumart. Such machinery and equipment had previously been leased to and used by Nuline, at such Smithfield premises, in the conduct of its glass business. That assignment, though expressed to commence on 1 April 2015,  was no doubt effected with the operational transfer date of 15 March 2017 in mind.

24.    It is not in dispute that former Nuline staff each received a letter from Nuline (copied to Sunny Glass) dated 8 March 2017.  Such letter was received by the applicant and other staff before the transfer of operations on 15 March 2017. The letter received by each such employee was addressed to them, and was in identical terms. The letter to the applicant was as follows:

Nu - Line Glass

8 March 2017

Private and confidential

Dean McParland

54 Elouera Street

Moorebank 2170

(CC to Sydney Sunny Glass)

Dear Dean,

Termination of your employment by reason of change of ownership

The purpose of this letter is to confirm the outcome of a recent review by Nu Line Glass (The Employer) on the 28^th February 2017 if its operations at its Smithfield NSW factory, and the verbal notice given to all employees on this day.

Nu Line Glass will be ceasing its operations in Smithfield as of the 14^th March 2017. The new employer Sydney Sunny Glass will be taking over all production and lease agreements as well as some assets from Nu Line Glass at the above sit on the 15^th March 2017.

Your current position will no longer be required by Nu Line Glass and therefore your position will be terminated as of the 14^th March 2017.

This decision is not a reflection on your performance.

Your new employment will restart with Sydney Sunny Glass on the 15^th March 2017 and your new position will continue with the new employer.

Based on your employment arrangements, your notice period is 2 weeks. Therefore, your employment will end on 14^th March 2017 with all entitlements owing paid in your final payment.

We thank you for your valuable contribution during your employment with us. Please contact me if you wish to obtain a reference in the future.

Yours sincerely

Rob Thrift

Nu Line Glass

Director”

25.    It was also not in dispute that on or about 14 or 15 March 2017:

a)        Sunny Glass sent a letter dated 14 March 2017 (authored by James Liu of Sunny Glass) to Rob Thrift, a director of Nuline. 

b)        Rob Thrift forwarded a copy of that letter to the applicant by email. 

26.   

The letter from Sunny Glass to Rob Thrift dated 14 March 2017 provided as follows:

“SYDNEY SUNNY GLASS PTY LTD

ACN: 603 335 548

Address: 27 Daisy Street, REVESBY NSW 2212

Tel: [phone] Fax: [phone]

[email protected]

Tuesday, March 14, 2017

Dear Rob,

Takeover of employment in Nu Line Glass by transfer of ownership

The purpose of this letter is to confirm the operation of Sydney Sunny Glass (incoming employer) at Smithfield factory and the verbal notice given to all your employees on this day.

Sydney Sunny Glass is going to operate in Smithfield at 15^th March 2017. All production and lease assets from Nu Line Glass at above site will be taken over by Sydney Sunny Glass.

Sydney Sunny Glass will continue to offer current entitlements and unchanged working hourly rate to current employees of Nu Line Glass, Sydney Sunny Glass authorize to decide to make changes to working position, may do own discretion base on employee performance during three months’ probation to make change on salary after above period and through discussion with employees.

Sydney Sunny Glass would like to thanks for your assistance and attention this transition period.

Your faithfully

James Liu

Associate General Manager

Sydney Sunny Glass”

27.    Mr Eric Chi was the son of Sunny Chi. He played a significant role in the management of Sunny Glass at the time of the takeover of the Nuline operations by Sunny Glass on 15 March 2017. He was a director and a 40% shareholder in Sunny Glass. Sunny Chi was the other shareholder in the company. Mr Eric Chi was clearly financially interested in the outcome of the subject litigation, as of course was the applicant.

28.    Mr Eric Chi was cross-examined as to when the Sunny Glass letter dated 14 March 2017 referred to above was handed to the applicant and other former employees of Nuline. Having clarified during his cross-examination that the reference by him in paragraph 13 of his affidavit filed on 23 October 2018 to annexure ‘DM-12’ to the applicant’s affidavit filed on 12 September 2018 ought to have been a reference to annexure ‘DM-13’ to that affidavit, Mr Eric Chi confirmed that such letter:

a)        Was prepared by James Liu.

b)        Was sent with his authority to Rob Thrift in his capacity as a director of Nuline.

c)        Was handed out to “each of the old Nuline staff, including the applicant” at a handover meeting at the Smithfield premises on 15 March 2017.

29.    By paragraph 8 of Mr Eric Chi’s affidavit filed on 23 October 2018, it was provided as follows:

“8. The contents of that agreement between the companies concerning the employees was later confirmed in writing between the companies on 14 March 2018. I refer to DM-12 DM-13* (Correction inserted*) at p141 of the affidavit of Dean McParland dated 12 September 2018.”

30.    Mr Eric Chi was there seeking to convey that each of Nuline and Sunny Glass had, prior to takeover on 15 March 2017, agreed on the terms by which the former Nuline employees were to be re-employed by Sunny Glass as part of ongoing Sunny Glass business operations. He did so also knowing that the applicant knew of those terms before he commenced working for Sunny Glass on 15 March 2017. The content of the 14 March 2017 letter made it clear to the applicant that in consideration of him agreeing to be employed by Sunny Glass, his entitlements would remain unchanged. Such prior agreement between Nuline, Sunny Glass and former Nuline employees, as confirmed in writing, was in the circumstances normal commercial practice where a change of employment was agreed to occur on 15 March 2017.

31.    The relevant terms of the confirmation of the agreement between Nuline and Sunny Glass concerning the transfer of the applicant’s employment were embodied in the agreement by the use of the words:

“Sunny Glass will continue to offer current entitlements and unchanged working hourly rate to current employees of Nuline Glass. …”

32.    When construing what the actual rights and liabilities of parties to a contractual arrangement are, the High Court in Toll v Alphapharm Pty Ltd & Ors at [40] per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ said:

“[40] This Court, in Pacific Carriers Ltd v BNP Paribas (20), has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction (21).”

