Patty v Commonwealth Bank of Australia

[1998] IRCA 7

INDUSTRIAL RELATIONS COURT OF AUSTRALIA

INDUSTRIAL LAW - termination of employment - whether valid reason for termination arising from applicant’s conduct - misconduct - standard of proof - proof on balance of probabilities - whether employer’s honest belief of misconduct held on reasonable grounds after sufficient enquiry a valid reason for termination - whether misconduct occurred in fact - whether sufficient enquiry - onus of proof - refusal to answer questions and provide additional information - duty of employee to give information to employer - duty of fidelity and good faith in positions of responsibility and trust

Workplace Relations Act 1996 - ss170DB, 170DC, 170DE, 170EA, 170EDA

PATTY v COMMONWEALTH BANK OF AUSTRALIA
VI-2542 of 1996

Judicial Registrar Ryan
Melbourne

19 February 1998

PATTY v COMMONWEALTH BANK OF AUSTRALIA
VI-2542 of 1996

E V Burswood Resort Management Limited (1996) 70 IR 122
Sangwin v Imogen Pty Ltd (unreported, IRCA, von Doussa J, 8 March 1996)
Bi-Lo Pty Ltd v Hooper (1994) 53 IR 224
Gregory v Philip Morris (1988) 24 IR 397 at 413

Stearnes v Myer SA Stores (unreported, Industrial Relations Commission of South Australia, Print No 9A/1973), p5.

Byrne v Australian Airlines Ltd (1994) 47 FCR 300; 52 IR 10
Gregory v Philip Morris Ltd (1988) 80 ALR 455
Smith v City of Glasgow District Council [1987] IRLR 326
Wheeler v Philip Morris (1990) 97 ALR 282 at 306

Perkins v Grace Worldwide (Australia) Pty Ltd (unreported) IRCA Moore J, 4 September 1996

Chambers v James Cook University (1995) 61 IR 121
Yew v ACI Glass Packaging Pty Ltd (1996) 71 IR 201
Kenefick v Australian Submarine Corporation (1995) 62 IR 107
Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371
AMACSU v Shire of Collie (1995) 64 IR 98
UINK v Department of Social Security, 24 December 1997, Decision 1572/97 S Print P7680
Imogen Pty Ltd v Sangwin (1996) 70 IR 254
Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd and Others (1992) 110 ALR 449
Blyth Chemicals v Bushnell (1933) 49 CLR 66
Bell v Lever Bros (1932) AC 161
Associated Dominions Assurance Society Pty Ltd v Andrew (1949) 49 SR (NSW) 351
Sybron Corp v Rochem (1984) 1 Ch 112 at 126

IN THE INDUSTRIAL RELATIONS

COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VI-2542  of   1996

BETWEEN:	DEAN PATTY APPLICANT
AND:	COMMONWEALTH BANK OF AUSTRALIA RESPONDENT
JUDICIAL REGISTRAR:		RYAN
DATE OF ORDER:		19 FEBRUARY 1998
WHERE MADE:		MELBOURNE

ORDER:

The Court orders that the application be dismissed.

IN THE INDUSTRIAL RELATIONS

COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

 VI-2542 of 1996

BETWEEN:	DEAN PATTY APPLICANT
AND:	COMMONWEALTH BANK OF AUSTRALIA RESPONDENT

JUDICIAL REGISTRAR:	RYAN
DATE:	16 FEBRUARY 1998
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

THE APPLICATION
The applicant, was a customer service officer with the respondent. He started work with the bank on 5 September 1988. His employment was terminated on 27 August 1996.

On 9 September 1996 the applicant filed an application for relief in respect of termination of employment. At that time he sought compensation on the grounds that the termination of his employment was unlawful. He now seeks reinstatement. He stated in his application that he was given a written notice of termination and he wrote the following as a summary of the reasons given for termination:

“unproven involvement in an incident at work. They were unsatisfied with the answers given during the investigation. No charges or police involvement have occurred but they have terminated me anyway.”

On 5 August 1996 the respondent’s senior manager, Human Resources, Victoria and Tasmania, Robert Fletcher, wrote to the applicant stating, inter alia, that

• “This department has received a report which leads us to believe that you are implicated in the theft of cash amounting to $27,400 from an automatic teller machine located at 150 Smith Street, Collingwood Branch.”

• “A decision has been taken to suspend you with pay effective from the close of business on 5 August 1996. This decision was verbally conveyed to you at your interview today at Level 37, 385  Bourke Street Melbourne.”

• “We consider your facsimile response to the Senior Manager, Network Services, Mr Rod Medland’s letter to you dated 24 June 1996, a copy of which is attached for your information, is most unsatisfactory.”

• “As a result of extensive investigation over a six month period, of which you are aware, we conclude that you are implicated in the theft and consideration is being given to recommending to Group Human Resources that your services be terminated without notice.”

The letter concluded as follows:

“I therefore request that you consider whether you now wish to provide additional information or to make further representations to me prior to my report and recommendations to Group Human Resources being finalised. Any representation/information in this regard should reach the Department no later than 5.00 pm on Monday, 12 August 1996.”

On 27 August 1996 Mr Fletcher wrote to the applicant again. This was a letter of dismissal. It was delivered that day to the applicant by certified mail. The letter of dismissal reads as follows:

“The Commonwealth Bank of Australia has concluded its enquiry into your involvement in the theft of $27,400 cash from 150 Smith Street, Collingwood branch Victoria on 10 February 1996 and your failure to provide the Bank with reasonable explanation of your actions on 10 and 11 February 1996.

Your answers during the interviews on 7 May, 20 May, 13 June and 5 August 1996 have been taken into consideration.

The decision has been taken to dismiss you from the service of the Bank effective from today.

We will be writing to you separately regarding release of your final salary payment and your superannuation entitlements.”

AUTOMATIC TELLER MACHINE (ATM) SERVICE AT THE COLLINGWOOD SERVICE CENTRE, SATURDAY 10 FEBRUARY 1996
The applicant and another bank officer, Dino Centofanti, were rostered together as an ATM service team to perform ATM service and maintenance on Saturday 10 February and Sunday 11 February. On Saturday 10 February, in response to a routine request from the Information Services Department, the applicant and Centofanti attended the Collingwood Service Centre, a sub-branch of the bank located at 150 Smith Street, Collingwood. The request was for the team to attend to “an ATM communication problem”. In bank parlance, a “service centre” is a sub-branch which provides “service” in conjunction with a nearby branch. The service centre at 150 Smith Street provides service separate from but linked to the main Smith Street branch located at 211 Smith Street.

ATM machines are usually accessed by removing two combinations, a top combination known as the “A” combination or lock and the bottom combination known as the “B” combination or lock. ATM service teams usually comprise two officers. The teams are rostered to attend to operational faults out of hours and especially to attend to these faults at weekends.  Machine malfunction is common. Many operational faults are fixed by ATM service teams. The usual procedure involves each member of the team being responsible for calculating and removing either the A or B combination on the ATM. Each team member is issued with a sealed envelope which contains numbers which allow for the calculation of either the A or B combination.

While there are certain inconsistencies in the evidence of the applicant and Centofanti as to what occurred at 150 Smith Street on 10 February, the following activity is supported by their general evidence at trial, by their responses to police and bank investigators and by bank records.

At 13.43.39.04 (i.e. at 1.43 pm) Centofanti logged on with the Voice Response Unit (VRU) in Sydney. He did this by telephone from the Collingwood Service Centre at 150 Smith Street. Very soon thereafter, the applicant contacted the Security Monitoring Centre (SMC) and advised that the service team was in the branch and was about to deactivate the alarm system. There are log reports provided by SMC and Wormald Security Monitoring Service confirming these logging on calls.

Centofanti attempted to obtain the B combination for the ATM by using a touch phone and keying in his staff number and (supposedly) the bank branch number. At about 13.45.33.04 (i.e. at 1.45 pm) Centofanti keyed in an incorrect branch number and could not further access a series of numbers which, if obtained, and deducted from other numbers held by him in a sealed envelope, would have provided the correct combination for the B lock on the ATM machine.

At this stage, the applicant went downstairs. He has stated that he went downstairs to use the toilet. Meanwhile, Centofanti, having failed to obtain the B combination because of an invalid branch number, attempted to contact two other bank officers by phone with a view to obtaining the correct branch number and accessing it. He was unsuccessful in locating either bank officer and began searching desk drawers in the hope of locating the correct branch number. He located a grey key card wallet in the top drawer on the left hand side of a desk normally occupied by the second in charge of the bank. Centofanti described the wallet as “old and tatty”. Within the wallet, on a “Record of Account Details Card”, two series of numbers were written. He assumed that the numbers might have been the actual combinations of the A and B locks for the ATM. He was correct in the assumption that one series of numbers represented the A combination. Using these numbers he removed the A combination. Using the other series of numbers, he unsuccessfully tried to remove the B combination. The applicant had by then returned from downstairs. Centofanti asked the applicant to try and remove the B combination using the numbers on the card. The applicant tried and was also unsuccessful.

The Court pauses to note that the recording of ATM combination numbers and the leaving of such numbers in any place where access might be obtained was a clear breach of the respondent’s security procedures. This was only one of many breaches of security procedures which occurred at 150 Smith Street and which appear to have occurred frequently at many branches of the bank. On that day Centofanti was responsible for the B combination. His removal of the A combination was a breach of security procedure. The applicant was responsible for the A combination. His attempts to remove the B combination were also a breach of security procedure.

At this stage, Centofanti successfully contacted another ATM service member by telephone and obtained from her the correct branch number. While Centofanti was so engaged, the applicant continued to search desk drawers in the hope of  locating the B combination.

Once Centofanti had obtained the branch number he logged on again with VRU by touch phone and was placed on hold. At weekends, service team members often have to wait to be provided with numbers which allow calculation of combination locks. Such relatively short delays appear to be an inevitable result of the volume of telephone calls made by service team members. While Centofanti was on hold, the applicant successfully “solved” the ATM “communication problem” by resetting a controller or rebooting a modem.

While the applicant was so engaged, Centofanti obtained the appropriate numbers from VRU and calculated the B combination which he wrote on “a piece of paper”. Although the ATM communication problem appeared solved because of the applicant’s resetting of a controller, Centofanti decided to open the ATM and confirm the machine was working by performing what is known as a “COCO” test. To perform the COCO test, having earlier removed the A combination, he removed the B combination using the combination number on the piece of paper, partially opened the ATM security door and flicked a toggle switch located inside the ATM security area. The ATM then performed a self test program which registered a “COCO display” which indicated that the machine was once more in working order. Centofanti then secured the ATM door by spinning the combinations and telephoned VRU to log on for the next service call. At the same time, the applicant advised SMC that the alarm was about to be reactivated.

These actions by Centofanti and the applicant are confirmed in the operating logs tendered as evidence. The logs suggest that Centofanti logged off from 150 Smith Street at 14.08.52.69 (i.e. about 2.09 pm).

When interviewed by police and bank investigators and in his evidence at trial Centofanti was unable to recall precisely what he did with the B lock combination which he had calculated and written down on a piece of paper. However, he was adamant that he would have followed his usual procedure and torn the piece of paper up and thrown it in a rubbish bin.

