[2021] FWC 160

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Ms Jean Madden
v
Street Swags Ltd
(U2016/1866)

COMMISSIONER HUNT

BRISBANE, 14 JANUARY 2021

Application for relief from unfair dismissal – lengthy application history – Small Business Fair Dismissal Code - belief the applicant had engaged in conduct sufficiently serious to justify immediate dismissal based on reasonable grounds – application dismissed.

[1] On 22 April 2016, Ms Jean Madden made an application to the Fair Work Commission (the Commission) pursuant to s. 394 of the Fair Work Act 2009 (the Act) alleging her dismissal from Street Swags Ltd (Street Swags/the Respondent) was harsh, unjust and unreasonable.

[2] I note that in her initial Form F2 – Unfair Dismissal application, Ms Madden named Mr Adrian De Maria and Mr Brian O’Reilly as respondents to the application. Mr De Maria and Mr O’Reilly were Directors of Street Swags at the time. Ms Madden was contacted by the Registry of the Commission and ultimately filed an amended application on 24 May 2016.

[3] On 31 May 2016, the Respondent filed a Form F3 – Employer’s Response raising jurisdictional objections on the grounds that the application had been made out of time, Ms Madden had not been dismissed, and that the Respondent was a small business and the dismissal was consistent with the Small Business Fair Dismissal Code.

[4] The matter was allocated to me for consideration on 17 June 2016. I held an in-person conference on 18 July 2016. Boss Lawyers represented the Respondent. Ms Madden informed me that there had been a meeting held of members overthrowing the purported board and therefore their decisions were invalid, and she did not recognise Boss Lawyers as having any authority to represent the Respondent. I suggested to Ms Madden if that were the case, perhaps the new board would reinstate Ms Madden and her application before the Commission is unnecessary. Boss Lawyers advised that an application was before the Supreme Court that very same afternoon to assist in the determination as to the true representatives of the Respondent. Accordingly, I adjourned the conference.

[5] On 23 February 2017, Ms Madden (through her representatives at the time, Lander & Rogers Lawyers) made a request for a stay of the proceedings, on the basis that Ms Madden had been charged with criminal offences by the Queensland Police Service relevant to her involvement with the Respondent. These included one count of fraud dishonestly causing detriment, some eight counts of fraud involving dishonestly gaining benefit/advantage by a director/member of a governing body, and one count of falsification/destruction/alteration/damage of records. Ms Madden sought for a stay to be granted in dealing with the unfair dismissal application until the criminal proceedings were finalised. The stay was opposed by the Respondent at first instance but ultimately a four-month stay was granted.

[6] The criminal proceedings continued, and a further stay was granted. A number of mentions regarding the progress of the criminal proceedings occurred, resulting in further requests for adjournment of the matter.

[7] On 5 July 2018, after seeking the views of the parties and receiving no response, I issued a Decision 1 determining that the proceedings in this matter should be stayed pending the finalisation, or withdrawal, or other appropriate disposal, of the related criminal proceedings. That Decision goes into greater detail of the progress of the matter until that point.

[8] On 6 January 2020, Ms Madden wrote to my Chambers advising that the criminal proceedings had been withdrawn and requesting the stay be revoked. I issued a decision on 2 March 2020 2 revoking the stay.

Background

[9] This application has a lengthy history. Ms Madden is the founder of Street Swags Ltd, a charitable organisation providing waterproof sleeping bags to homeless people across Australia. As will be detailed below, Ms Madden was ultimately dismissed as an employee of the Respondent on 19 May 2016. It is undisputed that the Respondent had less than 15 employees as at 19 May 2016, and therefore it is a small business employer pursuant to s.23 of the Act.

[10] On 24 March 2016, Ms Madden was sent the following letter from Boss Legal representing the Respondent (emphasis maintained):

“Dear Ms Madden

Suspension of your employment

We act for Street Swags Limited (Street Swags).

The directors of Street Swags have undertaken a review of the company's bank accounts and financial statements. During the course of that review, a number of transactions have been identified which have caused the directors grave concern.

Accordingly, pursuant to clause 12 of your employment agreement, the board has resolved to suspend your employment with full pay effective immediately pending the outcome of an independent audit and forensic investigation of the company's financial affairs. You will, of course, be afforded the opportunity to respond to any allegations made against you.

You are hereby directed to attend Boss Lawyers Spring Hill premises located at [address redacted] at 10.00 am on Tuesday, 29 March 2016 to return all property of Street Swags in your possession or under your control, including but not limited to:

1. any vehicles provided by Street swags, including the Holden Colorado Ute and/or Land Cruiser provided to you by Street Swags;

2. any mobile telephones provided by Street Swags;

3. any laptop computer provided by Street Swags;

4. any fax machine or printer provided by Street Swags; and

5. all credit and debt cards provided by Street Swags.

You are not to attend the premises of Street Swags or to contact any staff, donors, or make any appearances or statements to the media or anyone else on behalf of Street Swags in relation to the above matters until further notice.

As you know, Walk About Beds Pty Ltd is a wholly owned subsidiary of Street Swags. We take this opportunity to remind you of your statutory and common law duties to Street Swags. All monies in Walk About Beds Pty ltd must be properly accounted for.

Please do not hesitate to contact me in writing if you require any further information.

Yours faithfully
Mark Harley, Partner”

[11] Numerous correspondence then passed between Ms Madden’s lawyers at the time and the Respondent’s lawyers in attempts to resolve the matter.

[12] Ms Madden’s evidence is that she did not receive this correspondence until the evening of 28 March 2016.

[13] On 30 March 2016, Boss Lawyers wrote to Ms Madden on behalf of the Respondent, terminating her employment (the first termination):

“Dear Ms Madden

False documents lodged with ASIC

We refer to ASIC Documents No. 7E7824903 and 7E7825233, which were lodged with the Australian Securities and Investments Commission (ASIC) electronically on 29 March 2016 at 5.23 pm and 5.46 pm respectively (the ASIC Documents). Copies of the ASIC Documents are attached.

The ASIC Documents purport to remove Mr De Maria and Mr O'Reilly as directors of Street Swags Limited (Street Swags) and appoint new directors.

Pursuant to our letter of 24 March 2016, you have no authority to lodge documents with ASIC or to make any statement or give information on behalf of Street Swags. Furthermore, given that Mr De Maria and Mr O'Reilly remain directors of Street Swags, the information that you have provided to ASIC is demonstrably false.

We note that it is an offence pursuant to s 1308 of the Corporations Act 2001 (Cth) {the Act) to make false or misleading statements in a document lodged with ASIC. The maximum penalty for an offence committed under s 1308 of the Act is a fine of 200 penalty units or 5 years' imprisonment. The lodgement of the false ASIC Documents will be referred to the appropriate authorities for investigation.

Given the above matters, the board of Street Swags is satisfied that you have engaged in serious misconduct and hereby terminates your employment pursuant to cl 13.2 of your Employment Agreement.

By reason of cl 14.2 of your Employment Agreement and article 5.3(c)(iv) of the Street Swags Constitution, you are also hereby removed from the board of Street Swags Limited.

Yours faithfully
Mr Mark Harley”

[14] Later on the same day, Boss Lawyers, on behalf of the Respondent wrote a lengthy letter to Lander & Rogers Lawyers, outlining what it described as a selection of the numerous concerns regarding Ms Madden’s conduct and requiring her to answer particular questions and retain certain property:

“Dear Colleagues

Street Swags Limited

We act for Street Swags Limited (Street Swags). We understand that you represent Ms Jean Madden, who is a former director and former employee of Street Swags, and a group of individuals claiming to be the board of Street Swags.

We refer to your email of 30 March 2016, in which you offer to facilitate a "round table" meeting between each of our clients. We are currently taking our client's instructions in relation to such a meeting and will revert to you in due course. Naturally, given her conduct to date, our client is concerned that Ms Madden would not approach such a meeting in good faith.

In the meantime, we take this opportunity to outline a selection of the numerous concerns that Street Swags has with Ms Madden's conduct. For present purposes, it suffices to say that our client has grave concerns about Ms Madden's attitude regarding her statutory and fiduciary responsibilities.

Suspension of Ms Madden

1. On 24 March 2016, the board of Street Swags resolved, by written resolution, to suspend Ms Madden from her employment on full pay pending the outcome of an investigation into apparent breaches of the Corporations Act 2001 (Cth) (the Act).

2. Ms Madden was informed of the board's decision by a letter dated 24 March 2016, which was emailed to her, sent by registered post and delivered by hand to her residence on 25 March 2016. A copy of the letter is attached.

3. The letter required Ms Madden to:

(a) deliver up all property of Street Swags in her possession or under her control;

(b) refrain from attending Street Swags' premises;

(c) refrain from contacting staff or donors of Street Swags in relation to her suspension.

4. To date, Ms Madden has failed to comply with any of the board's directions outlined in the letter of 24 March 2016.

The Unauthorised Meeting

5. On 28 March 2016 at 2.00 pm, Ms Madden purported to call a meeting of members for 6.00pm on 28 March 2016 (the Invalid Meeting).

6. On 28 March 2016 at 5.44 pm, Street Swags, by its lawyers, sent a letter to the members of Street Swags noting that the Invalid Meeting was unauthorised. A copy of the letter is attached.

7. The Invalid Meeting was invalid for the following reasons:

(a) Ms Madden is not authorised pursuant to article 4.2 of the Street Swags Constitution or the provisions of the Act to call a meeting of members;

(b) Ms Madden failed to give notice in the form required by article 4.4 of the Street Swags Constitution to any member of Street Swags; and

(c) no waiver of notice was given in writing as required by article 4.4(d) of the Street Swags Constitution.

8. At the Invalid Meeting, persons purporting to be members of Street Swags purported to pass resolutions removing Mr De Maria and Mr O'Reilly as directors of Street Swags.

The False ASIC Documents

9. As averred to in our earlier letter of today's date, Ms Madden caused Documents No. 7E7825233 and 7E7824903 to be lodged with ASIC (the False ASIC Documents), which purported to remove Mr O'Reilly and Mr De Maria as directors of Street Swags.

10. Ms Madden lodged the False ASIC Documents in the full knowledge that she had no authority to do so, thereby committing an offence pursuant to s 1308 of the Act.

11: ASIC has altered its register in reliance upon the False ASIC Documents.

12. We are instructed that Ms Madden intends to attend the National Australia Bank branch at Ashgrove and use the altered register to change the signatories of Street Swags' bank accounts.

13. We put your client on notice that if any funds are removed from any bank account belonging to Street Swags or Walkabout Beds Pty Ltd (Walkabout Beds), we are instructed to immediately contact the Queensland Police Service and provide a brief of evidence to them.

The 30 March Letter

14. We have recently been provided with a letter from your client to Mr Harold Thornton dated 30 March 2016 that raises serious concerns regarding Ms Madden's intentions towards Street Swags (the 30 March Letter). A copy of the letter is attached. Its contents are, to say the least, bizarre.

15. In the 30 March Letter, Ms Madden makes a number of statements as to what would happen if she were removed as director that she describes as "cold truths" but which appear to be in the nature of threats. These "cold truths" are to the effect that, inter alia:

(a) Street Swags' premises is leased in Ms Madden's name and she would not allow Street Swags to occupy its current premises;

(b) the accrued leave entitlements owed to Ms Madden are so great that the company would become insolvent if she were to leave;

(c) Street Swags has 'over fished' its donor pool and needs Ms Madden to raise necessary funds in a "winter waive" (sic);

(d) Ms Madden owns the entirety of Street Swags' intellectual property and would not allow the company the use of it or her "physical name" (whatever that may be) if she were not allowed to remain;

(e) if Ms Madden were to leave, she would take Street Swags' cabin business with her as her own commercial endeavour;

(f) if she desired, she could acquire Street Swags' shares in Walkabout Beds.