33.    Based upon the surrounding circumstances leading up to and including the applicant’s commencement of employment with Sunny Glass on 15 March 2017, the Court finds that a reasonable person would expect that upon the applicant commencing work with Sunny Glass, the applicant would be entitled to receive that to which he was entitled under the former Nuline contract of employment.

34.    Post contractual conduct might be considered for the purpose of identifying whether a contract was formed, but not as to the terms of such contract. In Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 at 163-164 [25]-[26] per Heydon JA it was said:

‘24. The first relevant principle of law is that pre-contractual conduct is only admissible on questions of construction if the contract is ambiguous and if the pre-contractual conduct casts a light on the genesis of the contract, its objective aim, or the meaning of any descriptive term: Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337 at 347-352.

25. The second relevant principle is that post-contractual conduct is admissible on the question of whether a contract was formed: Howard Smith & Co Ltd v Varawa [1907] HCA 38; (1907) 5 CLR 68 at 77; Barrier Wharfs Ltd v W Scott Fell & Co Ltd [1908] HCA 88; (1908) 5 CLR 647 at 668, 669 and 672; B Seppelt & Sons Ltd v Commissioner for Main Roads (1975)1 BPR [97011] at 9149 and 9154-9156; Film Bars Pty Ltd v Pacific Film Laboratories Pty Ltd (1979) 1 BPR [97023] at 9255.

35.    Further, as McDougall J said in Mushroom Composters v IS & DE Robertson Family Trust [2014] NSWSC 164 at [127]-[130] inclusive:

127. In some cases, it is necessary to look at the conduct of the parties, at a time when or after when one of them says a contract was formed at all. That will be so, for example, where it can be seen that one party made an offer, intended to be lead to the formation of a contract to the other, and where the other is said to have accepted that offer not expressly but by its conduct, subsequent to the making of the offer. Its conduct may show that “it agreed to all the conditions contained in the offer” (to quote Ipp AJA in Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; (2001) 53 NSWLR 153 at [173]). The same point was made by Heydon JA in the same case at [81] to [85].

128. An examination of conduct for that purpose is particularly relevant where offer and acceptance analysis is inconclusive. As Heydon JA said in Brambles at [71], offer and acceptance analysis “is neither sufficient to explain all cases nor necessary to explain all cases” of contract formation, and “does not work well in various circumstances”.

129. Although, as will be seen, the present case does require analysis of the circumstantial evidence to see whether (and if so on what terms) a contract was formed, I am for the present looking at a narrower application, or use, of post-contractual conduct.

130. For that more narrow purpose, the authorities seem to me to establish two, related, propositions. The first is that post-contractual conduct may be relevant to prove whether a contract of the kind for which one party contends was made. The second is that such conduct may be relevant to prove an admission by the other party of such a contract, or of (some of) its terms, or of a fact relevant to the existence of a contract.

36.    It is of no moment then, when objectively considering the actions of the applicant, Sunny Chi and Eric Chi after 15 March 2017, that a reasonable person might question  why the applicant continued in employment with Sunny Glass, without complaint, in circumstances where, from the time of the commencement of such employment with Sunny Glass, the wage and other remuneration paid to him was less than that which he asserted he was entitled to be paid at the end of his employment with Nuline. A reasonable person would ask why the applicant continued to work for Sunny Glass in such circumstances.

37.    The answer lies in an examination of the applicant’s particular circumstances both as at, and after, 15 March 2017. As to both the applicant’s claimed but un-delivered share entitlement, and his underpayment of wages and other remuneration before 15 March 2017, it is likely that after 15 March 2017 the applicant was not wanting to prejudice his actually having the shares transferred to him. The value of the shares far outweighed any temporary underpayment of wage and other entitlements. The applicant no doubt appreciated that he was in a vulnerable position. Notwithstanding assurances from Benny Young that the shares would be transferred to him, the applicant had no control over when or how that would be done. It is understandable that in such circumstances the applicant decided to go quietly, and not rock the boat by complaining to Sunny Glass about his entitlements.

38.    Eric Chi and Sunny Chi said that the reason the applicant was paid what he was paid was because that was the agreement which had been reached between them and the applicant. The applicant denied that there was any such agreement.

39.    When considering all of the surrounding circumstances of the change of employment contextually – and having regard to the principle of objectivity as discussed above – it is considered that a reasonable person, having knowledge of all of the relevant facts, matters and circumstances , would believe that it was part of the employment contract between the applicant and Sunny Glass that the applicant’s terms of employment with Sunny Glass would replicate the terms of employment which governed his contractual relationship with Nuline.

40.    The terms of the applicant’s employment with Nuline, as referred to in paragraphs 13 and 14 above, and as found by the Court, were as follows:

a)        the Applicant would be paid a base salary of $135,000 per annum; and

b)        Nuline would make superannuation contributions into a complying superannuation fund nominated by the Applicant, on a quarterly basis, at a rate of 9.25% of the Applicant’s base salary; and

c)        the Applicant would receive a $500 weekly car allowance; and

d)        Nuline would cause 1,000,000 fully paid up shares in Baumart Holdings Limited to be transferred to the applicant within two years of the date on which Baumart was listed on the ASX. Baumart was listed on the ASX on 21 May 2015.

e)        the payment of “a car allowance to cover the costs of obtaining a work vehicle in addition to Dean’s salary”.

41.    Such finding is also supported by relevant and compelling credibility findings on point.

Credibility Findings

42.    It was submitted on behalf of the applicant that the applicant was a witness of credit, and that his evidence as to relevant events should generally be preferred to the evidence of Sunny Chi and Eric Chi. Conversely, it was submitted on behalf of the third and fourth respondents that the applicant was an unreliable witness in all important respects.  There is force in each of the arguments so put in respect of different aspects of the evidence.