THEFT AT 150 SMITH STREET AT 7.45 PM, SATURDAY 10 FEBRUARY 1996
At 7.43 pm three electronic messages were recorded on logs kept in Sydney at a Central Data Recording and Control Centre known colloquially as “the ATM Help Desk”. This is part of SMC. The messages were recorded one after the other at 19.43.43.61, at 19.43.43.63 and at 19.43.43.65. The messages indicate that the ATM machine doors at 150 Smith Street were opened at 19.43.43.61 and that the “service door” and the “currency/depository area door” were open.

Andrew King is a programmer and analyst with seven years experience in the Information Services Department of the bank and three and a half years involvement in monitoring ATM systems and software. He gave evidence of his examination of the electronic records and expressed the view that the cartridges holding the notes stolen from the ATM were removed from the machine within a nine minute period between 7.43 pm and 7.52 pm and that the cartridges could have been out of the machine by 7.44 pm.

For a variety of reasons, bank and security staff failed to act in a manner which would have led to the discovery of the theft on the evening of Saturday 10 February. The guards at Wormalds in Melbourne appear to have been alerted by a message from SMC in Sydney. The nature of the message is unclear although the respondent’s senior security officer in Melbourne, Trevor Howell, gave evidence of “a pager call....at 9.22 pm (21.22 hours)...from the guards in the control room....a message that SMC had received an access alarm out of hours from Collingwood 150 Smith Street Branch”.

Mr Howell stated that by then (i.e. by 9.22 pm) “a guard had attended but was unable to gain access as he did not have a front door key”. The Court observes that the security officers who patrolled the premises from time to time from 7.45 pm on Saturday 10 February to midday and Sunday 11 February failed to check the rear door of the premises which were probably unlocked on and possibly open from about 2 pm on the Saturday afternoon.

At 9.35 pm Mr Howell contacted SMC and requested that “the branch remain on random patrols”. One of the problems seems to have been the assumption that the messages of “doors open” on the ATM was treated by monitoring staff in Sydney and, indeed, probably by Mr Howell, as a communication fault or discrepancy which did not necessarily denote unauthorised access to the ATM and theft of money.

Mr Howell recorded his actions in respect of this matter in a diary memorandum which suggests that his primary concern was “to seal the alarm”. He described his attempts as follows:

“At 21:34 hours (9.34 pm), I contacted SMC and requested that the branch remain on random patrols and I would attempt to get a staff member to seal the alarm. The patrol was to remain until 12:00 hours on 11 February 1996 when at worst the SST team could seal the alarm. I would contact them again if I could get a staff member back.

I then contacted I/S (Information Services), Sydney and asked if they could ascertain from MSS (Melbourne Security Services) if they had keys to 150 Smith Street. It was at this time that I/S informed me that the ATM doors were coming up as open. I told I/S that Wormald were patrolling the branch and so far had not reported any abnormality. I requested that the SST team make Collingwood Branch their first call on Sunday.

At 21:55 hours, I/S paged me that MSS did not have keys but they would undertake external patrols. I rang I/S back and requested they not proceed with MSS patrols as the branch was already under external patrols by Wormald.

During this time, I had been trying to contact front door key holders Lina AGIUS (no longer worked for the Bank), Theresa VO (now a Mobile Lender), James GRIGOR (no answer) and Graham PRIOR (answering machine). I did not leave a message on Graham’s answering machine as I knew the branch was on patrol and the problem would be fixed by 12:00 Sunday.

On Sunday, remembering what happened at Balaclava Branch, I rang I/S at 12:10 pm to check to make sure the SST team were on their way to Collingwood. At the time I/S told me there was no priority call for Collingwood, I again requested they get the SST team there straight away.

At 12:18 pm, I received a pager from the guards in the Control Room. The message was that SMC were querying “when is the alarm at Collingwood going to be sealed?” I requested the guard to inform SMC that the SST team were on their way.

At 13.16 pm, SMC paged me to inform me that 150 Smith Street, Collingwood had been broken into and the cash from the ATM taken.”

ATM SERVICE TEAM REPORTS THEFT FROM 150 SMITH STREET
At about 12.45 pm on Sunday 11 February Centofanti and the applicant returned to 150 Smith Street. They have given conflicting accounts as to the advice provided which led to the team revisiting the branch but they agree that

• they had been directed to attend the branch

• the applicant volunteered to enter the branch and perform the initial security check

• Centofanti remained in the bank car “about three shops away out front”

• a few minutes later the applicant emerged from the front door of the bank and reported that he had found the ATM door open, the canisters missing, the back door to the bank open and the door between the public and staff areas of the bank closed

• they walked across to the main Smith Street branch at 211 Smith Street and notified VRU and Wormalds of the theft

• shortly thereafter police arrived and commenced their investigations

POLICE INVESTIGATIONS
Police and bank officials remained at 150 Smith Street throughout the afternoon of Sunday 11 February. Several of the police officers gave evidence at trial that a thorough search of the premises failed to locate

• the grey wallet with the A combination which the applicant claimed he placed back in the desk in the second drawer on the left hand side after receiving directions from Centofanti as to that being the location where the latter had discovered it

• the piece of paper on which Centofanti stated he wrote his calculation of the B combination.

At 4.45 pm on 11 February at 150 Smith Street the applicant signed a written statement taken from him by Constable Adrian Casey.

At or about 6.33 pm on 11 February at 150 Smith Street Centofanti signed a written statement taken from him by Sergeant E W Whiting.

At 8.45 pm, at the Fitzroy CIB offices, Senior Detective Robyn Heal commenced an interview with the applicant in the presence of Senior Detective Michael Gleeson. At 8.55 pm the interview was suspended and the applicant was taken to his residence at 7 Anstey Avenue, Reservoir. The applicant’s girlfriend, Kristine Blencowe, was at the premises. Her reaction and comments when the police arrived are of considerable relevance and will be covered later in this judgment. The applicant was not permitted to speak to Miss Blencowe during this late evening visit. The police found no money or any other material evidence at the premises which connected the applicant with the theft of the money from the ATM.

The applicant was returned in police custody to the CIB offices in Fitzroy and Senior Detective Heal resumed the interview in the presence of Senior Detective Gleeson at 11.55 pm. The interview concluded at 12.50 am on the morning of Monday 12 February 1996. The interview was recorded and transcribed. The tape and a transcribed record of the interview were tendered at trial. While Senior Detective Heal conducted the interview, Senior Detective Gleeson intervened from time to time to comment and ask questions.

Early in the interview, Senior Detective Heal referred to the written statement made by the applicant at 150 Smith Street earlier on the afternoon of Sunday 11 February and said:

“ As has been explained to you...there are a few differences in what we have been told...comparing your statement to other persons statements.”

Late in the interview Senior Detective Heal, referred to pager messages which she asserted had been sent to the applicant about noon and 1.30 pm on 11 February. The applicant replied “I didn’t receive any of the pagers and we have had trouble with pagers before”.

Soon thereafter the applicant, having indicated that he had gone “against bank procedure” and conducted a “security check of the premises” after he discovered a theft, was asked why he conducted a security check “completely against bank policy”. He replied “I don’t know. I have no explanation for it. I couldn’t believe it happened. There was nothing at the front that suggested someone broke in. I just wanted to see if something was downstairs or not. I don’t know.”

Reproduced below are extracts from the interview as it continued towards its conclusion.

Heal:Could you explain to me, how you knew the cartridges were missing when you were a few feet.....inside the door. I think you’d agree with me, you cannot see if the cartridges are missing when you’re a few feet inside the bank door.

Applicant:        They’re big cartridges.

Heal:I know, but not that big. You can’t see, you can’t (see) the component that they were in. If you say you walked into that bank, you’re a few feet inside the door when you noticed that ATM machine open. Now I think you’ll agree with me, with the ATM machine open and that top trolley thing or drawer, where the cash is stored, when that’s pulled out it’s very evident to anyone walking into that bank. You would notice it within a few feet, being inside the bank. Do you agree with that?

Applicant:        Yes, that’s true.
Heal:               The cartridges are stored on the opposite side to where you were standing.
Applicant:        That’s correct.
Heal:               How did you notice they were missing?

Applicant:On cartridge number two, which is the twenties (twenty dollar notes), which is up the top, you could see the top of it clearly, even from the other side, because they are on a slight angle and working on autobanks for years you get to know these things.

Heal:               You are extremely observant when you want to be.

Gleeson:What about the bottom cartridge? Can you clearly see that from where you are saying?

Applicant:        Clearly, no.
Gleeson:          So you weren’t sure whether the bottom cartridge was missing or not?
Applicant:        When I originally went in, no.
Gleeson:          Yeah, that’s what I’m saying...from that few feet?
Applicant:        From that few feet, no.
Heal:               But you went and told Dino both cartridges were missing.

Applicant:When I did the security check, you could see from the side because when you’re in the staff area you could see straight down the machine and see that it is open and the cartridge is missing.

Heal:The card the combination was written on, where is that?

Applicant:I put it back in the desk drawer closest to the stairs where Dino told me he got it from, in the top drawer.

Heal:And it is a grey little keycard wallet thing?

Applicant:With a white card inside it that should have account numbers on it.

Heal:Would it surprise you if I was to say that the uniform sergeant that was at the crime scene today searched the desk drawers and mysteriously we were unable to find the grey little keycard thing?

Applicant:I would assume the sergeant would do that. It does surprise me that it isn’t there though.

Gleeson:Why didn’t you mention this in your statement? This whole instance, about the card, the difficulty in opening the machine, the problems with the voice response unit, the modem?

Applicant:I did mention the modem.

Gleeson:Alright, then what about the other things?

Applicant:The card, I didn’t remember much about that.

Gleeson:Do you think it is very important in relation to a $42,000 (sic) theft?

Applicant:It is very important. I didn’t think yesterday was an out of the ordinary day. It was just another day on the job. Same thing that I have had last time I was on the autobank machine, same as the time before that...it was just the same old stuff so I didn’t take much note of what happened. It sort of just happens after a while.

Gleeson:You didn’t mention on Saturday that you went downstairs alone while Dino was upstairs. You didn’t mention that at that stage.

Applicant:No, I didn’t. I didn’t know that it was necessary to tell every time I went to the toilet because I went to other branch toilets as well.

Heal:You perhaps thought it might have been pertinent saying the back door was open, tell the police “I used the toilet yesterday and the door was closed or the door was open”?

Applicant:I did say something to the Wormald guy...saying that the back door was closed yesterday.

Heal:There is a statement from the Wormald guy and there is no mention in fact that he was asked that.

Applicant:I mentioned it to somebody. I’m not sure who.

Heal:You don’t have a very good memory do you?

Applicant:My memory sometimes isn’t that good, no.

Heal:Selective?

Applicant:No, I wouldn’t say selective.

Gleeson:You haven’t got an explanation as to why you didn’t follow procedure....?

Applicant:I was negligent in that matter. I have not an explanation.

Gleeson:Could the problem be that the reason for you being called to service the ATM was that it was run out of cash?

Applicant:It wasn’t that. The voice response unit would have said “Out of cash”.

Heal:What were you told when you received the phone call this morning?

