Mylonas v NRMA Insurance Limited

[1995] IRCA 477

CATCHWORDS

INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - COMPLAINT OF UNLAWFUL TERMINATION - SERIOUS MISCONDUCT - FAILURE TO DISCLOSE MATERIAL FACTS BY RESPONDENT’S ASSISTANT MANAGER AFTER ACQUIRED INFORMATION - ONUS OF PROOF - CIVIL TEST - SATISFACTION ON PREPONDERANCE OF EVIDENCE - BALANCE OF PROBABILITIES - SERIOUS ALLEGATION - GRAVITY OF CONSEQUENCES - REASONABLE SATISFACTION

Industrial Relations Act 1988, S170DE(1)
Insurance Contracts Act 1984, (Cwealth)

National and General Insurance Company v Chick (1984) 2 NSWLR 86
Mohebatullah Mohazab v Dick Smith Electronics 32 of 1994 (unreported 1 June 1994)
Nicholson v Heaven & Earth Gallery (1994) 126 ALR 233
Preston v Carmody (1993) 44 FCR
Byrne & Frew v Australian Airlines (1994) 52 IR10
Lowe & AFMEU v ACL Bearing Company 173/94 Ryan J (unreported), 15 February 1995
Bi-Lo Pty Ltd v Hooper (1992) 53 IR224
ALHMWU Liquor & Hospitality Division v Carlton Breweries Ltd, Murphy JR 2 1447 of 94 (unreported)
Briginshaw v Briginshaw (1938) 60 CLR 336
Guardian Assurance Co Ltd V Condogianis 26 CLR 231
Wheeler v Phillip Morris Ltd (1990) 97ALR 305
Gregory v Phillip Morris (1988) 80 ALR 455
Lane v Arrowcrest Group (1990) 99 ALR 45
North v Television Corporation Ltd (1976)11 ALR 599
Jupiter General Insurance Ltd v Andeshir Bomanji Shroff (1937) 3 AER 67
Blyth Chemical v Bushnell (1933) 49 CLR 66
Boston Deep Sea Fishing & Tee Company v Ansell (1988) 39 CHD 339
Gooley v Westpac Banking Corporation 102/95 (unreported) Wilcox CJ, 3 April 1995
Glicksmand v Lancashire & General Insurance Company (1927) AC 139
Mayne Nickless Ltd v Pegler (1974) INSWLA 229
Toikan International Insurance Broking Pty Ltd v Pastell Windows Australia Ptd Ltd (1989) 15 NSWLR 298
Ayoub v Lombard Insurance (Aust.) Pty Ltd (1989) 5ANZ Insurance Cas 60 - 993
Vermeulen v S.I.M.U. Mutual Insurance (1989) 4 ANZ Insurance Cas 60 - 812
Insurance Law In Australia, Sutton, 2nd Edition 1991, Part 1: Contract of Insurance

MYLONAS V NRMA INSURANCE LIMITED

No. NI 1384 OF 1995

Before:         Locke JR
Place:            Sydney
Dates:           19, 20, 21, 24 April 1995 & 13, 14, 15, 16 June 1995
Judgment Date:       20 September 1995

INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
NEW SOUTH WALES REGISTRY

No. NI 1384 of 1995

BETWEEN:

Anna MYLONAS
Applicant

AND:

NRMA Insurance Ltd
Respondent

BEFORE:     LOCKE JR
PLACE:       SYDNEY
DATE:          19, 20, 21, 24 April 1995
  13, 14, 15, 16 June 1995

REASONS FOR JUDGMENT

The Application

Having been in employment with the National Roads and Motorists Association Ltd (NRMA) for a period of eight years, the applicant was summarily dismissed on 20 December 1994.  The ground and/or grounds relied upon by the respondent for relieving itself of her services was "gross misconduct".
Both parties give markedly different versions as to the facts and circumstances leading to the termination of the applicant's employment.

In short, the applicant's case as characterised in the evidence of both her husband, Constantine Vhalopoulos and herself, is that her dismissal was unjustified, in that she, in particular, had made full disclosure of material facts when proposing the necessary information  referrable to the previous five year period to enable insurance to be set in place for a motor vehicle (1993 Honda Prelude) registered number SYN-986.  She also resisted  the contention that she had "orchestrated" the removal of an excess of $1,800.00 (over and above that which is normally applied) which had been made conditional upon the respondent assuming the risk for any vehicle driven by the applicant's husband.

The respondent avers it had serious and valid reason for the termination of the applicant's employment.

By application dated 22 December 1994, the applicant seeks the remedy of reinstatement only.

It is manifest by the evidence led on behalf of the respondent that the gross misconduct relied upon to justify the course it took on 20 December last, was as follows:

(a)Serious non-disclosures by the applicant in regards to both her husband's driving record and insurance history.

(b)The failure by the applicant to rectify those omissions at any time between 21 January 1994 and the disciplinary interview leading to her termination on 20 December.  (It must be recorded at this point that the policy was operative for six months only and because of that fact was renewable in July 1994).  Again there was an omission to disclose material facts including a "red light" (camera detected) offence in respect of which the applicant herself had been breached. 

It was conceded by the respondent that this was a matter for disclosure but that it would not have had any effect on the excess.

Uncertainty exists as to the exact date this offence came within the applicant's knowledge.  However, two matters were verified in the evidence.  Firstly, the applicant would not have known of this violation of the Motor Traffic Act when the policy of insurance was originally proposed.

Secondly, the monetary penalty arising from this offence was paid on the 27 May 1994.  Thus, it must be concluded that this was something relevant to the obligation of full disclosure  upon renewal in July.

National and General Insurance Company Ltd -v- Chick (1984) 2 NSWLR 86 and Section 11 of the Insurance Contracts Act 1984 (Cth) are authority for the proposition that each renewal of an existing policy constitutes a fresh contract. Thus, the duty to disclose arises anew. This gives lie to the contention that the applicant "never failed to disclose any traffic offence (either my own or my husbands) when applying for an insurance policy with the NRMA," especially when considered with the fact that the renewal document (exhibit "B") contained an exhortation regarding the duty of disclosure.  It is a matter of history that this was never done until the day the applicant was dismissed.  Two speeding fines of the husband (29/09/93, 13/09/92 - exhibit "H") may be similarly categorised.

There existed a formal procedure for subsequent disclosure, (exhibit "C") but it is thought that something less than this may have sufficed, such as a note or a telephone call.  It is difficult to appreciate how an assistant manager (whether forgetful or stressed) so cognisant of the seriousness of failure to disclose had overlooked these omissions for such a long period of time. She knew of the correct procedure to be followed, just as she was aware that were the information disclosed, it would have operated, among other things, on the size of any excess imposed.  These facts are all a matter of evidence.

(c)The failure of the applicant to offer, on 20 December 1994, any plausible explanation for the conduct referred to in previous paragraphs.

Finally, it is part of the respondent's case that it is the applicant's view, that in spite of her managerial status within the respondent's organisation, she was entitled to benefit from any mistakes made by personnel with respect to her own insurance. Her evidence was that she treated the deletion of the excess imposed upon her husband as being "fortunate".  It would appear she did not regard it as part of her duty, as a trusted employee, to alert the respondent to such errors, so that a correction could take place.  This submission must be accepted as on the evidence, no other view is open.

BACKGROUND:  APPLICANT'S CAREER [1986 - 1994] AT NATIONAL ROADS AND MOTORIST ASSOCIATION (NRMA)

In November 1986, the applicant was employed by the respondent in the telephone inquiry centre at the Association's Head Office in Clarence Street, Sydney.   Her Higher School examinations had just been completed.  It was her first full time working experience, although she had worked at the respondent's Dulwich Hill and Bankstown Branches during school vacations while a student at Beverley Hills Girls High.

It would appear that the respondent's insurance business is divided into sales and service on the one hand and claims on the other.  The former being the front line, taking and accepting insurance proposal over the counter or over the phone.  Claims Departments, such as the Property Loss Department assessed any claims made by insureds, settling or rejecting them as the case may be.

It was in the claims area that the applicant worked at the time of her dismissal.  She held the position of Assistant Manager of the Property Loss Department at the respondent's Bankstown Branch.  Her appointment to this position took place in December of 1993, under circumstances which evoked some ill feeling among the staff of the division and which apparently never abated.

Mr William Rooney, the respondent's Claims and Assessing Operations Manager (Southwest) in his sworn affidavit described the applicant's position thus:

"the position of Assistant Manager in the Property Loss Department is a position of trust.  That person is not subject to any significant supervision and is a position where honesty and personal integrity is of the utmost importance....., is required to advise more junior staff in relation to matters involving protocol and procedure including that in relation to the proposing of insurance  (the emphasis is added) and claims handling."

Mr Rooney continued:

The applicant is charged with counselling staff both generally and in terms of customer relations with respect to ensuring that staff apply proper protocol to act with diligence and honesty."

This witness was not cross examined on this aspect of his evidence, although the applicant avowed in oral evidence that her knowledge and experience was isolated almost entirely to claims, not the proposals of insurance as Mr Rooney alleges.  Overall, I am not persuaded by the applicant's evidence and prefer that of the Claims and Assessing Operations manager.  Giving evidence, he said that he regarded it as unacceptable for an Assistant Manager to by pass the mistakes of other employees, simply regarding the matter as being closed and attributing it to luck, good fortune or what you will.

It "shakes a persons credibility..... there is an issue of honesty..... I liken it to, sort of getting the wrong change at the supermarket.  I'd give it back."  He added.

From November 1989 to December 1993, the applicant had been a group leader in the department.  It was to the respondent's telephone inquiry centre that the applicant was assigned, as her first appointment.  There, her duties were to take telephone enquires regarding quotes for car, third party property damage, home contents, quotes for insurance, extending insurance cover on particular policies and trying to sell policies over the phone.  Everything, then, was done manually:  There were no computer cover notes or computer extensions.  All documents were brought into existence manually.

During her work experience as a student at Bankstown, according to her application form dated 19 November 1986, the applicant was shown how insurance policies were issued to members and shown, renewals, schedules, membership and endorsements on insurance policies.  Her duties also included general office procedures.  At this stage (it being 1984) the applicant has just completed year 10 at high school.  It must be recorded that the procedures at this date were performed manually.  However, the applicant was able to recollect with some particularity what she had learned two years previously.

Within nine months of the appointment with the respondent, the applicant had advanced from telephone inquiries into City Insurance Claims where she remained for two years.  It was at the conclusion of this period she went to Bankstown as a group leader in the Property Loss Department dealing with theft claims, inter alia.

During the period the applicant worked in insurance claims processing both comprehensive and third party property damage, she undertook various courses of study, completing Claims Examiner I and, at least, commencing stage II of that course and an Advanced Management Course.

At an indeterminate date, computers were introduced by the respondent to their work place. 

Under cross-examination, the applicant was asked what her clearance level was in respect to the computer system:

"There were some things you were entitled to access and some things you were not entitled to access."

With this proposition the applicant agreed adding:

"I think it was level five, I was last told, I'm not too sure, could have been six.  Claims level."

That was the extent of her access.

No other branch, not other - nothing."

She could not delete an excess.

"You need an underwriters level from what I understand now through the union...."
"I don't think I even had an underwriting level"

When asked if she were familiar with the way the NRMA computer system handles and stores proposal information she responded:

"I cannot comment on proposals, but as to claims, recording a claim, Making notations on the claim, deleting notations on the claims (the emphasis is added)...."

It is also clear from the evidence if one accepts of Ms Farren, that the applicant had a capacity to check proposal notations including excesses imposed on herself and her husband.

In evidence, the applicant related that when taking out an insurance policy on 21 January 1994, the consultant, Ms Farren said:

"I am looking at something."