43.    On the issues relating to the terms of his employment contract with Nuline, and as to the relevant conversations the applicant had with Sunny Chi and Eric Chi concerning what those terms of employment were, the applicant was observed to give direct evidence in a clear, concise and responsive manner during cross-examination. His affidavit evidence on point was likewise clear and credible. Sunny Chi was evasive and non-responsive to questions asked of him during the course of cross-examination concerning his conversations with the applicant about the applicant’s terms of employment with Nuline, and as to conversations leading up to, and at the time of, the termination of the applicant’s employment by Sunny Chi on 6 June 2017. The Court did not find Sunny Chi to be a witness of credit.

44.    Nor was Eric Chi a witness of credit. The Court does not accept that the conversation as set out in paragraph 14 of the affidavit of Eric Chi filed on 23 October 2018 – which Eric Chi alleged occurred between himself, Sunny Chi, James Liu and the applicant on 15 March 2017 – ever took place. The content of the alleged conversation as set out in the Eric Chi affidavit, implausibly framed in too precise a manner having regard to the manner in which Sunny Chi and the applicant each gave their evidence, was robustly denied by the applicant in a plausible and credible manner.

45.    The Court accepts that on the question of what conditions of employment were or were not agreed to between the applicant on the one part, and Sunny Chi and Eric Chi on behalf of Sunny Glass of the other part, the evidence of the applicant is to be preferred.

46.    As to the lack of complaint made by the applicant about wage and other entitlement underpayments for the whole of the period of his employment with Sunny Glass, it is to be noted that such period was from 15 March 2017 until the time when the applicant ceased employment with Sunny Glass on 6 June 2017. The applicant was on leave for much of that time. Notwithstanding that the applicant was entitled to be paid the sum of $135,000 base annual salary plus superannuation, that being the applicant’s entitlement pursuant to his Nuline terms of employment, he was only paid by Sunny Glass on the basis of a base annual salary entitlement of $100,000 plus superannuation. He was not paid a car allowance. The loss suffered by the applicant between 15 March 2017 to 6 June 2017 is at least compensable as follows:

a)        $5,374.82 base salary underpayment.

b)        $523.39 superannuation underpayment.

c)        $6,000.00 non-payment for car allowance (12 weeks x $500

Total  $11,898.21

Share Claim against Sunny Glass

47.    Upon receipt of the 8 March 2017 and 9 March 2017 Nuline letters  (each of which were email copied to Sunny Glass) advising him that as and from 15 March 2017 his employment was being transferred to Sunny Glass “with all current entitlements and your hourly rate unchanged as agreed by Sydney Sunny Glass”, the applicant well knew that he had not had transferred to him the 1,000,000 Baumart shares as promised by Nuline. That had been a considerable concern to him over some time as evidenced by his conversations, correspondence and text messages with Nuline’s Benny Young.

48.    Nuline failed to cause 1,000,000 Baumart shares to be transferred to the applicant by 21 May 2017 – that being the intended transfer date 2 years after Baumart was listed on the ASX. Sunny Glass has also failed and refused to cause 1,000,000 shares, with an agreed value of $240,000, to be transferred to the applicant. The applicant claims an entitlement to be paid the sum of $240,000 in lieu of such transfer.

49.    Sunny Chi deposed in paragraphs 5 and 6 of his affidavit filed on 31 October 2018  that in a meeting held between him, Eric Chi, James Liu and Sok Teoh of Baumart on 1 March 2017, Sunny Chi was asked by Sok Teoh, in Chinese, whether Sunny Glass would employ the staff previously employed by Nuline. Paragraphs 5 and 6 of that affidavit provided as follows:

“5. Around 1 March 2017 I had a meeting with Sok, Eric Chi (“Eric”) and James Liu (“James”). Both Eric and James worded for SSG. During this meeting I had a conversation to the following effect with Sok in Chinese:

Sok said: “When you move into Smithfield can you also take the staff from Nuline? I don’t want them to be out of a job.”

I said: “Yes I can but I will only offer them a 3 month job first. If they perform well I’ll give them a full contract after.”

6.  I then asked about the general cost of the staff. In particular I had a conversation with Sok to the following effect:

I said: “Dean is the most senior staff. How much is he paid?”

Sok said: “$100k [$100,000] and super.”

I said: “Is there a contract with him? Can you show me?”

Sok said: “Yes there is. I’ll find it for you; I don’t have it here. I do have his last payslip.”

Sok then handed me a copy of the last payslip from Origin to Dean with the payslips for each of the other seven employees. Annexed hereto and marked “B” is a copy of the last payslip from Origin to Dean.

I said: “Do you pay him car allowance?”

Sok said: “Dean’s car is his own but we pay for fuel.””

50.    Notwithstanding that Sok Teoh was a Baumart employee and not a Nuline employee, by having affirmed that such conversation had occurred, Sunny Chi was importantly acknowledging that at least as far as Sunny Chi was concerned, Sunny Chi knew that the applicant had a written contract of employment with Nuline. So much was clear from his having allegedly been told by Sok Teoh that a copy of the contract would be found. Whether Sunny Chi believed Sok Teoh or not when he allegedly told Sunny Chi that the applicant was paid “$100k [$100,000] and super”, is irrelevant to the Court’s consideration as to whether the terms of the Sunny Glass letter of 14 March 2017 – by which the representation that the then current employment entitlements of Nuline staff would continue to be honoured by Sunny Glass – was binding on Sunny Glass or not.