Applicant:This morning, it said that there is just a problem at Collingwood Service Centre. I forget the exact word they used.

Gleeson:But they did specify the problem?

Applicant:They didn’t specify the problem.

Heal:To the best of my knowledge you were informed why you were attending at the Commonwealth Bank 150 Smith Street.

Applicant:I don’t disagree with that “to the best of your knowledge”.

Heal:When were you told?

Applicant:I can’t remember the phone call this morning. I can’t remember totally. All I remember is I didn’t think it was anything out of the ordinary so I just remembered the first branch is Collingwood Service Centre.

Gleeson:What’s your opinion on everything that has taken place over the last two days?

Applicant:It is definitely very suspicious and it does seem like an inside job but I didn’t do it.

Gleeson:You just said it appears to be an inside job, what gives you that opinion?

Applicant:You would need a key to the front door. You would need both combinations and the security pad. In fact, the SMC should have got a phone call saying that someone was there so they could turn off their alarm system.

Heal:Dino says that he wrote his combination down on a piece of paper and then, when the machine was open, threw it in one of the rubbish bins.

Applicant:I’m unaware of that.

Heal:Well the bit of paper is missing.

Applicant:Is it?

Heal:The cleaners have not been in since Friday, which means somebody has got the piece of paper out with the bottom combination written on it.

Applicant:I did not take it. I didn’t take it.

Heal:I would like to run a theory by you. ....I’m of the opinion that when you entered the bank on Saturday, and, as you say, went to the toilet, you have left the back door open. You have somehow obtained both combinations and I believe you know the number of the key card. You have left and, more than likely, given those details to another person that, at around about a quarter to eight Saturday evening, has attended the bank and helped themself to a large amount of cash. What do you say to that?

Applicant:That is not true. I wouldn’t do that. That would jeopardise my whole banking career. It would get me in trouble and sent to jail. I read about people who rip off the bank. Every couple of months they send out an information list saying “so and so has ripped of the bank...the Feds, the Federal Police are charging him”.

Heal:It doesn’t stop people though.

Applicant:It doesn’t stop people but I didn’t do it. I wouldn’t do it. I have just been put in a position of trust by the bank and I’ve worked hard to do it, get this far. I didn’t do it. That’s it.

Heal:Did you check the deposit tray yesterday at 150 Smith Street?

Applicant:Yes I believe so.

Heal:Why was that?

Applicant:I don’t know why. Sometimes we do check the deposits.

Heal:Dean, you have not said that in your statement. You have left it till now. You didn’t check the cash. Why would you check the deposit tray?

Gleeson:Dean, do you have something to say to us?

Applicant:No, I haven’t.

Heal:This is ridiculous Dean.

Applicant:No, I haven’t. I’ve said it. I’m innocent. I didn’t do it.

Gleeson:Well, how come now you (are) leaving out the extremely (important) part of the circumstances that have taken place?

Applicant:I didn’t think what involvement the deposit tray had.

Heal:Dean, I have asked you on three occasions today did you check the cash? ....did you yesterday, on Saturday, did you or Dino check the deposit tray. ....now what is it Dean?

Applicant:All I did was open the bin. I just pulled the bin open and saw there was deposits and pushed it shut. This is when it was doing its test, you flick the switch and it does a test. ...I looked down. I saw envelopes. I believe there were three.

Heal:Did you open the door to the bin? You pulled the bin out?

Applicant:A little bit, yes. Saw there was deposits.

Gleeson:Did it cross your mind to say “Hey, you’ll probably find my prints there because I opened up the deposit bin”?

Applicant:I could’ve said that. My fingerprints would have been elsewhere on the machine as well.

Gleeson:Well, you did not mention that?

Applicant:No, I didn’t mention that.

Gleeson:Why is that?

Applicant:The fingerprint person came up, took my fingerprints on an elimination slip or something. He has just said so he could know “what is yours and what isn’t yours”.

Heal:Dean, you are lying. End of story and I don’t mean to be rude but I’m going to be. You are lying. I have asked Dino and I have asked a number of other people, that deposit tray, when you and Dino were there you didn’t touch it. You did not touch the deposit tray. Dino stood there and said “no, we don’t check that and we don’t check”. He went right through with me and one of the other police members that were there. You did not touch it and the reason you have said it (is) because you saw the fingerprint man lift prints off that deposit tray.

Applicant:That is not true.

Heal:Okay, next question...whose prints are on the back of the deposit tray?

Applicant:I wouldn’t have a clue.

Heal:There are no prints on the front of the deposit tray.

Applicant:I wouldn’t have a clue.

Heal:Exactly, you are lying Dean, end of story. You did not check the deposit thing. The only reason you have said that is to cover yourself just in case your fingerprints are on there.

Applicant:That is not true. I did check it in one branch.

Heal:Did you at 150 Smith Street, on Saturday, check the deposit box?

Applicant:If you want me to swear on a bible I can’t.

Heal:I want you to answer the question, yes or no, Dean?

Applicant:I can’t remember which branch it was. I thought it was this one. I’m sorry I gotta leave it there. I don’t know I did check it at one branch.

The Court observes that at trial investigating police gave evidence that

• no fingerprints of the applicant were found on the ATM

• the security area of the ATM and the rear door of the premises were open when they attended the premises on Sunday 11 February and there were latex gloves in various positions around the ATM

BANK INVESTIGATIONS
The Respondent commenced investigations on Monday 12 February. The principal investigators were Ms Mary Clare and Mr Dan Enright. Both gave evidence at trial. Ms Clare was the principal investigator and gave detailed evidence on four separate occasions during a trial which ran over eighteen days between April and September 1997. At trial, the Respondent called thirty-six witnesses. The applicant gave evidence and called evidence from Ms Blencowe and Mr Bradley Adams.

The length of the bank investigation (over six months) and the length of trial and the number of witnesses were in part occasioned by the multiple breaches of security and the large number of bank employees who had access, or could have obtained access, to a key to the premises at 150 Smith Street and to the A and B combinations of the ATM.

At the time of the theft, there were at least five identifiable keys to the front door of 150 Smith Street. One was held by the officer in charge, Mr Anton Emilinawociz. A second key was under the general supervision of the second-in-charge, Mr Duane Bodey. On the evening of Friday 9 February Mr Bodey appears to have left this key, with other branch keys and a copy of the B combination, in an overnight bag in the strong room at the main Smith Street branch at 211 Smith Street.
A third key was held at 211 Smith Street. A fourth key was provided for the ATM service team and on 10 and 11 February it was in the possession of Centofanti although the applicant took it from Centofanti on the morning of 11 February in order that he might perform the security check on that occasion.

A fifth key had been in the possession of Chris Moragiannis. He had, contrary to security procedures, retained a key which he had obtained while second-in-charge of 150 Smith Street. Moragiannis was interviewed by police and by bank investigators and was called to give evidence by the respondent. He had left 150 Smith Street in August 1995 a few weeks before the B combination was changed to the combination in use on 10 February 1996. He admitted that on a Sunday just before Christmas in 1995 he used the key to enter the premises and unlock the back door and allow a female member of staff to enter the branch and use the toilets.

In addition to the applicant, Centofanti, Emilinawociz, Moragiannis and Bodey, the bank investigators identified sixteen bank officers who were included on “a list of possible suspects”. In other words, the investigators identified twenty-one “possible suspects”. The list included eleven other ATM service team members who had attended at 150 Smith Street since the combination change in September 1995, the branch manager at 211 Smith Street who was a “deputy holder of the A combination from September 1995”, three other second officers (in addition to Bodey) who had been second officers at 150 Smith Street from September 1995 and the “OIC Reliefs” at 211 Smith Street who was also a “deputy holder” of the A combination from September 1995.

The investigators established that

• there were two written records of the A combination at 150 Smith Street and one written record of the B combination

• one A combination was kept with the OIC and the other was kept either in the front of the ATM “rough book” or in the top drawer of the second officer’s desk

• the B combination was kept in the front of the ATM “rough book” or with the second officer or in a yellow overnight bag used to transport records between the main branch and the service centre

• it was common practice for the B combination and branch keys to be left in the overnight bag which was then returned to the main branch at 211 Smith Street and was locked overnight in the voucher room

• there were at least nine other staff, identified and named by the investigators, and additional to the twenty-one staff on the list of “possible suspects”, who had spent time at 150 Smith Street and may have had the opportunity to avail themselves of keys and combinations.

It is clear from the evidence of Senior Detective Heal and from the evidence of Ms Clare that the former considered the applicant the “prime suspect” for involvement in the theft and that the latter shared this view. Senior Detective Heal maintained this position at trial. However, in the absence of further evidence to support the Heal theory that the applicant

• unlocked the back door of the branch on Saturday 10 February

• returned to the bank later on 10 February and deactivated security and removed the cash or

• (more likely) prepared access to the ATM and arranged for others to access the ATM and steal the bank notes and canisters

the police determined not to pursue the matter further unless more evidence became available. In other words, the police handed the investigation over to the respondent.

The bank investigation was further complicated by the fact that, in February 1996, Clare and Enright were conducting investigations of fraudulent deception involving a former bank staff member (Mustafa), an associate of Mustafa who was at that time still a member of staff at 150 Smith Street (Bartle) and an alleged association between Bartle and two other officers at 150 Smith Street (Moragiannis and Leong).

Because of the possibility of some involvement in the ATM theft by Bartle and/or Moragiannis and/or Leong, all three were interviewed by Senior Detective Heal. All denied involvement in the ATM theft although Bartle admitted involvement with Mustafa in an unrelated fraudulent deception amounting to $25,000.

It is clear that the bank investigators concentrated their inquiries on the applicant, Centofanti, Emilinawociz, Moragiannis and Bodey. It is not clear what degree of investigation (if any) was instituted in respect of the other sixteen persons on the list of “possible suspects” or in respect of the other nine ATM members who had had access since the combination change of September 1995.

After lengthy police and bank investigation interviews with the applicant and Centofanti, and substantial interviews with Emilinawociz, Moragiannis and Bodey, the bank investigators appear to have concentrated on the inconsistencies in the information provided by the applicant and Centofanti. In late May or early June 1996 Ms Clare completed a report which pointed out that the applicant and Centofanti had been interviewed separately and which recommended that they be interviewed together in an attempt to resolve what Ms Clare described as “issues surrounding the alleged missing combinations” (i.e. A combination in the grey wallet allegedly returned by the applicant to the desk drawer and the B combination allegedly calculated by Centofanti, written on a piece of paper, torn up and placed in a rubbish bin).

In the report, Clare concedes that there are other “suspects” but seems to imply that the applicant remained the “prime suspect”. Certainly, her report is predicated on the basis that the investigations in June 1996 should at first focus further on the applicant and Centofanti. The report is not paginated but appears as pages 32 to 44 in the respondent’s primary documentary exhibit (“the Court Book” Exhibit R1). At page 42 Ms Clare reports as follows

“However, at this stage, with all information gathered to date it still appears likely that Dean PATTY or Dino CENTOFANTI is in some way responsible for the offence.