16. Aside from being fantastical and highly inculpatory, Ms Madden's "cold truths" are demonstrably untrue as:

(a) it is of no consequence that Street Swags' lease is in Ms Madden's name as the company could simply relocate and leave her to deal with the consequences of her poor commercial decisions;

(b) aside from her common law duties, all intellectual property developed by Ms Madden during her time at Street Swags vests in Street Swags pursuant to cl 9 of her Employment Agreement;

(c) Street Swags is the sole shareholder of Walkabout Beds; and

(d) Ms Madden is restrained from using her position to launch Street Swags' cabin business as her own commercial endeavour both at law and under the Act.

17. Furthermore, the "cold truths' are revealing of Ms Madden's lack of regard for her fiduciary and statutory duties as they appear to be entirely to her own benefit and to the detriment of Street Swags.

The Manufacturing Contract

18. On or about 1 December 2015, Ms Madden, on behalf of Walkabout Beds Pty Ltd (Walkabout Beds) executed a contract with Mr Carl Weiss whereby he would manufacture Manufactured Homes/Transportable Cabins (the Manufacturing Contract). A copy of the Manufacturing Contract is enclosed.

19. We are instructed that Mr Weiss is Ms Madden's de facto partner.

20. We are further instructed that Ms Madden failed to gain the consent of the members of Walkabout Beds (being Street Swags through its board) before entering into the Manufacturing Contract.

21. The Manufacturing Contract included a number of terms which appear to operate solely to the advantage of Mr Weiss, including, inter alia:

(a) by cl 3.1(b): Walkabout Beds will order the greater of a minimum of 44 Manufactured

Homes/Transportable Cabins or $528,000 worth of Manufactured Homes/Transportable

Cabins from Mr Weiss each calendar year;

(b) by cl 8.3: if it chooses to terminate the Manufacturing Contract, Walkabout Beds will cover any expenses connected with termination of the Manufacturing Contract, including (but not limited to) Mr Weiss's obligations in respect of his leased business premises and the payment of his employees;

(c) by schedule 2, item 8: Walkabout Beds will provide Mr Weiss with a copy of its financial statements at the end of each financial year; and

(d) by cl 9.1: Mr Weiss will be paid $10,000 per year to store property of Street Swags and Walkabout Beds Including, inter al/a, a Hino truck (the Hino Truck), a moveable stage (the Stage) and a Holden Colorado Ute (the Ute).

22. Mr Weiss appears to have the exclusive use and enjoyment of the Ute.

23. Despite the provisions of cl 9.1 of the Manufacturing Contract, we are instructed that neither the Hino Truck nor the Stage have been stored at Mr Weiss's premises and that swags owned by Street Swags were not stored at Mr Weiss's premises until the end of February 2016.

24. We are further instructed that the Stage has been stored at a property belonging to a Mr James Booth, who has been dealing with the hiring of the Stage to other persons and the taking of payment for such hire.

25. On 14 March 2016, Mr Weiss revealed by email that he was trading whilst insolvent. Despite this, no action has been taken to terminate the Manufacturing Contract.

26. On 14 March 2016, Ms Madden proposed Street Swags pay Mr Weiss a retainer of $130,000 per annum with back pay to 1 December 2015.

27. On 10 March 2016, Ms Madden authorised the payment of invoice no. IN-00041 (enclosed) to Mr Weiss in the amount of $10,000 from the accounts of Street Swags (the Invoice 41 Payment). We note that although the Manufacturing Contract is between Mr Weiss and Walkabout Beds, the invoice is made out to Street Swags and was paid from Street Swags' accounts.

28. On 17 March 2016, Ms Madden made a payment from Credit Card No. 4336 8757 5518 8580 to Super Steel Australia 01$2,467.32 (the Steel Payment). The Steel Payment was made solely for the benefit of Mr Weiss.

29. From 17 March 2016, Ms Madden commenced making payments to Mr Weiss from Street Swags' accounts of $2500 per week (the Weekly Payment).

30. The payments outlined in paragraphs 27 to 29 above will be referred to collectively as the Weiss Payments.

31. Accordingly, Ms Madden is required to show cause for the following in relation to the Manufacturing Contract and the Weiss payments:

(a) Why did Ms Madden fail to consult the members of Walkabout Beds concerning the Manufacturing Contract?

(b) Why does the Manufacturing Contract contain a number of terms that are uncommercial and operate solely for the benefit of Mr Weiss?

(c) Is there any reason why the award of the Manufacturing Contract to Mr Weiss without the approval of the members of Walkabout Beds and the Weiss payments do not constitute a breach of s 208 of the Corporations Act 2001 (Cth) (the Act)?

(d) Is there any reason why the award of the Manufacturing Contract to Mr Weiss without the approval of the members of Walkabout Beds and the Weiss payments does not constitute an improper use of Ms Madden's position pursuant to s 182 of the Act?

(e) Is there any reason why the award of the Manufacturing Contract to Mr Weiss without the approval of the members of Walkabout Beds and the Weiss payments do not constitute a breach of Ms Madden's fiduciary duties to both Walkabout Beds and Street Swags?

(f) Is there any reason why the award of the Manufacturing Contract to Mr Weiss without the approval of the members of Walkabout Beds and the Weiss payments does not constitute a breach of Ms Madden's fiduciary duties (both at law and pursuant to cl 3.5 of her Employment Contract) to Walkabout Beds and Street Swags?

(g) We require Ms Madden to provide all evidence concerning the hiring of the Stage, including receipts for payment and the bank entries noting such receipts.

Payment of Expenses

32. On the 15th of each month {most recently on 15 March 2016), the amount of $1,350.77 is paid from Walkabout Beds to ‘Finrent' (the Finrent Payments). We are instructed that this amount is for the financing of three (3) cabins, two (2) of which are located on Ms Madden's residential property and are used by her father and son.

33. On or about the 15th of each month (most recently on 15 March 2016), the amount of $345.75 is paid from NAB Account 86-478-3727 to Toyota Finance for the lease of the Ute (the Ute Payments). As noted above, we are instructed that Mr Weiss has exclusive use and enjoyment of the Ute.

34. On 3 March 2016, the amount of $300 was transferred from NAB Account [redacted] under the entry "CMC tickets' (the CMC Payment). We are instructed that this amount was transferred to purchase tickets for Ms Madden and Mr Weiss to attend a country music festival.

35. On the following dates, the following amounts have been transferred under the entry

"Reimbursement":

(a) 11 November 2015, the amount of $5,982.51 from NAB Account [redacted];

(b) 29 February 2016, the amount of $2,359.00 from NAB Account [redacted];

(collectively, the Reimbursement Payments)

36. On the following dates, the following amounts have been paid to various recipients that appear to be unrelated to the business of Street Swags and Walkabout Beds:

NAB Account [redacted]

(a) 4 August 2014, the amount of $400.00 to Chemist Warehouse ;

(b) 5 September 2014, the amount of $66.61 to Woolworths;

NAB Account 86-478-3727

(c) 17 August 2015, the amount of $52.98 to Choice Discount Store;

(d) 17 August 2015, the amount of $11.52 to Coles Kenmore;

(e) 17 August 2015, the amount of$715.00 to Lutece Bistro & Wine Bar;

(f) 21 August 2015, the amount of $584.00 to Lutece Bistro & Wine Bar;

(g) 31 August 2015, the amount of $275.00 to Gympie Muster;

(h) 21 August 2015, the amount of $584.00 to Lutece Bistro & Wine Bar;

(i) 24 September 2015, the amount of $2,585.00 to Brooks Legal Service;

(j) 2 October 2015, the amount of $11, 176.00 for "Invoice #1594899 108428"";

(k) 10 October 2015, the amount of $1,000.00 for "topup";

(I) 21 October 2015, the amount of $3,000.00 for 'topup";

(m) 21 October 2015, the amount of $418.00 for "Reimb Batteries';

(n) 23 November 2015, the amount of $10,000 for '28 Fienta Place Da";

(o) 23 November 2015, the amount of $88,000 for "Order 1000 ssl";

(p) 25 November 2015, the amount of $40.60 for Osaka Japanese Dinner;

(q) 9 December 2015, the amount of $269.90 to Red Earth Hotel;

(r) 9 December 2015, the amount of $9.40 to Sunset Opal Factory";

(s) 10 December 2015, the amount of $33.50 to Australian Age of Dinosaur;

(t) 10 December 2015, the amount of $81.00 to Tatts Hotel;

(u) 4 January 2016, the amount of $10,117.80 to Walkabout Beds;

(v) 20 January 2016, the amount of $9936.89 to Regional Insurance;

(w) 28 January 2016, the amount of $4002.00 to Westpac Cards;

(x) 29 February 2016, the amount of $800.00 to Apple Store;

(y) 2 March 2016, the amount of $32.30 to French Twist Chermside;

(z) 2 March 2016, the amount of $5,120.00 to Bundaberg Toyota;

(aa)7 March 2016, the amount of $66.57 to 7-Eleven;

(bb)18 March 2016, the amount of $166.30 to Soul Sun Ashgrove;

Credit Card No. [redacted]

(cc)6 September 2013, the amount of $1586.77 to Repco Enoggera;

(dd)17 December 2013, the amount of $390.00 to Sheepskin & Opal World, Peregian Beach;

(ee)25 February 2014, the amount of $1,144.32 to TJM Geebung;

(ff) 25 February 2014, the amount of $103.50 to lnterflora Prahran;

(gg)14 March 2014, the amount of $237.60 to Neta Tyres;

(hh)28 March 2014, the amount of $388. 71 to Repco Enoggera;

(ii) 6 May 2014, the amount of $725.00 to Direct Clutch Services;

OD 7 May 2014, the amount of $1,222.63 to Repco Enoggera;

(kk)20 June 2014, the amount of $1,362.26 to Repco Enoggera;

(II) 30 July 2014, the amount of $1695.52 to Beaurepaires lndooroopilly;

(mm) 12 September 2014, the amount of $473.15 to Go Electrical Albion;

(nn)14 November 2014, the amount of $94.67 to Noonan's IGA Ashgrove;

(oo)12 February 2015, the amount of $405.85 to Wayne Park Autos & Tyres, Milton;

(pp)22 June 2015, the amount of $2,324.00 to Apple Store Online;

(qq)18 August 2015, the amount of $175.00 to Cakes by Judy;

(rr) 8 September 2015, the amount of $39.64 to Coles The Gap;

(ss) 17 September 2015, the amount of $84.97 to Kenmore Hardware; and

(It) 29 February 2016, the amount of $53.84 to BP The Gap.

(collectively, the Miscellaneous Payments)

37. Pursuant to cl 5.2 of Ms Madden's Employment Contract, she is required to provide the following in respect of each of the Fin rent Payments, the CMC Payment, the Ute Payments, the Reimbursement Payments and the Miscellaneous Payments:

(a) reasons as to how each payment constituted an expense incurred in the performance of Ms Madden's duties in connection with the business of Street Swags;

(b) all documentary evidence of each payment, including any relevant tax invoices; and

(c) for any payment over $5000, the written approval of the board of Street Swags obtained for that payment.

Membership of Street Swags

38. We refer to article 2.2 of the Constitution of Street Swags, which outlines the process by which persons may become members of Street Swags Limited.

39. Pursuant to s 173 of the Act, Ms Madden is directed to provide this office with a copy of the Register of members of Street Swags Limited (the Register).