51.    As to the question why Sok Teoh might have been having a conversation with Sunny Chi about the transfer of Nuline worker entitlements upon their commencement of employment with Sunny Glass rather than Sunny Chi having such conversation with someone from Nuline, Sok Teoh’s involvement was most likely trying to protect Baumart’s position. His intervention was probably related to a fear on the part of Baumart that Nuline, which had experienced a business downturn in 2016, might default on the payment of moneys pursuant to its lease obligations owed to Baumart should it not assign its lease obligations to a more commercially viable business. Sok Teoh was likely trying to ensure that a company which was well able to meet the payment of ongoing lease obligations was available to have assigned to it the Nuline lease agreement obligations. The making of representations by Sok Teoh concerning Nuline staff entitlements was a matter which Sunny Chi and Eric Chi could have independently verified for themselves with Nuline management personnel.

52.    If Sunny Glass, by and through Sunny Chi and Eric Chi, did not then (or at some later time prior to 15 March 2017) know of the existence of the Nuline obligation to transfer 1,000,000 Baumart shares to the applicant, then that demonstrated a lack of commercial diligence on their part. The failure of any Sunny Glass director or employee to obtain a copy of both the 12 March 2015 Nuline email from Sam Lau to the applicant  and a copy of the written contract agreement between the applicant and Nuline dated 23 March 2015 , before Sunny Glass agreed to continue to offer “current entitlements and unchanged hourly working rates” to the applicant, was reckless. If Sunny Chi relied upon representations made to Sunny Chi and Eric Chi by Sok Teoh without first confirming the accuracy of such representations with relevant Nuline personnel, and if Sunny Chi and Eric Chi failed to obtain a copy of any relevant written contract documentation evidencing the contract of employment between the applicant and Nuline, then they took a commercial risk in doing so, and cannot now complain that they didn’t know what they were committing Sunny Glass to do.

53.    As to Sunny Chi’s denial that the applicant was ever entitled to have the 1,000,000 Baumart shares transferred to him, the conduct of Sunny Chi in failing to so acknowledge any obligation on the part of Sunny Glass in respect of the transfer to the applicant of the Baumart shares may have had its genesis in a conversation held between him and the applicant in late 2016 as set out in paragraph 15 of the applicant’s affidavit filed on 16 November 2018. In that affidavit, the applicant swore that he had a conversation with Sunny Chi about his entitlement to the receipt of 1,000,000 shares “from Baumart”. The Court accepts that such conversation was as deposed to in the applicant’s affidavit, namely as follows:

“15.

Me:   “I will receive 1,000,000 shares from Baumart in May or June next year as agreed in my contract so I want the business to do well.”

Sunny:  “You have shares?”

Me:              “No, not yet. They are being held for me until around May or June 2017.”

54.    Such conversation probably had the effect of satisfying Sunny Chi that any entitlement on the part of the applicant to receive 1,000,000 Baumart shares was a matter between him and Baumart. He was probably erroneously satisfied that he didn’t need to further concern himself about that issue. He may have been lulled into such sense of satisfaction by the innocent use of the applicant’s spoken words which, on one interpretation, could have given rise to a belief by Sunny Chi that there was some obligation on the part of Baumart to provide the applicant with the 1,000,000 shares. Because of his resultant lack of concern about the possibility of Sunny Glass ever having an obligation to the applicant concerning the 1,000,000 Baumart shares, and because no one from Nuline or Baumart had said to him that it was part of the applicant’s contract of employment entitlement with Nuline that the applicant would receive such shares, or had otherwise provided Sunny Chi with the applicant’s written contract documentation, Sunny Chi erroneously believed that Sunny Glass had no obligation to pay for the applicant’s shares, or to cause the shares to be transferred to the applicant. Sunny Glass may have, as a result, a claim against Nuline, Sok Teoh or Baumart, but that is irrelevant to its contractual obligations owed to the applicant in respect of the shares, based on both the written representations and the conduct of Sunny Glass in respect of its agreement to continue to offer “current entitlements” to the applicant if he commenced employment with Sunny Glass on 15 March 2017.

55.    The Court finds that each of Nuline and Sunny Glass is liable to pay to the applicant the agreed value of the Baumart shares as at the date of trial, namely the amount of $240,000. Interest at the applicable rate is payable on such sum from the date of the making of the first demand for the transfer of such shares to the applicant after the applicant’s termination of employment on 6 June 2017, or alternatively from the date of the making of the first demand for payment of the value of the shares after 6 June 2017.

Circumstances Leading to Applicant’s Cessation of Employment

56.    There is no question that the applicant commenced employment for Sunny Glass on 15 March 2017. He attended daily and went about his duties for Sunny Glass in broadly the same way in which he had carried out such duties for Nuline. However, after three weeks of employment, the applicant became unhappy with safety conditions then prevailing at the Sunny Glass Smithfield site.

57.    In paragraphs 53 – 69 inclusive of his affidavit filed on 12 September 2018, the applicant set out in detail a number of dangerous work practices which were in place at the Sunny Glass operations. He referred to a number of conversations which he had with Sunny Chi between 5 April 2017 and 14 April 2017 in relation to safety and work practice issues. Each conversation was prompted by unsafe work practices. There was one particularly serious event which occurred on 13 April 2017 when glass had been allowed to spill out of a container then suspended in the air by a crane. A remote control for the crane suspending the container carrying the glass had been mistaken for a different remote control for a different crane, and its unintended use had caused the glass to fall, nearly resulting in a near fatal accident.

58.    In paragraph 17 of his affidavit filed on 31 October 2018, Sunny Chi admitted that the applicant had complained to him on 14 April 2017 about unsafe work practices, albeit that he denied that he had yelled aggressively at the applicant at the time. However, when cross-examined on the point, Sunny Chi initially said that he “did not know” about any complaints being made by the applicant to him about workplace safety in April 2017 , before conceding that some conversations had in fact been had with the applicant about safety at that time.

