Piper v Metanoia Kojo Pty Ltd - [2005] FMCA 1051

FEDERAL MAGISTRATES COURT OF AUSTRALIA

PIPER v METANOIA KOJO PTY LTD

[2005] FMCA 1051

HUMAN RIGHTS – Allegation of sex discrimination on the grounds of pregnancy – failure to offer employment – maternity leave – whether the respondent in offering employment to their son and not the applicant who was due to leave to give birth amounts to direct discrimination – whether the applicant was told after the respondent purchased the new rent roll business that upon that purchase her employment would cease or had ceased – where the applicant’s employment ceased upon change of partnership – claim not proved.

Human Rights and Equal Opportunity Commission Act 1986 (Cth), ss.46PO, 46PO(4), 46PR
Sex Discrimination Act 1984 (Cth), ss.4, 4B, 5, 5(1), 5(1)(a), 5(1)(b), 5(1)(c), 5(1A), 5(2), 5(3), 7, 7(1), 7B, 7C, 7D, 8, 14, 14(1), 14(1)(a), 14(1)(b), 14(1)(c), 31
United Nations Convention for the Elimination of All Forms of Discrimination Against Women 1979
South Australian Industrial and Employee Relations Act 1994 (SA), s.72

Bear v Norwood Private Nursing Home (1984) EOC 92-019
Thomson v Orica (2002) EOC 93-227
Commonwealth v Humphries (1998) 86 FCR 324
Gibbs v Australian Wool Corporation (1990) EOC 92-327
Allegretta v Prime Holdings P/L t/a Phoenix Hotel and Anor (1991) EOC 92-364
Boehringer Ingelheim Pty Ltd v Reddrop [1984] 2 NSWLR 13
Commonwealth v HREOC (Dopking No 1) (1993) 46 FCR 191
Ministry of Defence v Jeremiah [1980] QB 87
Haines v Leves & Anor [1987] 8 NSWLR 442
HR&EO Commission v Mount Isa Mines Ltd (1993) 118 ALR 80
IW v City of Perth [1997] 191 CLR 1
Director-General of Education & Anor v Breen & Ors (1984) EOC 92-015
Bligh and Others v State of Queensland [1996] HREOCA 28
Jamal v Secretary, Department of Health (1988) 14 NSWLR 252
Australian Iron and Steel v Banovic (1989) 168 CLR 165
Waters & Ors v Public Transport Corporation (1992) 173 CLR 349
R v Birmingham City Council; Ex Parte Equal Opportunities Commission (1989) 2 WLR 550
Purvis v New South Wales Department of Education and Training (2003) 202 ALR 133
Bringingshaw v Bringingshaw (1938) 60 CLR 336
McAllister v SEQ Aboriginal Corp for Legal Services & Anor [2002] FMCA 109
Beamish v Zheng [2004] FMCA 60
The Australian Public Service v The Australian Trade Commission (1988) EOC 92-228

Applicant:

KRISTINA MARIA PIPER

Respondent:

METANOIA KOJO PTY LTD (TRADING AS CHOICE RESIDENTIAL MANAGEMENT)

File Number:

ADG 168 of 2003

Judgment of:

Pascoe CFM

Hearing dates:

21 & 22 June and 24 November 2005

Delivered at:

Sydney (via telephone link to Adelaide)

Delivered on:

22 December 2005

REPRESENTATION

Counsel for the Applicant:

Mr S Blewett

Solicitors for the Applicant:

Lieschke & Weatherill

Counsel for the Respondent:

Mr F Di Fazio

Solicitors for the Respondent:

Moloney & Partners

ORDERS

That the application is dismissed.
That the respondent within 45 days file any written submissions on the question of costs and within 14 days thereafter the applicant file any response.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY (via telephone link to Adelaide)

ADG 168 of 2003

KRISTINA MARIA PIPER

Applicant

And

METANOIA KOJO PTY LTD (TRADING AS CHOICE RESIDENTIAL MANAGEMENT)

Respondent

REASONS FOR JUDGMENT

The proceeding

The applicant, Ms Kristina Maria Piper, makes application before this Court dated 25 July 2003 under s.46PO of the Human Rights and Equal Opportunity Commission Act 1986 (Cth) (“HREOC Act”). Two complaints alleging discrimination on the basis of pregnancy were terminated by the Human Rights and Equal Opportunity Commission on 13 August 2002 and 30 June 2003 respectively.
It is alleged that the respondent, Metanoia Kojo Pty Ltd (trading as Choice Residential Management) unlawfully discriminated against the applicant on the grounds of her pregnancy in not offering her employment.