40. Ms Madden is further directed to provide the following particulars of each person appearing in the Register:

(a) a signed membership application;

(b) the date on which the membership application was received by Street Swags;

(c) the date on which the membership application was accepted by Street Swags;

(d) the written notice of acceptance given by Street Swags to the member; and

(e) the date on which the member's name was entered in the Register.

41. If the Register is located in the Ashgrove office, inform us of its location.

42. We are instructed that without the consent or knowledge of the board, Ms Madden purchased a Toyota Landcruiser (the Landcrulser) by way of a loan in the name of Street Swags.

43. Ms Madden has exclusive use and enjoyment of the Landcruiser.

44. Ms Madden is hereby directed to deliver up the Landcruiser and provide all documents relating to the purchase and financing of the Landcruiser to this office.

Refusal to obey and comply with lawful directions of the board

45. On 24 March 2016 the board provided Ms Madden with a letter, by hand, registered mail and email, noting that Ms Madden was suspended from her employment immediately and requiring her to do the following:

(a) not attend the premises of Street Swags;

(b) not contact any staff or donors of Street Swags; and

(c) deliver up all property of Street Swags in her possession or under her control.

46. Despite the direction of the board, Ms Madden has failed, as at the date of this letter, to deliver up any property of Street Swags in her possession or under her control.

47. Despite the direction of the board, on 28 March 2016, Ms Madden purported to issue a staff member of Street Swags with a show cause notice.

48. Despite the direction of the board, on 28 March 2016, Ms Madden purported to call a meeting of members of Street Swags.

49. Despite the direction of the board, on 28 March 2016, Ms Madden purported to pass a resolution of members of Street Swags removing the current directors;

50. Despite the direction of the board, on 29 March 2016, Ms Madden attended the premises of Street Swags and:

(a) attempted to gain entry to the premises; and

(b) locked herself in the common area of the premises.

51. We note that the assistance of the Queensland Police Service was required in order to have Ms Madden unlock the common area.

52. Despite the direction of the board, on 29 March 2016, Ms Madden contacted a security services provider employed by Street Swags and represented herself as authorised to give directions on behalf of Street Swags.

53. Despite the direction of the board, on 29 March 2016, Ms Madden purported to lodge documents removing Mr De Maria and Mr O'Reilly as directors of Street Swags with ASIC.

54. Despite the direction of the board, on 29 March 2016, Ms Madden contacted McCullough Robertson and purported to engage them as Street Swags legal representatives. We note that McCullough Robertson does not act for Street Swags and will not be paid for any services rendered.

55. In light of the matters outlined at paragraphs 46 to 54 above, the board was satisfied that Ms Madden had engaged in serious misconduct which warranted summary termination of her employment pursuant to cl 13.2 of her Employment Contract.

56. Accordingly, Ms Madden was terminated by letter dated 30 March 2016 and was removed as a director of Street Swags by reason of cl 14.2 of her Employment Agreement and article 5.3(c)(iv) of the Street Swags Constitution.

We require Ms Madden's answer to paragraphs 31, 37, 40 and 44 above by 4,00 pm on 6 April 2016.

We again reiterate that McCullough Robertson does not act for Street Swags and that your fees and outlays will not be paid by Street Swags.

We note that a complaint has been made to ASIC concerning Ms Madden's conduct and that Street Swags intends to fully cooperate with any regulatory or criminal investigation.

Street Swags otherwise reserves all its rights.

Yours faithfully
Mark Harley, Partner”

[15] Further events took place, detailed later in this decision in evidence, culminating in a letter being sent to Ms Madden on 19 May 2016, dismissing her (the second termination). The letter read (emphasis retained):

“Dear Ms Madden

Summary Dismissal Notice

On behalf of the directors of Street Swags Limited (Street Swags), I hereby give you notice that the directors have resolved to terminate your employment by way of summary dismissal pursuant to cl 14.2 of your Employment Agreement effective immediately. Your last day of work is 20 May 2016, however the directors do not require you to attend work on that date.

The directors have considered your letter of 13 April 2016 in response to the allegations leading to your suspension and have also taken into account your conduct since that date as well as the report of a qualified forensic accountant of Worrells Accountants in coming to their decision.

We note that you agreed to be suspended as Chief Executive Officer on 12 April 2016, which will be referred to herein as the Suspension Date.

Reasons for Summary Dismissal

The reasons for your summary dismissal are as follows:

Since the Suspension Date, you have repeatedly refused to turn over property belonging to Street Swags, which is essential to its day-to-day operation, including:

(a) social media accounts; and

(b) Street Swags' Xero Accounting Software subscription.

1. We note in relation to the Xero account that you were warned in letters dated 29 April 2016 and 3 May 2016 from Boss Lawyers that failing to turn over Street Swags' Xero account was serious misconduct and grounds for summary dismissal.

2. Since the Suspension Date, you have continued to intimate to third parties that you represent Street Swags, including inter alia the Department of Housing and Public Works and the organisers of the Commonwealth Games.

3. Since the Suspension Date, you have openly disparaged and made defamatory comments concerning the directors of Street Swags.

4. The report of Worrells Forensic Accountants indicates that you have incurred $441,399.43 in expenses from Street Swags and its subsidiary over the past year without proper authorisation.

Your Entitlements

You will be paid:

1. your accrued statutory leave entitlements; and

2. your accrued and unpaid salary to date.

These amounts will be subject to tax, and the final amounts will be paid into your bank account once we have received access to Street Swags' Xero account or you have provided us with payslips to substantiate the amounts owing. Final superannuation payments will also be paid into your superannuation fund.

Your Duties

Street Swags expects that you will comply with all post termination obligations set out in your employment agreement, including your obligations to return Street Swag's property and protect its confidential information.

Please return all property of Street Swags in your possession or under your control by 4.00 pm on 25 May 2016 to our office at [redacted] including (but not limited to):

1. the Toyota Landcruiser;

2. the laptop; and

3. the mobile telephone.

We hereby put you on notice that if these items are not returned, they will be reported as stolen and appropriate repossession action will be taken.

Yours faithfully the Board Street Swags ltd.”

Relevant Legislation

[16] I am required to consider the competency of the application, beginning with s.394 of the Act which sets out:

“394 Application for unfair dismissal remedy

(1) A person who has been dismissed may apply to the FWC for an order under Division 4 granting a remedy.

Note 1: Division 4 sets out when the FWC may order a remedy for unfair dismissal.

Note 2: For application fees, see section 395.

Note 3: Part 6 1 may prevent an application being made under this Part in relation to a dismissal if an application or complaint has been made in relation to the dismissal other than under this Part.

(2) The application must be made:

(a) within 21 days after the dismissal took effect; or

(b) within such further period as the FWC allows under subsection (3).

(3) The FWC may allow a further period for the application to be made by a person under subsection (1) if the FWC is satisfied that there are exceptional circumstances, taking into account:

(a) the reason for the delay; and

(b) whether the person first became aware of the dismissal after it had taken effect; and

(d) prejudice to the employer (including prejudice caused by the delay); and

(e) the merits of the application; and

(f) fairness as between the person and other persons in a similar position.”

[17] Further, ss.385 relevantly provide as follows:

“385 What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(d) the dismissal was not a case of genuine redundancy.

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”

[18] Section 388 of the Act provides that a person’s dismissal was consistent with the Small Business Fair Dismissal Code (the Code) if:

(a) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person’s employer was a small business employer; and

(b) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.

[19] The Code was declared by the Minister for Employment and Workplace Relations on 24 June 2009, and states:

“Small Business Fair Dismissal Code

Commencement

The Small Business Fair Dismissal Code comes into operation on 1 July 2009.

Summary Dismissal

It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.

Other Dismissal

In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.

The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.

The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.

Procedural Matters

In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.

A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.”

[20] If the dismissal was not consistent with the Small Business Fair Dismissal Code, I am required to consider the criteria set out under s.387 of the Act which provides:

“387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant.”

[21] As to any remedy to be ordered, s.390 provides:

“390 When the FWC may order remedy for unfair dismissal

(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:

(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and

(b) the person has been unfairly dismissed (see Division 3).

(2) The FWC may make the order only if the person has made an application under section 394.

(3) The FWC must not order the payment of compensation to the person unless:

(a) the FWC is satisfied that reinstatement of the person is inappropriate; and

(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.

Note: Division 5 deals with procedural matters such as applications for remedies.”

Submissions

[22] The parties initially made submissions in relation to the application in 2016, prepared by their respective legal representatives at the time. Both parties adopted these submissions and were given an opportunity to provide final written submissions prior to the hearing, given the number of years that had elapsed between the filing of the initial material and the hearing date. At the time of filing final submissions, neither party was legally represented. The summary of submissions below attempts to summarise both sets of submissions.

[23] I note that all material, including all submissions, in the matter has been read and considered in its proper context and that this summary merely outlines the parties’ positions.

Hearing

[24] The matter was heard before me on the following dates:

• 11 – 14 May 2020;

• 28 – 29 May 2020; and

• 12 June 2020.

[25] Ms Madden represented herself. The following people gave evidence for Ms Madden:

• Dr Harold Thornton;

• Mr James Booth;

• Mr Carl Weiss;

• Mr Kathleen Cleland; and

• Ms Candice Todd.

[26] The Respondent was represented by Mr Paul Daly, a current Director. Mr De Maria was permitted to participate in the hearing and also gave evidence. The following people gave evidence for the Respondent:

• Mr De Maria, current Managing Director of Street Swags;

• Mr Brian O’Reilly, retired, former teacher at Nudgee College and current Director of Street Swags;

• Mr Kevin Gillett; retired; and

• Mr Tony Deane, Special Counsel, Clayton Utz.

[27] It became necessary during the proceedings to issue to Ms Madden a caution in relation to her right not to answer any question where she considers that an answer may incriminate her. I informed Ms Madden that the Commission is not able to draw any adverse inferences from any decision she makes to exercise that right. I provided such a caution to Ms Madden on several occasions during the hearing.

Trickling in of further material

[28] The parties used the opportunity of the hearing to “go to war” with each other. Clearly there is a repulsion Ms Madden has for Mr De Maria, so much that she cannot bring herself to refer to him as Mr De Maria; she simply refers to him as “De Maria”, often spoken in a scornful tone.

[29] Each of the parties continued to file and serve a substantial amount of documents, mainly emails, during the course of the hearing. I note that the parties are relatively unsophisticated with respect to litigation and each of them considered that the additional emails before the Commission would assist in their respective case. I permitted the trickling in of further material and I have had regard for all of the material provided by the parties.

Ms Madden’s evidence

[30] Ms Madden filed three witness statements in the matter, dated 16 September 2016 (the First Witness Statement), 25 January 2017 (the Second Witness Statement), and 22 April 2020 (the Third Witness Statement).

[31] Ms Madden said that in 2005, she founded Street Swags to help the homeless by assisting them off the street by connecting with them through the delivery of sleeping materials and engaging with other organisations. Street Swags was registered as an Australian, non-profit, public company on 18 September 2007 and was bound by a company constitution and administered by the Australian Charities and Not-for-Profits Commission (ACNC). A copy of the Street Swags constitution was provided. Ms Madden said Street Swags (at the time of the witness statement) gave almost 50,000 canvas swags to homeless Australians in 11 years of operation.