59.    On 19 April 2017 the applicant contacted Worksafe NSW (‘Worksafe’) and made an anonymous complaint about unsafe work practices at the Sunny Glass Smithfield operations.

60.    On 20 April 2017 the applicant sent an email to Sunny Chi, Eric Chi and James Liu informing them that for family reasons the applicant would be heading to Tasmania to join his family on 26 April 2017 and that he would be taking 3 days leave for that purpose. The applicant also reminded them that he had annual leave “coming up from May 29^th – June 2^nd (Returning to work on Monday June 5^th”.

61.    On 24 April 2017 the applicant presented at the rooms of one Dr Diddee. A record of that consultation is as follows:

“Progress notes for Dean McParland

Monday April 24 2017                 16:07:35

Dr. M. Diddee

1/

130/90

BLOOD CHECK DUE

2/

CO R HEEL PAIN

WORSE AFTER REST

SETTLES AFTER WALKING

O/E

TENDER OVER CALCANEAL TIP OF R HEEL

A HEEL SPUR

PLAN

HOME EXERCISES THEN REVIEW

3/

ANXIOUS / POOR SLEEP

LOW MOOD

VERY STRESSED

PROBLEMS ADJUSTING TO CHANGES AT WORK

NOT COPING WITH NEW DIRECTORS MANAGEMENT PRACTICES

NOT SUICIDAL NOT HOMICIDAL

COUNSELLED AT LENGTH

A ADJUSTMENT DISORDER / DEPRESSION

PLAN

REST

REVIEW 1/52

Actions:

Pathology requested: FBE MBA TSH; TSH FT4 FT3; CHOL TG HDL LDL – FAST BLOOD CHECK STRESS/ ADJUSTMENT dISORDER

Letter Created – re. MC to MC

Letter Printed – re. MC to MC”

62.   It is significant that as at 24 April 2017, Dr Diddee diagnosed the applicant as having “Adjustment Disorder / Depression”. It is also significant that such condition was diagnosed in the context of the applicant having apparently told Dr Diddee that he was “not coping with new directors management practices”. 

63.   The applicant next attended Dr Diddee on 1 May 2017, presumably after his return from Tasmania. Dr Diddee recorded that the applicant was not coping with changes at work and she prescribed for the applicant the anti-depressant / anti-anxiety drug Zoloft. The applicant was given 1 week off work. 

64.   At a time prior to 1 May 2017, when the applicant was on sick leave, the applicant had made an arrangement for a job interview on that date, with a different prospective employer, through a person named Andrew Wanden (who was described as an “Organiser”) for the purpose of the holding of the meeting described as “Intermac Interview”. Though such interview was cancelled, as confirmed by the applicant during cross-examination, it nevertheless demonstrated an intention on the part of the applicant to seek alternative employment as early as late April 2017. 

65.   On 4 and 5 May 2017, the applicant was, via text, pressing Benny Young of Nuline concerning when the Baumart shares would be transferred to him. 

66.   The applicant further attended Dr Diddee on 8 May 2017, 15 May 2017 and 25 May 2017. Relevant medical certificates recorded that the applicant was unfit for work from 24 April 2017 until 5 June 2017.  None of the doctor’s notes made specific reference to what life stressors the applicant might have been experiencing at the times of his consultations, though the progress note of 8 May 2017 recorded that the applicant had been counselled “re: dealing with stressors in work and life issues.” No detail was provided as to what life issues might have been the subject of such counselling.

67.   On 10 May 2017, when the applicant was still on sick leave, the applicant applied for a job with CSR, contacting a person named Lisa McDonald for that purpose. Attached to such email by PDF was a summary of the applicant’s job description at Sunny Glass. The job application in part read as follows:

“Hi Lisa,

I would like to apply for the advertised position of “Planning & Administration Manager”. I have been in the industry for 31 years and I have a very good understanding of the Lisec machines & software. I am currently looking for a new challenge as my current role is not challenging for me due to structural changes. … I would like the opportunity to meet with you to discuss this position. I am currently on leave until Monday 5^th June & I am available to meet up to Friday 26^th May.

Please do not respond to the below mobile number or email as I only have limited access to my emails and have left the mobile at the office.

You can contact me on …”

68.   That letter / email was significant in a number of respects. It was sent two days after the applicant had attended Dr Diddee on 8 May 2017 when Dr Diddee recorded of the applicant that he was “anxious when thinking about work” and “depressed with circumstances of work”. Secondly, the letter was framed in resolute terms suggestive of the applicant’s desire to seek new employment because the applicant’s role with Sunny Glass was no longer challenging. Thirdly, the applicant was resolutely seeking new employment notwithstanding that, two days earlier, he had been recorded as saying to Dr Diddee that he had become anxious when thinking about work. There was no clarity as to whether the doctor’s notes referred to the applicant as only being anxious when thinking about work at Sunny Glass, or whether it was a reference to thoughts of work generally which gave rise to anxiety.

69.   On 24 May 2017, the applicant sent an email with CV attachments to one Tony O’Leary, who was someone he knew through his son’s sporting activities, and who also ran a recruitment company. In part that email read:

“Tony

Please see attached, please don’t respond to this email, you can use [email protected] as you can see I’ve only ever worked in glass but happy to look at other options. I need a new challenge in my life mate as I’m getting somewhat bored in the glass sector now. I am away next week (School hockey) but will be back on deck from Monday 5^th.”

70.   By 29 May 2017, still at a time when the applicant was on sick leave, arrangements had been made between Lisa McDonald of CSR Recruitment and the applicant for the applicant to attend an employment interview with personnel from a company called “Viridian” on 7 June 2017.