Relevant factual background

The applicant was employed on 12 June 2000 by a partnership which traded as Ray White Adelaide Property Management (“the rent roll business”). At that time the partnership consisted of Metanoia (‘the respondent”), St Peters Estates and Ms Kristina Barnes.
The main asset of the rent roll business was its rent roll and the income derived from it. Metanoia also conducted another real estate business known as Ray White Adelaide (“the sales business”) which was a separate and distinct business from Ray White Adelaide Property Management.
The sales business was solely owned by Metanoia and although it operated on the same premises, it was a separate business with different employees.
At the time of the applicant’s employment with Ray White Adelaide Property Management the applicant had had extensive experience in property management since 1993. Effectively she was the only employee of the partnership although for a very short time she was assisted by a casual employee.
Around the time she commenced employment in June 2000 a number of developments occurred. In May 2000, Paul Clements and his business partner Greg Toyama formed and registered a company called Choice Property Group Pty Ltd. It was their intention to leave the franchise of Ray White and establish their own sales business, to be called Choice Residential. The intention was also to establish a rental management business, to be called Choice Residential Management. That structure was registered in February 2001.
In November 2000 the applicant discovered she was pregnant.
In December 2000, Mr Toyama gave notice of his intention to withdraw from Metanoia and Mr John Cook, principal of St Peters Estates decided to sell his one-third interest in the rent roll of that partnership.
In March 2001 the sales business of Metanoia ceased trading as Ray White Adelaide and began trading as Choice Residential with about eight employees, all of whom were transmitted from the old business. Ray White Adelaide Property Management continued to trade separately with the applicant as its sole employee.
On 1 February 2001 the rent roll business was valued. At this time Mr and Mrs Clements were contemplating purchasing the interest of St Peters Estates in the company. Finance was offered by the Commonwealth Bank to the respondent but the terms of that loan were unacceptable.
Sometime in March 2001 the rent roll business was offered to the applicant and her partner Mark Bamber and negotiations between the parties continued throughout March. By April 2001 the applicant and her partner had declined to purchase the rent roll. Shortly thereafter the rent roll was placed for sale on the open market.
The applicant advised both Paul and Carol Clements in March or April 2001 that she was pregnant.
On 4 May 2001 the applicant gave written notice to Paul Clements of her pregnancy and requested maternity leave, to commence on 16 July 2001.
Paul Clements responded on 25 May 2001 by way of letter which advised the applicant that there was to be a change in ownership of the rent roll business and accordingly her employment could not be guaranteed beyond the period of the current ownership.
In about June 2001 despite previous attempts to sell the rent roll business to third parties, it was decided that Metanoia would purchase the share in the property management business being sold by St Peters Estates and that the Clements would advance their own funds rather than borrowing through the company. Mr and Mrs Clements gave evidence that the price of the rent roll business had fallen significantly and it was this coupled with a desire to provide employment for their son Tim which led them to change their minds about purchasing it. Mrs Clements evidence was particularly strong on these issues especially the desire to provide employment for Tim.
On 28 June 2001 Paul Clements wrote to the applicant advising her that her employment with Ray White Adelaide Property Management had ceased, and that she would need to discuss any future arrangements with the new owners of the rent roll business.
Shortly after Paul Clements and the applicant discussed her employment status. Paul Clements offered to have Metanoia engage the applicant either “off the books” or as a contractor until 16 July 2001. The applicant gave evidence that she was upset but agreed to work on that basis and to train Tim Clements.
On 16 July 2001 the applicant left and Tim Clements replaced her as property manager. He remains in that position.
On 1 August 2001 the applicant wrote to Paul Clements confirming that she was on maternity leave for 52 weeks and requesting confirmation that her position as property manager would be available to her upon the cessation of maternity leave.
On 13 August 2001 Paul Clements wrote to the applicant stating that she had never been employed by Choice Residential Management and advising her that as a consequence she would not be returning to the specified position.