To which the applicant replied (allegedly):

It shows an excess of $1,800.00 which was deleted and it looks like normal excess applies to this policy."

Giving evidence, the consultant denied this conversation took place.  This aspect will be reverted to anon.

In passing, it might be noted that the evidence points to the fact that the applicant did have a good working knowledge of the respondent's computer system over and above that which she alleges.  This finding is sustained both by some of the contents of exhibit "F" (written on 22 December 1994 for the union and prior to their investigation of the matter) and the applicant's affidavit in reply sworn 19 April 1995.

Some time prior to 1991, the applicant met her now husband.  In 1991, they became engaged to marry and that state of affairs was entered into about 25 July 1992.

Documentary evidence presented suggest that even prior to marriage, from April 1991 at least ( and, indeed, thereafter), the applicant prepared all applications for motor vehicle insurance made on her own, her husband's or on their joint behalf.

The applicant's husband having been provisionally licensed to drive a motor vehicle in November, 1985, which became unrestricted the following year, the said licence was cancelled in August of 1989.  It would seem about this time or a little before, an excess of $1,000.00 in addition to the basic excess was imposed on any property damage claim made by the husband.

This amount of $1,000.00 was increased by Mr Rutter, an underwriter employed by the respondent organisation, to $1,800.00 in May 1991 in assessing a theft claim made under a cover note.  The vehicle was recovered subsequently and the claim withdrawn.  This in globo excess effected not only policies taken out by the husband but also a policy in which he had an interest as a co-insured.  This excess was modified at a later stage (3 June 1992) and any excess only applied to a claim when the motor vehicle was driven by Mr Vhalopoulos, who was unhappy about the imposition of the excess and threatened to withdraw his business from the association.

Historically, between April 1991 and 30 April 1993, other policies or cover notes were taken out in one or other of the husband's and wife's name.  On 3 June 1992, a cover note was taken out in joint names.  It is not part of the respondent's case that the third party policy PD 93027985, taken out in joint names on 6 May 1993 constituted material non disclosure and, ergo, part of the matters considered by the respondent in bringing an end to its employment relationship with the applicant.  At the date of this policy, it had been some time since either Ms Mylonas or Mr Vhalopoulos had a vehicle.  On 30 April 1993 when a proposal was lodged by the applicant for a Sigma Scorpion, it was known to her that unless the excess was deleted, it was alive in respect of the husband.  This aspect is germane to the facts and circumstances leading to Ms Williamson, an underwriter, deleting the  $1,800.00 excess and back dating it to 25 June 1992, on 6 May 1993.  It also has its place in the background of the events of 20 December 1994.

What predicated the applicant's dismissal was ultimately what occurred on 21 January 1994.  On or about that date the wife and husband purchased a Honda Prelude Coupe.  Both finance and insurance were arranged at the respondent's branch at Bankstown through the offices of Ms Karen Farren (then Karen Ross).

In the afternoon of that day the parties signed and finalised the loan documents.  Thereafter a discussion took place about insuring the vehicle.  At that time it was possible to take out insurance without filling out a proposal form - New Business - Screen Based Insurance (exhibit "P").  Here, again, there is a stark contrast between the two witnesses for the applicant and Ms Farren as to the what occurred during that brief late afternoon encounter.  It is manifest that Confirmation of Details document was signed by the applicant and her husband (exhibit "A", annexure "D" to the affidavit of Mr Warren Phillips) and two bills of sale were taken over this personal property "which were very unusual."  The amount of the loan was $35,000.00.  When a screen based insurance contract is entered into it is mandatory that the details taken or provided had to be confirmed by the insured/s.  This is to give the person/persons the opportunity to correct any mistakes made by the consultant, if any, and that the party/parties acknowledged there had been an honest and frank disclosure of material facts.

A reading of the Confirmation of Details document reveals notation include the following:

a)       No insurance cancelled - which was not the case.

b)       No special conditions imposed - accidents or incidents.

c)        no accident or incident involving damage or theft of a vehicle.

d)       Offences - 15 - 30 kms 16 April 90 fined $120.00.

This was explained away by the applicant by saying at her interview on 20 December 1994:

“ I gave Kim Wilson the information .... but she obviously did not record anything."

Nothing was said according to Miss Vatiliotis, from the respondent’s Human Resources, and Messrs Rooney and Phillips, who were present at the meeting about the presentation to Ms Farren of Mr Vhalopoulos' traffic record (RTA).  Nor is this fact recorded in a contemporaneous statement made by Ms Vatiliotis during the discussion.  The question of RTA first surfaced two days later in a statement prepared by the applicant for her union (exhibit "F"):

“ The same RTA (meaning that dated 6 May 1993 and supplied at the request of the respondent on that date)..... was supplied for this policy."

Ms Farren, on the other hand, denies being presented with a document of this like and in paragraph 7 of the affidavit deposed by her on 31 March 1995 (and which is consistent with her oral evidence ) that she asked the applicant a question to the following effect:

"Within the last five years have either of you had any traffic offences or incidents within the last five years."

This is how the deponent said the applicant responded:

"Only Con's speeding fine in 1990."

Reference to exhibit "G" gives lie to that statement, if it were said.  This document reveals two further breaches in September 1993 and December 1992.
Both the applicant and her husband gave evidence that they thought at the time the 1992 offence was to be defended in Court and the applicant alleges she told Ms Farren so and she warranted that person’s reply (which was denied) fell this way.

"We won't note it because you are taking it to Court.  You can always update it later on."

Yet it is clear from exhibit "G" that a $226.00 fine had been paid without reference to a Court.  It must be noted at this stage that this offence was disclosed in the policy taken out in May 1993 and did not appear later on in the computer system.

There is no mistake that it was the speeding offence of 29 September 1993 that was defended at the Local Court in Castlereagh Street, Sydney on 10 March 1994.  Mr Vhalopoulos pleaded not guilty, however, the offence was found to be proved and he was fined $150.00 with $46.00 Court costs.  Both the husband and wife said they were confused about this matter and thought it was the 1992 which was being contested. Given that he conducted his own defence, it beggars belief that a person could have so much involvement in a court matter and yet still say he was confused as to the date of the breach he defended.  Given the involvement of the applicant in the affairs of her husband, a fair inference can be drawn that she assisted him in the preparation of his defence and must have seen the summons which had been served upon him and been cognisant of the date.

Harking back to what Ms Farren alleges was the only disclosure made to her on 21 January, the applicant, in her affidavit in reply denies saying the words attributed to her by Ms Farren.  Then under cross examination she testified:

“I did say that but I also mentioned the ‘92 fine which we were contesting in Court..... RTA at the same time mentioning to her."

The answer is taken to mean "Only Con's speeding fine in 1990 and 1992 defended speeding" handing to Ms Farren the 6 May 1993 RTA.

Subsequently, the applicant gave this evidence in relation to the matter which was being contested in Court.

"I confused the two fines when taking out the policy.  When I took out the policy I thought it was the 92 fine that was going to Court."

One can only infer from this response that the applicant was aware that there were two speeding offences which were material.

This is how Mr Vhalopoulos recollects what was disclosed to Ms Farren:

Being cross-examined by counsel for the respondent he was asked in reference to paragraph 7 of his wife's affidavit and in particular, his wife's reply to Ms Farren, "only Con's speeding fine in 1990."

"Do you remember your wife saying that or words like that?"

To which Mr Vhalopoulos answered:

"No."

Subsequently, in his evidence the husband agreed that his wife did mention his speeding fine in 1990.  He explained this in the following terms:

"Well, the actual RTA was given to her so we went through all of them."

His recollection was wanting as to which of them (husband or wife) actually mentioned that fine.

He was then asked by Mr Kimber:

"Well, why would you need to mention that as you were going through the RTA, if she had the document in front of her there would be no reason to mention a particular offence, would there?"

The witness replied:

“ No, I can't see the reason for it..... well, as I recall I think the 1990 wasn't on the actual computer that is why we made specific reference to it, but I think all the other information was already there."

What computer it "wasn't on" is on one's selection.  It is certain that on 21 January 1994, it was on the Roads and Traffic Authority's computer and according to Ms Mylonas it was put into the respondent's system along with the other matters on the alleged RTA tendered by her.

The evidence given by both Ms Mylonas and Mr Vhalopoulos on this point is most conflicting and unreliable, so much so, that the evidence given by Ms Farren is to be preferred.

Part of the respondent's protocols for new business taken out in the screen base manner, is to sign a document called Comprehensive Insurance Confirmation of Details.  Evidence regarding the signing of the document by the applicant has been mentioned previously - she did not even read the document before signing was what she said on the point.  This flies in the face of the impression that the applicant sought to present to the Court that she was "meticulous and exhaustive" as to the nature and extent of disclosure she made to Ms Farren and then gives evidence she did not bother to read this document, the importance of which she appreciated in the scheme of things. 

Learned counsel for the respondent submitted that the court should treat this explanation as a recent invention, (even on the applicant's own case) as the applicant's explanation for the signature on the Confirmation of Details documents did not surface anywhere until she was cross-examined at the hearing and certainly not on 20 or 22 December 1994.  It is difficult to reject this contention.
Mr Kevin Regan, an insurance underwriter at the respondent's Bankstown establishment, swore an affidavit as well as giving oral evidence on the applicant's behalf.

Learned Counsel for the respondent cross examined this witness on the importance of the protocol under discussion and which fell as follows:

"Because you see what I want to suggest to you and you know this, the whole idea of the Confirmation of Details is to take out any suggestion that the operator made an error because the procedure is to get them to type it all onto the system?"

Responding to this question posed by Mr Kimber the witness said:

"Mmmmmm."

Continuing the cross examination:

".....as a proposition, you agree with me that the system is structured to ensure at the end of the day...... cannot complain about the operator?"

Answering this question, Mr Regan said:

"Well that's right."

As cross-examination progressed, Mr Regan agreed with several propositions put to him on this point including that the reading of the document ensured that no material particular had been omitted; that the applicant, as an assistant manager of the NRMA, would be expected to know the purpose of the Confirmation of Details - that is, to minimise any prospect of error.

It is interesting to note Mr Vhalopoulos' evidence was that he also did not read the document.

Life, for the applicant subsequent to 21 January became less than satisfying.  Her performance at work was called into question and she was placed on tri-monthly reviews.  To her credit, the situation was ameliorated somewhat by effort on her part and six monthly reviews of her performance were restored.

However, the morale in the Property Loss Department at Bankstown steadily deteriorated as 1994 advanced.  Describing the situation the applicant said morale was "Zilch".

Seeking to address the question, Mr Rooney, on behalf of the respondent retained the services of a sometime employee, Mr Warren Phillips to investigate the problem of staff morale in the relevant department.  This person had wide work experience with the respondent between 1955 -1990.  Details of this are set out in paragraph 2 of the affidavit he swore on 20 July 1990.  Mr Phillips retainer extended to scrutinising any other matter which may have arisen incidentally to the primary purpose of the probe.  Mr Phillips was also charged, that, where practicable, interviews should take place in the presence of a representative of the Human Resources Division of the Association.

Inquires commenced on or about 1 December 1994 and various members of the staff of the Property Loss Dept. were interviewed including the applicant and her sister Anastasia (Tas), who Mr Kimber submits was in a position to know the nature and extent of any irregular conduct on her sister's part.   That might well be the case but no evidence was elicited from this person.  It would therefore be speculation to base a finding that was the applicant's sister who alerted the respondent.  She is but one of several who could be the informant.

As a result of that information given to the investigator during the interviews, the inquiry took a change of direction .  Reverting from morale to insurance matters.