71.   Also whilst on stress leave in May 2017, the applicant contacted one Britney Wild, a colleague at Sunny Glass who knew that the applicant had made a complaint to Worksafe. He asked her whether any Worksafe inspector had yet attended at the premises. Ms Wild said that no-one from Worksafe had yet attended. About a week after that call, the applicant again made a call to Sunny Glass “about some work matters” and was informed by a colleague called Ms Trimarchi that Worksafe had attended at the premises the day before. The applicant sought details of what had happened at the inspection from Ms Trimarchi.

72.   The fact that the applicant was intent on querying fellow employees about the progress of any Worksafe inspection during a period when he was supposedly on stress leave, allegedly as a result of workplace stress caused by unsafe work procedures, shows that the applicant was, despite his allegedly distressed state, very much able to remain focussed on workplace health and safety considerations at Sunny Glass.

73.   As to the attendance at the Sunny Glass premises by the Worksafe inspector on 15 May 2017, at paragraph 19 of his affidavit filed on 31 October 2018, Sunny Chi said that he initially thought that the Worksafe inspection on 15 May 2017 was a “routine inspection” until he read what the applicant had said in his affidavit filed after the commencement of proceedings. By such affidavit, the applicant disclosed that he had made an anonymous complaint to Worksafe about unsafe work practices at the Sunny Glass Smithfield operations. However, during cross-examination, Sunny Chi admitted that he thought that the inspection was routine up until the time that he was told by the Worksafe officer that the inspection was taking place consequent upon the making of a complaint.  Sunny Chi’s affirmed evidence contrasted with his responses to questions asked of him in cross-examination. Such responses during cross-examination about his affirmed evidence were lacking in credibility.

74.   As a result of the Worksafe inspection on 15 May 2017, Sunny Glass was issued with a number of “Improvement Notices” which required a number of workplace health and safety concerns to be addressed on or before 5 June 2017.  The court finds that Sunny Chi was upset and galled by the issue of, and Sunny Glass’s receipt of, such notices.

Circumstances Surrounding Applicant’s Attendance at Smithfield on 6 June 2017

75.    At paragraphs 85 – 92 of the applicant’s affidavit filed on 12 September 2018, the applicant detailed an abusive exchange between himself and Sunny Chi upon the applicant’s return to work on 6 June 2017. The applicant alleged that Sunny Chi entered his office and was shouting at him to “get out”, saying that there was no job for him. Sunny Chi denied that he had shouted at the applicant, or that he had told the applicant to “get out”. He also denied that he was aggressive in any way toward the applicant. 

76.    Sunny Chi had admitted in cross-examination that as soon as he saw the applicant on 6 June 2017 he went to see the applicant in the applicant’s office. 

77.    Ms Wild was a fellow Nuline and Sunny Glass employee who had nothing to gain from embellishing her evidence to support the applicant’s case. As to the events of 6 June 2017, Ms Wild swore in her affidavit filed on 20 November 2018, in paragraphs 13 – 17 inclusive and 19, as follows:

I was at the Smithfield Premises on 6 June 2018.

14.                  I recall the Applicant and Sunny having a conversation in the Applicant’s office. The Applicant’s office was located near the front of the Smithfield Premises. My desk was the first desk on the left handside when entering the admin office located in the middle of the admin office, approximately 3-4 meters from the Applicant’s office.

15.                  Although I could not hear every word of the conversation, I did hear that Sunny was shouting at the Applicant. I heard Sunny shout words to the effect of:

“This is my company, I will run this how I want.”

16.                  The Applicant did respond and yell back at Sunny however, I remember he said words to the effect of:

“Stop shouting. There are people in the office that are trying to work here.”

17.      Sunny continued to shout at the Applicant after this. Sunny shouted words to the effect of:

“Get out”; and

“You can leave”.

…

19.      Following from this conversation, the Applicant came to speak with, and say goodbye to me, the Applicant said words to the following effect:

“Ok, well Sunny has fired me and I’m leaving.””

78.    In cross-examination it was put to Ms Wild that Sunny Chi did not shout at the applicant, or that the applicant had said “stop shouting” to Sunny Chi. She denied what was put to her. She presented as a credible witness with no grudge to bear. Her version of events supports the applicant’s version of events, and her evidence was worthy of acceptance.

79.    It was put to Sunny Chi in cross-examination that his version of events as set out in paragraphs 24 – 31 of his affidavit filed on 31 October 2018 was false. Sunny Chi’s denial to that proposition fell into the same category of evidence as the assertion in his affidavit to the effect that he believed that the Worksafe inspection 15 May 2017 was “routine” until he appreciated that it was as a result of the applicant’s having made a complaint as set out in his affidavit. His version of events was at times contradictory. He was not an impressive witness. To the extent that his version of events surrounding the cessation of the applicant’s employment with Sunny Glass on 6 June 2017 differed from that of the applicant, the applicant’s version is accepted.

80.    The Court finds that upon being informed that the Worksafe inspection on 15 May 2017 occurred as a result of the making of a complaint, Sunny Chi deduced that the applicant was the source of the complaint. The Court does not accept Sunny Chi’s denials to the contrary. 

81. In so accepting the applicant’s version of events and the case as propounded on behalf of the applicant, the Court necessarily finds that the applicant’s termination of employment by Sunny Chi on 6 June 2017 was unlawful adverse action within the meaning of s 342 of the FWA, and in contravention of the provisions of s 340 of the FWA. The applicant had lawfully exercised a workplace right to complain about unsafe work practices. Sunni Chi formed the view that the applicant had made the complaint to Worksafe about unsafe work practices at the Sunny Glass premises and penalised him by terminating his employment. The respondents have failed to establish that the termination of employment was unrelated to the applicant’s exercise of a workplace right.