[32] The Street Swags Constitution at clause 1.4 states the following Objects of the charity:

“1.4 Objects

(a) The objects of the Company are:

(i) to provide homeless people with “street swags” in order to reduce the effects and dangers of sleeping outdoors without adequate protection to the elements;

(ii) to provide comfort and shelter to the homeless and needy, including but not limited to supported accommodation;

(iii) to provide holistic support to the homeless and needy; including but not limited to educational and, social and practical support;

(iv) to provide education to homeless people about the dangers of sleeping outdoors without adequate protection;

(v) to provide education to the homeless, vulnerable and needy, to assist in their personal development;

(vi) to promote community awareness of homeless people and the dangers they face sleeping outdoors;

(vii) to promote education and awareness to the community about the dangers and disadvantages of the homeless, vulnerable and needy;

(viii) to provide community education concerning homeless people and the dangers they face sleeping outdoors;

(ix) to reduce the amount of illness and the number of deaths in Australia attributed to homelessness and sleeping outdoors without adequate protection to the elements.”

[33] Ms Madden said that since 2010, she had been delivering a community healing program to at-risk youth in remote Aboriginal communities aiming to reduce crime, violence and sexual abuse. She said she received financial grants for this purpose and arranged for volunteers, staff and members to travel to remote indigenous communities, to deliver on Street Swags’ constituted objectives by providing holistic support to the homeless including social, emotional and practical support, and education and training to the homeless to assist in their personal development.

[34] Ms Madden said she was the first Australian winner of the world's largest design award, the INDEX: People's Choice Award in 2009, and also won the QLD Young Australian of the Year 2010 and was a finalist in two categories for the 2011 Telstra Business Woman of the Year Awards and winner for QLD Innovation. In 2009 Ms Madden received silver for the Female Innovator of the year - Government or NonProfit section in the Stevie Awards New York and became the Ernst and Young Social Entrepreneur of the Year for Australia in 2014.

2013

[35] Ms Madden noted that Mr O'Reilly was the chairperson of Street Swags in 2013. Her evidence is that he stated to her that he was against Ms Madden meeting the company's constituted objectives and developing the company. She considered that Mr O’Reilly did not seem to appreciate that Street Swags’ constitution required more of Street Swags than simply creating swags for the homeless. Ms Madden said that the constitution required a holistic approach which also met the emotional and social needs of the homeless, and that Mr O’Reilly did not seem to appreciate that there was insufficient donations to cover the cost of the staffing necessary to facilitate the swags reaching the homeless.

[36] Ms Madden said Mr O’Reilly attempted to have her expelled from Street Swags in 2013 over her development of the community healing project, and that he created a rift in the Street Swags board by making assertions that she was misusing donor money, despite being aware that Street Swags had received financial grants of funding to pay for the work related to the community healing project. Ms Madden said Mr O’Reilly alleged that she was using money that had been donated for the swags for the community healing project. Ms Madden said she explained to Mr O’Reilly that whilst the money may have come in as ‘donated funds’, it was money that had been itemised in grant funding applications and received as a grant for the community healing project work. Ms Madden said that while Mr O’Reilly said he accepted this explanation, he never really accepted her developing the community healing project work.

Walkabout Homes Pty Ltd and Walkabout Beds Pty Ltd

[37] Ms Madden said that in February 2016, independent of Street Swags and Walkabout Beds Pty Ltd, she personally established Walkabout Homes Pty Ltd, which was a company intended to provide affordable housing and necessary financial access to it. Her evidence is as follows:

“I had sought extensive advice (both legal and financial) about how best to structure the company. A due diligence report had been issued to the board of Street Swags in about June 2015. Additionally, all active members of Street Swags and staff were aware that Walkabout Homes had been in development for approximately two (2) years.”

[38] It appears that Walkabout Homes Pty Ltd is Ms Madden’s own private entity, and it is distinct from Walkabout Beds Pty Ltd which is a wholly owned subsidiary of Street Swags and had been operational for some years. Ms Madden was both a director of Street Swags and Walkabout Beds Pty Ltd, as well as having her own interests in Walkabout Homes Pty Ltd.

2015

[39] Ms Madden said that in about July 2015, she was accused of misappropriating approximately $41,000.00. Ms Madden said she believed the allegations were made by Ms Shelley Ryan, former employee of Street Swags, and Ms Nicole Quinn, who was formerly the company secretary.

[40] Ms Madden said that Ms Ryan had previously been advised that her role was being made redundant, and that an independent audit revealed that Ms Ryan had incorrectly coded transactions to inflate project expenditure, such as using the community healing project code to transactions relating to fuel and office expenses, which had nothing to do with the community healing project. The incorrect coding meant that the transactions appeared as though Ms Madden had spent over budget when she had not.

[41] Ms Madden’s evidence is that Street Swags engaged 'Notch Above' accountants to review the transactions. She stated that a full audit was undertaken by Geraghty Accountants at significant expense to Street Swags which revealed the incorrect coding and the allegations were found to be baseless. Ms Madden said Ms Ryan’s employment was subsequently terminated.

[42] In June 2015, Ms Madden presented the board of the Respondent with eight quotes regarding manufacture of cabins as part of a due diligence process.

[43] In July 2015, Ms Madden began a personal relationship with Mr Carl Weiss, who operated a business as a sole trader, and in 2016 established a company called Weiss Industrial Pty Ltd (Weiss Industrial). 3 Ms Madden said she had known Mr Weiss since 2002 and they had been long-time friends and neighbours.

[44] At the Street Swags AGM in December 2015, Ms Madden said she openly declared her business arrangements with Mr Weiss, including that Mr Weiss was willing to sacrifice personal profit to assist in the manufacture of cabins for the cabin project. Ms Madden said that she was congratulated on the new initiative and Mr O’Reilly suggested that Mr Weiss should be afforded some profit margin. 4 Ms Madden attached purported AGM minutes to her witness statement. The Respondent disputes the AGM minutes and states that they have never been adopted as there has not ever been an AGM since the December 2015 AGM.

[45] The contract for production of the cabins was ultimately awarded to Weiss Industrial. Ms Madden said that she was asked what would happen to the cabin project if something happened with her relationship with Mr Weiss. Ms Madden said that she had documented the arrangement for the cabin projects in writing, and it was agreed a formal contract should be prepared 5 and the contract was formalised in March 2016.6

[46] Ms Madden said that Weiss Industrial had agreed to add little to no mark up on the manufactured homes to ensure a price point that was around half the price of any equivalent on the market. Ms Madden said that the small mark-up meant that Weiss Industrial could only cover its expenditure for the project if a minimum of 44 orders per year was achieved, and that based on sales figures provided by Mr De Maria, this was achievable.

January 2016

[47] In about January 2016, Ms Madden said Mr De Maria approached her following a lunch. Ms Madden said Mr De Maria knew that she had had a few drinks at lunch, and said words to the effect, “I have heaps of contacts and would be able to sell 100 cabins in a month” and “I could replace Virginia Daniels.” Ms Daniels was employed as a sales manager and was to replace Ms Madden in her role over the Christmas holidays but was unable to do so due to personal circumstances.

[48] Ms Madden agreed to employ Mr De Maria as a sales manager on the same salary as Ms Daniels on the basis that he made the 100 sales. Mr De Maria commenced working in the Ashgrove office on 25 January 2016.

[49] Ms Madden sent the following text message to Mr O’Reilly on 9 January 2016:

“Hi I hope you had a lovely Christmas and New Year. Just to update you: The Christmas Campaign has achieved similar results to past years with final figures to be calculated in the coming weeks.

Orders for swags are also similar historically for this time of year.

We start production on cabins next week with the staff cabins being first off the rank, mine, Ginny’s then yours which have now been approved for finance. We have 67 orders from different people who have confirmed their intent to buy. With Community Sector Banking approving 1.5 million for rent to buy orders. These orders were generated from the radio I did before Christmas.

On top of this we are underway negotiating large orders for 3 cabin villages, Arnhem Land, and just started looking into Cape York.

Manufacturers Contract, Sales Contract, Financers Agreements and Engineers Reports have all been drafted, and will be finalised in the next 2 weeks when Candy and I get back to work.

In short an excellent start to the year!”

[50] Ms Madden said she returned to work after Australia Day 2016 and was frustrated by Mr De Maria’s lack of performance and unsettling of staff, and she was advised of a number of issues by staff including that Mr De Maria had spent the first three weeks of his employment as sales manager drawing caricatures of her for a website which depicted her as a very young girl in a very short dress. Ms Madden said Mr De Maria misled staff as to his role as sales manager and made assertions that “sales is Kathy's role”, referring to Ms Kathy Cleland, another employee.

[51] Ms Madden said she formalised an employment contract for Mr De Maria with Walkabout Beds on a fixed term of three months, with the employment contract back dated to his commencement on 25 January 2016. Ms Madden said she reluctantly set Mr De Maria’s salary at $120,000 plus superannuation as that was what he had previously been paid in other external employment. The stipulated key performance indicator (KPI) in Mr De Maria’s contract of employment was reduced to the sale of 40 cabins by the end of March 2016.

Concerns raised with Mr De Maria

[52] Ms Madden said her assistant, Ms Candice Todd was on a period of leave following her own annual leave in January 2016, and Ms Madden did not discover that Mr De Maria had been “paying himself” out of the charity funds of Street Swags until the first week of March 2016. Specifically, Ms Madden said she learned that while she was on leave, Mr De Maria withheld the fact that he had been engaged by Walkabout Beds, and he instructed Ms Cleland to pay him from Street Swags. Ms Madden understood Mr De Maria received a substantial personal monetary benefit of $15,000 ($30,000 pre-tax value) salary sacrifice. This is despite Ms Madden’s witness statement attaching Mr De Maria’s employment agreement from Street Swags.

[53] Ms Madden said she brought the issue of the payment from Street Swags to his attention and referred him to the Street Swags constitution, and Mr De Maria said he would get legal advice.

[54] Following this discussion, Ms Madden said she had a series of conversations with Mr De Maria in relation to him not fulfilling his responsibilities as sales manager, and his divisiveness and disrespectful behaviour towards Ms Madden and other staff. Ms Madden said she spent considerable time performance managing Mr De Maria, who did not take the matters seriously and referred to her matters of concern as his ‘charge sheet’. Ms Madden said Mr De Maria also made a number of sexual advances towards her during these meetings.

[55] Ms Madden said she spoke to Mr De Maria about concerns that he was wasteful with company resources in that he made a number of decisions without properly researching beforehand and his not respecting staff and their roles. Smaller concerns raised by other staff included:

(a) numerous iPhone charger cables disappearing from the office;

(b) Ms Cleland and Ms Todd regularly finding their personal phone cables plugged into Mr De Maria’s computer;

(d) Mr De Maria not cleaning up after himself;

(e) Mr De Maria wearing canvas bedroom slippers to work and always lookinggenerally dishevelled; and

(f) Mr De Maria often touching and readjusting his crotch.

[56] Ms Madden said it was revealed to her that Mr De Maria regularly requested copies of financial records and information for Street Swags and Walkabout Beds from Ms Cleland, and that as Mr De Maria was not a director of Walkabout Beds, he had no reason to request the financial records for it and such request was beyond his scope of employment with Walkabout Beds.

[57] Ms Madden said Mr De Maria also sexually harassed Ms Todd and other members of Street Swags staff. She recalled an occasion in or about January 2016, during the Christmas holiday period (which Ms Todd in fact puts as mid-February 2016), when Ms Todd attended her office and appeared to be out of sorts, and Ms Madden observed that she had wet herself. Ms Madden said she was interrupted by other staff and did not get a proper opportunity to speak to Ms Todd about what had happened, but discretely offered her a change of clothes.