On 20 December 1994, the applicant arrived at the respondent's premises at 9.30 am to commence her work.  Responding to a request, she attended the manager’s office.  She arrived there to find present, Messrs Rooney and Phillips in addition to Ms Vatiliotis and an interview was commenced.  There exists a conflict between the applicant and the respondent's witnesses as to what was actually said at that meeting.  However, Ms Vatiliotis did make contemporaneous notes which were reproduced to become annexure “A" to the affidavit of Mr Rooney sworn 3 April 1995.

In response to a request by an officer of the Finance Sector Union, the applicant prepared exhibit "F" which included her version of what occurred at the collocation.  This document is dated 22 December 1994.  In relation to the two records insomuch as the contents conflict, I prefer the account of what took place given by Ms Vatiliotis.  It has a greater degree of contemporaniety and did not depend on recollection raised at some later albeit a short time.  This finding also involves a question of credit which will be a matter adverted to anon.  The parties were together from 9.30 am to 12.30 pm.  At 11.00 am, Mr Kevin Regan joined the meeting at the applicant's request, having elected not to be represented previously.

Ms Howell, solicitor for the applicant attacked the procedure of the meeting, in that the applicant was not given advance notice of the allegations which were to be put to her, thus not giving her an opportunity to prepare and present any response to any allegations which might be made.  Ms Howell submits that it was only after the meeting commenced that her client was made aware of the subject matter of the meeting - an insurance policy taken out by her almost a year previously.
Counsel for the respondent's replication read thus:

“The respondent submits that there is no evidence that the applicant suffered any detriment whatsoever in not having had advance notice of the matters raised with her at the meeting.  The reality is that there was a three hour meeting with at least three breaks and the applicant has given no evidence to show that the lack of any advance notice of the matters raised with her at the meeting caused her any disadvantage whatsoever.  She even elected " not to have a union representative present once she was well aware of the nature of the matters that she was required to answer.  From her own evidence, she did not suggest (at any stage during the course of that meeting) that she needed (for instance) a lengthy adjournment so that she could check her own file with respect to the matter and/or speak to any other persons or bring any other potential witness along (for any purpose).  The court is directed by the Act to consider whether there was "a fair opportunity" in all the circumstances.  And, it is submitted, this was the case on December 20 1994.  The court will also note that there was no evidentiary complaint (apart from submissions at the end of the case) from the applicant that she was confused in any way about the matters that were being put to her.  Whilst she has asserted that on two occasions she said "I don't understand" the court would reject this evidence for the reasons outlined in the respondent's earlier written submissions, especially the concession made by the applicant in cross examination that she did in fact "understand" what was being put to her (especially with respect to possible options).  The court would also reject, as unsustainable, the applicant's contention that "the respondent had not clearly worked out what the allegations were by this stage".  They were clear and specific and clearly put to the applicant for her to consider and respond to." (on Mr Rooney and Mr Phillips' evidence).

There were some shortcomings so far as procedure was concerned, in a general sense.  However, those matters were not requirements imposed on employers by the legislation.  However, it is difficult to resist a conclusion that the respondent did conduct a proper inquiry within the parameters of the established authority of this Court on the point.  A perusal of Ms Vatiliotis' record as reproduced below would tend to confirm this point.

MEETING AT PROPERTY LOSS BANKSTOWN

20/12/94

9:30 TO 12:30

ATTENDED BY:  Bill Rooney, Anna Mylonas, Warren Phillips, Angie Vatiliotis, Kevin Regan (part of meeting)

Before the commencement of the meeting, Angie asked Anna whether she wanted any representation during the meeting.  Anna refused.

Bill thanked Anna for coming and told her that there were some issues to discuss as a result of the investigation.

Bill asked Anna to give him details of her employment history during the NRMA.  Anna stated she had joined Property Loss five years ago as a Group Leader and one year ago was appointed Assistant Manager.  Previously, she had spent 9 months in the City TSC and 2 years in City Claims.  Anna had also attended a Claims Proficiency Course.  Bill asked Anna that as a result of her previous history, did she realise the importance of being truthful and frank.  Anna stated that she does understand the importance of being truthful and frank when filling out proposal forms - "all information must be disclosed" she said.

Anna stated to Bill that as Assistant Manager and through her previous NRMA experience, she understands the whole process and admitted that confidentiality is also important.  Anna mentioned to Bill that through her experience with Property Loss she would view any non disclosure by a staff member or client as very serious.

Bill then told Anna they had some serious concerns with a policy her husband and herself had taken out on their current - a Honda Prelude - in January 1994.

Before Bill could go on any further, Anna grabbed her bag and pulled out 2 RTA listings - one for her own driving history and one for her husband's driving history.  She then proceeded to inform the group that she was about to disclose all the information today and that it had been in her bag for a while.

Bill told Anna that he had not yet said anything about disclosing information and passed over to Warren who explained the non-disclosure he had found on her policy

At this stage, Angie asked Anna whether she wanted any representation during this meeting.  Anna refused.

Anna admitted she had an offence for a red light camera on 20th January.  We all agreed that Anna could not have known that she had received a traffic infringement as the notice is usually received a few weeks later.  However, Anna had various opportunities to disclose this information since January, especially at Renewal in July.

Bill and Warren then proceeded to ask Anna about the non disclosure of her husband's fines and licence cancellation.  Anna stated that she had given the information to a "Kim Wilson" who obviously did not record anything.  Anna stated that she thought her and Con were "lucky" that no excess was imposed.  Warren told Anna that she had an opportunity to correct the mistake after viewing the policy document which disclosed only one traffic fine - Con's speeding offence.  By signing this document she was stating that everything on the document was honest and frank.  Warren again asked Anna why she had not disclosed the previous theft or licence cancellation as they had occurred in the last few years.  Warren asked Anna did she realise that if they had been disclosed it would have made a difference to the excess imposed.  Anna said she understood that but the excess had been deleted.  Warren and Bill asked why was it deleted and by whom?  Anna said she did not know why it was deleted and did not remember who she asked in Underwriting to do it.  Anna said she could not explain the non disclosure.

Anna then proceeded to tell us that she had brought everything today to disclose the information and kept telling herself that she had to remember to do this.

Anna concluded by saying that it was an honest mistake and that she was going to disclose the information.

Bill Rooney told Anna that the issue was a serious one and would result in either demotion, transfer from Property Loss or dismissal.  Bill also said another possibility for Anna in terms of her employment records could be to resign.  Bill told Anna that the group needed a few minutes to think about what had been discussed so far and walked out of the room.

Angie rang Doug Wilson and gave him a summary of the events so far and what Anna's defence had been.  Doug also agreed that Anna has had ample opportunity to disclose the information through the year and has not.  Thus dismissal would be appropriate due to gross misconduct as Anna would be able to obtain a benefit by non disclosing - especially if they had claimed.

Bill, Warren and Anna walked back into the room and Bill repeated the above and told Anna that as she is an Assistant Manager she holds a position of trust and responsibility.  Non disclosure is a serious issue that would not be tolerated therefore and as a result the only option was dismissal.

Anna was very upset and pleaded for demotion or transfer as she was going to disclose the information today anyway.  Anna asked if she could have another 5 minutes alone.  We agreed.

Bill, Warren and Anna walked out of the room and Anna made a phone call.  Anna then called Angie as there was someone on the phone and Angie assumed it was either Employee Relations or the Finance Sector Union.  When Angie took the call she discovered that it was Anna's husband Con who asked why we were punishing Anna when the offences/incidents were his non disclosure.  He asked why we could not consider punishing him instead of Anna.  Angie told Anna's husband that she did not feel it was appropriate to talk to him as Anna was the employee of the NRMA not him.  Angie also reminded Con that Anna had signed the proposal form.  Angie gave the phone back to Anna and walked out of the room.  Anna called Kevin Regan (union representative for Bankstown) and asked him to attend the meeting.

Bill, Warren and Angie walked back into the room and Kevin joined the meeting.  Angie met Kevin at the door and explained his presence at the meeting was requested by Anna as he was the branch FSU office representative.  Bill then explained to Kevin the discussions so far.  Anna asked for Kevin's advice as an underwriter and as a union representative.  As an underwriter, Kevin stated that it was a serious issue of non disclosure and told Anna this.  Anna requested to see Kevin alone.  Again, the meeting was broken and Kevin and Anna went into another room to discuss her situation.  On their return, Kevin suggested that we should call the employee who put the policy on line as Anna had blamed them for the non disclosure.  Bill called the employee but was told that she was on leave and would be back in a few weeks.

Bill told Anna that he did not think it was appropriate to blame the other employee as earlier Anna had admitted the non disclosure.  Bill and Angie told Anna that she had ample opportunity to state her case - 3 hours and that she would be dismissed.  Kevin advised Anna not to resign if she wanted to pursue the matter further.  Anna stated that she would pursue the matter and Bill for the last time summarily dismissed her.  Anna was allowed time to collect her personal effects, hand in her security pass and other keys and was escorted off the premises."

There is no doubt from the reading of this document that the matters which concerned the respondent were put fairly and squarely to the applicant and her explanation on any view could hardly be considered plausible or satisfactory.  This  finding conforms with the opinion of Mr Rooney and in the face of the applicant's refusal to resign (a fair opportunity) she was summarily dismissed. 
It is right and proper to refer to the respondent's submissions on this aspect of the proceedings, especially as the evidence and the cited case law are open to support this view.

Criticism is also levelled at the format of the meeting.  Nothing is perfect, so goes the adage, but the legislation does not require perfection but fairness.

One might think ( as Ms Howell submitted) that a weakness in the arrangement was lack of notice of what was going to take place.  But the relevant provisions of the Act do not demand such a course.  In three hours, there were three breaks, and the applicant was in touch with at least two persons for advice.  At no time did she request an adjournment of the proceedings.

If the applicant was importuned in any way, it was open to her to seek an adjournment to consider her position.  She did not.  It must be remembered that we are not here dealing with an ordinary member of the public, but an assistant manager of a large corporation and a person who, in the course of her employment had experience of court procedure.

The  way in which she gave her evidence suggested she was an intelligent, forthright and competent person, well able to speak for herself and exert her perceived rights.  It can be inferred, thus, that had she required an adjournment, she would have sought one.  Thus, one cannot proceed to judgment against the respondent merely because this was not offered.

It was on the applicant’s election that she did not require the attendance of a union representative until one and a half hours into the meeting -  again a requirement not imposed on employers by the legislation - Mohebatullah Mohazab v Dick Smith Electronics Pty Ltd NI 0327R of 1994 (unreported) 1 June 1995 at page 9 as per Wilcox CJ.

Relying upon what fell from Wilcox CJ in Nicolson v Heaven and Earth Gallery (1994) 126 ALR 233 at page 245, Ms Howell submitted that the investigation of the conduct of the applicant prior to 20 December 1994 was wanting. Ms Mylonas' legal representative then went on to detail her criticism of that inquiry concentrating mainly on the inquiries undertaken by Mr Phillips and that the issue had been prejudged by him. The legal representative then cited several points of the evidence which she alleges supported the inadequacies of the enquiry.

There is no evidence that the employer did not genuinely investigate the allegations of misconduct in a proper way and merely went through the motions, thus fulfilling the requirements set out by Wilcox CJ in Nicholson v Heaven & Earth Gallery (1994) 126 ALR 233 at page 245.

Let it be made perfectly clear at this  point, that the evidence supports a conclusion that it was not Mr Phillips' decision to terminate the applicant’s employment but Mr Rooney, [see Preston v Carmody (1993) 44 FCR 1 as per Wilcox J (as he then was)] who was unsatisfied by the responses given by Ms Mylonas and it was he who made a value judgment in relation to these responses and the fact that at that stage, no further confirmation of the issues were required, including an interview with Ms Farren (Wilson?) who was on holidays. It is hard to resist a conclusion that after the interview the relevant facts were clear to the applicant as required by the legislation.