82.    The Court finds that Sunny Chi, on behalf of Sunny Glass, denigrated the applicant for his having exercised that workplace right. The Court further finds that Sunny Chi dismissed the applicant by way of payback with malice, believing that the applicant was the source of the complaint made to Worksafe. The evidence of Sunny Chi to the contrary during the course of cross-examination, and his evidence to the effect that the applicant left his employment of his own accord, was lacking in credibility.  True it was that the applicant was actively seeking employment elsewhere leading up to 6 June 2017, but that does not dissuade the Court from finding that on the issue of Sunny Chi’s reasons for the termination of the applicant’s employment, the applicant’s version of events is to be preferred.

83. It is not in dispute that in the circumstances of the applicant’s termination of employment no notice of termination whatsoever was given to the applicant. In circumstances where Sunny Chi had actual knowledge of all relevant facts, matters and circumstances leading up to the applicant’s termination of employment on 6 June 2017, and further where Sunny Chi relevantly engaged in the conduct constituting the adverse action, it follows that Sunny Chi is accessorily liable for Sunny Glass contraventions by operation of the provisions of s. 550(1) of the FWA.

84.    The Court is satisfied that Sunny Glass, as the applicant’s employer, contravened the provisions of:

a) Section 117(1) of the FWA, and in turn section 44(1) of the FWA, by dismissing the applicant without having given written notice.

b) Section 117(2) of the FWA, and in turn section 44(1) of the FWA, by dismissing the applicant without having given the minimum one week period of notice.

c) Section 340 of the FWA, by taking adverse action against the applicant when exercising a workplace right pursuant to s 341(1)(c) of the FWA.

d) Section 323(1) of the FWA by failing to pay all of the applicant’s base salary, car allowance, share allotment/transfer and superannuation entitlements.

85. The court is further satisfied that Nuline, as the applicant’s former employer, contravened the provisions of s. 323(1) of the FWA by failing to pay all of the applicant’s base salary, car allowance, share allotment/transfer and superannuation entitlements.

Post 6 June 2017 Events

86.    On 21 June 2017, CSR Recruitment confirmed the applicant’s completion of pre-employment documentation prior to the applicant’s commencement of employment with Viridian.  The applicant in fact commenced employment with Viridian on 26 June 2017.

87.    The Court finds that the applicant had, as early as late April 2017, evinced an intention to leave the employment of Sunny Glass and obtain employment elsewhere. So much is clear from the persistence with which the applicant made alternative job applications as referred to above. The applicant went far further than just testing the water. He actively pursued Ms McDonald about the progress of his job application with Viridian.  The applicant did so at times when he was on stress leave. There is a disconnect between the applicant being on stress leave for alleged work related issues on the one hand, yet his still being able to actively seek further alternative employment opportunities through recruitment agents, and otherwise remain actively involved in the progress of a workplace health and safety complaint made by him against Sunny Glass, on the other hand.

88.    Having made application for a job with Viridian on 10 May 2017 through CSR Recruitment, that application process resulted in confirmation of the applicant’s medical assessment check-up for that position being given to CSR Recruitment on 9 June 2017.  The Completed Health Assessment report prepared as a consequence related to an assessment undertaken on 14 June 2017 at 8.45 am. 

89.    A WHA Candidate Questionnaire was completed by the applicant in conjunction with the carrying out of the health assessment arranged by CSR Recruitment.  The Court finds that the applicant was untruthful when filling out such questionnaire.

90.    Under the heading MENTAL HEALTH – Q4. Mental health – Do you currently have OR have you EVER had any of the following?, the applicant falsely answered in the negative to the question:

“Have you ever had any mental health issue requiring medication (anti-depressants, sedative or sleeping tablets) or counselling?”

91.    In circumstances where the applicant had, between 1 May 2017 and 5 June 2017, been diagnosed as suffering from depression and anxiety by Dr Diddee (such diagnosis not only requiring the applicant to be counselled at length by Dr Diddee, but also requiring the prescription of anti-depressant/anti-anxiety medication, as well as requiring the applicant to have substantial time off work for such symptoms), the applicant must have been alive to the gravity of answering health questions truthfully. Those health issues were matters which were clearly within the applicant’s ken and his answer to the above question was plainly false.

92.    So too were his negative responses to the questions as to whether he had ever experienced depression, anxiety or insomnia.  The applicant also falsely answered a declaration at the end of the questionnaire to the effect that all of the information provided by him in the questionnaire was “correct and that I have not provided any misleading particulars”.

93.    The Court is not persuaded that the applicant has demonstrated that any major depressive order, as diagnosed by Ms Morrow (clinical psychologist) at 5.1 of her report dated 22 November 2018 , was causally related to the applicant’s termination of employment. As was found by Mason CJ, Deane, Toohey and Gaudron JJ in March v E & M, H Stramare Pty Limited & Anor , where negligence is in issue, causation is essentially a question of fact to be answered by reference to common sense and experience and one into which considerations of policy and value judgments necessarily enter. So too it is the case here when considering whether statutorily based compensation ought to be awarded or not.

94.    At 6.1 of her report, Ms Morrow, when responding to the question as to what her view was as to the cause or causes of the applicant’s psychological condition, said:

“At this stage no definitive causative factor has been identified,…”

95.    At 6.2 of her report, Ms Morrow said as follows:

In considering the development of Mr. McParland’s psychological disorder the apparent contributing factors include;

•         and the feeling of shame and helplessness that Mr. McParland has experienced in the face of the alleged critical appraisal, verbal denigration and summary dismissal by his manager, Sunny.