The legal framework

This application involves an allegation of unlawful direct discrimination on the grounds of pregnancy and therefore the provisions of the Sex Discrimination Act 1984 (Cth) (“the Act”) apply.
The Act gives effect to the United Nations Convention for the Elimination of All Forms of Discrimination Against Women 1979. It prohibits discrimination in such areas as employment, gender, family responsibilities, marital status and sexual harassment.
The meaning of the term sex is set out in s.4. It relevantly provides:
"man" means a member of the male sex irrespective of age.
"woman" means a member of the female sex irrespective of age.
Section 5 of the Act sets out the elements of direct discrimination which all must be proved. Section 5(1) provides that for the purposes of this Act, a person (in this subsection referred to as the discriminator) discriminates against another person (in this subsection referred to as the aggrieved person) on the ground of the sex of the aggrieved person if, by reason of:
a)the sex of the aggrieved person;
b)a characteristic that appertains generally to persons of the sex of the aggrieved person; or
c)a characteristic that is generally imputed to persons of the sex of the aggrieved person;
the discriminator treats the aggrieved person less favourably than, in circumstances which are the same or are not materially different, the discriminator treats or would treat a person of the opposite sex.
(1A)To avoid doubt, breastfeeding (including the act of expressing milk) is a characteristic that appertains generally to women.
(2)For the purposes of this Act, a person (the discriminator) discriminates against another person (the aggrieved person) on the ground of the sex of the aggrieved person if the discriminator imposes, or proposes to impose, a condition, requirement or practice that has, or is likely to have, the effect of disadvantaging persons of the same sex as the aggrieved person.
(3)This section has effect subject to ss.7B and 7D.
The Act prohibits discriminatory treatment that is less favourable on the basis of factual or presumed characteristics. For example, characteristics generally appertaining to women to bear children are set out under s.4B of the Act. Characteristics appertaining to or imputed to a person are best illustrated in Bear v Norwood Private Nursing Home (1984) EOC 92-019. Similarly, maternity leave is a characteristic that appertains generally to women (Thomson v Orico (2002) EOC 93-227). However, s.31 provides that it is not unlawful to discriminate against a man by affording certain rights to a woman in relation to pregnancy or childbirth.
Section 14 of the Act renders discrimination on the grounds of pregnancy unlawful in employment. Section 14(1) relevantly provides:
(1)It is unlawful for an employer to discriminate against a person on the ground of the person's sex, marital status, pregnancy or potential pregnancy:
(a)in the arrangements made for the purpose of determining who should be offered employment;
(b)in determining who should be offered employment; or
(c)in the terms or conditions on which employment is offered.
Section 7 sets out the test to determine whether discrimination has occurred. According to the wording of s.7, discrimination occurs if the discriminator treats the woman (in relation to pregnancy) less favourably than someone who is not pregnant or potentially pregnant in the same or not materially different circumstances (See Gibbs v Australian Wool Corporation (1990) EOC 92-327; Allegretta v Prime Holdings P/L t/a Phoenix Hotel and Anor (1991) EOC 92-364). However in determining whether an act is in contravention of the Act the Court must assess the facts objectively (cfBoehringer Ingelheim Pty Ltd v Reddrop [1984] 2 NSWLR 13, per Mahoney JA)
The identification of less favourable treatment requires the Court to engage in a factual enquiry (Commonwealth v Humphries (1998) 86 FCR 324 at [333], per Kiefel J). Wilcox J said at [210]-[211] in Commonwealth v HREOC (Dopking No 1) (1993) 46 FCR 191 that the applicant must show that the less favourable treatment complained of resulted in them suffering detriment (See also Ministry of Defence v Jeremiah [1980] QB 87). For the Court to find that the applicant has been treated less favourably it must compare the situation to that of another person or the hypothetical person (Boehringer Ingelheim Pty Ltd v Reddrop (supra); Haines v Leves & Anor [1987] 8 NSWLR 442, at [471]).
The words "on the grounds of" which are found in ss.7(1) and 14(1) of the Act, together with the words "because of" on the authorities require a causal connection between the pregnancy and any less favourable treatment (HR&EO Commission v Mount Isa Mines Ltd (1993) 118 ALR 80; IW v City of Perth [1997] 191 CLR 1; Director-General of Education & Anor v Breen & Ors (1984) EOC 92-015 at (75,429), per Street CJ). In other words for the applicant to succeed in her action the Court must be satisfied on the balance of probabilities that by reason of her pregnancy, the pregnancy being the causative factor, she was treated less favourably than someone in that position.
It is not necessary to show that the discriminatory reason was the dominant reason for making the determination (s.8), nor is the applicant required to show that the respondent’s conduct was intentional (Bligh and Others v State of Queensland [1996] HREOCA 28; Jamal v Secretary, Department of Health (1988) 14 NSWLR 252, at [252], per Kirby P; Australian Iron and Steel v Banovic (1989) 168 CLR 165 at [179]; Waters & Ors v Public Transport Corporation (1992) 173 CLR 349, at [359], per Mason CJ and Gaudron J; R v Birmingham City Council; Ex Parte Equal Opportunities Commission (1989) 2 WLR 550 at [552], per Lord Goff). However, this does not exclude it as a material factor (Mt Isa Mines (supra), at [102], per Lockhart J and affirmed by Alsop J in Thomson v Orica (supra)). What follows from these cases is that only in some cases will intention and motive be central to the case. It is also or may also be relevant, not necessarily in every case, but it can be relevant to determine whether a person alleged to have discriminated did have that particular motive and intention.
There is debate in the authorities as to whether the terms "on the grounds of" and "because of" could be said to import the time honoured "but for" test. However, in Purvis v New South Wales Department of Education and Training (2003) 202 ALR 133, the High Court at [166] said that the weight of authority was now no longer to accept the "but for" test and that the inquiry should focus on the "real reason" for the action of the alleged discriminator.
Although the Court is able to exercise discretion not to be bound by technicalities in proceedings arising under the HREOC Act (s.46PR) it must be satisfied that the applicant has proved her claim of unlawful discrimination in accordance with the civil standard test (Bringingshaw v Bringingshaw (1938) 60 CLR 336 at [362], per Dixon J; McAllister v SEQ Aboriginal Corp for Legal Services & Anor [2002] FMCA 109 at [39], per Rimmer FM; Beamish v Zheng [2004] FMCA 60 at [14], per Driver FM and s.7C of the Act) and that the applicant’s allegations are corroborated by sufficient evidence. Failing sufficient corroboration the Court may otherwise make adverse findings on her application (The Australian Public Service v The Australian Trade Commission (1988) EOC 92-228 at (77,165), per Einfeld J).