Mr Rooney, in his uncontroverted and unshaken evidence, said he had not
prejudged the matter at all.

Cross-examining this witness, Ms Howell asked the following question:

"Now, in paragraph 41 of your first affidavit of 22 March, you had not decided to dismiss the applicant and that you anticipated that the applicant may have some explanation.  So, in theory, Ms Mylonas could have said something on 20 December to change your mind about the dismissal."

"That is correct." Replied the witness. 

Continuing , he added how this could be so:

"Well, an explanation of why she had signed the documentation in taking out the policy on the Honda was something we were looking at.  Why the document had been signed when, if in Miss Mylonas' explanation it was not completed by her or not correct..... she claimed to have disclosed it (all relevant information) at the time of taking the insurance out."

Ms Howell submitted that Mr Rooney's evidence at a particular point supported a finding that had he been aware of disclosures made by the applicant and her spouse when initiating previous insurance, his decision could have been different.

In the light of Mr Kimber's counter argument, a full review of his evidence on this point is deemed to be helpful.

Q.       "Were you aware at the time you received the report that the information allegedly not disclosed  had been disclosed previously?"

A.        "No, I wasn't."

Q."Well, would this have concerned you if you had known it?"

A."It would've but if I could just say that......"

Q."Well?"

A."All right."

Q."Well, you were aware also that the same information had been disclosed again in relation to a different policy on 6 December 1994?"

A.        "6 December 1994."

It must be said at this juncture there was not a policy at 6 December, 1994.  An RTA was obtained on that date at the request of the husband's employer so that the truck the husband drove in the course of his employment could be insured.  Exhibit "V" indicated that this proposal form was submitted by Excel Concrete and Formwork Pty Ltd on 9 December 1994, although it does indicate that it was signed, sealed and dated on the first mentioned date.  On the fourth page of the exhibit it indicates a Con Vhalopoulos as being the driver of the vehicle with no other details to link him with the applicant. 

All material facts appear to have been disclosed in exhibit "V" apart from the matter in respect of which Mr Vhalopoulos was convicted at Castlereagh St Local Court on 10 March 1993 (exhibit "H").  To be fair, this breach did not appear on the RTA of 6 December, but it was something that was within his knowledge (and by analogy his wife’s).

Mr Rooney continued answering questions on the subject in this vein:

"Yes" he was asked.

"I would have to say no to that."

"Would that have made any difference to your assessment of this report?"

"It certainly would have been something to consider."
"Well, would it have prompted you to make further enquiries?"

"I'd raise the issue during a discussion with the member involved, yes."

An analysis of that evidence gives force to Mr Kimber's submission that Ms Howell had not fairly characterised Mr Rooney's evidence.

At no point in this portion of his evidence did Mr Rooney concede that his decision could have been different if he had  considered previous disclosures, at large or in reference to exhibit "V".  At its highest, his evidence in support of this would be:

"It would've but if I could just say this,"

At which point he was cut off.

Observing him in the witness box, it was quite evident he became confused at this point and when the word "Well" was put to him, he responded "all right it certainly would have been something to consider” (emphasis is added).  Questioning then proceeded in some particularity in regards to exhibit "V", a proposal not even in the name of either the husband or the wife.

It was contended that a reading of the affidavit and the oral evidence of both Messrs Rooney and Phillips (including annexures) establishes that prior to 21 January 1994, there had been disclosures of a suspension, a theft claim and an excess plus 1992 speeding breach in respect of which the fine had been paid and which was not defended in Court.

This submission appears to be in rebuttal to a question posed by Mr Kimber in his cross-examination of the applicant:-

"You did not adopt the stance.... I don't need to tell you any of this information because you already know it."

Replying in the negative to this, the applicant went on to agree that she knew it was her obligation whenever she took out new business, her obligation was to comply with the duty to disclose.

However, it was stressed by Ms Howell that the applicant did not rely on the argument that she had previously disclosed the information therefore she had no further need to disclose, (even though this is not the correct legal position in accordance with the Insurance Contracts Act and NRMA proposal form).

No reference was made to any particular section of that legislation.  One can only presume reliance is placed on s21(2).  Should this be so, it is thought that the conduct under review would not be absolved by the reference.

A canvass of the exhibits suggest that the respondent complied with section 22(1) of the Insurance Contracts Act 1984 in that it discharged its duty of informing the insured in writing of the duty to disclose. In relation to telephone or screen based insurance it is deemed sufficient to read out a statement of the duty of the disclosure over the phone and follow it up by a written statement within 14 days. It is common ground that there two requirements were met - by what Ms Farren said to the couple and a written notice of the duty of disclosure on Exhibit "A" and more particularly annexure "D" to Mr Phillips’ affidavit.

It will be recalled that the documents plucked from the applicant’s bag in the very early stages of the interview of 20 December were RTAs in respect of the applicant and her husband.  One dated 6 December 1994 in Mr Vhalopoulos' name was one and the same document obtained on his employers behalf.
Exhibit "F" alleges that the applicant did not know what the meeting was about, yet it is obvious that RTA documents were produced prior to any reference had been made to any personal policy of insurance.

The respondent conducted "as full and extensive and investigation into the relevant matters surrounding the alleged misconduct as was reasonable in the circumstances", see Byrne and Frew -v- Australian Airlines Limited (1994) 52 IR 10, Lowe and AFMEU -v- ACL Bearing Company IRC Matter No TI 173 of 1994 Ryan JR Melbourne 15 February 1995 at pp 5.5-6.7.

The respondent is not bound to establish, on the balance of probabilities that the employee committed the misconduct, in order to escape the finding of a harsh, unjust or unreasonable dismissal, given that the Respondent provided the Applicant with a reasonable opportunity and sufficient time to answer the allegations put to her and did, at the end of that exercise, honestly and genuinely believe "reasonably on the information available" that the employee was guilty of the alleged misconduct, Bi-Lo Pty Limited -v- Hooper (1992) 53 IR 224 Lowe and AFMEU v ACL Bearing Company (supra) and ALHMWU Liquor & Hospitality Division v Carlton and United Breweries Limited IRC Matter No VI 1447 of 1994, Murphy JR, Melbourne, 2 march 1995 especially at pp 8-10.2

The applicant, for her part, was unable to inform the respondent on December 20, 1994 of any facts which might have exculpated her, despite being given every opportunity to do so; see Bi-Lo Pty Limited v Hooper  (supra).

Ms Vatiliotis' record of the interview of 20 December, could, at its highest, be read as an admission of the allegations of violation of trust being suggested, and at its lowest, as providing absolutely no plausible explanation, let alone excuse for what had occurred on that January late afternoon of January 1994.

According to that document, the applicant attributed any sins of omission as being "an honest mistake", adding, it was her intention to make good that error that very day prior to going on holidays.

It is open to find that the probable reason that the applicant had in her possession those records (they had been in her bag for many months, she alleged) was that she had an idea there was a likelihood that other staff had “tipped the bucket” on her.  Thus alerted of the way in which the investigation was progressing, she had come prepared to resist any charge of impropriety on her part.  Mr Kimber urges that such an inference be drawn: it is.  After all, her own sister had been interviewed and this interview was not isolated to lack of morale in the Property Loss Department.

It will be recalled that during the interview the applicant made contact with others.  One of these was her husband, who gave evidence that he knew of his obligation to disclose all relevant matters.

Ms Vatiliotis’s record of the proceedings (which, on this point has not been traversed in any way) sets out that she was beckoned to the telephone by the applicant to speak with her husband "who asked why we were punishing Anna, when the offences/incidents were his non disclosure and why consideration could not be given to punishing him instead of Anna”.  This evidence takes the matter no further than the human resources representative spoke with the husband.  An admission by him is not evidence against the applicant.

Indeed, the applicant conceded she was cognisant with Mr Phillip’s job in the respondent organisation - that he was looking at matters including staff claims.  She would not yield to investigation of suspicious claims.

There is simply no reliable or acceptable evidence upon which to secure a finding that the applicant was going to do that which she alleges, that is, make the appropriate disclosure prior to going on holidays.

Contrariwise, an inference might be drawn that the applicant had those documents in her possession in case she was faced with the prospect of non disclosure in respect of connubial insurance and would not have so disclosed unless it became inevitable.

The force of the argument that the respondent did not rely as a reason for termination  of the applicant's "red light breach" is a matter for consideration.  It must be part of the background of events, to be considered on the totality of the evidence, whether the applicant’s behaviour was contumacious or not.

By way of corroboration of her alleged intention to disclose, the applicant gave evidence that she disclosed or rather discussed disclosure with a Ms Harrison (and another whose full name she could not recall) of the Bankstown Sales and Service Department approximately a week prior to 20 December (in fact 16 December).  Ms Howell submitted this evidence was uncontested, which it was and obviated any suggestion of dishonest intent.  This later submission is not accepted in light of the inference I have already drawn that the applicant had "wind" of the change of direction of the investigation.  The explanation is quite artificial in light of the fact that we are dealing with evidence of a senior long term, experienced employee, who has given evidence of her knowledge of procedure both formal and informal.  In a three hour interview in which three breaks were taken and in which, for the first one and a half hours, she was confident enough not to require anybody to assist her plus, no "bar" was placed on contact with others, it would be thought the meeting with Ms Harrison would be worthy of mention. In due course it was mentioned in the document that became exhibit “F” and dated 22 December 1994.

It would appear that the basis of this submission is to limit the applicants non disclosure to her contract of insurance with the respondent.  Whilst this is of considerable importance, of equal significance is her contract of employment.  In the context of this case both must be considered. 

I concur with the supplementary submissions made on behalf of the respondent, pages 22 & 23 and paragraph 22.  Written comment will be directed to this point when findings are made.

ONUS OF PROOF

Reference has already been made of the conduct upon which the respondent relies to justify dismissing the applicant.  This is, she acted is such a way so as to constitute serious misconduct by breaching her duty to the respondent of good faith and fidelity - she had been dishonest in what she told her employer/insurer.  Non disclosure was only part of the breach resulting therefrom.  In addition there was a potential of a benefit accruing to the co-insured and therefore as a partner, to the applicant herself.  Serious consequences could flow because of her conduct as she was at all times armed with knowledge of all the material facts.

Section 170ED(A) of the Industrial Relations Act 1988 (the Act) provides that the onus is on the respondent to prove a valid reason for dismissal on the balance of probabilities. "However, when the allegation..... “justifying and incurring summary termination of employment, such circumstances indisputably require the respondent to prove the allegation on a very high balance of probabilities test" is how Judicial Registrar Ryan dealt with the onus the respondent bears in dishonesty cases: Lowe and AFMEU v ACL Bearing Company (supra).

Ryan JR went on to say Briginshaw v Briginshaw (1938) 60 CLR 336 is adequate and long standing authority for this proposition. He then went on to cite with approval part of Dixon J's (as he then was) judgment at page 363:

"Except upon criminal issues to be proved by the prosecution, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal.  But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequences of the fact or facts to be proved.  The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, of the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal.  In such matters 'reasonable satisfaction' should not be produced by inexact proofs, indefinite testimony, or indirect inferences.  Everyone must feel that, when, for instance, the issue is on which two dates an admitted occurrence took place, a satisfactory conclusion may be reached on materials of a kind that would not satisfy any sound and prudent judgment if the question was whether some act had been done involving grave moral delinquency."

Ms Howell submitted this was the appropriate onus in this case.

Learned counsel for the respondent did not resile from the fact that the high balance of probabilities test was that applicable in the instant case.  There can be no disagreement with what either legal representative put forward for consideration.  Whether the respondent has discharged the onus it  bears will be a matter for a finding which will be ultimately made.