•         the financial stress caused by the loss of income and shame that he trusted his employers

•         the sense of helplessness in the face of betrayal by his employer regarding the non-issue of shares

•         the feeling of helplessness in the face of failed mediation”

96.    The factors recorded as giving rise to the applicant’s condition identified by Ms Morrow were largely related to matters unconnected with the applicant’s termination of employment. The letter of instruction to Ms Morrow from Harmers Workplace Lawyers  made no reference to the fact that the applicant had first consulted Dr Diddee in relation to work related anxiety/depression on 24 April 2017, nor that the Applicant had been declared unfit for work by Dr Diddee, and was off work on stress leave, by reason of such condition, from 24 April 2017 until 5 June 2017. Had Ms Morrow known that the applicant had evinced an intention to leave his employment after the onset of anxiety / depression symptoms (which resulted in the applicant being off work on stress leave allegedly arising out of his employment from 24 April 2017 to 5 June 2017) – a matter which significantly has not been addressed in Ms Morrow’s report – the Court doubts whether Ms Morrow would have included reference to summary dismissal as one of a number of contributing factors to the applicant’s condition at all. The Court accepts, rather, the overriding view of Ms Morrow expressed in 6.1 of her report that she could not identify any definitive causative factor giving rise to the condition.

97.    In those circumstances, having formed an adverse view as to the applicant’s credibility on matters relating to the cause, nature or extent of any psychological condition alleged to be suffered by him, the Court finds that the cause of any psychological condition continued to be experienced by the applicant post 6 June 2017 was something related to the applicant’s employment but which predated, and was not exacerbated by, the applicant’s termination of employment.

98.    Any condition suffered by the applicant post 6 June 2017 was therefore unrelated to the date of, or circumstances surrounding, the applicant’s termination of employment. The Court further finds that the symptoms as diagnosed by Ms Morrow do not constitute distress, hurt or humiliation for the purposes of the making of an order for compensation pursuant to the provisions of s 545(2)(b) of the FWA. Rather, Ms Morrow’s diagnosis is one consistent with an injury having been sustained at work which might give rise to either a common law right of action in tort or for breach of contract, or alternatively which might give rise to a claim for statutory compensation in a personal injuries context. The court finds that the applicant did not suffer hurt, loss of enjoyment of life, humiliation or distress as a result of his termination of employment, and that the applicant is not entitled to any compensation under any of those heads of loss.  The applicant was not so affected, because by the date of his termination of employment on 6 June 2017 he was already preparing to leave Sunny Glass, and was looking forward to employment elsewhere.  Likewise, the applicant is not entitled to any compensation for any disruption by reason of his termination because there was none. The applicant had already taken steps to enable him to move on to different employment, something which in fact transpired when he commenced employment with Viridian on 26 June 2017. 

99.    The Court further makes an adverse credibility finding against the applicant in so far as the applicant has asserted that he has suffered ongoing economic loss after the date of his having commenced employment with Viridian on 26 June 2017. The Court finds that the applicant would have commenced employment with Viridian on 26 June 2017 irrespective of whether his employment with Sunny Glass had been terminated on 6 June 2017 or not.

100.  The Court is satisfied that the applicant had wanted a change of his work environment, and that he had, by 6 June 2017, already agreed to attend a work interview on 7 June 2017 for later placement at Viridian.

101.  By 6 June 2017, the applicant had had extensive contact with representatives of both Nuline and Baumart concerning the promised Baumart share placement. The applicant had, by 4 May 2017, so arranged his financial affairs such that the shares promised by Nuline could be transferred to “McParland Holdings Pty Ltd” as Trustee for the “McParland Family Trust” by 21 May 2017.  The applicant believed that he would at least receive shares exceeding in value the sum of $200,000. In those circumstances, the Court accepts that the applicant’s applications for alternative employment were genuine, and that his intention to leave the employment of Sunny Glass as soon as possible was set in stone. The applicant believed what Benny Young and Sok Teoh had been telling him about his imminent receipt of the share transfer, and, so comforted, he applied for alternative employment on that basis.

102.  The applicant is therefore only entitled to compensation by reason of his unlawful termination of employment for a period of two weeks. That takes into account a one week period of notice of resignation from employment which the applicant would reasonably have been required to give to Sunny Glass in any event.

103.  The Court does not otherwise accept the applicant’s claims for compensation for economic loss by reason of the termination of the applicant’s employment.

104.  The Court will hear the parties as to the appropriate form of orders to be made consequent upon the handing down of the Court’s reasons.

105.  The lawyers for the parties are directed:

a)        to cause a copy of these reasons to be served upon the first respondent.

b)        to confer for the purpose of preparing draft orders for the Court’s consideration.

106. The Court will further hear the parties as to the imposition of any pecuniary penalty arising out of a contravention or contraventions of provisions of the FWA.

I certify that the preceding one-hundred and six (106) paragraphs are a true copy of the reasons for judgment of Judge Egan

Associate: Sean Williams

Date: 13 June 2019

CORRECTIONS (10 JUNE 2019):

1.          Paragraph 11 has been amended to show ‘paragraph 7 (d) above’ instead of ‘paragraph 6 (d) above’).

2.          Paragraph 40 has been amended to show ‘paragraph 13 and 14 above’ instead of ‘paragraphs 12 and 13 above’)

3.          Paragraph 72 has been amended to remove ‘on’

4.          Paragraph 74 has been amended to shows ‘Sunny Glass’s’ instead of ‘Sunny Glasses’

5.          Paragraph 97 has been amended to include ‘was’.

6.          Paragraph 98 has been amended to remove ‘,’.

CORRECTIONS (13 JUNE 2019):

7.          Paragraph 97 was amended to include ‘was’.

8.          Paragraph 98 was amended to include ‘suffered by the applicant post 6 June 2017’ and ‘The court finds that the applicant did not suffer hurt, loss of enjoyment of life, humiliation or distress as a result of his termination of employment, and that the applicant is not entitled to any compensation under any of those heads of loss.  The applicant was not so affected, because by the date of his termination of employment on 6 June 2017 he was already preparing to leave Sunny Glass, and was looking forward to employment elsewhere.  Likewise, the applicant is not entitled to any compensation for any disruption by reason of his termination because there was none. The applicant had already taken steps to enable him to move on to different employment, something which in fact transpired when he commenced employment with Viridian on 26 June 2017’.