There are still a number of interviews to be conducted however, until all inconsistencies in statements provided by PATTY and CENTOFANTI can be clarified there seems little point in undertaking further interviews. Certainly there  is no one suspect investigated that has evidently been involved, however there are a number of suspects with obvious motive.

To date PATTY and CENTOFANTI have been interviewed separately. In order to establish the authenticity of the information provided by both or either it would be useful to interview both parties together. One may trigger the others memory or at least make it uncomfortable enough for the other to establish the bonefide of issues still in dispute.

We need to be certain that the combinations were disposed of in the manner stated by both parties to proceed with investigations.”

Ms Clare goes on to identify what she considers “inconsistencies that require clarification” and under the heading of “Recommendations” comments at page 43:

“It appears therefore essential that the position of the alleged missing combinations be positively clarified.”

After identifying other possible suspects the report concludes with the following comment

“however, prior to continuing investigations into the above (i.e. other suspects) it is strongly recommended that we try to resolve the issues surrounding the alleged missing combinations as previously described”.

On 13 June the applicant was interviewed again by Ms Clare and Mr Peter Forkjen. Mr Forkjen was a witness for the respondent at trial. The interview concentrated on cash deposits made to the bank accounts of the applicant and Kristine Blencowe after 10 February 1996.

The notes taken from the ATM on 10 February were in $20 and $50 denominations and the investigators devoted considerable attention to deposits to the applicant’s account of $250 in $50 notes on 29 April 1996 and a deposit of $100 in $50 notes to Blencowe’s account on 21 February 1996.

The applicant had previously suggested that the $350 in $50 notes “probably represented” payments for the sale of fish to Antony Brown, the proprietor of Emperor Marine Aquarium. The applicant was advised that Brown had told the investigators that he did not, as part of his business, pay in cash for the sale of fish. The applicant, in the course of the interview on 13 June, then advised that the payments “may have been” cash salary payments to Blencowe from Franklins Supermarkets where she was then employed. The investigators were suspicious of these cash deposits, having perused the bank accounts of the applicant and Blencowe back to January 1995, and finding there no evidence of similar cash deposits. Very late in the trial, the applicant produced evidence which suggests that these cash deposits could very well have represented cash salary payments to Blencowe. However, the applicant did not provide such evidence in June 1996 and the cash deposits were one of eleven matters about which the respondent sought further information and comment from the applicant. The applicant declined to comment further on any of the eleven matters and was later to inform the respondent that his refusal to comment was based on legal advice.

During the course of the interview on 13 June, the applicant was asked whether he had any “recent contact” with Brown. The investigators noted that the applicant did not answer the question put to him but volunteered the information that, “in the weekend of the robbery”, Blencowe had borrowed Brown’s mobile telephone. The applicant immediately altered or “corrected” that statement and asserted that on the evening of Sunday 11 February Blencowe had borrowed the mobile phone before attending at Fitzroy Police Station where the applicant had been returned by the police after the search of his premises. The applicant claimed that Blencowe needed access to a telephone in the event that it was necessary, late on the Sunday evening, to obtain assistance, including legal assistance. Again, the investigators were suspicious of the information volunteered by the applicant. In fact the evidence of Blencowe and Brown at trial suggests that the former called in on the latter on the way to the Fitzroy Police Station late on the evening of 11 February and that Brown offered Blencowe the benefit and comfort of access to his mobile phone and that she took it but did not use it. Evidence tendered very late in the trial confirmed that no billings were recorded to the phone in the period in question. This matter too was one of the eleven matters about which the respondent, on several occasions, sought further information and comment. It was one of the eleven matters on which the applicant declined to comment on the basis of legal advice.

ADDITIONAL INFORMATION AND COMMENT REQUESTED OF THE APPLICANT BY THE RESPONDENT
During the course of the investigation, and particularly from May 1996, the respondent often asked the applicant to comment on certain issues. On 24 June 1996, Mr Rod Medland, Senior Manager, Network Services, wrote to the applicant and advised him that the respondent had decided to bring investigations to a close, finalise a report to the Human Resources Department in the head office in Sydney and provide the head office with findings and recommendations. Mr Medland expressed the view that “a number of issues surrounding your statements to both police and officers of this department....have not been satisfactorily resolved”. He provided a detailed list of the issues and offered the applicant “the opportunity to reply, in writing, prior to our submission and final recommendation to Human Resources”.

Mr Medland detailed eleven issues. They can be summarised as follows:

1. how did the applicant know that there was a rear car park at 150 Smith Street, a car park which he admitted he suggested to Centofanti they “should use...next time (they) attended the branch”?

2. clarification of the order in which the applicant and Blencowe returned to their residence on the afternoon of 10 February. The applicant had claimed to have returned first at 4.00 pm whereas Blencowe claimed that she had returned first and that the applicant arrived about 5.00 pm

3. conflicts in evidence as to when the applicant left his uncle’s home in Wattle Glen on the evening of 10 February

4. possible conflict in the time of leaving Wattle Glen based on the applicant’s assessment of being at the Greensborough Civic Video Store for a minimum of 45 minutes with a computer record indicating he left the video premises at 8.01 pm

5. evidence from Mrs Isgro which cast some doubt on whether Blencowe was at the video store at all

6. whether the applicant touched the inside of the ATM at 150 Smith Street with or without a glove on 10 or 11 February and the relevance of the applicant’s claim that on 10 February he had put a glove on his hand and made a joke about it to Centofanti

7. the alleged telephone call to the applicant from the “Help Desk” on the morning of Sunday 11 February advising him to attend 150 Smith Street as a priority, a telephone call of which no record was made in Information Services logs

8. the denial by Centofanti that he “knew” about the requirement to attend 150 Smith Street on the Sunday as a priority and his surprise when told of this by the applicant.

9. the request from the respondent, made on many occasions, that the applicant explain why he continued to undertake a full security check at 150 Smith Street on 11 February when, on his own evidence, it was apparent to him while he was still in a secure position inside the bank that the ATM had been opened and that the cartridges were missing. In simple terms the respondent wanted to know why the applicant went downstairs and allegedly put himself in a position in which he was able to discover that the back door of the bank was open.

10. the bank cash deposits of $250 and $100.

11. the relevance of the applicant volunteering on 13 June, when responding to a query as to whether there had been any “recent contact” with Brown, that on 11 February Blencowe had borrowed Brown’s mobile phone

THE FINAL INVESTIGATION REPORT
On 16 July Mr Medland signed a report to Human Resources Victoria. The report was prepared by Ms Clare and

• outlined the history of the investigation

• emphasised poor security control by management in the Collingwood branches at 150 and 211 Smith Street

• claimed “all possible avenues of investigation have been undertaken and all possible identified suspects researched and where considered necessary interviewed”

• summarised the investigators’ conclusions as to the activities of the applicant and Centofanti in the bank on 10 February for approximately 1.45 pm to 2.15 pm

• advised that “at approximately 7.43 pm (on 10 February) a person or persons unknown entered the premises located at 150 Smith Street by means unknown, deactivated the ATM security monitored alarm by inputting the correct code, opened the ATM, removed the cartridges containing the cash and decamped via the rear door”

• concluded that as the security code was removed “a matter of seconds prior to the ATM door being opened that the combinations were likely to have been removed prior to deactivation of the alarm”

• reported on an “open door” alarm at 7.43 pm on 10 February but no action until 9.30 pm when a telephone call to Mr Howell from Central Monitoring Service led to a request for an ATM team to attend “as first port of call” at noon on Sunday 11 February

• described the activities of the applicant and Centofanti at 150 Smith Street on 11 February and the “immediate..police..identification (of the applicant) as a probable suspect due to inaccuracies and inconsistencies in statements and information...provided”

• referred to the lengthy police questioning of the applicant and the search of his residence late in the evening of 11 February

• concluded that “in the commission of the theft, both written records of the ATM combinations previously described were used to successfully remove the combinations and that the offender fled the premises with these written records on his/her person”

• detailed investigations of Moragiannis, Emilinawociz and Bodey and the reasons why the investigators had reached the conclusion that they were unlikely to have been involved in the theft.

The report concludes as follows:

“During subsequent interviews and discussion with Patty, a number of relevant issues were raised. Patty’s verbal responses were often vague, inconsistent or totally irrelevant. As a result Patty was afforded the opportunity to provide a written response to all unresolved matters, which were formally raised with him again on the 24 June 1996.

On the advice of his solicitors Patty subsequently provided a “no comment” response.

In our opinion the following events transpired:

·   Patty removed the locks to the rear door of 150 Smith Street on the afternoon of 10 February when he went downstairs by himself and left the door slightly ajar.

·   Patty returned to 150 Smith Street after dropping Centofanti at home on Saturday afternoon and removed the combinations after entering via the back door. (Patty was driving the bank’s vehicle on the 10 February and no logs are kept for this vehicle). As detailed in supporting diary memorandum, Patty stated he returned home that afternoon at approximately 4:00 pm yet his girlfriend, Kristine, states that it was closer to 5:00 pm when he arrived home. Centofanti claims he was dropped off at home by Patty at approximately 4.00 pm. Patty lives within 5 minutes drive of Centofanti’s home.

·   Later that evening Patty attended the video store in Greensborough, but, as advised by management of the store, he was alone.

·   Patty’s girlfriend, Kristine left him at the store having departed, possibly with another party, (we surmise Anthony Brown, who features quite heavily in this issue), to attend 150 Smith Street equipped with the alarm deactivation code provided by Patty. Having said this, it is possible to complete the trip from 150 Smith Street to Greensborough Civic Video within 18 minutes so Patty may have attended 150 Smith Street himself. (Management of Greensborough Civic Video advise Patty was seen entering and leaving the store but not in between time).

The matter has been returned to Fitzroy CIB with a summary of our investigations for their further attention.”

SUSPENSION 5 AUGUST 1996
On 5 August Martin Hodgson, then manager Industrial Relations (Victoria) interviewed the applicant. An industrial relations officer, Ms Peta Hughes, was present and took notes of the interview (Exhibit R20). Mr Hodgson gave evidence at trial and adopted the notes as an accurate record. The notes indicate that Hodgson

• informed the applicant of doubts as to his honesty

• expressed the view that the applicant was implicated in theft of $27,000

• stated that the respondent was “after truth” and needed “responses to questions to iron out inconsistencies”

• advised the applicant that the bank required bank officers to “act honestly and with integrity”

• stated that the applicant was suspended immediately (5 August 1996) on full pay but that there was still an opportunity to respond to questions before a decision was made to dismiss him but that dismissal was certainly action which was being considered

Hodgson confirmed that the applicant was “teary and visibly upset” and said “I don’t know who did it...I wish they would find the right person instead of picking on me...I can’t lose this job...I did not take the money...I did not do it”.

Hodgson stated that

• at the conclusion of the interview he invited the applicant to talk to him “at any time”

• after the interview the applicant was given a letter of suspension drafted by Hughes and signed by Robert Fletcher, Senior Manager, Human Resources (Victoria/Tasmania)

Mr Fletcher gave evidence and confirmed that he signed the letter of suspension (Exhibit R21). The letter is as follows:

“Dear Mr Patty

This Department has received a report which leads us to believe that you are implicated in the theft of cash amounting to $27,400.00 from an Automatic Teller Machine located at 150 Smith Street, Collingwood branch.