Guardian Assurance Co Ltd v Condogianis 26 CLR 231 at 237-238 {1921} 2AC 125 is authority for non disclosure, lies on the insured.  An example of the two branches of the law complimenting each other.

CREDIT

Insofar as the view formed as to the credit of the various witnesses, I was favourably impressed by the witnesses called by the respondent in the proceedings.  It was my opinion that, in the main, they were all fair persons, giving reliable and on the whole, consistent evidence.  This also applies to the evidence that Ms Vatiliotis gave and what she wrote at the time of the meeting on 20 December last.  Some of the later witnesses’ recollection was afflicted, in some respects, by the effluxtion of time, but this did not in any way detract from the general view formed on the question of their credit.

Ms Vatiliotis particularly impressed me.  Her evidence fell in such an open and impartial manner.  She, together with Messrs Rooney and Rutter, seemed capable and helpful people who went out of their way to accommodate the applicant.

In not continuing to discuss the matter with the applicant's husband on the telephone, in my view, she acted with the utmost propriety.

In short, the effect of their evidence was they just wished to arrive at an appropriate solution to the matter and despite the serious nature of the information to hand, it was their intention to give the applicant "a fair go" to use the Chief Justice’s expression.  There was nothing in their demeanour to suggest that they had prejudged the issue prior to hearing from the applicant.  However, as estimable employees of the association, they were concerned that protocols may have been breached.

Three witnesses gave evidence in the case presented by the applicant.  The applicant herself, her husband and Mr Kevin Regan.  The last of these persons was an experienced underwriter and a long standing employee (thirty seven years) of the respondent.  Such was his experience and knowledge, other underwriters often sought his advice and a computer system was named for him.  The conundrum he faced at the meeting of 20 December 1994, was that he wore two hats, so to speak - that of an underwriter on one hand and a union representative on the other.  Illustrative of the position in which he found himself is the following evidence:

"I think with respect to this question of your opinion as an expert, at the end of the day you did not volunteer an opinion, so said, you should put it on the ACE system is that right?"

"Well, the reason for that is because I thought, well, I've seen it - I was then a - well, I change my hat from management or staff member to a union member union rep sorry, and it put me on the spot and said well, hang on, I am now on the other side so that is why I said well, better put it on .... the ACE system...  I didn't want to get my underwriting if I am helping a member which might have put her on the spot."

ACE SYSTEM

By way of explanation, the ACE system could be used to arrive at excess given the motor traffic breaches disclosed.  In this instance, its use was recommended to arrive at a possible excess (thus potential benefit) given the disclosures in the RTA's extracted from the applicants bag soon after the interview was commenced.  In cross examination Mr Regan opined that it be $1,200.00
He was being loyal to his employer while not compromising his position qua the applicant.  No disadvantage was suffered by her because of this circumstance.

Mr Rooney's evidence was direct and of benefit.  Again, his mien indicated he was doing no more than trying to assist the court.  He presented as a straight forward witness.

It must be said immediately that I found the applicant to be a disingenuous witness - unreliable, unimpressive, inconsistent and contradicting of her own witnesses.  She frequently explained away situations when confronted by compelling evidence to the contrary.  Her evidence was constantly in conflict with that of those called by the respondent.  Whenever there were occasions of conflict between the applicant's evidence and that given on behalf of the respondent (these were profuse), I prefer the evidence of the latter.

For completeness, this view extended to the evidence given by the applicant's husband.  It was of little weight when it came down to basic considerations.  He had very poor recollection and in many respects his evidence was in conflict with that given by Ms Mylonas.  One example of this being, the evidence he gave both orally and in the drawing which became exhibit "G" as to the seating arrangements and the position of the computer at the time the insurance was effected in respect of the Honda on 21 January 1994.  On his version in exhibit "G", it would have been impossible for either insured to see a thing on the computer.  Yet the applicant gave evidence that she observed every detail of Ms Farren's alleged inquiries.  According to Mr Rooney's evidence had the consultant undertaken all the checks alleged by the applicant, that fact would have been printed on the Confirmation of Details document.

Some of the evidence he gave was simply incredulous such as - he didn't ask his wife about the excess being reviewed; did not discuss with his wife the sudden removal of the excess in 1993; his alleged confusion regarding the 1992 and 1993 speeding offences and his evidence (and indeed his wife's) as to signing of the Confirmation of Details document - did not bother reading the document.

As is correctly submitted on behalf of the respondent, this witness demonstrated the clearest intention of merely giving what evidence he could to support whatever position his wife was advancing.

Further matters adverse to this witness’s credit (contrary to the applicant's evidence), include; Mr Vhalopoulos said he was not "surprised" nor did he consider that he was "fortunate" that the excess had been deleted.

It was noted that, ultimately, on the question of "confusion" about the 1992 -v- 1993 offence, Mr Vhalopoulos simply could not explain his position.  In this context, Mr Vhalopoulos was driven to suggest in effect (again contrary to the applicant’s own testimony) that he believed that he had nothing else to disclose as at December 1994 because he had already disclosed the relevant offence and indeed suggested that his "confusion" about these matters had persisted right up until the present time (June 1995).  This was when he gave evidence in these proceedings.

ISSUES AND ASSESSMENT OF THE EVIDENCE

Acceptance of the applicant's version of events relies heavily on her credibility as a witness.  Her evidence as to the accusations made against her on 20 December; “it was an honest mistake”.  Her version of events given to the respondent took on a different tenor on 22 of that month (exhibit "F"). 

The applicant and her husband were tested in a far ranging and detailed manner by counsel for the respondent.  They responded in an unsatisfactory manner, failing in many instances to give adequate and plausible explanations when responses required one.
Whilst extensive evidence was given as to the various checks apropos insurance details in relation to person/persons requesting that a risk might be assumed and whilst those matters appeared to be of great importance, in some respects, it was really a chimera.  Helpful to a degree.  However, a decision in the instant case could have been arrived at without the reception of such testimony in most instances.  Neither party really attempted to elucidate its importance in the setting as to whether or not material disclosure had been made on 21 January 1994.

It was not part of the applicant's case that any of these matters were previously disclosed.  When cross-examined on this subject at no time did she respond "I need not tell you any of this information because you already know it."  Nor did she rely on this position on 20/22 December 1994.  The various policy checks (CRPO) notations (NOID) and CLB (customer lists) may have facilitated the various previous disclosure and insurance history of the married couple but certainly the prolix exploration of this topic could have been attenuated as it was of limited assistance.

The applicant claims she was dismissed without notice for alleged non disclosure of material facts (mainly particulars of her husband's driving record) when taking out car insurance policy CR94013065 on 21 January 1994.  The respondent concluded the non-disclosure was the product of the applicant's unfettered free will.  Her evidence was, she had disclosed everything when taking the insurance out.

Ms Howell for the applicant submitted the respondent justified the summary dismissal by characterising her behaviour as deceptive and fraudulent.  Counsel for the respondent rightly submits that this was not so and the submission was based upon something  that was written to the applicant after termination which did characterise the conduct as such (see exhibit "C", applicant's affidavit sworn 13 March 1995).  Mr Kimber urged upon the Court that this description does not alter the facts well known to the applicant on the date of the summary dismissal and the reasons therefore.

Continuing, Ms Howell submitted alleged non-disclosure was the sole reason given by the respondent at the time of the dismissal.  During the hearing certain fresh matters were put to the applicant, mainly the allegation that she had orchestrated “the removal of an $1,800.00 excess” and then telling an officer of the NRMA it had in effect been removed.  This was alleged to have occurred on 6 May 1993 in relation to policy number PD93027985.

It is indisputable from documentary and oral evidence, that this excess was removed by Ms Williamson, an underwriter on 6 May 1993, after a check with Head Office Underwriters as she was required to do by the respondent's protocols when staff matters were involved.

The enquiry was made in response to what the applicant had said to her, that she had referred the matter to head office and "that it was okay to be deleted .... “it had been reviewed down to normal level."

Ms Mylonas denied having said this to Ms Williamson just as she denied that in early 1993 she had approached Mr Rutter, previously an underwriter and the one who had initially imposed the excess, and said to him: 

"Richard, would you review my husband's imposed excess of $1,800.00 as it's been a couple of years since you imposed it."

Refusing the request he said:

"No, I am unable to do that, I no longer have authority of an assistant manager underwriting to do that."

Taking issue with this version the applicant put it this way:

I say that I did speak to Mr Rutter and ask for his advice, how long does an excess apply for .... how long an excess that high stays valid for ....  He said to me, I'm no longer in the department, I can't comment."

She then went on to disclaim taking any other steps to have the excess deleted.

The effect of what the applicant claims to be Mr Rutter's answer, is responsive not to the question she alleges she posed, but that in respect of which Mr Rutter gave evidence.  For this reason, as well as the opinion formed on the credit on the two witnesses, Mr Rutter's evidence is preferred.

This view is fortified by what the applicant said in the record of interview on the day she was dismissed and as recorded by Ms Vatiliotis.

"Warren asked Anna did she realise that if they had been disclosed it would have made a difference to the excess imposed.  Anna said she understood that but the excess had been deleted.  Warren and Bill asked why it was deleted and by whom?  Anna said she did not know why it was deleted and she did not remember who she asked in underwriting to do it."

Further evidence given by Ms Mylonas was that she did not know the excess was deleted that day by Ms Williamson, who made the phone call to head office in her presence.

In relation to the policy now under review, the applicant claims she did not know the excess had been deleted until the policy document itself was received by the parties until 1 June 1993, then later in the month she rang underwriting in head office to verify this fact.  She could not recall with whom she spoke.
This inquiry was regarded as superfluous so far as Ms Mylonas as Assistant Manager  was concerned said Mr Rooney in evidence.  He described it as "a strange step for someone in claims to take, because, you can check on line as to whether your records are deleted or not." 

Whilst being re-examined in relation to the excess, Mr Rooney was asked:

"Do you know of any circumstances where an $1,800.00 excess would disappear in 12 months."

His response was in the negative.  Such was the view of other employees of the respondent when  a similar question was posed.

Ms Williamson, the actual perpetrator of the deletion gave evidence thus:

"The notation came up, as far as I can recall, of the existing excess of $1,800.00, but I overrode it due to the information I had received."

It was later agreed by her that the deletion of a $18,00.00 excess was unusual and was surprised it had gone from $1,800.00 to basic, in one jump.

Asked if she should have questioned further the decision of a senior head office underwriter, Ms Williamson thought there was no need, just as she felt it uncalled for to query it with the applicant herself:

"No, I mean it was for a staff member ....... in a senior position .... they had made the decision so I was only carrying it out."

Excesses are not deleted without reasonable cause and without some sort of advance being made in order that it be reduced to the basic excess.  This is a fair inference to draw even in the light of the fact in the ordinary course of business mistakes are made and "short cuts" sometimes taken.  In the light of the evidence on the point, it is highly improbable the deletion was the result of a short cut or a mistake.  All the evidence inferentially and otherwise points to an intermeddler, who could not be anybody other than the applicant making an informal and improper approach.  This contravened the respondent’s policy of not dealing in one’s own affairs.  There is no evidentiary support for the excess being deleted.

Both husband and wife were both unhappy when this very high excess was imposed by Mr Rutter in June 1992, so much so, Mr Vhalopoulos phoned the respondent's officer, Mr Cohen to complain and threatened to take "his business elsewhere" and did or at least decide  in 1991 not to proceed with the proposal for comprehensive insurance of his Ford Fairlane

Protocols were in place as to the proper way for the staff to make application for deletion of excess of which the applicant was aware.  The question thus presents itself:  why did the applicant approach the matter in this inappropriate and untoward fashion?  Why did they not write a letter signed by both of them formally requesting a review?