[58] Ms Madden said that she only learnt the extent of the harassment when she and Ms Todd were later working in the Darra office. Ms Madden said that by that time, she was no longer working in close proximity with Mr De Maria and did not have an opportunity to raise the issue directly with him. Ms Madden said she understood Ms Todd had made a complaint about the harassment to the Fair Work Commission shortly after she learned of the extent of the harassment, and understood that Work Cover has approved claims lodged by Street Swags staff members based on Mr De Maria’s bullying and sexual harassment, and that in response, Mr De Maria often stated words to the effect that “if anyone stands in my way, my lawyers will take your house and savings.”

[59] On 16 February 2016, Mr O’Reilly sent a text to Ms Madden advising that he and his wife would not be purchasing a cabin as it didn’t suit their retirement plans.

March 2016

[60] On 15 March 2016, a full staff meeting was held. During this staff meeting, the issue of Mr De Maria not fulfilling his contract was again discussed. Mr De Maria was present during this meeting. Ms Madden said a solution was proposed that Weiss Industrial would take over the sales of the cabins and deal with customers past their initial contact. Ms Madden said that Mr Weiss and his staff had the necessary knowledge to answer customer questions, make required design changes, and perform site inspections.

[61] Ms Madden said a number of the staff during this meeting voiced their frustration that the current arrangement of having Mr De Maria in the role of sales was not working and that it would be in the best interest of the organisation to hand this role over to Mr Weiss and his staff for the sake of efficiency and results.

[62] After the meeting, Ms Madden said she explained to Mr De Maria that having made no sales at all, it looked most unlikely that he would be able to reach his KPI of 40 cabin sales by the end of March, but that she would not hold him in breach but would let his contract run out to give him time to make alternate arrangements.

[63] Ms Madden said that on 23 March 2016, Mr De Maria emailed Ms Cleland, claiming to have “gastro” and stated he would be working from home but to “put it down as sick leave.” During the day staff attempted to contact him however he was not available.

[64] On 24 March 2016, Mr De Maria emailed Ms Cleland to say he was sick again, claiming to be “on the mend but not wanting to spread his germs.” Ms Madden said she later found out that Mr De Maria had been briefing “his lawyers”.

[65] Between 25 and 28 March 2016, Ms Madden said she was on holidays for the Easter long weekend in Noosa. She said that on 25 March 2016, she loaded her weekly diary post to her Facebook page and YouTube channel, unaware that staff had been emailed by Mr De Maria earlier that day. Having viewed Ms Madden’s diary posts of 25 March 2016, I note that Ms Madden gushed well wishes to Mr De Maria towards the end of the video, noting he had been unwell. From viewing her video, Ms Madden appears to be extremely fond of Mr De Maria.

28 March 2016

[66] On 28 March 2016, Ms Madden returned from Noosa to attend a birthday party for Ms Todd at her house. While at Ms Todd’s house, Dr Harold Thornton, said that there was something she should know and that she might want to check her emails. Ms Madden said she checked her emails on her phone, and that she also had access to Ms Todd’s emails on her phone. She observed an email had been sent to staff of Street Swags by Mr De Maria advising that Ms Madden had been suspended pending an investigation into financial irregularities.

[67] Ms Madden said that at the time of reading the email, she had not received any email from Mr De Maria about any suspension of her employment or any letter from about any suspension of her employment. Ms Madden said she left Ms Todd’s house and telephoned Mr O’Reilly to ask if there was anything that he wanted to tell her, to which Mr O’Reilly responded, “No”. Ms Madden then sent an email to Mr De Maria at 2:32pm as follows:

“Dear Adrian,

It will not come as news to you that there has been issues with your employment in Street Swags Ltd and Walkabout Beds Pty Ltd.

An incident of a very serious nature concerning your conduct has been bought (sic) to my attention therefore the decision has been reached to provide you with an opportunity to ‘show cause’ as to why you (sic) employment with these organisations should continue.

I will explain the process for this ‘show cause’ to you further at my earliest opportunity hopefully this week in the meantime you are stood down on full pay until further notice.

This is a highly confidential matter and you are directed as an employee to refrain from discussing it with other staff or associates of this organisation but only with properly constituted support person (union-legal).

Yours faithfully

Jean Madden”

[68] After sending the email to Mr De Maria, Ms Madden said she caused notice to be given of an extraordinary special meeting of members to be held at her residence at 6.00pm. Members that were unable to attend were advised to telephone in.

[69] At about 5.43pm, members of Street Swags received an email from Boss Lawyers acting for Street Swags advising the following:

“To whom it may concern

Unauthorised meeting

We act for Street Swags Ltd.

It has been brought to the attention of Mr O’Reilly and Mr De Maria, the directors of Street Swags Limited that Ms Madden has attempted to organise a meeting purportedly of the members (Invalid Meeting).

Ms Madden has absolutely no authority to organise such a meeting nor is the Invalid Meeting binding on the company. Any resolution passed is null and void. We direct you to disregard Ms Madden’s unauthorised and unsolicited email.

Ms Madden’s conduct demonstrates a flagrant breach of the directives given to her by the directors of Street Swags Limited and will be dealt with accordingly.

Ms Madden has been stood down from Street Swags Limited pending a full investigation and you are again reminded and directed not to take any directions from Ms Madden until further notice of the directors of Street Swags Limited.

We are confident that most members will do the right thing and let the investigation into Ms Madden run its course through the proper channels. However, for those of you who don’t, then the directors and indeed other members may consider your conduct warrants expulsion from Street Swags Limited.

If you have any questions, please direct them to either Mr O’Reilly or Mr De Maria.

Yours faithfully

Mark Harley, Partner.”

[70] At about 5.56pm, Ms Madden emailed Boss Lawyers the following email:

“Dear Mark, as set out in the Street Swags Constitution, I absolutely do have the authority to call this meeting.

I have not been stood down and have received no communication to the like.

Your services are no longer required, you now no longer act for Street Swags Ltd.

Jean”

[71] It is Ms Madden’s evidence that she did not receive the email at [10] until 6:03pm. Further, it is Ms Madden’s evidence that Boss Lawyers had been retained by Walkabout Beds. The retainer with Boss Lawyers was arranged by Mr De Maria, who Ms Madden said did not declare that Boss Lawyers had previously been acting for him in a personal capacity.

[72] At about 6.00pm, the members’ meeting commenced. In relation to the members’ meeting, Ms Madden’s evidence was that:

(a) all active current members were in attendance with the exception of Mr De Maria;

(b) all members agreed to waive their rights to the required notice;

(d) at 6.03pm, Ms Madden received an email copy of a letter dated 24 March 2016 from Boss Lawyers (above at [10]) advising her that she had been suspended on full pay and that she was to deliver property of Street Swags including a truck and stage to the offices of Boss Lawyers in the Brisbane CBD by 10am on 29 March 2016;

(e) resolutions were passed including:

(i) removing all existing directors being Mr De Maria, Mr, O’Reilly, and Ms Madden;

(ii) appointing Dr Harold Thornton, Dr Angela Richards and Mr James Booth as directors and Ms Todd to continue as company secretary; and

(iii) that a further meeting to consider the situation would be scheduled for 4 April 2016.

[73] Ms Madden said she was happy to be removed as director at that time to ensure there was no perception of a conflict of interest while the alleged financial irregularities were investigated. Ms Madden said the letter dated 24 March 2016 she received from Boss Lawyers at 6.03pm was forwarded to an incorrect email address, and to date she had not received a hard copy of the letter from Boss Lawyers despite claims that it was sent by registered post.

29 March 2016

[74] On 29 March 2016, Ms Madden said she was advised by a member of the Ashgrove branch of the National Australia Bank that Mr De Maria caused the Street Swags accounts to be frozen.

[75] Ms Madden attended the Ashgrove office for work, and on arrival, two security guards were refusing access to the Street Swags office. Ms Madden said the security staff had been engaged by Mr De Maria without financial delegation or authority from Street Swags. Mr Mark Harley of Boss Lawyers was in attendance with Mr De Maria and was taking photographs and threatening legal action against staff seeking to retrieve personal property from the office.

[76] Ms Madden said that her personal property including furniture, awards and other personal items have not been returned to her. Ms Madden said office files were also removed together with valuable designer accessories belonging to staff, and Mr De Maria informed the police that none of the property is in his possession.

[77] Ms Madden said that the Queensland Police Service (QPS) were called to attend and advised her that there was nothing they could do. Ms Madden said the QPS told her and Mr De Maria that no one could enter the office until the issues were resolved.

[78] Ms Madden said she believed Mr De Maria seized control of Street Swags without authority and his actions were designed to remove her as CEO of Street Swags and put himself in her place. Ms Madden said that in accordance with her role as CEO she asked Mr De Maria to leave, but he blocked the entrance/exit to the premises and instructed the security guards to follow her if she tried to move, including following her to the toilet. Ms Madden said she was distressed and fearful for her personal safety.

30 March 2016 and first termination

[79] On 30 March 2016, Ms Madden received a termination letter (the first termination letter) from Boss lawyers, above at [13]. Ms Madden said she received the termination letter by email, and prior to receiving the termination letter, she had no opportunity to address the reasons for her termination or suspension.

[80] Ms Madden said she was confused as to the validity of her termination and suspension in circumstances where Mr O’Reilly and Mr De Maria had been removed as directors by the members on 28 March 2016.

April 2016

[81] Ms Madden said that on 2 April 2016, she was advised by business owners and tenants of the arcade in which Street Swags operated that Mr De Maria had been in the Street Swags office and moved boxes in front of the glass doors preventing anyone from seeing inside. Ms Madden attended the Street Swags office and took photographs of the boxes and observed that the lock had been ground off with a machine tool.

[82] Ms Madden said a business owner from within the arcade advised her that he observed files being removed from the office by Mr De Maria and an unknown man. Ms Madden said that the description given to her of the unknown man matched the description of Mr Harley of Boss Lawyers.

[83] Ms Madden said that Dr Thornton, Dr Richards, and Mr Booth, as directors of Street Swags installed at the members’ meeting of 28 March 2016 obtained legal advice from McCullough Robertson. Ms Madden said she was advised that McCullough Robertson attempted to schedule a meeting between the new directors and Mr De Maria and Mr O’Reilly to address issues including who was properly a director, but no meeting occurred.

[84] Ms Madden said that she was not legally represented by McCullough Robertson, and that during exchanges of correspondence between McCullough Robertson and Boss Lawyers, McCullough Robertson advised Boss Lawyers that McCullough Robertson was acting for the new board and not Ms Madden.

[85] On 10 April 2016, Ms Madden sent the following text to Mr O’Reilly:

“You are breaking employment law by not paying staff. You need to unfreeze the bank accounts. You are also party to Adrian’s break and enter and stealing.”

[86] On 11 April 2016, Ms Madden received a copy of a letter, dated 30 March 2016 (reproduced above at [14]), that Boss Lawyers had sent to McCullough Robertson. The correspondence outlined a number of allegations in relation to financial irregularities that were directed at Ms Madden, which caused her to become very upset because she had only just received the correspondence after weeks of wondering whether she had been suspended or terminated and not properly understanding the proper reasons for her termination. Ms Madden said it was unclear as to whether this letter was sent to her in her capacity as CEO or as Director.

[87] Ms Madden said that in the following days, Dr Thornton, Dr Richards, and Mr Booth were served with a Supreme Court application on behalf of Street Swags seeking orders including preventing them from acting as directors. The correspondence also threatened costs against them personally.

13 April 2016

[88] Ms Madden said she stayed up very late the night before on 12 April 2016 writing her responses to the allegations in the 30 March 2016 letter, and that she continued writing her response into the morning of 13 April 2016. She said that given she had been terminated she assumed the allegations were about her conduct as a Director of Street Swags.