The evidence

Ms Kristina Maria Piper

The applicant relies upon her affidavits filed 25 July 2003 and 5 and

21 June 2005. Before taking up a position with Ray White Adelaide Property Management the applicant had had extensive experience in full time property management. She successfully completed a business diploma in real estate at TAFE. She resigned from her previous employer Ray White Modbury following an approach by a receptionist for Ray White Adelaide with whom she was acquainted. She was subsequently interviewed by Mr Clements as a result of which she was offered a full time position with Ray White Adelaide Property Management with a base salary of $30,000 per annum together with a weekly car allowance of $110 plus incentive bonuses paid on new listings and provided mobile phone expenses. The applicant accepted the offer on 12 June 2000 despite some reservations and commenced employment on 26 June 2000.
The applicant’s job required her to manage a rent roll portfolio of about 150 listed properties. This included management of rent monies, Trust Account, payments, leasing, maintenance, dealing with Tribunal disputes and marketing to landlords. The applicant says that when she commenced work the rent roll was a “mess” but over time she restored it to working order. Initially, she had an assistant who later left due to a shortage of hours. There was also a sales business known as Ray White Adelaide operated from the same premises in which the applicant played no part.
The applicant says that during her employment with the respondent she was often praised for her work.
In about December 2000 the applicant learned that there could potentially be a change in the ownership structure of the rent roll business. She was aware that St Peters Estates and Greg Toyama wanted to cease their respective involvement. Greg Toyama’s involvement ceased in around December 2000. Paul Clements became the sole principal of the sales business and according to the applicant she was told by Paul Clements that he would cease operating as Ray White Adelaide and start trading as Choice Residential and Choice Residential Management. The sales business of Choice Residential commenced operation from about March 2001. The rent roll business did not change its trading name until later in 2001. The reason for this delay was because Paul Clements was seeking finance in order to be able to purchase the rent roll business. The rent roll business was subsequently offered to the applicant and her partner but that offer was declined in about April 2001 and the rent roll business was placed on the open market.
The applicant fell pregnant in November 2000. She told the respondent that she was pregnant in about March or April 2001. At about this time the rent roll business was offered to her and her partner. She formalised confirmation of her pregnancy in writing by way of a letter dated 4 May 2001. She gave evidence that she advised Paul Clements in his capacity as Director of the Choice Property Group. She did this because by this stage the Choice Property Group was operating the sales business and it was her understanding that once the purchase of the rent roll business was resolved it would also operate that business. In her letter of 4 May 2001 the applicant requested maternity leave and there is no suggestion that such request together with the necessary documents was not provided correctly. For completeness the entitlement to maternity leave is found in s.72 of the South Australian Industrial and Employee Relations Act 1994 (SA) and the minimum standard for such leave is set out in Schedule 5 of that Act. The applicant received a response to her letter of 4 May dated 28 May 2001. From that letter the applicant understood that the rent roll business was to be sold on the open market and that there was no guarantee that her employment would be continued by a new owner in the event of sale. The applicant says that she had no reason to discuss the letter with Paul Clements as she understood the position of the rent roll business.