Mr Rutter provided the answer to this in his evidence, when he iterated that it would be immediately cast upon them to update  their duty of disclosure with a fair chance it would be refused.

As Ms Howell submits, this is bringing before the Court ex post facto conduct.  Deletion of the excess was discussed at the final meeting before the applicant departed but it was not squarely put to her that she "orchestrated" matters.  Linked to this aspect of after acquired information, reference must be made to what Gray J said in Wheeler v Phillip Morris Ltd (1990) 97 ALR 308:

"Under the earlier law relating to wrongful dismissal, it was open to an employer to justify a dismissal retrospectively, by reference to facts not known to the employer at the time of the dismissal, but discovered subsequently, or by reference to a correct analysis of facts which were known, but which were analysed incorrectly at the time of the dismissal.  It is clear from the judgments in Gregory v Phillip Morris Ltd (1988) 80 ALR 455 that cl 6(d)(vi) of the award does not permit that sort of approach.  It is necessary to look at the circumstances known to the employer, and to ask whether the employer acted reasonably in the light of them, and particularly whether the employer discharged adequately the obligation to investigate the facts."

Making submissions on this point, this is how counsel for the respondent described the situation:

"We do not have to rely, nor do we rely, on what was established here ex post facto trying to justify the decision that was made.  We say it is confirmatory."

It must be conceded that there is a divergence of opinion on this point between Gray J in Wheeler v Gregory (supra) and Von Doussa J in Lane v Arrowcrest Group Pty Ltd (1990) 99 ALR 45, but because of the respondent's submission, comparison and contrasting of those two opinions need not be pursued.

Firstly, the termination in my view was not based, in any significant way, on after required revelations.  All the necessary information to justify the termination was in the respondent's possession prior thereto.

However, counsel rightly submits it is confirmatory of insubordinate and base conduct.  Thus, in the light of reliable and acceptable evidence and looking at it as a totality, this conduct does come perilously close to Von Doussa J example of fraud in Lane v Arrowcrest Group Pty Ltd (supra) at pages 74 and 75.  That is, a potential fraud perpetrated upon her employer if Mr Vhalopoulos had been involved in an accident for which he was liable while driving the vehicle.  The NRMA would have been deprived of at least $1,200.00.

This is the basis of the submission made by counsel for the respondent that despite these authorities, the debate contained in these cases cannot and does not undermine the relevance or significance of  "after required information" drawn to the attention of the Court in the context of unfair dismissal proceedings.  However, it must be said that this submission would have some force in the exercise of discretion under section 170EE of the Act.

Ms Mylonas' response to the allegation raised in relation to the insurance policy taken out with the respondent on 21 January 1994 is as follows:

1. All relevant information was disclosed to Ms Farren, the NRMA consultant.  It will be recollected that this person was cited by the applicant as being Kim Wilson in her record of interview.  It was not she who discovered the relevant person was Ms Farren but Ms Vatiliotis.  When faced with overwhelming evidence to the contrary she did accept, this was the person she confronted at the desk on the day the loan approval and the insurance was effected. 

On 10  March 1994, when the husband was convicted of the speeding offence in the Local Court, the duty of disclosure sprang up in respect of the Honda.  On 28 May, a similar duty resided in the applicant. Nothing was done.  The renewal day came and went; still no action.  Though about this time the applicant made an inquiry at the Bankstown Branch of the Roads and Traffic Authority and was told that “red light”  offence did not yet appear on her record.  Despite this being so, it did not exculpate the applicant from proceeding to disclosure.  Both she and her husband conceded in evidence that they knew it took some time for breaches of the Traffic Act to be recorded.  This provides some evidence of the applicant's lack of good faith in the matter and makes it difficult to resist a conclusion that the applicant would only disclose that which could be verified.

Linked to that conclusion is another.  If the applicant was so "stressed" or "forgetful" or "confused", would it not have taken less toll on her energies and time to informally disclose the matters as was her duty rather than undertake the perceived more onerous task of going to the office of the Roads and Traffic
Authority (albeit only next door) making an inquiry and awaiting its response, then proceeding back to the work place.  It is rejected that the applicant failed to disclose in that intermediate period for the reasons she alleges, but did so because of the impact it would have had of WBD excess of her husband.  His poor traffic record and history together with the matters under review would have led to the imposition of a higher excess than the prevailing normal excess.  These facts and circumstances would also lead to a conclusion that, but for the interview on 20 December, no disclosure would have been made at that point in time.  At the expense of labouring the point, this was not a full disclosure so far as the applicant's spouse was concerned.  A fact of which the applicant was well aware despite her alleged confusion, which I do not accept.

1. All relevant information had been disclosed in relation to other policies;  excesses, cancellations etc and had previously been subsequently disclosed to the NRMA in relation to another policy.  One infers this was the Motor Vehicle Comprehensive Policy taken out by Excell - the applicant’s husband's employer in which he was not nominated as the insured but as a driver.  Evidence was given by Mr Regan, that it was sufficient to cross reference policies on the respondent’s system by citing a name only.  I took it that the thrust of his evidence on this point related purely to insured, not persons who were nominated only as driving the vehicles.  That being so the disclosure in respect of the Excell insurance was not one that can be taken into account as being exculpatory.  It must be said that this document did not completely give full details of Mr Vhalopoulos’ breaches as the 1993 speed was not included.  A similar finding is justified in respect of the RTA extracted from Ms Mylonas's bag, a final step in the respondent’s investigating process on the 20 December.

1. Ms Howell contends, because of previous disclosure, the policy officer (Ms Farren) would have had the relevant information in front of her when processing the policy through at least two routine procedures  and could not have been unaware of it. This was denied by Ms Farren.

This is how she described what happened in paragraph 2 of her affidavit sworn 31 March 1995:

"At the conclusion of the interview when the 'new business' information was obtained from the applicant and her husband, the computer programme automatically checks the information against its own data base and in the event that there is relevant data or other information on the respondent’s data base by reference to the applicant or her husband and the subject motor vehicle the computer system automatically prompts the operative to undertake what we know as notation (NOID et al) checks.  Ms Farren gave evidence she received no such prompting either from the computer or the client,  and thus no notation checks were made, contrary to what the applicant alleges, if one accepts she could even see the screen.  A contention that exhibits "G" & "U" do not support."

Ms Farren concedes that checks were mandatory and there were four of them, but as a matter of practice in the time she was a consultant and selling screen base insurance this was not always carried out.  Again, this does not vindicate a prospective insured (let alone an insurer's Assistant Manager) from not giving the details required to be given.  To omit doing so would be a rejection of the obligation of good faith and in this case fealty also.

Ms Williamson's evidence pointed to the fact that such a "fact track" approach was common especially when computer operations were extremely busy and/or in a hurry.  Mr Regan, the applicant's own witness confirmed that the manner in which Ms Farren undertook her duties that day was entirely consistent with the norm (if not strictly correct procedure). 

Part of the applicant's case was that the interview took place late in the afternoon (3.45pm) and she did not read the Confirmation of Details document as she was in a hurry to collect the car.  By mere coincidence, Ms Williamson was given the same explanation on 6 May 1993.  Mr Kimber urges that an inference be drawn that Ms Farren was also in a hurry to conclude her work prior to the close of business as being an explanation for any lack of attention to detail.

Having observed this witness give evidence, there was nothing in her demeanour which suggested she was other than an honest and forthright witness.  Nothing emerged in cross examination to allay this impression.

Ms Howell contended that Ms Farren had no "direct" or independent" recollection of what occurred at the meeting that evening.  This is simply not substantiated by the evidence.  In particular, it was suggested that this witness reply in the record of interview given to her employer that, "No if she had given me the information I would have included it on line" corroborates this alleged lack of recall.  It does nothing of the sort.  A fair characterisation of that retort is open to other interpretations, as Mr Kimber submitted.

Continuing with the applicant's traverse of the allegations, Ms Howell was critical of investigation procedure and the removal of the excess argument ("orchestrated") advanced on behalf of the respondent.

Nothing of any importance can be further stated in relation to the former, but so far as the latter is concerned, a respondent only has a duty to conduct  "as full and extensive investigation into relevant matters surrounding the alleged misconduct as was reasonable in the circumstances.  Byrne and Frew v Australian Airlines Ltd, Lowe and ARMEU v ACL Bearing Co.

This is how the respondent summarises the responses/explanations provided by the applicant:

"I accept that there are relevant offences that we have not disclosed but I was going to do it today.  I was going to do it earlier but "I am just a forgetful person" (this was rejected by the Applicant in her affidavit reply)

I showed Kim Wilson the RAT records but "she did nothing about it".  (Statement denied by the applicant in her affidavit in reply.....I thought that she had recorded all the offences (Phillips' affidavit)

“The $1,800.00, excess we saw was deleted on the computer screen and we thought were lucky the excess had been deleted” - (Phillips' affidavit, Vatiliotis' notes) "Lucky" was denied by her at one point in cross-examination but "could not remember" using that term at another point.  Finally the applicant accepted that she considered herself as being "fortunate" that the excess had been deleted.

Mr Phillips proposes what the applicant said about her failure to disclose subsequently:

“I did not disclose the offences at the time of renewal in July 1994 because I am very forgetful.  I had just forgotten to.”

The applicant rejected that she was: “forgetful” in her affidavit in reply.

Admitting that she signed a form that did not contain a truthful and frank full disclosure of relevant information and that a proper disclosure would have had an impact on the excess at the meeting on 20 December 1994, - Phillips' affidavit.  The applicant denied in cross-examination that she had said that there probably would have been an impact on the excess as alleged, but then conceded that this was in fact the case.

She knew that non-disclosure was "a very serious matter" as Mr Phillips’ affidavit proposes.

The Confirmation of Details document was an opportunity to "correct the mistake" and yet such opportunity was not taken to disclose the previous theft claim or the licence cancellation and the applicant could not explain why this was so to Ms Vatiliotis and Messrs Rooney and Phillips.  At a later stage the applicant denies that she said "I can't explain" and suggested that she said instead "the information was supplied".  Even this answer does not make sense in the context and constitutes no explanation whatsoever for the signing of the false declaration).

She knew that the excess had been deleted but was not sure who she had asked to do it.  She could not explain the non-disclosure;-

My non-disclosure was "an honest mistake".  I was going to disclose the information (Rooney's affidavit).

After a break, the applicant was offered a further opportunity to say anything further but said "I have nothing to add" (Rooney's affidavit)(the applicant denied that she said "I have nothing to add" and asserts that she said "I don't understand" although again, such a remark does not make any sense in the context of the conversation deposed to by Mr Rooney, that the applicant otherwise admitted in cross examination was true.  The applicant also conceded that she did "understand" that penalty "options" were being discussed with her.

The applicant asked whether the respondent would consider demoting or transferring her(Rooney).  (The applicant denied this passage in her affidavit in reply).

“I told Karen Farren about the cancellation”.  The applicant asserts that this was a reference to the cancellation of the theft claim, but this flatly contradicts the evidence of Mr Regan who said there was no doubt that the applicant was talking about the cancellation of the licence. Note also that this matter was not traversed in the applicant's affidavit in reply.

FACTS AND CIRCUMSTANCES OF THE TAKING OUT OF POLICY CR94013065 ON 21 JANUARY 1994

There is a wide divergence in the evidence of what was actually said and done on that occasion, some of that evidence has already been considered.

When first told that serious concerns existed regarding a policy her husband and herself had taken out on their current car, a Honda Prelude, in January 1994 and after extracting the two RTA's from her bag, the applicant informed the group that she was about to disclose all the information that day.  Further discussion took place and when the applicant was asked about certain non-disclosures in relation to her husband, she replied she had given all the information to a "Kim Wilson" who obviously did not record anything.  No explanation was given why she did not sign the Confirmation of Details document on the production of the RTA of 6 December 1994.