[89] At about 1:26pm, Ms Madden sent her response letter to Boss Lawyers refuting the allegations of misusing funds and provided a full account for each of the transactions in question, stating she believed the members meeting of 28 March 2016 was valid.

[90] Ms Madden said that after sending her response, she noticed it contained a typographical error and she immediately sought to amend it. At this time, Ms Madden said someone came to the Darra office looking for her, and she was scared and hid in the toilets with the lights off. Ms Todd recognised them and told them Ms Madden wasn't in the office. Ms Madden and other workers were working from the “Darra office” purportedly doing Street Swags and Walkabout Beds work, on the premises provided by Mr Weiss.

[91] Ms Madden said that at about 2:17pm, she received news that McCullough Robertson advised Dr Thornton, Dr Richards, and Mr Booth that they could not provide pro bono representation in any litigation, and that as volunteers with families and work commitments, Dr Thornton, Dr Richards, and Mr Booth decided they would sign the consent forms in relation to the Supreme Court interlocutory relief action commenced by Mr De Maria and Mr O’Reilly on behalf of Street Swags. Ms Madden said that they agreed that the 28 March 2016 meeting was invalid, solely due to personal, time and financial constraints, and felt as though they had no option but to sign.

[92] At about 2:30pm, Ms Madden said she left in a distressed state to collect her children from school, and at about 3:30pm she took the children from school to Mr Weiss’ house and hid, as she could hear someone driving up and down her driveway. Ms Madden said she wanted to avoid being served with any court papers until such time as she had obtained legal advice.

[93] Ms Madden said she received a number of angry text messages from Mr Booth at about 6:39pm, making her aware he had been served with court papers and he was named as a respondent to the interlocutory action.

14 April 2016

[94] Ms Madden sent the following email at 6:08am on 14 April 2016 to Mr Tony Deane of Clayton Utz:

“Hi Tony, I hope you have been well. I’m sorry that things ended up badly between us. Street Swags did have an independent accountant go through every receipt and carry out a thorough audit. This revealed Shelley had retrospectively in Xero put transactions into the wrong job codes in order to inflate the expenses in certain projects. Her campaign spread a great deal of poison.

Two directors who remained from this time have rehashed this campaign. They have issued an interlocutory application for Friday at 10am (emailed to me last night).

There is only around $80k in the consolidated accounts and the demands they are asking for tomorrow will leave Street Swags Ltd insolvent.

I have no legal representation to save the company. PLEASE HELP ME.

I am very happy to pay commercially.

My best contact is [number]

Jean”

[95] Ms Madden’s evidence is that she was so stressed by events that she forgot to take her son to his piano lesson. She said she then took her children to school and sent the following text message to Mr O’Reilly hoping that he could see reason in the situation before she drove to Mr Weiss’s office and locked the doors:

“SSL has $49k in cash, paying Boss and the security tomorrow will make it insolvent.”

[96] Ms Madden said she received correspondence from Boss Lawyers via email, also directed to Dr Thornton, Dr Richards, and Mr Booth, proposing terms of settlement in relation to the Supreme Court proceedings. The terms included, in summary, that:

(a) all parties agree the proper Directors of Street Swags are Mr De Maria, Mr O'Reilly, and Ms Madden;

(b) the Directors appoint an independent auditor to undertake a forensic audit of Street Swags’ finances; and

[97] Ms Madden said she received a reply from Mr Deane at 10:46am saying he could not help her due to a conflict with Street Swags. Ms Madden replied to Mr Deane as follows:

“Thank for taking the time to read it and for all you have done for us over the years.

I will act now to wind up the company.

xo”

[98] Ms Madden’s evidence is that at about 11:23am, she spoke with Mr Nigel Markey at Pilot Partners about “our” options, including attempting to stop the destruction of “my” company which she felt would be inevitable if the Supreme Court orders were made. Mr Markey told her there was nothing she could do about Street Swags.

[99] Ms Todd informed Ms Madden that Dr Richards was distraught and furious, and that Dr Richards’ children had been staying up late crying and scared that their mother was going to go to jail. Dr Richards sent Ms Madden a message asking her to make the matter go away and asking, “Is he after my money too?” Ms Madden responded in part, “I’m sorry. I am making it go away the whole charity to keep you safe.”

[100] Ms Madden said she agreed to sign the terms of settlement at 2:30pm as she was frightened and felt she had no choice but to accept the terms as she had no money and no other options for legal support, and she was deeply concerned by how her supporters were being affected. Ms Madden said that at the time of agreeing to the settlement she did not understand what it meant for her employment, as the terms referred to her being stood down, but she understood she had already been terminated. Ms Madden said she was not sure whether the stand down related to her capacity as a Director or as an employee.

15 April 2016

[101] Ms Madden said that on 15 April 2016, not really understanding the full impact of what had happened the previous day nor what she had signed, she made her weekly 'Jean's Diary' video.

[102] Following the filing of consent orders, Ms Madden said:

(a) the Supreme Court made orders in the terms of the consent orders signed by Dr Thornton, Dr Richards, Mr Booth, and Ms Madden;

(b) Mr De Maria gained access to the Street Swags accounts and appointed himself to the role of Managing Director, and immediately back paid himself to the 25 March payday a new unauthorized salary of $150,000, not including super.

[103] Ms Madden said all other staff salaries and super remained unpaid, and large sums of money were paid to Boss Lawyers and the security company, both being unsecured creditors. Ms Madden said other unsecured creditors, such as the vehicle leasing company and foam supplier, remain unpaid.

From 19 April 2016

[104] Ms Madden said that the Street Swags members issued a notice calling a meeting of members, with the principle agenda items being to add members, add directors and appoint new company lawyers.

[105] Ms Madden said that she received a letter dated 20 April 2016 from Boss Lawyers providing notice that each of the parties was required to “provide an original signature to the court indicating their consent to the orders to be made”. A request for consent order was attached to the correspondence together with draft orders that provided:

“THE COURT DECLARES BY CONSENT THAT-

1. The proper directors of Street Swags Limited ACN 127 605 832 are Adrian Pasquale De Maria; Brian John Emmett O'Reilly and Jean Ellen Madden.

2. The notice of meeting dated 28 March 2016 is invalid.

3. All resolutions passed at the purported Meeting of Members on 28 March 2016 are invalid.”

[106] At about 2.03pm on 20 April 2016, Ms Madden sent the following email, resigning as a Director of Street Swags:

“Due to being precluded from carrying out my duties as a director and as per my letter (15 April to my fellow directors, outlining my concerns for solvency), I resign as a director of Street Swags Ltd.”

[107] Ms Madden said that following the agreement reached on 14 April 2016, Ms Todd, Mr Weiss, and Ms Madden each had their personal email, Facebook and iCloud accounts hacked by someone operating from within Ashgrove. This was reported to the police and other relevant authorities.

First unfair dismissal application

[108] Ms Madden said she was confused by what application the terms of settlement, dated 14 April 2016, had in relation to her termination of 30 March 2016, and consequently she emailed Mr O’Reilly requesting confirmation of whether or not she would be reinstated or terminated noting that it had been a week since she provided her detailed response to the allegations in the 30 March 2016 letter. The email is as follows:

“A week has now passed since I responded to your show cause… attached. I believe this is ample time for you to respond.

Can you please advise today whether you reinstate or terminate….

My termination pay is as follows:

3 weeks in unpayed (sic) wages plus 4 weeks notice for termination

$846.16 ordinary pay x 7 is $5,923.12

Annual Leave Owing 591.178 units is $15,667.69

= $21,590.81

Into account [redacted]

And

$307.69 salary sacrifice pay x 7 = $2,153.83

Into account [redacted]

Jean”

[109] As at 22 April 2016, Ms Madden stated that she remained confused as to what application the terms of settlement had in relation to her employment and sought to protect her interests and filed an application in the Fair Work Commission seeking an unfair dismissal remedy.

[110] On 26 April 2016, Ms Madden received a letter from Boss Lawyers as follows:

“26 April 2016

…..

Dear Ms Madden

Suspension of your employment

We refer to your email on 21 April 2016, in which you ask whether your employment has been terminated.

As noted in our letter of 24 March 2016 (a copy of which we attach), your employment has been suspended pending the outcome of an independent audit and forensic investigation of the company’s financial affairs.

We thank you for your response to our letter of 30 March 2016 but as the director’s investigations into the financial affairs of the company remain ongoing, your employment remains suspended

Payment of monies owing

We note that the directors of Street Swags only obtained access to the National Australia Bank Account late on 20 April 2016. The directors are currently calculating the entitlements owed in back pay to each employee and will make such payments. we note that any monies due to be paid to you from Walkabout Beds will need to be referred to the administrators of that company.

Bendigo Bank Account

We have been informed by Community Sector Banking that a number of significant transactions were made on Street Swags’ Bendigo Bank Account on 1 April 2016. We note that you were the sole signatory of the account at this time.

We are therefore instructed to seek that you provide a full account of the monies disbursed from the Bendigo Account by 4:00 pm on 28 April 2016.

[1341] The payment wasn’t even made to Mr Weiss; it was made on his behalf. There was no basis for doing so. Ms Madden has attempted to gloss over details, suggesting that hundreds of swags were moved from the College to the Darra shed, but this did not occur until February 2016, and only occurred because of a temporary arrangement due to racking alterations at the College.

[1342] Mr O’Reilly was intimately aware of the storage capabilities at the purpose-built centre at the College. A grant had been given for this purpose, which was then required to be enormously topped up by the Nudgee community, and was done so on the basis of other social justice initiatives of the College. I accept that the board did not and would not have agreed, if it had been put to it for its consideration, to pay $10,000 towards Mr Weiss’ costs on account of supposed storage fees. I consider the purported minutes of the 2015 AGM to be a fabrication. The biggest giveaway is the minutes declare that Mr O’Reilly suggested that the staff move to the Darra office to cut down on office rent expenses. I accept Mr O’Reilly’s evidence that he never made such a suggestion.

[1343] I am satisfied the belief that Ms Madden had engaged in conduct sufficiently serious to justify immediate dismissal was based on reasonable grounds.

Lodgment of ASIC documents on 29 March 2016

[1344] As it transpires, the parties were in a corporate tussle at or around 29 March 2016, with Ms Madden being informed of her stand down, and then orchestrating a coup of members to hold a purported members’ meeting which has been declared by the Supreme Court to have been invalid.

[1345] Ms Madden denied that it was she who filed the ASIC documents, conveniently pointing the finger at Ms Todd. Clearly, Ms Todd did not initiate this action or even devise this idea. Ms Madden ultimately electronically signed the documents.

[1346] The parties then reached a consent position in mid-April 2016 as to the legitimacy of the 28 March 2016 members’ meeting, so I consider that any wrongdoing by Ms Madden was rectified by the consent position put to the Court.

[1347] Given the huge turmoil and tussling the parties were involved in at that time, I am not satisfied that the belief that Ms Madden had engaged in conduct sufficiently serious to justify immediate dismissal was based on reasonable grounds.

Ms Madden considered that she could establish an alternative cabin business and considered the IP as hers in her own right

[1348] Curiously, in Ms Madden’s correspondence with Dr Thornton, she was, I consider, throwing her weight around, making curious threats, or what she calls, home truths. It was not the first time Ms Madden had engaged in such behaviour; in mid-2015 she had used strong words to demand the support of the board otherwise she would call a special members’ meeting seeking a resolution for the dissolution of the board.