In about early June 2001 the applicant met Tim Clements, the respondent’s son and says she was told that he would cover her period of leave. She was asked to train him before leaving the business. The applicant says she thought Tim was not capable of doing the job because he was inexperienced and lacked enthusiasm and motivation. She recommended that Tim be trained by a professional trainer but Paul Clements was opposed to the idea. The applicant recalls conversations with Tim about her absence from the business and deposes that she used the terms maternity leave in all conversations with him. She says that he would have heard her when advising clients of her imminent departure on maternity leave.
The applicant says that between 28 June and 16 July 2001 there was no clear indication from the respondent which might have led her to believe that her request for maternity leave had not been approved and that at the end of that leave she would not be returning to her position.
The applicant continued to work in the business as Property Manager until 16 July 2001. She says that she continued to refer to the business as Ray White because Paul Clements instructed her to do so and that during the period she found it difficult to have any interaction with him
When the applicant left the business on 16 July 2001, she says that she was not completely sure as to where she stood in relation to her employment and thus she wrote a letter to Paul Clements dated 1 August 2001. In that letter she confirmed that she was on maternity leave from her employment with Choice Residential Management for a period of 52 weeks commencing on 16 July 2001 and that Tim Clements was currently relieving her position. In a letter headed Choice Property Group and dated 13 August 2001 Paul Clements indicated that the applicant’s letter had come as a surprise and advised that Choice Residential Management had not offered her ongoing employment and that her period of employment had ceased on 16 July 2001.
In a letter dated 21 June 2001 the applicant was advised by Paul Clements that Ray White Adelaide Property Management had been formally dissolved and that Metanoia Kojo Pty Ltd trading as Choice Residential Management now operated the rent roll business. The letter also advised the applicant that her position as Property Manager ceased upon the dissolution of Ray White Adelaide Property Management and that any future employment arrangements should be discussed with the new owners. The applicant and Paul Clements spoke about future arrangements and according to the applicant, Mr Clements offered to pay her “off the books”. The applicant was upset and unhappy with this arrangement mainly because of concern that if she injured herself in the course of her employment she would not be entitled to any workers compensation. She says she consulted the Working Women’s Centre for legal advice.
The applicant received two separation certificates at about this time. The first dated 10 July 2001 was from Ray White Adelaide Property Management stating that she was employed from 26 June 2000 to

28 June 2001 and that her employment was terminated due to a shortage of work or redundancy. That certificate however was never provided to the applicant. The second dated 16 July 2001 was from Choice Residential stating that she was employed from 29 June to 16 July 2001 and that that employment was terminated due to end of season or contract.