Come 22 December of that year, an expanded version of what the applicant alleged occurred with  Karen Ross (the Kim Wilson of the 20).  Additional information included the production of the RTA, the noid screen was viewed by  the three of us, it was stated by the consultant that "Con would have no special condition whilst he drives this car as the excess of $1,800.00 was deleted, there were no need to mark the records as the markings were cancelled.  The applicant also recorded that the operator also viewed the cancelled theft claim by using the "flip screen" - something of which Ms Farren had no knowledge.

Ms Farren is alleged to have stated that because no insurance was paid and no claim was made she would not mark the records.  No further mention was made of this circumstance.  All these matters are contained in what has been described as the applicant’s contemporaneous record of events.

Whilst the applicant has always maintained that all matters raised were disclosed such as:-

-          26 April 1991, claim re theft of vehicle
-          6 November 1991, special conditions $1,800.00 excess
-          30 April 1989, licence cancellation.
-          All relevant traffic history.  Indeed this is so.  She has been consistent but this is against the weight of the evidence.  It was not until the applicant swore her second affidavit that the alleged minutiae of what occurred at the meeting of 20 December.

That all material matters were not set out in the Confirmation of Details document alleges the applicant was because Ms Farren failed (for no apparent or even suggested reason) to properly record the information provided orally and by documentation.

Briefly, this is how Ms Farren traversed how the applicant’s  description of what happened that day:

1. No RTA was produced.  When shown the document in re-examination she said she had never seen it before.

1. When she inquired of the parties whether either had any traffic offences or incidents (meaning excess, claims, cancellation of licence) within the last five years, the applicant replied :  "Only Con's speeding fine in April 1990."  This was the only offence she recorded on the computer.

1. Having inquired as to details of the 1990 offence, Ms Farren asked a further question, it being:  "any others?" to which she received a negative reply from Ms Mylonas.

1. When all "new business information had been obtained, the computer programme automatically checks this against its own data base and in the event that there is relevant data or other information on the respondent's data base by reference to the applicant and her husband and the subject motor vehicle, the computer system automatically prompts the operative to undertake what are known as "notation checks" - NOID et al.  No such prompts were received by Ms Farren on the information received, ergo, no notation checks.

1. The Comprehensive Insurance Confirmation of Details document was generated on the computer system and given to the parties to read.  It was then signed by both of them as the documentary evidence confirms.

This witness comprehensively denied the accuracy of virtually everything the applicant said occurred at that interview on 21 January.  No reliable and acceptable evidence was led that this witness had a motive for giving false evidence, nor was it indicated in her mien.

Counsel for the respondent correctly pointed out it could not be for fear of losing her job as she could have more conveniently said she did not recall the particular occasion and that would have been the end of the matter.  Having observed Ms Farren giving her evidence and taking cognisance of the content of her oral and documentary evidence, I prefer the version given by her.

CONFIRMATION OF DETAILS DOCUMENT

This document was expressly created to ensure applicants for either telephone or screen base insurance could not blame NRMA operators for inaccuracies of information discovered at a later point in time.  The applicant and her husband both signed this document which is annexure "D" to Mr Phillips’ affidavit.  This document was extremely difficult to read as it was a copy.  Solicitors for the respondent provided a type written transcript of this document to the Court.  A copy was also supplied to the applicant's solicitors who have, to date, taken no issue with it as reproduced.

Ms Farren, giving oral evidence, explained it this way.

"If you are not prompted to make a notation check to the proposal and the client goes through and reads the proposal and if they agree and understand the duty of disclosure, then they sign the proposal form .....  I would've given the document to them and asked them to read it and make sure the information was correct before signing ....  I do not recall if they actually read the document or not."

Thus it can be seen that this document was an opportunity to correct any mistakes that may have been made by Ms Farren such as the previous excess, the theft claim and a license suspension.  The applicant avers that from the time the proposition was first put to her she replied:

"The information was supplied.  Ms Vatiliotis recorded her response as, 'I can't explain."

However, at the time of signing the document, neither insured raised any complaint about the accuracy or otherwise of the content of the document.  No explanation as to why the applicant placed her signature on this false declaration was proffered until she was being cross-examined in the late afternoon on 20 April 1995.  Although in a pleading she swore she had a brief look at it which is summed up in these passages of the evidence.

"So is your view that when you saw the Confirmation of Details document that came out of the system soon thereafter and it only recorded one offence, what conclusion did you reach then that she had failed to .....?"

"I - we signed the proposal form, yes, the proposal form straight away on the assumption that what we supplied her was put into the computer and we signed it straight away."

This evidence ignores the fact that the applicant gave very detailed evidence that she had seen all relevant matters put into the computer and checks made.

Continuing with the evidence as to how the explanation surfaced the applicant was asked:

"Ms Mylonas, are you seriously now contending that when the Confirmation of Details came out and it showed only one offence?"

Her response:

"I did not read it .... I didn't read it, no, it was a mistake, I admit.  I did not read it.  I supplied her all the information to the questions."

Before proceeding, it should be indicated "proposal" used by the applicant is not the correct appellation of the document signed but not read.  In January 1994 it was not part of the respondent's protocols to require applicants for insurance to complete a proposal document.  The procedure was that a programme was accessed on a computer screen which prompted the operator to ask a series of questions and record the answers.  The correct title is Comprehensive Insurance Confirmation of Details (exhibit  "A") which the applicant in evidence agreed that she had seen prior to 21 January 1994.  She further conceded that it was one of the obligations placed on a customer to read  before signing the declaration, in order to ensure and verify whether or not the NRMA officer "got it right".  Her understanding of the object of the exercise is to leave the ultimate responsibility for truth and the adequacy of the information with the customer.

Taking cognisance of this evidence and the fact of her position within the respondent organisation, it is hard to resist Mr Kimber's suggestion that this evidence is a classic example of recent invention.  Just as difficult, is not to yield to what conclusion he asked the Court to draw as follows:

"In light of the untenable nature of the contention that Ms Farren simply failed to record significant information provided her and in view of the fact that the applicant offered (at 20 December interview) no explanation for her grossly inaccurate Confirmation of Details document, it is submitted that the respondent was entirely reasonable in not wanting to interview Ms Farren before it made a final decision about the termination of the applicant's employment.  He then cited authority for this proposition - Byrne -v- National Australian Airlines Commission (1994) 52 IR 10.  This failure to read to the Confirmation of Details document was both a breach of good faith and fidelity to her employer as well as a breach of good faith in relation to the insurer.  It is not acceptable behaviour for any person, not under  disability, in the circumstances and even less acceptable for a person who was an assistance manager of the respondent, albeit not enough of itself to justify summary termination but that was not the end of the matter.  Even if it were accepted that the applicant did not read the document on that day, it should have been a matter for disclosure at a later date."

MS FARREN'S RECOLLECTION

Ms Farren was interviewed in relation to the matter by Ms Vatiliotis.  She remembered an insurance policy taken out by Mr Vhalopoulos, the witness gave evidence her recollection was prompted by the fact it was a Honda Prelude for which she had "done the finance, it was an unusual case as it was for a staff member”.  Another source of her recollection is that she had to do two bills of sale, which was very unusual, plus it was a very expensive vehicle.  So it can be seen there were many distinguishing features about this transaction which would be lacking in many similar undertakings performed by her in the usual course of her working day.

Nothing in the evidence emerged which would cause me to form a conclusion adverse to the likely honesty of this witness.  She responded to the questions demanded of her in a forthright manner, making conclusions where appropriate.  Where any statement of fact alleged by Ms Farren conflicts with that of the applicant and her husband, I accept the former.  Thus, the inference to be drawn is that the applicant knew the Confirmation of Details Document was inaccurate simply because the correct data had not been supplied.  In so acting, her duty of good faith and fidelity to her employer was breached.

FINDINGS

1. Both the standard of proof in accord with the Briginshaw principle and the onus of proof under S170DDE (1) of the Act have been discharged by the respondent in relation to the matters raised by Messrs Rooney and Phillips on 20 December 1994 as set out in both their documentary and oral evidence and supported by that material which became exhibits in the proceedings.  Of the two contemporaneous documents I prefer the recordings made by Ms Vatiliotis for reasons already canvassed.

Ms Howell submitted that performance was raised as an issue, and that the respondent had not done so in an appropriate evidentiary manner.  At no time did the applicant's performance appear to be an issue central to whether she was terminated.  Evidence was led on that point as supporting a proposition that reinstatement was impracticable.  That matter did not fall to be decided.

1. On the evidence, it is certain the applicant had no doubt as to the importance of disclosure.  Indeed, she informed Mr Rooney on 20 December she would view non disclosure as a very serious matter.  Nor is there any doubt that she was aware of the respondent's policies in relation to staff business.  That is, never handle your own NRMA business or NRMA business for immediate family, relative or friends, and for good reason.  These matters were most clearly set out in the Claims Officers Manual as well as that pertaining to Human Resources.  As Assistant Manager in the Property Loss Department (a claims area) the applicant would have had some responsibility for ensuring that these instructions were carried out, even though the evidence suggest she took scant notice of them herself.

1. I am satisfied on the evidence there has been no breach of the Act on the part of the respondent - the termination of the applicant's employment was not unlawful.

2. At common law misconduct has been described by the Full court of Federal court in North v Television Corporation Ltd (1976) 11 ALR 599 as:

"Conduct so seriously in breach of the contract that by standards of fairness and justice the employee should not be bound to continue the employment."

An apt authority for how this test should be applied is to be found in the Privy Council decision in Jupiter General Insurance Limited v Andeshir Bomanji Shroff (1937) 3 AER 67.  This is what the Board held at pages 73 and 74:

"the test to be applied must vary with the nature of the business and the position held by the employee, and decisions in other cases are of little value.  We have here to deal with the business of life insurance.  A mistake in accepting a risk may lead to a very considerable loss, and repetition of such mistakes may lead to disaster.  The undertaking is one in which the undertaking of each individual risk is necessarily hazardous, and it is only  by unremitting care and prudence that the business can profitably be carried on.  If an officer of a life insurance company, whatever his motive may be, withholds from his superiors information which will in all probability lead them to refuse risk, and a fortiori if it is one of exceptional character and magnitude, it would seem to be very difficult for his superiors to be confident that he will, in the future, properly carry out important duties entrusted to him.  In other words, if a person in charge of the life assurance department, subject to their superior officers, shows by his conduct or his negligence that he can no longer command their confidence, and if, when an explanation is called for, he refuses apology or amendment, it seems to their lordships that his immediate dismissal is justifiable."

Counsel for the respondent submitted that the dicta of the Board set out above is "entirely applicable to the circumstances prevailing in this case in that there is no doubt on the evidence, that the respondent had every reason to loose its confidence n the applicant given the seriousness of the non disclosure." With this I agree, particularly when one considers the possible benefits which may have flowed to Mr Vhalopoulos and the applicant, if a claim were to be made under the policy.

It would seem that there is no fixed rule defining the degree of misconduct necessary to justify summary dismissal.  However, established authority does support a proposition that an employer is justified in so dismissing if the conduct complained of is such as to show the person employed has disregarded an essential condition of the contract of service.  A duty of good faith and fidelity to his/her employer resides in an employee and the High Court in Blyth Chemical -v- Bushnell (1933) 49 CLR 66 pointed to conduct which would amount to a breach of this most important obligation. The following fell from the High Court:

"Conduct in respect of important matters is incompatible with the format of an employee's duty, or involves an opposition, or conflict between his interest and his duty to his employer, or impedes the faithful performance of his obligations, or is destructive of the necessary confidence between the employer and employee is a ground of dismissal ... but the conduct of the employee must itself involve the incompatibility, conflict or impediment, or be destructive of confidence.  An actual repugnance between his acts and his relationship must be found.  It is not sufficient that ground for uneasiness as to its future conduct arises."