[1349] It appears to me that whenever Ms Madden considered she had an opponent in her way, attempting to stop her from doing whatever it is she wanted, she steamrolled them out of the way. Directors who had considered that at various times she was out of control had resigned, and most notably, Ms Quinn, whose correspondence strikes me as most sensible and entirely reasonable with insight into Ms Madden’s manic-like behaviour, had resigned as company secretary in genuine fear of Ms Madden’s path of determination that nothing would get in the way of her and the cabin project. Nothing! Not even sensible, correct, firm legal advice given on a pro bono basis by one of the largest law firms in the country.

[1350] The email sent from Ms Madden to Dr Thornton was known to the Respondent prior to the decision to dismiss Ms Madden. While the Respondent informed Ms Madden of the ridiculousness of her assertions on the two issues, that she could establish an alternative cabin business and considered the IP as hers in her own right, she never withdrew from this sentiment, and she carries this sentiment through to these proceedings.

[1351] These views expressed by Ms Madden are incongruous with her duties as an employee and as a CEO of the Respondent. I am satisfied the belief that Ms Madden had engaged in conduct sufficiently serious to justify immediate dismissal was based on reasonable grounds.

Ms Madden had executed a contract, without authority of the board for a minimum payment of $528,000 per annum to Mr Weiss, her partner

[1352] It is impossible to know where to start in describing the appalling conduct engaged in by Ms Madden in devising a contract with Mr Weiss of this magnitude. At various times during the hearing Ms Madden explained that as she was the sole director of Walkabout Beds, it was a decision she could make without the authority of the Street Swags board. After I had heard this explanation from Ms Madden on a number of occasions, I had to incredulously inform her that she needed to stop such a ridiculous assertion.

[1353] The premise of finding a minimum of 44 people per annum, presumably homeless and having somebody permit them to occupy their land with a purpose-built, low-cost cabin is, in my view, a fairy tale. Further, under the scheme devised by Ms Madden, this homeless person would be agreeing to have parts of their welfare payments pay-off the financed cabin, as I understand it, for up to five years. The plan was that this would grow to hundreds of cabins per annum. The plan detailed that basic cabins would cost $8,500 per year, with a $3,500 markup for Street Swags, costing the purchaser $12,000. Curiously, the cabin put on Ms Madden’s land for her father cost Street Swags/Walkabout Beds close to $30,000, without any evidence of Ms Madden having paid any money towards the cabin (later repossessed). It was supposedly going to be used as a ‘trial’.

[1354] Ms Madden committed the Respondent, either through Street Swags or Walkabout Beds, it does not matter, to an extraordinary liability. These are the sorts of contracts you would expect your lawyers to draft, with the beneficial aspects for the drafter, not for the recipient and one’s boyfriend. Ms Madden’s incredulous evidence is that she allowed Ms Daniel’s to assist with drafting of the contract and that would make it “at arm’s length”.

[1355] It appears to me that Ms Madden, even more than four years after the event considers there was nothing wrong with awarding a contract of such magnitude to Mr Weiss, without the board’s consent. Interestingly, she has reasoned with herself that because she informed the board at the December 2015 AGM of her relationship with Mr Weiss, she was free to go on a half a million dollar per year frolic of her own with a charity underwriting her decision.

[1356] Again, repeatedly throughout her written and oral evidence, Ms Madden reasoned that she did not need any approval because the contract was with Walkabout Beds and not Street Swags. Yet, the documents produced in mid-2015 for consideration and put to the Board and provided to Clayton Utz declared that no Street Swags money would be expended. The finance arrangement was that the purchaser would require finance, not Walkabout Beds and guaranteed by Street Swags.

[1357] I accept Mr O’Reilly’s evidence that he was unaware of this contract until he returned from Cambodia and met with Mr De Maria at the premises of Boss Lawyers and discovered the contract.

[1358] I am satisfied the belief that Ms Madden had engaged in conduct sufficiently serious to justify immediate dismissal was based on reasonable grounds.

Mr Weiss had revealed by email he was insolvent on 14 March 2016. On the same day, Ms Madden proposed Street Swags pay to Mr Weiss, without any authorisation, an amount of $2,500 per week

[1359] Ms Madden’s evidence suggests that Mr Weiss’ email states that he is not yet insolvent, but would be in a month’s time because of the failure of the Respondent to order cabins. Mr Weiss’ email does, in fact, state he is trading insolvent; the words do not require manipulation. Ms Madden’s solution to such a dilemma was to then organise a staff meeting, and according to her, the staff decided that Mr Weiss should receive a weekly retainer of $2,500.

[1360] The use of a charity’s money to pay to the CEO’s boyfriend this payment, particularly in light of his declaration of his financial position is beyond extraordinary. Ms Madden was, in my view, blinded by love, trying to do whatever she could to satisfy her dissatisfied and frustrated boyfriend who had been sold a commercial promise that could never be fulfilled.

[1361] The staff of this charity had no authority whatsoever to agree to the payment of $130,000 per annum to any party. Their evidence, where given on this subject is almost cult-like; Ms Madden thought it a good idea, and they thought Mr De Maria was not pulling his weight so yeah, Mr Weiss should receive payment. Never mind the board is entrusted to make such important decisions, spending money donated by the community and corporate citizens. Never mind the impropriety of making such a payment to a person in a relationship with the CEO.

[1362] I am satisfied the belief that Ms Madden had engaged in conduct sufficiently serious to justify immediate dismissal was based on reasonable grounds.

From 17 March 2016, two payments were made to Mr Weiss in the amount of $2,500 per week

[1363] Ms Madden has given conflicting evidence on this issue; saying that weekly payments of $2,500 to Mr Weiss were not paid, and alternatively, only a small number of payments were made. The facts are that two payments were made to Mr Weiss in March 2016.

[1364] Mr De Maria and Mr O’Reilly knew these payments to be unauthorised and improper. I am satisfied the belief that Ms Madden had engaged in conduct sufficiently serious to justify immediate dismissal was based on reasonable grounds.

On 10 March 2016, Ms Madden authorised a further payment of $10,000 to Mr Weiss from Street Swags

[1365] I am not clear on this issue as it is confused by payments to Mr Weiss on account of cabin manufacturing. I am not prepared to declare that I am satisfied the belief that Ms Madden had engaged in conduct sufficiently serious to justify immediate dismissal was based on reasonable grounds.

On 17 March 2016, Ms Madden made a payment of $2,467.32 on a Street Swags credit card to pay for Mr Weiss’ steel

[1366] Mr De Maria’s evidence, which I accept is that he witnessed Ms Madden make a payment on a Street Swags credit card to pay for Mr Weiss’ steel bill. Smokes and mirrors have been wheeled out, with Ms Madden, at one stage, declaring that the amount then came off Mr Weiss’ invoice for cabin manufacture. There is no evidence of this occurring at all. At hearing, at various times Ms Madden did not wish to address this payment, and I make no adverse inference from her right to refuse to answer the question put to her.

[1367] I am satisfied the belief that Ms Madden had engaged in conduct sufficiently serious to justify immediate dismissal was based on reasonable grounds.

Ms Madden had indebted Street Swags to finance arrangements with Finrent unbeknownst to the board

[1368] The arrangement Ms Madden and Ms Daniels put together for Finrent’s involvement is messy and not for the benefit of the Respondent. All the risk was found at the feet of Walkabout Beds, and ultimately Street Swags. How Ms Madden and Ms Daniels thought it a good idea is perplexing. I consider it was simply a quick solution to allow for the manufacturing of the cabins to commence, in stark defiance to what the board was told in mid-2015.

[1369] I am certain that if Clayton Utz had been permitted to review the proposed financial arrangement, it would have advised against it. Ms Madden was, however, demonstrably like a bull at a gate, determined to get the project into manufacture, while committing the Respondent to large repayments. Ms Madden shared with Mr Deane the report she had provided to the Board, declaring that no Street Swags money would be put to manufacture of the cabins. Within a short period of time, she and Ms Daniels had turned that on its head.

[1370] Mr De Maria’s involvement in signing the finance terms is curious. I accept his evidence that Ms Madden would intimate that Mr O’Reilly was across the plan, which led him to believe that the terms were acceptable. However, he fell well short of his obligations as a director when signing the finance terms. He did not adequately scrutinise the terms and blindly signed them, committing Walkabout Beds, and ultimately Street Swags as guarantor to hundreds of thousands of dollars in repayments.

[1371] I accept the evidence of Mr De Maria and Mr O’Reilly that Ms Madden was each telling them the other was across things, when they were not. Even though Mr De Maria was within the operation at the time as an employee, Mr De Maria and Mr O’Reilly’s responsibilities as directors were not being met, as particularly in the case of Mr O’Reilly, he was a non-executive director. His involvement as a director was because of his obligation to his employer, the College. Mr O’Reilly certainly did not have his finger on the pulse, meeting all of his board responsibilities, but with a competent and honest CEO, the board member would have less to scrutinise. I am of the view that Ms Madden was not a competent and honest CEO, and in engaging in the behaviour that she did, she razzle dazzled Mr O’Reilly and Mr De Maria into believing that the cabins project was full steam ahead with Clayton Utz overseeing due diligence. She deliberately misled each of Mr O’Reilly and Mr De Maria, particularly relevant to the withdrawal of Clayton Utz and its due diligence consideration.

[1372] The conduct of Ms Madden is particularly apparent where she informed Mr O’Reilly by text message at [49] that there were 67 orders from individuals who had confirmed their intent to buy. It is a complete falsehood. Further, I accept Mr De Maria’s evidence where Ms Madden fabricated that Clayton Utz was interested in purchasing $250,000 worth of cabins.

[1373] Mr O’Reilly would, no doubt, have been spinning on his return from Cambodia to learn of the mess the Respondent was in. He was learning so many things at this time, including that Mr De Maria was employed, of the manufacturing contract, and of finance arrangements.

[1374] By the time of the dismissal, both Mr O’Reilly and Mr De Maria knew far more, including the sum of money Ms Madden had indebted Street Swags to, exacerbated by her decision to put Walkabout Beds into administration. Mr O’Reilly and Mr De Maria, based on advice, considered that such an action had crystalized a debt owed.

[1375] I am satisfied the belief that Ms Madden had engaged in conduct sufficiently serious to justify immediate dismissal was based on reasonable grounds.

Ms Madden had Walkabout Beds pay to her private family law firm an amount of $3,195.26 and it suspected that there might have been more payments made

[1376] In Mr De Maria’s witness statement to the Commission he stated that he was satisfied that there was sufficient evidence to justify the view he had that she had improperly paid $3,195.26 of money from the Walkabout Beds account to her private law firm.

[1377] Ms Madden’s response was that the bank statement attached to Mr De Maria’s statement demonstrated an amount of $603 per week being deduced from her weekly wages and being redirected to the Crowley Greenhalgh trust account. Ms Madden stated, “Walkabout Beds is a commercial company and I had no reason to disclose to the Street Swags directors which account my pay was going into.”

[1378] Ms Madden’s evidence is a complete fabrication. Yes, it is true that deductions of $603 per week were made a short time prior to the payment of the $3,195.26 to Crowley Greenhalgh, but as is demonstrative of the calculations above, only $1,809 had been withheld when the payment was made. As is clear from the letter sent by Boss Lawyers to Pilot Partners, the directors of the Respondent were concerned that there had been more payments made, but at the time of the dismissal, they did not have evidence of fraudulent payments. This, in the form of the $14,400 payment came later.

[1379] In answering questions from the Commission, Ms Madden fabricated that sufficient monies were set aside to cover the payment to Crowley Greenhalgh when it was made.