Paul Douglas Clements

Paul Clements is the Managing Director of Metanoia. He confirmed the circumstances by which the applicant was employed with Ray White Adelaide Property Management. Paul Clements was happy with the applicant’s work performance but said her ability to list properties was a little unsatisfactory.
On 9 May 2000 Paul Clements and Greg Toyama formed the company Choice Property Group Pty Ltd. Mr Clements says that he and Mr Toyama became dissatisfied with the Ray White Franchise Group. And planned to leave and start a business under the name of Choice Residential, selling real estate. It was intended that when they left the Ray White Franchise, the rent roll business being conducted under the name of Ray White Adelaide Property Management would cease and the Choice Property Group Pty Ltd would conduct the rent roll business trading as Choice Residential Management. By late 2000 their intentions were well known. However matters did not proceed as planned. Mr Toyama returned from an overseas trip and withdrew from the plans for the Choice Group in order to take up a position in the United States commencing on 1 January 2001.
From 1 March 2001 after the registration of the sales business Metanoia operated under the business name of Choice Residential. All eight employees who had been employed by Metanoia trading as Ray White Adelaide were offered employment by Choice Residential and all but one accepted.
Paul Clements says that the applicant was fully aware of the change in ownership of the sales business because there was a change in the signage, telephone numbers and stationary. The applicant’s employment however did not change and she remained employed by Metanoia and St Peters trading as Ray White Adelaide Property Management which continued to trade whilst being offered for sale.
In December 2000 when Mr Toyama advised his intention to finalise his involvement with Metanoia, John Cook who was the principal director of St Peters, was advised of Mr Toyama’s decision. St Peters then indicated that it wanted to sell its one third share of the partnership trading as Ray White Adelaide Property Management. The partnership proceeded to have the rent roll business valued by licensed valuers. On 2 March 2001 the Commonwealth Bank made an offer to Paul Clements to finance the purchase of St Peters interest by Metanoia. He refused on the basis that the terms offered were unacceptable. That resulted in a determination by the partnership to sell the whole of the rent roll business. Ultimately the partnership offered to sell the rent roll business to the applicant and her partner who was involved in real estate. Paul Clements hoped that the applicant and her partner would purchase the rent roll business and that a sale could be finalised prior to the end of the annual statutory audit period which was in March. Closure of the rent roll was delayed to enable the applicant and her partner to make a decision but by the end of April 2001 the applicant and her partner had indicated that they did not wish proceed with the purchase. Subsequently the rent roll business was offered for sale on the open market.
Paul Clements gave evidence that prior to receiving the applicant’s letter of 4 May 2001, he was aware of the applicant’s pregnancy, he thought as early as March/April 2001. According to Mr Clements he knew that the applicant was pregnant prior to 4 May 2001 because when considering the purchase of the rent roll business with her partner she had indicated to him that this may enable her to work and care for her child at the same time. The letter of 4 May 2001 was received by Mr Clements after she and her partner made the decision not to purchase the rent roll business. Paul Clements was surprised that the applicant in her letter of 4 May 2001 addressed him as Director of the Choice Property Group as opposed to his capacity as Director of Metanoia which at that time was her employer. He described this as a deliberate act and a sinister attempt to entrap him. At the time Paul Clements wrote the letter of 25 May 2001 the rent roll business was for sale on the open market. There had been no decision by the Clements to purchase it. The letter states that there would be a change in ownership and that the applicant’s employment could not be guaranteed beyond the current ownership.
Following the letter of 25 May, Paul Clements says that he and the applicant had a conversation in which he advised her that he was purchasing or had purchased the rent roll business. He says that he did not recall whether it was in that same conversation or whether it was at a later time but he says that prior to the purchase there was a conversation whereby he informed the applicant that he was going to bring Tim into the rent roll business and asked if she would agree to train him.
Paul Clements and his wife, Carol decided to purchase the one third share previously owned by St Peters in about June 2001. Mr Clements says that there were both domestic and commercial reasons which led them to purchase the rent roll business. He felt that it would complement the sales business (i.e. by providing referrals for vendors who were selling their rental properties) and enable them to provide employment for Tim Clements who had been unemployed for about two years and suffered depression. Paul Clements saw the purchase of the rent roll business as a good opportunity to get Tim involved in the overall family business as the property manager. He wanted to get Tim back into the workforce and was concerned that his long period of unemployment had affected his motivation. Mr Clements says that it was difficult to persuade Tim but after some persistence he agreed to take up the position of property manager. Mr Clements says that had Tim not agreed he would not have proceeded with the purchase of the business.
Paul Clements denies the assertion of the applicant that Tim was not up to the job of property manager. However, he accepted that Tim had no previous experience in property management and that his involvement in the business constituted a risk. Tim Clements commenced employment with Ray White Adelaide Property Management on 18 June 2001 on an unpaid basis and was trained for two weeks by the applicant.
Paul Clements also denies he advised the applicant that Tim would be covering her position whilst she was on maternity leave. A lot of time was spent on this topic in cross-examination. Mr Blewett, Counsel for the applicant asked Mr Clements to state exactly what was said to the applicant during this conversation. He says that he told the applicant that she was to train Tim and said that the applicant well knew that her employment was to cease when the rent roll business was sold.
Paul Clements says that he assumed from earlier correspondence with the applicant that she understood the consequences for her position when the old partnership came to an end. He says that sometime before the letter of 28 June he told the applicant verbally that he was purchasing the rent roll business and says the applicant appeared happy. However he did not tell the applicant specifically that the effect of the decision to purchase the rent roll business would be the cessation of her employment. He says she would have known that because of her agreement to train Tim. Paul Clements however says that his letter to the applicant of 25 May 2001 clearly stated that her employment was to cease once the rent roll business was sold and that at no time did he indicate or convey to her that her employment would continue with the new entity.
On 21 June 2001 Metanoia agreed to purchase the St Peters one third interest in the rent roll business. The agreement dissolved the partnership between Metanoia and St Peters. On 28 June 2001 Paul Clements wrote to the applicant advising her that the partnership between Metanoia and St Peters had been dissolved by agreement dated 21 June 2001 with effect on 2 July 2001. Again, Mr Clements was cross-examined at great length in relation to what the applicant had been told in relation to her employment. Paul Clements could not recall whether there was a particular conversation but he says that the reality was that Metanoia’s decision to purchase the business was based on a desire to bring Tim in as property manager. He says that at the time of this letter he had had conversations with the applicant in relation to Tim’s employment as the full time property manager and that when he asked her if she would be prepared to train him he indicated to her that her employment would cease once this was done.
Paul Clements says that it was agreed between him and the applicant that for the period 28 June 2001 to 16 July 2001 she would be paid a gross fee for her work rather than a wage. Mr Clements denies that the applicant appeared angry or upset about this arrangement and says that the arrangement was not an “off the books” arrangement. Mr Clements denies that he gave specific instructions to the applicant that she continue to refer to the business as Ray White Adelaide for this period. He says that such instructions would have been inconsistent with letters sent to landlords and tenants advising them that the business name had been changed to Choice Residential Management.
Paul Clements denies the applicant’s claim that from 29 June to 16 July 2001 the applicant was uncomfortable, hurt, upset, stressed and anxious at work and that she avoided contact with him.
Paul Clements gave evidence in relation to Metanoia’s decision not to employ the applicant when the partnership ceased. His evidence was that it had nothing to do with her pregnancy but was part of a decision to set up a family business. He was asked whether or not he considered the applicant in the decision to purchase the rent roll. He indicated that he did and conceded that if she had not advised that she was leaving the business, then he would not have proceeded with the purchase of the rent roll which would have been sold on the open market. He emphasised that the critical issue in the respondent’s decision to purchase the rent roll was that he and his wife wanted to bring Tim into the business. The applicant’s pregnancy had nothing to do with the ultimate decision reached by Mr Clements and his wife to purchase the rent roll business. They simply did not think about her as they believed on the basis of what they had been told by the applicant that she was leaving in any event.
Paul Clements also gave evidence at page 86 of the Transcript that in early 2001 Metanoia contemplated purchasing the rent roll business at which time there was no suggestion that Tim would be brought into the business.