A decision has been taken to suspend you with pay effective from the close of business on 5 August 1996. This decision was verbally conveyed to you at your interview today at Level 37, 385 Bourke Street, Melbourne.

We consider your facsimile response to the Senior Manager, Network Services, Mr Rod Medland’s letter to you dated 24 June 1996, a copy of which is attached for your information, is most unsatisfactory.

As a result of extensive investigation over a six month period, of which you are aware, we conclude that you are implicated in the theft and consideration is being given to recommending to Group Human Resources that your services be terminated without notice.

I therefore request that you consider whether you now wish to provide additional information or to make further representations to me prior to my report and recommendations to Group Human Resources being finalised. Any representation information in this regard should reach the Department no later than 5.00 pm on Monday, 12 August 1996.

Yours sincerely  I acknowledge receipt of the above
  letter and attachment and understand
  its contents.
R L Fletcher  ........ ........ ........ ........ ........ .
Senior Manager  D M Patty  s/n 135549    5 August 1996”

Hodgson also gave evidence of a telephone conversation with the applicant on 12 August and of his record of the conversation which he signed on 13 August (Exhibit R22). The record reads as follows:

“Record of Telephone Discussion

12 August 1996

PATTY telephoned on 12 August 1996, and advised that he was not prepared to answer any of the questions which were again put to him at interview on 5 August 1996.

On his behalf, PATTY wished to advise that he ‘honestly did not have anything to do with that incident’. He stated that he had done his best for the Bank over almost 8 years. He had spent a long time in church and church life and was a leader in the church. He had also spent most of his life in and around sport.

I indicated to PATTY that if he was honestly not involved in this matter, then he should have no qualms about clarifying those issues which were still outstanding. I further indicated that, because of the inconsistencies in his responses, his lack of a response would mean that we would have no option other than to progress the matter to Head Office with the information to hand.

PATTY stated that he felt the Bank was only interested in finding someone to take the blame for the ATM theft, and that he was merely a scapegoat in the absence of the real offender/s.

I stressed to PATTY that the Bank was interested in the truth in this matter. Again I pointed out that if he were truly innocent of any involvement in the theft, he should be able to readily answer all of the questions put to him.

PATTY again indicated that he was not prepared to respond to any of our questions.

I indicated that the matter would now proceed to Head Office for a decision regarding his future employment with the Bank.

Martin Hodgson
Manager Industrial Relations

13 August 1996”

THE DISMISSAL
On 13 August Mr Fletcher signed a memorandum to the respondent’s head office, to Mr Paul Hilton, Group Human Resources, Staff Services Division, Sydney. He referred to

• earlier discussions

• the suspension of the applicant

• questions put to the applicant at interview and in writing on 5 August

• the continued refusal of the applicant to comment further

The memorandum concludes as follows:

“I now enclose our file for your consideration, with our recommendation that PATTY’s services be terminated because on the balance of probabilities we have concluded that he was involved in the theft from the Collingwood Branch ATM.

His continued refusal to respond to questions, together with the inconsistencies in his responses to other questions, support our conclusion that he was involved in the theft.

Also enclosed is a Legal Department (Melbourne) opinion. This opinion supports our view that, on the balance of probabilities, PATTY was involved in the theft at Collingwood and therefore dismissal is appropriate.”

Mr Hilton replied to Mr Fletcher on 26 August (Exhibit R24) and wrote inter alia

• “your recommendation for Mr Patty to be dismissed from the service of the bank is approved”

• “we forward draft letter of dismissal for your use as appropriate”

• “please forward your letter advising dismissal as soon as possible to the staff member by certified mail”

I have quoted above the specific advice from Mr Hilton which constituted the approval for the dismissal of the applicant. Mr Hilton’s memorandum advising that the dismissal was “approved” also contained some curious, guarded and qualified comments which may have been an attempt to place the responsibility for dismissal back to Mr Fletcher in Melbourne. In fact, Mr Fletcher signed the letter of dismissal and to that extent he did take the responsibility, or at least was the vehicle by which the respondent conveyed the decision of dismissal. I am satisfied that Mr Hilton and the final decision maker approved of the dismissal of the applicant and, in essence, relied on the advice of Mr Fletcher and noted supporting advice from the respondent’s Legal Department.

The comments of Mr Hilton which I have described as “curious, guarded and qualified” were as follows:

“We note that the complete file was not provided to this office for our consideration. We also note that Legal Department, Victoria have been able to reach a conclusion based on information additional to that provided to this Division.

On the understanding that Legal Department Victoria were privy to all available information when reaching their conclusion/advice as to Mr Patty’s involvement in the theft of monies from the ATM at 150 Smith St Collingwood on 10 February 1996, your recommendation for Mr Patty to be dismissed from the service of the Bank is approved.”

Mr Hilton was the final conduit or adviser in the route to the decision to dismiss the applicant. The decision was ultimately taken by a very senior officer, Robert John Frame, Executive Manager (Staff Services and Payroll).

Both Frame and Hilton had access to 21 documents comprising the core of the investigation file. They had access to internal memoranda (Exhibits R1 to R4, Exhibits R6, 8, 19 and 23), file notes (Exhibits R5, 7, 9, 10 and 22), facsimiles (Exhibits R11, 12, 14 and 18), the Investigation Report (Exhibit R15), a diary note (Exhibit R16), letter of 24 June (Exhibit R17) and 5 August (Exhibit R21). This means that they had 21 of the 23 documents which comprised a record of the investigation and supporting documentation. They did not receive Exhibit R13 which is merely Exhibit R14 minus handwritten comments and they did not receive Exhibit R20 which was the handwritten notes of Ms Peta Hughes recording the meeting between the applicant and Mr Hodgson on 5 August 1996. Mr Hodgson was called and gave evidence for the respondent. Relevant aspects of his evidence are summarised earlier in this judgment.

Mr Frame also had the draft letter of dismissal prepared by Mr Hilton (Exhibit R24, Court Book page 71) and the draft of the advice to Mr Fletcher from Mr Hilton in which the latter advised the former that his recommendation of dismissal had been approved (also part of Exhibit R24, Court Book pages 69 and 70).

Mr Frame initialled the advice of dismissal and Mr Hilton signed the advice. As already indicated, Mr Fletcher signed the actual letter of dismissal (Exhibit R25, Court Book page 72).

Mr Frame and Mr Hilton also had access to advice from the respondent’s Legal Department. The substance of Mr Frame’s evidence was that:

• he was not provided with the complete file on the investigation but it was his understanding that he and Mr Hilton had access to “all available information” and that Legal Department Victoria had likewise had access to that information and to additional detail

• in “the centralised area” of head office he and Mr Hilton relied on “recommendations and abstracts of information”

• the approval of Mr Fletcher’s recommendation for dismissal “on the understanding that Legal Department Victoria were privy to all available information” was a “comfort factor ....to put the record straight”

• on the basis of the information submitted to him through Mr Fletcher and Mr Hilton he concluded that the applicant had been involved in the theft on 10 February and that that involvement constituted misconduct which justified termination of employment

• the refusal of the applicant to cooperate further and respond to the requests for further comment and information amounted to a failure by the applicant to provide the respondent with a reasonable explanation of his actions on 10 and 11 February and also constituted a ground for the termination of the applicant’s employment.

On 27 August 1996 the respondent terminated the employment of the applicant. The letter of dismissal was delivered to the applicant on that day by certified mail, was signed by Mr Fletcher and reads as follows:

“The Commonwealth Bank of Australia has concluded its enquiry into your involvement in the theft of $27,400 cash from 150 Smith Street, Collingwood branch Victoria on 10 February 1996 and your failure to provide the Bank reasonable explanation of your actions on 10 and 11 February 1996.

Your answers during the interviews on 7 May 1996, 20 May 1996, 13 June 1996 and 5 August 1996 have been taken into consideration.

The decision has been taken to dismiss you from the service of the Bank effective from today.

We will be writing to you separately regarding release of your final salary payment and your superannuation entitlements.”

NEGOTIATIONS AFTER DISMISSAL
A month after the dismissal, on 25 September, the applicant’s solicitors advised the respondent

• they acted for the applicant

• the applicant strenuously denied the allegation that “he was implicated in the theft of cash amounting to $27,400

• the applicant had issued proceedings in the Industrial Relations Court of Australia and sought re-employment and/or compensation

• the solicitors had attended a conciliation conference on 23 September and required certain documents by way of discovery

The applicant’s solicitors concluded their letter with the following offer:

“We note that in the past the bank has requested that our client provide further answers to additional questions that have been put to him and that our client has on legal advice which was provided to him at the time, refused to answer any further questions.

If our client is to answer further questions and to provide additional information to the bank he will require access to the above documents. We advise that our client is prepared to provide further answers provided that bank is willing to re-employ him pending the provisions of those answers, in consideration of his answers and the finalisation of the bank’s position on the matter.”

On 4 October 1996 the solicitor for the respondent replied rejecting, at that stage, the application for additional discovery and commenting as follows:

“I refer to your letter of 25 September 1996 and advise that the Bank is prepared to, and indeed would like to, receive written answers to those questions previously posed to your client, on a number of occasions, in relation to the theft of cash amounting to $27,400.00.

If your client is prepared to answer those questions the Bank may reconsider its position in the light of such answers. The provision of those answers must in no way be construed as an undertaking to re-employ alternatively reinstate Mr Patty.

The Bank is of the opinion that it would be in the interest of trying to resolve this matter if your client provided answers to the outstanding questions, the sooner he does so the better. Once those answers are provided the Bank will assess them in the light of its thorough investigation of this matter.”

THE APPLICANT’S CASE
The applicant’s case is that he was terminated unlawfully by the respondent without valid reason and that he is entitled to reinstatement and to the payment of remuneration lost because of the termination.

The case is predicated on the basis that

• the respondent had not undertaken an adequate investigation into the theft

• the respondent relied on documents in determining to dismiss the applicant

• the documents did not justify the conclusion that the applicant was “implicated in the theft of cash amounting to $27,400 from an automatic teller machine located at 150 Smith Street Collingwood”

• the applicant’s refusal to make further comment in response to Mr Medland’s letter of 24 June 1996 and Mr Fletcher’s letter of 5 August 1996 did not constitute a valid reason for the termination of the employment

THE RESPONSE

*(The references in this segment of the judgment to transcript are to the transcript of 20 August 1997.)