[1380] I am satisfied the belief that Ms Madden had engaged in conduct sufficiently serious to justify immediate dismissal was based on reasonable grounds.

Improperly put Walkabout Beds into administration

[1381] Ms Madden’s actions in putting Walkabout Beds into administration on 14 April 2016 is astonishing. On the information before me, I consider that it was a malicious act, done for an improper purpose and to cause as much damage as possible.

[1382] Ms Madden had options if she considered that it was necessary to put Walkabout Beds into administration. She could have held a discussion with its one member shareholder, Street Swags to seek advice. As advised by Boss Lawyers, she could have informed Street Swags of her intent to resign as a director to allow for new directors to be appointed.

[1383] After improperly making a payment of $14,400 to her lawyers from Walkabout Beds, or allowing it to be made if she did not do it herself, after agreeing to consent orders with the directors of Street Swags, she swiftly, and without notice, put Walkbout Beds into administration.

[1384] Whether it was to attempt to hide the payment of $14,400 or for more sinister purposes, it is not clear. It is true that the Respondent was not aware of the $14,400 payment at the time of the dismissal.

[1385] I am satisfied, however, that the act of improperly putting Walkabout Beds into administration was viewed by the Respondent as an act of serious misconduct, and I accept that it was an act of serious misconduct. It was not Ms Madden’s place, even as a director to do so. I am satisfied the belief that Ms Madden had engaged in conduct sufficiently serious to justify immediate dismissal was based on reasonable grounds.

Representing the Respondent during the period of suspension

[1386] There is no doubt that Ms Madden attended a meeting with representatives of the Commonwealth Games with Mr Weiss in attendance. She did so while suspended as an employee of the Respondent. Her evidence is that she was there in her capacity of her own enterprise, Walkabout Homes Pty Ltd.

[1387] Ms Madden deliberately thumbed her nose at the Respondent in her actions of attending a meeting to discuss the potential of low-cost cabins with representatives of the Commonwealth Games. Ms Madden’s own business was not in any way materially operational, and clearly she was invited to attend a meeting on the basis of her reputation and contacts as the CEO of the Respondent. The invitation even stated “Street Swags”.

[1388] I am satisfied the belief that Ms Madden had engaged in conduct sufficiently serious to justify immediate dismissal was based on reasonable grounds.

Refusal to hand over Xero login etc.

[1389] Ms Madden, together with others, refused to provide login details to Mr De Maria for the Respondent’s Xero accounts. She cited her concerns that in doing so, financial transactions then made by others would appear as though they were made by her.

[1390] Without understanding Xero products in any detail, I would suspect that if Ms Madden made a transaction on a certain date, let’s say 20 March 2016, if that transaction was later updated, say, on 10 May 2016, the data would demonstrate 10 May 2016 as the latest transaction, even if it were to overwrite the 20 March 2016 transaction.

[1391] I note that ultimately the Court ordered Ms Madden to handover the login details and awarded costs against her.

[1392] I am sympathetic to Ms Madden’s views at the time, and her concerns that if others had her login, and particularly Mr De Maria, she might be “set up” by attempts to have fraudulent transactions credited to her. If Ms Madden had been provided assurance by Xero that any transactions posted after she had provided her login could not overwrite her own transactions might have gone some way of alleviating her concerns that she could not be blamed for improper transactions after she had provided her login.

[1393] While I am certain her actions were considered malicious and a nuisance, and were very disruptive to the operations of the Respondent at a time when there was still corporate turmoil, I am not satisfied the belief that Ms Madden had engaged in conduct sufficiently serious to justify immediate dismissal was based on reasonable grounds.

Takeover of social media accounts

[1394] The Commission does not have before it any evidence of Ms Madden’s “takeover” of social media accounts that pre-date the dismissal, despite it being included within the termination letter of 19 May 2016. Mr De Maria’s witness statement includes details from July 2016 but not beforehand.

[1395] Presumably, if such a statement was included within the termination letter, Ms Madden must have had control of the Respondent’s social media accounts at that time. I cannot, however, be satisfied the belief that Ms Madden had engaged in conduct sufficiently serious to justify immediate dismissal was based on reasonable grounds.

Defamatory comments

[1396] The only evidence the Commission has before it relevant to defamatory comments that pre-date Ms Madden’s dismissal is:

(a) her letter to Boss Lawyers of 29 April 2016, suggesting that Mr De Maria has been “trolling” through her emails;

(b) The letter from Boss Lawyers to Ms Madden dated 29 April 2016 where the firm stated: “We do note that you shouted “have fun in hell” at the representative of our client and a solicitor of our firm as they left the meeting.”

[1397] I note that Ms Madden agreed at [129] that she made personal comments about Mr De Maria and Mr O’Reilly, however it is not clear when these statements were made; during he employment or post-employment. Without additional evidence before me, I cannot be satisfied the belief that Ms Madden had engaged in conduct sufficiently serious to justify immediate dismissal was based on reasonable grounds.

The information within the Worrells Report

[1398] The termination letter dated 19 May 2016 nominated that the Worrells Report indicates that Ms Madden has incurred $441,399.43 in unauthorised expenses in the past year. While I do not consider that Mr De Maria and Mr O’Reilly would have accepted that every expense in that large amount would have ultimately have been unauthorised, when further scrutinised, I am satisfied that they believed a very substantial amount was unauthorised.

[1399] The very large amounts include, of course, financed payments. Some of the monies, however, include the steel payment and the payment to Ms Madden’s family law lawyer which were not specifically detailed within the termination letter.

[1400] Noting there would be appropriate deductions from the amount of $441,399.43 where suitable explanations could be provided, I am satisfied that Mr De Maria and Mr O’Reilly considered a substantial sum of that amount constituted unauthorised payments.

[1401] On receipt of the Worrells Report, it was the first time Mr De Maria and Mr O’Reilly had before them accounting information that had not been produced by somebody Ms Madden had earlier engaged. I have observed the way that Ms Madden has manipulated the information provided to Pilot Partners in the Walkabout Beds administration report, and how she explains their report as providing that there was nothing wrong with her conduct. Ms Madden failed to provide a full picture to Pilot Partners, particularly relevant to the $14,400 payment made to Crowley Greenhalgh. Further, they do not give her a clean bill of health, as she claims.

[1402] Considering the information before the Respondent contained within the Worrells Report, to an extent I am satisfied the belief of wildly inappropriate payments, some of which are extrapolated above, Ms Madden had engaged in conduct sufficiently serious to justify immediate dismissal was based on reasonable grounds.

Diversion of Street Swags mail

[1403] By late April 2016, Ms Madden was withholding Street Swags mail, and after meeting with the Respondent and Boss Lawyers, suggesting that if they had wanted the mail, which she had with her, they should have asked. Withholding mail as late as 29 April 2016 or thereabouts, when Ms Madden had confirmed she would sign the consent orders demonstrates an extraordinarily malicious and vexatious capacity to cause damage to Street Swags.

[1404] I am satisfied the belief that Ms Madden had engaged in conduct sufficiently serious to justify immediate dismissal was based on reasonable grounds.

Dismissal consistent with the Code

[1405] Relevant to my considerations above, I am more than satisfied that dismissal was consistent with the Code. Having satisfied myself of that, it is not necessary to turn my mind as to whether there was a valid reason for the dismissal, and other s.387 considerations, including whether Ms Madden was given an opportunity to respond to allegations.

[1406] I note, however, that there was a significant number of additional matters that came to the Respondent’s attention following the dismissal. The most alarming of those matters is the payment of $14,400 to Ms Madden’s family law lawyers. Whether Ms Madden paid that amount herself or had somebody else pay that for her is unknown. What has become clear in these proceedings, however, is Ms Madden’s conduct in retaining that payment for her benefit, even when she initially declared to her firm that the payment was an “error”.

[1407] Ms Madden’s conduct is nothing short of astonishing, and it surprised me that Ms Madden would continue her application, even after such information came before the Commission. It is difficult to understand Ms Madden’s motivation in pursuing this application when the light has been shone on potential criminal conduct that might not have earlier been before the Court.

[1408] Where I consider that Ms Madden’s cross-examination of Mr Deane of Clayton Utz was, at times, somewhat sycophantic in describing him as her mentor, Mr Deane’s evidence demonstrates that Ms Madden was somebody who would not listen to appropriate legal advice, given for the benefit of the Respondent. Ms Madden simply did not want anyone or anything to stand in her way. Her failure to inform the board of the decision by Clayton Utz to withdraw its services, particularly at the August 2015 board meeting would easily have resulted in the dismissal of her unfair dismissal application has that been the only misconduct she had engaged in. Where Clayton Utz were requiring her to involve her board and have them acknowledge that they had been provided with the relevant advice, Ms Madden was doing everything in her power to ensure the board would not speak with Clayton Utz, lest the board discover the legitimate concerns of Clayton Utz relevant to the projects.

[1409] It is unnecessary to deal with the other matters in [1335], other than to say that Ms Madden could not have succeeded in her application before the Commission.

Conclusion

[1410] While this decision is extraordinarily lengthy, I consider it has been necessary to lay bare all of the conduct engaged in by Ms Madden. This is not only for her benefit; to allow her to reflect how an objective person, without the perceived spite of Mr De Maria has collectively viewed the transactions she has improperly engaged in. It is also for the benefit of her supporters, whom I expect have been told many things over many years, probably only half true.

[1411] I sincerely hope such supporters can appreciate the disappointment that donors to the charity would experience when reading of Ms Madden’s activity, and the way in which she so easily and inappropriately expended donated monies.

[1412] The charity in 2021 clearly does good work, supported by prisoners who sew the swags and students of Nudgee College who assist in rolling the swags. These are all meaningful tasks, all with the altruistic purpose of providing swags to homeless people. In my view, the charity should not be punished for the acts of Ms Madden engaged in during a period in 2015 and 2016.

[1413] The application is dismissed. An order [PR726170] will be issued with this decision.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

1 [2018] FWC 3828.

2 [2020] FWC 1137.

3 Witness Statement of Jean Madden dated 16 September 2016 at para 24

4 Ibid at para 27

5 Ibid at para 29

6 Ibid at para 10

7 Mr De Maria statement at [48].

8 Applicant’s reply statement at [99].

9 Applicant’s reply statement – annexure JEM-15.

10 Applicant’s reply statement at [100].

11 Ibid [109].

12 Ibid [113].

13 Ibid [123].

14 Ibid [128].

15 Ibid [161].

16 Ibid [203].

17 Annexure AJD-14 to Mr Deane’s statement.

18 Witness Statement of Jean Madden dated 16 September 2016 at [49].

19 Witness Statement of Candice Todd at [25]; Witness Statement of Kathleen Cleland at [15].

20 Witness Statement of Jean Madden dated 16 September 2016 at [57].

21 Khammaneechan v Nanakhon Pty Ltd ATF Nanakhon Trading Trust T/A Banana Tree Cafe [2010] FWA 7891 (Bartel DP, 14 October 2010) at para. 60, [(2010) 204 IR 39]; cited with approval in Pinawin T/A RoseVi.Hair.Face.Body v Domingo [2012] FWAFB 1359 (Watson VP, Richards SDP, Cloghan C, 21 March 2012) at paras 27, 29, [(2012) 219 IR 128] .

22 Pinawin T/A RoseVi.Hair.Face.Body v Domingo [2012] FWAFB 1359 (Watson VP, Richards SDP, Cloghan C, 21 March 2012) at para. 29, [(2012) 219 IR 128].

Ms Jean Madden v Street Swags Ltd

[2021] FWC 160

14 JANUARY 2021

DECISION

Background