Carol Ann Clements

Carol Clements is the wife of Paul Clements and mother of Tim Clements. She relies on her affidavit filed 15 June 2005. Mrs Clements works in the business assisting her husband with general administrative and office duties. Her evidence confirms the applicant’s employment with Ray White Adelaide Property Management.
Mrs Clements described the applicant’s relationship with herself and her husband as a normal working relationship she had regular daily contact with the applicant. She found the applicant to be capable and intelligent. To her knowledge there was nothing unsatisfactory about her performance.
Mrs Clements says that she learned of the applicant’s pregnancy at the time when the rent roll business was offered to the applicant and her partner. She says that once it was decided that the applicant and her partner were not going to purchase the rent roll business, Mr and Mrs Clements discussed the possibility of purchasing it themselves as they considered that it would complement the sales business. However to make the purchase they would have to use their own funds and as a result, wanted to make it a family business and bring their son Tim into it. Mrs Clements says that both she and her husband had discussions with their son about coming into the business and admits that they had some reservations because he did not have any relevant experience.
Mrs Clements confirmed her husband’s evidence that they had been thinking about purchasing the rent roll business from at least October 2000 without Tim’s involvement. At pages 141-142 of the transcript it was said:
Finally it must have been in your minds at least from October 2000 that if you were able to do it, it would be a great thing to be able to have the two sides of the Choice Property Group business working in tandem? Every real estate company, if they have the possibility of having a property management as well as their sales, yes, it is.
Mrs Clements says that the applicant did not say that her departure was to take maternity leave and that she would be returning to the business. She says that on the applicant’s last day a farewell function had been organised in the boardroom and that there was nothing to suggest that she was simply going on maternity leave. She says that there was nothing to suggest to her that the applicant was unhappy or uncomfortable about working for Choice Property Management for the last two weeks. She says further that she never heard the applicant tell clients that she was going on maternity leave and that she never had a conversation with the applicant about her placing her name on child care centre waiting lists.
Mrs Clements emphasised that once it was decided that family money would be used to purchase the rent roll business it would only be completed on the basis that Tim came in as property manager. I found her evidence both clear and credible.

Timothy Paul Clements

Timothy Clements to whom for the sake of brevity I shall refer to as Tim is the son of Mr Paul and Mrs Carol Clements. He relies on his affidavit filed 15 June 2005. He was born on 22 January 1975 and since 16 July 2001 has been employed in his parent’s business as property manager.
Tim recalls being trained by the applicant in the two weeks preceding her departure from the rent roll business in July 2001. He says that he understood that he was replacing her permanently. Prior to his employment with Metanoia he had been unemployed for about two years, and suffered from depression and took prescribed medication. Shortly before his training with the applicant he had been approached by Paul Clements about working in the family business as a property manager. He understood that his father wanted him to come and work so as to give him employment experience and to develop a career. He says that he understood from those conversations that he would be working as the property manager replacing the applicant and that this was a permanent arrangement. He says that there was nothing to suggest that the applicant was not performing well in her job but his father wanted to give him the opportunity to get experience and become involved in the family business.
Tim described the applicant as confident in her job and felt that they had a good relationship during his training. He denies that the applicant suggested to him that he receive some professional training or that he lacked motivation and enthusiasm. He says that during the training period the applicant appeared happy. He denies that the applicant in conversation with him or with clients said that she was going on maternity leave or gave any indication that she was returning to work. He admitted however that on a couple of occasions he told clients that the applicant was on maternity leave because he feared that the client may have left because of his inexperience.