Counsel for the respondent asserts that

• “it has never been the Bank’s position that Mr Patty was dismissed solely because of his suspected implication in the theft - involvement in the theft. It has always been the Bank’s position that it was that plus his refusal to assist with its request for further information” (T44)

• “if a person (the applicant) chooses to exercise a right not to answer on the basis of perceived potential for self incrimination, he cannot rely upon that as a basis for refusing to provide information to his employer in an action which he brings against the employer” (T46)

• the applicant’s “action is based, at least partially, on the failure of the employer to adequately investigate in circumstances where, when the employer attempts to investigate, the plaintiff or the applicant refuses to co-operate (and) is suing the employer for the very matter that he has resisted” (T47)

• Messrs Fletcher and Frame, the two most senior executives of the respondent bank, gave evidence which was never challenged and which evidence was that the applicant “was dismissed not merely for suspected involvement (in the theft) but also because of his refusal to respond to requests for information” (T57)

• the respondent complied with s170DC and provided the applicant with ample opportunity to defend himself against the allegations made

• the respondent conducted as full and extensive an investigation into all of the relevant matters surrounding the alleged misconduct as was reasonable in the circumstances and genuinely believed, and had reasonable grounds for believing, on the information available at the time, that the applicant was guilty of misconduct and that the dismissal of the applicant was justified

• in any event, using a test of reasonable balance of probabilities, the respondent has demonstrated valid reason for the termination of the employment of the applicant being a valid reason connected with the applicant’s conduct

SECTION 170DC - OPPORTUNITY TO DEFEND AGAINST ALLEGATIONS MADE
I find that the applicant was given extensive opportunity to respond to the allegations made against him and that the respondent complied with the requirements of s170DC.

ADEQUATE INVESTIGATION AND GENUINE BELIEF ON REASONABLE GROUNDS - THE TEST IN SANGWIN v IMOGEN
Counsel for the applicant has asserted that there can be no valid reason for termination unless the respondent demonstrates on the balance of probabilities that the applicant was involved in the theft of money from the ATM machine. He cited with approval the analysis of Ritter JR in E V Burswood Resort Management Limited (1996) 70 IR 122. The authorities analysed in Burswood are perceived to be authorities for and against the test expounded in Sangwin v Imogen Pty Ltd (unreported, IRCA, von Doussa J, 8 March 1996).

The test was expounded prior to Sangwin in Bi-Lo Pty Ltd v Hooper (1994) 53 IR 224 where the Full Bench of the South Australian Industrial Relations Commission set aside an order that a dismissal was harsh, unjust and unreasonable. The order at first instance was based on an argument that evidence led by an employer had not discharged the employer’s burden of proof, that is the burden on the employer to demonstrate the dismissal was harsh, unjust and unreasonable. In Bi-Lo at 229-230 the Full Bench of the Commission said:

“In a case such as the present one where the employee is dismissed for misconduct in respect of dishonest dealing with the employer’s property we do not believe it is a correct test to state as did the learned trial judge that the employer must prove, on the balance of probabilities, on the evidence submitted to the commission, that the employee actually stole the goods, before it will escape a finding that a dismissal based upon such an alleged theft is to be treated as harsh, unjust or unreasonable.
There can be no doubt that in line with decided authority the ultimate task pursuant to s31 is for the commission to determine whether when viewed objectively the dismissal may be properly adjudged to fall within the statutory criteria of harsh, unjust or unreasonable.
An employee is entitled to both substantive and procedural fairness in respect of a dismissal. Substantive fairness will be satisfied if the grounds upon which dismissal occurs are fair grounds. Broadly speaking a dismissal will be procedurally fair if the manner or process of dismissal and the investigation leading up to the decision to dismiss is just.
Where the dismissal is based upon the alleged misconduct of the employee, the employer will satisfy the evidentiary onus which is cast upon it if it demonstrates that insofar as was within its power, before dismissing the employee, it conducted as full and extensive investigation into all of the relevant matters surrounding the alleged misconduct as was reasonable in the circumstances; it gave the employee every reasonable opportunity and sufficient time to answer all allegations and respond thereto; and that having done those things the employer honestly and genuinely believed and had reasonable grounds for believing on the information available at that time that the employee was guilty of the misconduct alleged; and that, taking into account any mitigating circumstances either associated with the misconduct or the employee’s work record, such misconduct justified dismissal. A failure to satisfactorily establish any of those matters will probably render the dismissal harsh,  unjust or unreasonable.
If a fact or facts come to light subsequent to the dismissal which cast a different light on the commission of the alleged misconduct, such fact or facts will not necessarily or automatically render the dismissal harsh,  unjust or unreasonable. In our view in such circumstances what will need to be considered is whether the employer, if it had acted reasonably and with all due diligence, could have ascertained those facts before the dismissal occurred.
The commission is required to objectively assess the subjective actions and beliefs of the employer as at the time of dismissal and not at some subsequent time: see Gregory v Philip Morris (1988) 24 IR 397 at 413; see also Stearnes v Myer SA Stores (unreported, Industrial Relations Commission of South Australia, Print No 9A/1973), p5.
Whether the employer will satisfy that objective test will depend upon the facts of each case. The gravity of the alleged offence will dictate the nature and extent of the inquiry which the employer must conduct. An employer must ensure that an employee is given as detailed particulars of the allegations against him/her as is possible, an opportunity to be heard in respect of such allegations, and a chance to bring forward any witnesses he/she may wish to answer those allegations.”

In Sangwin von Doussa J also referred to the judgment of the Federal Court in Byrne v Australian Airlines Ltd (1994) 47 FCR 300; 52 IR 10 where three members of a Full Court of the Federal Court of five judges, in the context of an alleged breach of an award provision which provided that termination of employment by an employer should not be harsh, unjust or unreasonable took a similar approach. von Doussa J referred to the judgment of Beaumont and Heerey JJ at 331; 39 and Keely J at 313; 21. Gray J at 355-356; 63 expressly disagreed and Black CJ at 303; 11 left open the question of which of these approaches was correct.

In Gregory v Philip Morris Ltd (1988) 80 ALR 455 at 471 Wilcox and Ryan JJ gave support to what was to become the Sangwin/Bi-Lo test when they stated:

“The question whether a dismissal is harsh, unjust or unreasonable must be determined in the light of the facts as they appear at the relevant time. We accept that, if the relevant facts are not clear, it is the obligation of an employer bound by a provision such as cl 6(d)(vi) to establish those facts before dismissing an employee: cf the observation of Lord Mackay of Clashfern in Smith v City of Glasgow District Council [1987] IRLR 326 at 329: ‘As a matter of law a reason could not reasonably be treated as sufficient reason for dismissing Mr Smith when it had not been established as true nor had it been established that there were reasonable grounds upon which the special committee could have concluded that it was true.’
But, provided that the employer discharges the obligation to investigate the facts, a dismissal does not contravene the provision merely because it later appears that the true facts differed from those which appeared at the date of the decision to dismiss. Clause 6(d)(vi) is intended to operate in a practical way in a commercial and industrial environment.”

The above passage was cited by Gray J in Wheeler v Philip Morris (1990) 97 ALR 282 at 306 but His Honour went on to find that in the case before him it was clear that the respondent did not discharge the obligation to investigate the facts properly.

Several of the cases described in Burswood as opposed to the Sangwin test contain findings of inadequacy in investigation. With respect, I do not agree that such cases with such findings can be categorised as opposed to the Sangwin test let alone authority contrary to the test. Counsel for the respondent made this submission in respect of Perkins v Grace Worldwide (Australia) Pty Ltd (unreported) IRCA Moore J, 4 September 1996; Chambers v James Cook University (1995) 61 IR 121 and Yew v ACI Glass Packaging Pty Ltd (1996) 71 IR 201 and I agree with him.

There is further support for the Sangwin test in Kenefick v Australian Submarine Corporation (1995) 62 IR 107. At 116 the Chief Justice said of s170DE(1):

“The subsection forbids an employer to terminate an employee’s employment unless there is a valid reason for the termination. Northrop J referred to the meaning of ‘valid’, in this context, in Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371. After referring to dictionary definitions, he said:

‘the adjective “valid” should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s170DE(1).’

I respectfully agree, and I think it follows that the reason must be genuine, that there must be a causal relationship between the reason and the termination and that the termination must be a logical response to the employee’s capacity or conduct or the employer’s operational requirements. Of course, there is often more than one logical way of dealing with a problem. While the subsection requires the employer to establish that the termination was a logical way of dealing with the problem of employee capacity or conduct, or operational requirements, that gave rise to it, it does not require proof that this was the only logical course. The subsection was designed to inhibit capricious terminations, not to put the Court in the employer’s managerial chair.”

There is also support for the Bi-Lo test (as it then was) in AMACSU v Shire of Collie (1995) 64 IR 98 where Beasley J at 107 cites with approval the analysis of the test by Beaumont and Heerey JJ in Byrne v Australian Airlines Limited (1994) 47 FCR 300 and 52 IR 19. The recent Full Bench decision of the Australian Industrial Relations Commission also implies support for the Sangwin/Bi-Lo test: see UINK v Department of Social Security, 24 December 1997, Decision 1572/97 S Print P7680 at 9, 10 and 18.

Finally, several unreported IRCA cases are cited in Burswood where Judicial Registrars have accepted the Sangwin test and in Imogen Pty Ltd v Sangwin (1996) 70 IR 254 the Chief Justice, while leaving open the final and logical conclusion from the test, namely that “a mistaken belief of misconduct can furnish a valid reason (for termination)” stated at 260:

“The submission raises the legal issue whether an honest, but mistaken, belief that an employee has been guilty of misconduct can furnish a valid reason for the employee’s dismissal. This is an important issue about which we have not heard argument. I prefer to leave it open. Making the assumption that it can furnish a valid reason, as von Doussa J held, I would agree with his Honour’s comment that:

For such a belief to constitute a valid reason the employer must establish that the allegation was investigated as fully as the circumstances permitted, that the employee was informed precisely of the allegation, and that the employee was given a fair and full opportunity to respond, that is to defend himself or herself against the allegation. Unless these steps have been taken a belief held by the employer will not have the quality which could constitute the belief a ‘valid reason’.”

I have concluded that in this case the allegation against the applicant was investigated as fully as the circumstances permitted and that the applicant was informed precisely of the allegation, was given a fair and full opportunity to respond and on numerous occasions, before and after taking legal advice, declined to respond further when requested to do so.

I am prepared to find that as a result of a detailed investigation the respondent held a reasonable belief that the applicant was implicated in the theft from the ATM and that in terms of the Sangwin test this constituted a valid reason for termination. I would be prepared to dismiss the application on such grounds but there are other grounds on which I find valid reason and on which I propose to dismiss the application.

CONFLICTS AND INCONSISTENCIES IN EVIDENCE
There are conflicts and inconsistencies in the evidence of the applicant and his partner, Kristine Blencowe, which reflect adversely on the credibility of both of them. There are conflicts in the evidence of Dino Centofanti and the applicant which reflect adversely on the credibility of the latter.

On 2 May 1996 Ms Blencowe told Ms Clare that she had arrived home before the applicant on the afternoon of Saturday 10 February 1996. In cross-examination (T162 - 18 August 1997) she gave the following evidence:

“I think I told her that I got home before Dean, because at the time that is - I wasn’t sure about it but at the time that was how I remembered it. I was trying to have lunch as well because I was - only had an hour..... I remember rushing because I wanted to be home before Dean got home, that I was running late, and when I spoke to her I remember the rushing round and trying to get home and that is why at the time when I spoke to her I thought that I had gotten home before Dean when in actual fact I got home after him because I was running late but at the time when I spoke to her that was how I thought things had happened.”