In Boston Deep Sea Fishing & Tee Company v Ansell (1888) 39 CHD 339 at 363 elaborated on this position.

"there may be cases where the breach of confidence and good faith towards the master would not arise from the simple isolated act, but would be founded on the accumulation and repetition of such acts, but those classes of cases are not cases of fraud at all, they are cases of isolated acts which, if they occurred singly, would not, in themselves, amount to a violation of the confidential relation or breach of the faithful service which the servant is bound to render.  In that class of cases it is perfectly proper to consider whether on the whole the conduct of the servant has been such as to amount to a breach of confidence, and if it is not, then the Master will not be justified in the dismissal.  In such cases you might have to leave it to the jury to consider whether there had been such an accumulation, or such a repetition of the acts, as to give ground for the determination of service, but in cases where the character of the isolated act is such as of itself to be beyond all dispute a violation of the confidential relation, and a breach of faith towards the Master, the rights of the Master do not depend on the caprice of the jury, or on the Tribunal which tries the question.  Once the tribunal has found the fact - has found that there is a fraud and a breach of faith - then the rights of the Master to determine the contract follow as a matter of law."

Ms Howell referred in her submissions to these various tests but in some cases the applicable authority is different.  In reference to these tests she noted that the applicant accepted that deliberate dishonesty with intent to defraud would constitute misconduct, but says unacceptably, the respondent has not come close to proving such behaviour.

Proceeding: Gooley v Westpac Banking Corporation  Wilcox CJ 3 April 1995 102/95 (unreported) was correctly cited for the proposition that mere misjudgment will not constitute serious misconduct.  If what Ms Howell was endeavouring to put, by citing this case, was even in the unlikely event a finding was made adverse to her client, it could be only for misjudgment and the consequences of the dismissal would be different.  Much thought was put into this particular submission, but the ultimate opinion I formed was that Ms Mylonas' conduct could not be thus described.

Mr Kimber relies on these authorities, in particular Jupiter General Insurance Limited v Andeshir Bomanji Shroff , to support his contention that the respondent was entitled to take these non disclosures by the applicant particularly seriously, given the nature of the respondent's business and the applicant's managerial status.  I extend this assertion to a reasonable man in the street.

Learned Counsel confirmed that the entitlement was fortified by the fact that the applicant was afforded a full opportunity to respond to the allegations of non disclosure.  She did not fulfil the test which devolved upon her to provide a plausible and acceptable explanation.  It is difficult to take issue with what counsel put.

I accepted that the applicant has been derelict in her duty to the respondent and her conduct warranted dismissal as occurred.

As Lord Dunedin said in Glicksmand v Lancashire & General Insurance Company (1927) AC 139 at 143.

"A contract of insurance is denominated a contract uberrimae fidei.  It is possible for persons to stipulate that answers to certain questions shall be the basis of the insurance and if that is done then there is no question as to materiality left, because the persons have contracted that there should be materiality (instantly non disclosure) in those questions, but quite apart from that, and alongside of that, there is the duty of non concealment of any consideration which would affect the mind of the ordinary prudent man in accepting the risk."

Certainly the concealment of a previous excess and a failure to disclose traffic breaches, cancellations and claims would fall into the category of breach of duty to which Lord Dunedin adverted.

It is vital for an insurer to have complete and accurate information about a particular risk which is sought to be insured, so that the risk may be assessed in an informed way whether to accept and upon what terms (the emphasis is added), as a matter of business efficacy.   "Personal inspection and inquiry is not always possible, so an insurer has perforce to rely on information supplied to him from the proponent so he can assess the physical hazard, such as the likelihood of loss.  An insurer is also interested in the moral hazard, that is, the moral integrity of the proposer and his credibility and the concomitant question of whether the proposal be subjected to special consideration.  A matter that depends on character, qualities and reputation.

Thus, a high and serious obligation is imposed on a proponent for insurance, a breach of that obligation, even by an ordinary reasonable man on the Clapham omnibus can attract serious consequences.  How much more so for an assistant manager of the insured?  "In the context of insurance claim the essential obligation of good faith was one of honesty" - Vermeulen v S.I.M.U. Mutual Insurance (1987) 4 ANZ Ins Cas 60-812. By analogy this would apply to a proponent properly discharging his/her obligation to disclose those matters required.

In light of what the Court held in - Vermeulen v S.I.M.U. Mutual Insurance - I find, on the evidence, the applicant has not been honest with her employer and that dishonesty extended to the production of an inadequate RTA on behalf of her marriage partner on 20 December last.
The Insurance Contracts Act (Cwth) effects a radical change to the assureds duty of disclosure.  The view being taken, that the common law test of materiality is too high a standard and is not justified by the requirement of utmost good faith.  In its place Section 21 of the Act, imposes on the assured a duty to disclose to the insurer before or at the time of the contract of insurance is entered into, every matter known to the insured which either;

a)        he knows is relevant to the decision of the insurer whether to accept the risk and if so upon what terms

b)       a reasonable person in the circumstances could be expected to know if it is a matter of relevance.

It would appear that the test in Section 21(1)(a) of the said Act is not what in fact the individual insurer would have done but whether the information not disclosed would, if divulged, have reasonably affected the mind of the insurer, Mayne Nickless Ltd v Pegler (1971) 1 NSWLR 288 at 229, Toikan International Insurance Broking Pty Ltd v Pastell Windows Australia Pty Ltd (1989) 15 NSWLR 288 at 229 (Dicta of Samuels JA), Ayoub v Lombard Insurance (Aust Pty Ltd) (1989) 5 ANZ Insurance Cas 60 - 993 (as per the dicta of Rogers J).

Subsection 2 of Section 21 of the Insurance Contract Act lists circumstances in which matters are not required to be disclosed by the insured in carrying out a duty of disclosure.  These appear to be declaratory of the common law.

It is thought the common law principle allowing the assured duties of disclosure to be limited by the terms of the contract of insurance has not been abrogated by the said act.  The effect of Section 51 being to proscribe only those terms which restrict or modify to the prejudice of the assured, the operation of the act where the facts are not material.
It has been said that the following facts will usually be held to be material:

1. All facts suggesting that the subject matter of the insurance is exposed to more than ordinary danger from the perils insured against.

1. All facts suggesting that the proponent is actuated by some special motive and not merely by ordinary prudence.

1. All facts showing that the liability of the insurer might be greater than would normally be expected.

1. All facts relating to the "moral hazard"..

1. All facts which the proponent knows are regarded by the insurer as “material” - Insurance Law in Australia, Sutton 2nd Ed, 1991 part 1" Contract of Insurance.

Accordingly, it would be thought that the position under the act qua the applicant (and, if relevant, qua her husband) would not differ from that at common law.  There has been a breach of statutory duty to disclose.

Because of the nature of these proceedings Section 28 of the Insurance Contract Act does not fall for consideration. The Industrial Relations Act 1988 provides its own remedies.

That which has been raised in relation to the nature of the Insurance Contract and some of the obligations arising thereunder are adverted to merely to assist by analogy in arriving at a proper characterisation of the nature of the conduct alleged against the applicant by the respondent.  It was also raised en passant by the parties in submission.

1. Given the applicant's admitted computer access level, as iterated previously, there was absolutely no reason for the applicant to telephone and confirm with a person she described as a "nice girl" that the excess was deleted.  That this person told the applicant in June 1993 that the excess had been deleted in June 1992 also reflects in a negative way as to her credit.  The acceptable and reliable evidence is that underwriters in head office did not have access to the necessary computer function which would provide information as to the date upon any such deletion actually occurred.

1. That the applicant had something to do with the removal of the excess in disobedience to the respondent's policies does not form a material basis for this decision, but it certainly tends to confirm in a peripheral way that there had been unacceptable conduct on the applicant's part and not an error on the part of a person in the Underwriting Department as the applicant would have it.

1. In addition to the evidence on this point, the Confirmation of Details document, corroborates that Ms Farren did not undertake a NOID test despite the determined argument of the applicant to the contrary.  It will be recollected, had this been undertaken, it would have been apparent on the face of the document, fell the expert evidence.  This is just another hypothesis which tends to prove justifiable the action of the respondent.

Criticism was directed at Ms Farren for failing to adhere to the respondent's Head Office policy and this in some way would taint her evidence as a whole.  Not so.  The fact that a reference was not carried out because she was not made aware by either the applicant or the system that there were material notations warranting any referral does not effect a situation..

1. The explanation given by the applicant and her husband for not disclosing 1993 speeding breach was because they confused it with 1992 which they alleged had been previously disclosed in May 1993.  This evidence lacks veracity.  These proponents were not Joe Bloggs and his wife buying and insuring their first motor vehicle, but the respondent's assistant manager and her husband with long experience of taking out insurance of motor vehicles.  It was also within their knowledge that RTA's in most cases were not a true reflection of the situation, taking up to nine or ten months for a conviction under the Motor Traffic Act to be recorded.  Note the applicant's conduct in July in investigating if her traffic light offence had been entered on her record during the period it ought to have been disclosed.  They were cognisant of the effect of traffic breaches so far as imposition of excesses were concerned - they resented them absolutely.  Motive was there to act in any manner to avoid the imposition of same.

1. Another puzzling aspect of this case is the Jacqueline Harris colloquy on 16 December, a mere four days prior to the meeting.  A recent event such as this should have been fresh in the applicant's recall on 20th of that month.  No mention was made of that conversation at any stage of the three hours, not even to her union delegate, Mr Regan.  As counsel for the respondent reminded the court "the employer was not in any position to seek the accuracy of the assertion."  Secondly, this inquiry would be superfluous in the light of the applicant's knowledge.  It is rejected, as submitted, as part of the applicant's case that the mere fact of this inquiry would dislodge an intention O tempora; O mores.  If the conversation took place at all, it was connived at by the applicant, who felt matters were closing in on her.

1. By applying her knowledge of the respondent's procedures in the matter as she did the applicant took a risk.  This is often, if not always, the case of persons who act improperly with knowledge.  They assume the risk of discovery in preference to foregoing the benefit or advantage that they perceive will flow from their improper conduct.  But for the investigation into staff morale the matter may have laid dormant and never come to light.

Arriving at a decision in this case was not possible without an in depth reflection of all the evidence.  However, it should be stated that apart from those matters already directly the subject of pronouncement, consideration has been given to all the documentation filed and exhibited in the matter, the testimony given by the several witnesses called on behalf of both parties during the seven day hearing as well as the lengthy and helpful submission made by the two legal representatives.  Their respective grasp of their client's case was of the highest order, making it most difficult for the Court to arrive at a verdict.

There was a dishonest and deliberate failure to disclose relevant information on behalf of the applicant and her husband.  The respondent acted appropriately.  I dismiss the application.

I certify that this and the preceding sixty nine (69) pages are a true copy of the Reasons for Judgment of Judicial Registrar Locke.

A/g Legal Assistant:            Nicola Lyle

Date:  19 September 1995

Appearances:

Applicant:  Ms Howell, Geoffrey Edwards & Co Solicitors

Counsel for Respondent:    Mr Kimber, Instructed by Abbott Tout

IN THE INDUSTRIAL RELATIONS
COURT OF AUSTRALIA
SYDNEY DISTRICT REGISTRY  
  No NI 1384 of 1995

BETWEEN:

Anna MYLONAS

Applicant

AND: 

NRMA Insurance Ltd

Respondent

Before:         Locke JR
Place:  Sydney
Dates:  19, 20, 21, 24 April 1995
  13, 14, 15, 16 June 1995

MINUTES OF ORDER

THE COURT ORDERS THAT:

1. The application be dismissed.