Reasoning

In determining this matter the critical issue is whether on the balance of probabilities, the applicant was treated less favourably because of her pregnancy and whether the alleged act of discrimination and her pregnancy are related so as to establish a causal connection.
The following timetable is relevant:
a)May 2000 – Paul Clements and Greg Toyama register Choice Property Group Pty Ltd.
b)June 2000 – applicant commences work with Ray White Adelaide Property Management. This is the rental property management side of a real estate business co-ordinated by the applicant in partnership with the sales side of the business trading as Ray White Adelaide.
c)November 2000 – applicant realises she is pregnant.
d)December 2000 – Mr Toyama advises of his intention to withdraw from Metanoia and Mr Cook of St Peters decided to sell his one-third share of the rent roll business.
e)February 2001 – Choice Residential Management registered as a business name.
f)February 2001 – Rent Roll business valued.
g)March 2001 – Ray White Adelaide ceases to trade and the sales side of Metanoia’s business begins to trade as Choice Residential.
h)March 2001 – Rent roll business offered to applicant and her partner.
i)March/April 2001 - applicant advises Mr and Mrs Clements that she is pregnant.
j)4 May 2001 – applicant gives notice to Mr Clements of her pregnancy and requests maternity leave to commence on 16 July 2001.
k)25 May 2001 – Mr Clements responds and advises employment not guaranteed beyond current ownership.
l)28 June 2001 – Mr Clements writes to applicant and advises her employment with Ray White Adelaide Property Management had ceased due to sale of the business and she would need to make any future arrangements with the new owners.
m)28 June 2001 – Mr Clements and the applicant agree she will be employed by Choice Residential Management as a contractor until 16 July 2001.
n)16 July 2001 – applicant leaves the employment of Choice Residential.
o)1 August 2001 – applicant writes to the Mr Clements stating she is on maternity leave for 52 weeks and asking for confirmation her position as property manager will be held open for her return.
p)13 August 2001 – Mr Clements writes to advise the applicant she is not and never was an employee of Choice Residential Management.

An examination of the timetable makes it quite clear that the applicant was perfectly well aware of the likely changes in the ownership of the business either before or about the time she advised Paul Clements she was pregnant. In March 2001 when she told Mr and Mrs Clements she was pregnant, the sales business was being operated by the new owners of the business and she and her partner were offered the rent roll business. It is clear from the evidence that when the Clements’ were considering the purchase of the rent roll business on previous occasions but did not proceed the position of the applicant was not a relevant factor and the decision turned purely on commercial considerations.
I find on the evidence that Mr and Mrs Clements whilst maintaining an interest in the possibility of purchasing the rent roll did not decide to purchase it until around 21 June 2001 and that the decision to purchase was based on two major factors. Firstly, the fact that the price had fallen and secondly the desire to employ their son, Tim in the family business. I note also that the funding arrangements had changed. Thus the decision was based on proper commercial and family considerations and had nothing to do with the applicant regardless of whether she was pregnant. I note that Mr Clements said on cross-examination that they would not have bought the business if the applicant had not indicated she was leaving but in the end nothing turned on this point. Nor is it relevant that Paul and Carol Clements may at some earlier time have considered buying the business without Tim’s involvement.
The applicant was at best peripheral to the decision by the Clements to purchase the business. At the time of the decision to purchase, they knew her employment would cease with any change in ownership of the business as did the applicant. This is in fact what happened. Further, the applicant had sought and received legal advice from the Working Women’s Centre as to her position following the purchase of the rent roll business by Mr and Mrs Clements.
It is true that at least from March 2001 Mr and Mrs Clements were aware of her pregnancy but there is no evidence that it affected their subsequent actions or resulted in the applicant being treated differently or less favourably by reason of her pregnancy. The consequences of a change in ownership of the rent roll business would have been exactly the same for any other employee.
I find the applicant’s letter of 1 August 2001 inexplicable given the previous correspondence, her conversations with Mr Clements and the fact that after receiving independent legal advice from the Working Women’s Centre she accepted short term employment as a contractor with Choice Residential Management after it had purchased the rent roll business and her employment with the previous owner had ceased. At best, she failed to understand the legal effect of the change in ownership of the business which had occurred, despite the advice she had sought and received from the Working Women’s Centre.
I am therefore satisfied on the evidence that the applicant’s pregnancy was not a factor in the decision of Mr and Mrs Clements to purchase the rent roll business nor did it affect in any way the status of her employment either before or after the business was sold.
Accordingly, the applicant cannot succeed in her claim and the application is dismissed.

I certify that the preceding seventy-eight (78) paragraphs are a true copy of the reasons for judgment of Pascoe CFM

Legal Associate: Peter Smith

Date: 22 December 2005