In that evidence Ms Blencowe also indicated that she decided that what she had told Ms Clare earlier on 2 May was wrong and that she came to that conclusion “later that night when I was - when I had more time to dwell on things and to think about it a bit more”. Her evidence at T164 was that late on the evening of 10 February (or early in the morning of 11 February), when interviewed by police in her lounge room, she told the police that on the afternoon of Saturday 10 February she had arrived home after the applicant. The Court observes that while Ms Blencowe states that she realised on the evening of 2 May that she had given incorrect information to Ms Clare, at no stage between that date and the trial, did she inform the respondent or anyone else that the position was the exact opposite of what she had told Ms Clare on 2 May. Indeed, counsel for the applicant of his own volition read into evidence his note of instructions from Blencowe and there is no reference to mistakenly providing Clare with incorrect information to the effect that she had arrived home on 10 February before the applicant.

The discrepancy as to first or second arrival home on 10 February was a matter on which the respondent repeatedly sought confirmation from the applicant to no avail.

Blencowe also told Clare that the applicant received a pager message on the morning of Saturday 10 February yet Centofanti gave uncontested evidence that he gave the applicant his pager when they met and in those circumstances the applicant had no pager on which Blencowe could have observed the receipt of a message on that morning.

The applicant and Blencowe gave differing accounts as to the alleged telephone call from the help desk on the morning of Sunday 11 February. Blencowe’s evidence (T143 - 18 August 1997) is as follows:

“We were asleep and the phone rang and woke us up and Dean got up and answered it and I stayed in bed and he came back and I wanted to know who it was and he said ‘Oh, it was someone from help desk, we’ve got to go to Collingwood first when we pick up - when I pick up Dino’. And I thought nothing else - thought nothing unusual about that, I just went back to sleep and he didn’t come back to bed at that stage he went and played the computer or watched TV or something . I don’t know, I didn’t get up straight away.”

In the part of the police interview which took place at the Fitzroy Police Station between 11.55 pm on 11 February and 12.35 am on 12 February (tape 1, part 2, Exhibit R42, page 344 of court book) the applicant stated:

“It was about quarter past nine when I got up. (I knew that because of) my wrist watch which was by the fish tank. I jumped in the shower, got dressed and went to the computer and played a computer game till Kristine got up, which she did after I got a phone call from the Voice Response Unit saying to go to Coburg, Collingwood Service Centre Branch, because they have still got a problem. It was between 10 and 10.30 I think, I’m not sure because once I get on the computer I lost track of time.”

Senior Detective Heal then said to the applicant:

“Well, if I was to say to you that from the bank’s records you received a phone call at quarter to eleven, what would you say to that?”

The applicant replied:

“Well, that would have to be right.”

Ms Clare gave the following unchallenged evidence (T170 - 3 April 1997):

“On the Sunday she (Blencowe) claims that Dean received a call from the help desk at about 10.00 am telling him to go directly to 150 Smith Street Collingwood and to ignore any other calls until after they have finished 150. She states that then Dean’s pager went off at 11.55 and it was the normal VRU message.”

About or just after midnight Sunday 11 February the applicant told the police that he did not receive pager messages on the Sunday morning (Exhibit R21 above page 345). In evidence at trial (T43 - 14 August 1997) the applicant confirmed this evidence and gave evidence consistent with what he had told the police but inconsistent with the version given by Blencowe.

The applicant and Blencowe gave conflicting evidence as to certain activities on the morning of Saturday 10 February. Blencowe stated (T160 - 18 August 1997) that she could not remember the applicant receiving a pager call at home on the Saturday morning and that she did not think she was home but out first to visit a chiropractor and then to shop and that she thought she was out from 9.30 am to approximately 12.30 pm. In cross-examination she indicated that did not recall telling Ms Clare that the applicant received a pager from the VRU just before 12 noon but that it was possible that she had told Ms Clare and that she could not recall one way or the other.

The applicant’s evidence is different. His evidence is that he was at home with Blencowe on the Saturday morning.

Counsel for the respondent described as “perhaps the most curious thing” the spontaneous and unsolicited comment made by Blencowe when the police visited her residence, the residence she shared with the applicant, in the evening of Sunday 11 February. Her evidence was as follows (T144 - 18 August 1997):

“The police eventually came and knocked on the door and by then I was an emotional wreck, I burst out crying and I was really upset because I thought they had come to collect me to take me to a hospital or something. There were two detectives. There was a female that was I think Robyn Heal and a male detective, somebody Gleeson, I think it was. And they knocked on the door and as soon as I looked through the peep-hole and there was two strange people there and I called out who it was and they said ‘Oh, it’s the police’ and they flashed their badges at me through the peep-hole and I burst out crying when I opened the door, I was really upset. And they said - they reassured me that Dean was fine, that he was okay and then my next immediate thought that it was something to do with the bank work and I - and I remember saying something to the effect of, ‘it’s about Collingwood isn’t it? It’s about the Collingwood Service Centre’ because of the phone call we’d gotten that morning. I thought that - I just sort of put two and two together because it’s not usual for help desk to ring us at home but because they had that morning before Dean had actually logged on and started work.
They sat me down and they said that they wanted to talk to me and basically they just asked me questions about the weekend and everything. And then they said that they had Dean in the car and that he had given them permission to search the premises and that’s what they wanted to do and that we were going to be kept separate and I wasn’t allowed to try and talk to him or see him or anything like that. And then one of them stayed with me and I went and locked the dogs up and then they came in and they searched the garage and all that sort of stuff and one of them was with me in the house and they just asked me questions.”

The following exchange took place in cross-examination at T168 and T169:

Counsel:You said in your evidence before that you called out when they knocked on the door and they said ‘police’ and assured you it was okay, and you said, was it about the Collingwood Service Centre. Why did you ask the police when they knocked on the door, is this about the Collingwood Service Centre?

Blencowe:Because it is not usual for the Help Desk to ring and tell Dean where to go specifically first.

Counsel:But here you were, Ms Blencowe, with the police knocking on the door, you were out of your mind with concern about Mr Patty, you are in tears, you are thinking he has had a car accident and you say, is this about the Collingwood Service Centre?

Blencowe:I didn’t say that first. After they reassured me that Dean was fine and that he was in fact in the police car in the street I calmed down and then I said, is this about the Collingwood Service Centre because I had not heard from him all day and because of the call that morning from the Help Desk to say to go to the Collingwood Service Centre first.

Counsel:So you put two and two together, did you, and you thought because he had been asked to go to the Collingwood Service Centre first and because the police were with him that something was wrong.

Blencowe:That something was wrong, yes.

Counsel:At the Collingwood Service Centre?

Blencowe:Yes

Counsel:What sort of things did you think might have been wrong at the Collingwood Service Centre?

Blencowe:I didn’t know at that stage.

Counsel:Why was it you said Collingwood Service Centre?

Blencowe:Because that’s what he told me - the Help Desk directed him to when they rang that morning and woke him up.

Counsel:I suggest to you, Ms Blencowe, that that was a very strange thing to say to the police in the circumstances. Unless of course you knew that there was something happening at the Collingwood Service Centre, something very unusual, was it not?

Blencowe:No.

During the course of the investigation the investigators, Mary Clare and Peter Forkgen examined the bank accounts of a number of bank officers who were considered possible suspects for involvement in the theft. The investigators were interested in tracing what might present as unusual deposits and, in particular, continued their investigations of certain cash deposits of $100 in $50 notes to Blencowe’s account on 21 February and $250 in $50 notes to the applicant’s account on 29 April.

The applicant gave evidence on 14 August (T57) that he undertook to provide Ms Clare and Mr Forkgen with cash deposit slips and cash payslips or envelopes relating to Ms Blencowe. Counsel for the respondent objected that this was an issue which had never been put to Ms Clare in evidence. This was one of several matters which led to the recall of Clare on several occasions in the course of the trial.

In cross-examination on 18 August (T114) the applicant claimed that he provided some of Blencowe’s pay envelopes to Clare or Forkgen but that he could not recall when he provided the envelopes or whether he did it at an interview “at the branch or in town”. I assume the applicant was referring to an interview at 385 Bourke Street when he referred to “town” but the applicant said that he could not recall the details of interviews with the investigators and he could not recollect when or where he provided the envelopes or what he said when he handed the envelopes over. He said there was writing on the envelopes and that he provided them to prove certain payments were made to Blencowe from Franklin’s supermarkets. In cross-examination on 18 August the applicant said that it did not occur to him

• to inform his counsel that he had offered the envelopes to Clare or Forkgen

• to tell his counsel of this when Clare and Forkgen were giving evidence so that counsel might ask them about his claim

The applicant was asked by counsel for the respondent why he did not tell his counsel and he replied “because Mr Kenyon is quite capable of thinking of things for himself” (T109).

The following exchange then took place (T109):

Counsel:You had not told him, had you? You had never mentioned to him about that evidence that you gave on Friday that you offered payslips to Forkgen and pay envelopes to Forkgen and Clare at one of those interviews. You had never mentioned that, had you?

Applicant:I don’t recall, sir.

Counsel:You do not recall mentioning it?

Applicant:That is right, sir.

Counsel:Mr Patty, you did not mention it, did you?

Applicant:I don’t recall, sir.

Ms Clare and Mr Forkgen are adamant that the applicant did not provide them with pay envelopes from Blencowe and this was the tenth matter about which Mr Medland requested information in his letter of 24 June. Mr Medland pointed out that the applicant had first suggested the cash payments in the bank accounts (the $350 in $50 notes) might have been from Anthony Brown of Emperor Marine Aquarium but that, when confronted with a claim by Brown that he did not deal in cash, the applicant then suggested the possible source was cash wages payments from Franklins to Blencowe. Mr Medland also advised the applicant in writing in the letter of 24 June that Blencowe’s “normal salary payments were electronically deposited to her account on either the day following or preceding each cash deposit”. Mr Medland finished that particular request for information with the following comment “it is now vital that you provide us with your final version”.

On 18 August, in cross-examination, the applicant was reminded of Mr Medland’s advice and the following exchange took place between counsel for the respondent and the applicant (T111):

Counsel:So it was a significant issue that you could easily have clarified by simply saying, “I have already offered pay envelopes and they have been rejected”. Is that so, Mr Patty?

Applicant:As I said before, depends on what weight they put on the envelopes, sir.

Counsel:That is the best explanation you can give, is it, Mr Patty, for not proffering that response? Is that the best answer you can give or explanation?

Applicant:I was under advice not to answer any further questions and that was one of the questions on there.

Counsel:But you knew that that was an issue before you got that advice, did you not?

Applicant:It had come up, sir.

In his final address, counsel for the respondent placed some emphasis on the admission the applicant made that a request for salary envelopes and for an explanation as to the cash deposits had come up before the applicant obtained legal advice that he was not to answer any more questions. Indeed, the evidence of Clare and Forkgen suggests that the matter had come up on many occasions and that it is likely that the applicant was asked to explain these matters on several occasions before he received legal advice not to respond further.

The applicant’s evidence as to knowledge of the car park at the rear of 150 Smith Street did not reflect favourably on his credibility. He claimed that he told Centofanti about the existence of the car park when he came out of the toilet soon after arriving at the bank on 10 February. In cross-examination, he stated that he could not recall how he knew that the car park existed or how he came to learn about the car park (T58 - 15 August 1997).

Despite claiming knowledge of the car park, the applicant did not suggest that he and Centofanti use it when they arrived at the bank on Sunday 11 February. Yet he insisted on doing the preliminary inspection within 150 Smith Street on the Sunday morning rather than leaving that task with Centofanti. He did not follow security procedures by performing a perimeter check of the premises, premises which he claimed to know included a car park which was not visible from the front of the building or from the front entry to the bank. The applicant compounded this breach of security procedure by continuing, or claiming to have continued, an internal check of the premises after discovering the theft.

The applicant gave conflicting evidence in respect of the ATM at 150 Smith Street. He denied touching the inside of the machine (T37 - 14 August 1997) but he told the police he opened it and flicked a switch which caused the machine to display a code indicating a communication problem (T52 - 15 August 1997 and court book page 327).  Under cross-examination, he admitted that his sworn evidence on this aspect was “entirely inconsistent” with what he had told the police (T52 - 15 August 1997).

The applicant gave conflicting accounts as to the time and order in which certain people left his uncle’s house on the evening of 10 February.

In his initial statement to the police, the applicant was silent on the difficulties he and Centofanti had experienced in accessing the ATM on 10 February. This was a puzzling and curious omission when interviewed by police investigating a theft discovered and reported by the applicant. This behaviour contrasts adversely with Centofanti’s spontaneous and complete account to the police including details of how he and the applicant obtained the A and B combinations.

INVOLVEMENT IN THE THEFT - THE TEST OF BALANCE OF PROBABILITIES
In terms of balance of probability, I have been guided by the following statement by the High Court of Australia in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd and Others (1992) 110 ALR 449:

“The ordinary standard of proof required of a party who bears the onus in civil litigation in this country is proof on the balance of probabilities. That remains so even where the matter to be proved involves criminal conduct or fraud. On the other hand, the strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove. Thus, authoritative statements have often been made to the effect that clear or cogent or strict proof is necessary ‘where so serious a matter as fraud is to be found’. Statements to that effect should not, however, be understood as directed to the standard of proof. Rather, they should be understood as merely reflecting a conventional perception that members of our society do not ordinarily engage in fraudulent or criminal conduct’ and a judicial approach that a court should not lightly make a finding that, on the balance of probabilities, a party to civil litigation has been guilty of such conduct. As Dixon J commented in Briginshaw v Briginshaw.
‘The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or 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....’
There are, however, circumstances in which generalisations about the need for clear and cogent evidence to prove matters of the gravity of fraud or crime are, even when understood as not directed to the standard of proof, likely to be unhelpful and even misleading. In our view, it was so in the present case.”

“When an issue falls for determination on the balance of probabilities and the determination depends on a choice between competing and mutually inconsistent allegations of fraudulent conduct, generalisations about the need for clear and cogent proof are likely to be at best unhelpful and at worst misleading. If such generalisations were to affect the proof required of the party bearing the onus of proving the issue, the issue would be determined not on the balance of probabilities but by an unbalanced standard. The most that can validly be said in such a case is that the trial judge should be conscious of the gravity of the allegations made on both sides when reaching his or her conclusion. Ultimately, however, it remains incumbent upon the trial judge to determine the issue by reference to the balance of probabilities.”

The respondent dismissed the applicant because of a belief that he was implicated in theft and because the applicant repeatedly refused to respond to requests to clarify matters which the respondent described as inconsistent and requiring explanation and clarification.

At interview on 5 August 1996 Mr Hodgson in the presence of Mr Hughes

• expressed doubts on behalf of the respondent as to the applicant’s honesty

• indicated the view of the respondent that the applicant was implicated in theft

• stated that the respondent required bank officers to act honestly and with integrity

• informed the applicant of immediate suspension on pay with an opportunity to respond to questions before a decision was made on possible dismissal

On 5 August Mr Fletcher made a final request to the applicant for information and informed him in writing of

• the respondent’s belief that he was implicated in theft

• his suspension with pay

• the unsatisfactory nature of the applicant’s response to requests for additional information

• the consideration then being given to termination of employment

In my view the respondent has failed to establish on any test of balance of probability that the applicant personally removed the cash from the ATM on the evening of 10 February 1996 but has established on such a test of probability that the applicant was involved and was implicated in the theft. In reaching that conclusion the respondent was entitled to take account of

• the many inconsistencies in the evidence at that time of the applicant and Ms Blencowe

• the inconsistencies at that time between the evidence of each of them

• the inconsistencies at that time in the evidence of the applicant and Centofanti

• the repeated refusal of the applicant to cooperate further and comment further or clarify inconsistencies put to him

Furthermore, this Court, in reaching the conclusion the respondent had a valid reason based on belief of implication in theft, is able to take account not only of the inconsistencies outlined above but also the many inconsistencies which presented in evidence at trial.

I am satisfied on a balance of probability that the respondent has established that the applicant was implicated in theft and that the involvement of the applicant in that theft constituted misconduct which was a valid reason for termination of employment. On that ground, I propose to dismiss the application seeking relief for alleged unlawful termination of employment.

REFUSAL TO PROVIDE INFORMATION
In my view, the applicant’s refusal to cooperate with the investigators and his refusal to comment on or elucidate the issues troubling the respondent and expressed in writing on 24 June 1996 and 5 August 1996 also amounted to conduct which justified termination of employment. This conduct itself was misconduct such as constituted a valid reason for termination.

In Blyth Chemicals v Bushnell (1933) 49 CLR 66 Dixon and McTiernan JJ said:

“Conduct which in respect of important matters is incompatible with the fulfilment 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 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 enough that ground for uneasiness as to future conduct arises.”

In Macken, McCarry and Sappideen’s The Law of Employment (4th Edition) the learned authors express the view at 141 that:

“The operation of the so called duty of fidelity and good faith is seen more clearly, not from statements of general principle, but in the application of those general principles, in particular factual situations.”

Eight examples are given including destruction of good will, unauthorised use of information, duty to account for property and duty to answer questions. In terms of a duty to answer questions the learned authors state at 150:

“In Australia there appears to be in some sections of industry a code or ethic that one employee will not ‘dob in’ another employee for supposed dereliction of duty. This tradition is not well based in law. An employee may, at times, be obliged to answer questions put to her or him concerning the employment: Bell v Lever Bros (1932) AC 161 at 228; Associated Dominions Assurance Society Pty Ltd v Andrew (1949) 49 SR (NSW) 351 at 357.

Bell suggests that, if the employer’s property is involved, all employees may be required to report any derelictions and, a fortiori to answer questions.

The suggestion in Sybron Corp v Rochem (1984) 1 Ch 112 at 126 that an employee may have to answer questions even at the risk of self-incrimination requires some qualification, at any rate if their Lordships meant by that phrase exposure to the risk of criminal prosecution.

A failure to answer questions which an employee is properly required to answer could be so serious as to render the employee liable to dismissal. In Associated Dominions Assurance Society Pty Ltd v Andrew, Herron J said that a duty lies upon an employee in general terms to give information to her or his employer such as ‘is within the scope of his employment and which relates to the mutual interest of employer and employee’. If an employee is requested at the proper time and in reasonable manner to state to his employer facts concerning the employee’s own actions performed as an employee...generally speaking (the employee is bound) to make such disclosure...Questions asked relating to the employee’s activities could be so reasonable and fair that to refuse the information may well be disobedience   justifying dismissal.”

I have concluded, paraphrasing Herron J in Associated Dominions, that a duty lay upon the applicant to give his employer at least some of the information requested. The information was within the scope of his employment and related to mutual interest of applicant and respondent. The applicant was requested often, at proper times and in a reasonable manner to clarify his actions. The applicant was not obliged to answer questions which might have exposed him to the risk of criminal prosecution. In this case, no criminal prosecution has been mounted against the applicant in respect of the theft of 10 February 1996. In my view, no prosecution is ever likely in the absence of clear and unequivocal evidence with the potential to establish beyond reasonable doubt that the applicant was involved in a criminal offence associated with the removal of cash from the ATM at 150 Smith Street.

However, the circumstances surrounding this civil action by the applicant against the respondent, this claim for relief in relation of an alleged unlawful termination of employment by the respondent, are such as lead me to conclude that the persistent refusal of the applicant to cooperate further in the investigation of the theft was, in itself, a form of misconduct which constituted a valid reason for termination. Had it been necessary to dismiss this application on that ground I would have been prepared to do so. Bank officers occupy positions of responsibility and trust. Their duty of fidelity and good faith encompasses many circumstances in which they are obliged to provide information to their employers.

FINDINGS
I find that

1. on the balance of probabilities the applicant was involved in a theft from an Automatic Teller Machine located at the respondent’s premises at 150 Smith Street Collingwood

2. the respondent concluded that on the balance of probabilities the applicant was involved in the theft and advised the applicant in writing of that conclusion and belief on 5 August 1996

3. the conclusion by the respondent of the applicant’s involvement in the theft was one of the reasons for the termination of the applicant’s employment by the respondent and was a valid reason connected with the applicant’s conduct and a valid reason for the termination of the employment

4. the allegation against the applicant was adequately investigated and the applicant was given a fair and full opportunity to respond

5. the respondent held a reasonable belief based on reasonable grounds after sufficient enquiry that the applicant was involved in theft from the respondent’s premises and that belief constituted a valid reason for the termination of the applicant’s employment by the respondent

6. on 24 June 1996 the respondent advised the applicant in writing of eleven issues and indicated that the applicant was required to provide clarification in writing on each issue

7. on 5 August 1996 the respondent advised the applicant in writing that the respondent had concluded that the applicant was implicated in the theft of $27,400 from an automatic teller machine located at 150 Smith Street Collingwood and requested the applicant to consider whether he wished to provide additional information or to make further representations and that any representation or information was required no later than 5 pm on 12 August 1996

8. on 27 August 1996 the respondent advised the applicant in writing that a decision had been taken to dismiss him from the service of the respondent effective from that date and referred in the letter of dismissal to his failure to provide the respondent with reasonable explanation of his actions on 10 and 11 February 1996

9. the refusal of the applicant to provide any of the information requested by the respondent on 24 June 1996 and 5 August 1996 and to provide reasonable explanation for his actions on 10 and 11 February 1996 amounted to misconduct by a bank officer in a position of responsibility and trust

10. the refusal of the applicant to provide any of the information or to provide the respondent with reasonable explanation for his actions on 10 and 11 February 1996 was one of the reasons for the termination of the applicant by the respondent and was a valid reason connected with the applicant’s conduct and a valid reason for the termination of the employment.

ORDER

The Court orders that the application be dismissed.

I certify that this and the preceding forty-seven (47) pages are a true copy of the Reasons for Judgment herein of Judicial Registrar Ryan

Associate:

Dated:             19 February 1998

Counsel for the Applicant:	Mr N Kenyon
Solicitor for the Applicant:	Ryan Carlisle Thomas
Counsel for the Respondent:	Mr B Dennis
Solicitor for the Respondent:	I F Purbrick
Date of Hearing:	2, 3, 4, 7, 8, 9, 28, 29 and 30 April 1997; 2 May 1997; 13, 14, 15, 18, 19 and 20 August 1997; 3 and 4 September 1997
Date of Judgment:	19 February 1998