The State of Western Australia v Hartmann-Nieto
[2014] WADC 70
•22 MAY 2014
| JURISDICTION | : | DISTRICT COURT OF WESTERN AUSTRALIA IN CIVIL |
| LOCATION | : PERTH | ||
| CITATION |
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| CORAM | : STEVENSON DCJ | ||
| HEARD |
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| DELIVERED |
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| FILE NO/S |
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| BETWEEN |
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AND
LIZA HARTMANN-NIETO
Defendant
Catchwords:
Contract of employment - Repudiation by employee - Plaintiff continued to pay salary for three years - Mistake of fact - Restitution - Unjust enrichment - Total failure of consideration - Termination of employment - No change of position by defendant - Unrepresented litigant - Duty of court to self-represented litigant and other party
Legislation:
Cleaners and Caretakers (Government) Award 1975
Government Miscellaneous (General) Agreement 2005
Property Law Act 1969
State Records Act 2000
[2014] WADC 70
Result:
Judgment for the plaintiff for $79,290.49
Defendant's counterclaim dismissed
Representation:
Counsel:
| Plaintiff | : | Ms P A Martino |
| Defendant | : | In person |
Solicitors:
| Plaintiff | : | Paula Martino |
| Defendant | : | Not applicable |
Case(s) referred to in judgment(s):
Baltic Shipping Co v Dillon (1993) 176 CLR 344
Clark v New South Wales (No 2) [2006] NSWSC 914
Commercial Bank of Australia v Younis [1979] 1 NSWLR 444
David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR
353
Glad Cleaning Service Pty Ltd v Vukelic [2010] NSWSC 422
Hamod v State of New South Wales [2011] NSWCA 375
Kenny v Ritter [2009] SASC 139
Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221
R v Gidley (1984) 3 NSWLR 168
Salib v Gakas; Newport Pacific Pty Ltd v Salib [2010] NSWSC 505
SZRUR v Minister for Immigration and Border Protection (2013) 305 ALR 557
| STEVENSON DCJ | [2014] WADC 70 |
STEVENSON DCJ:
Introduction
The defendant (Dr Hartmann) was employed by the Department of Education as a school cleaner. The school where she worked, City Beach High School, was closed in December 2005. The defendant was advised she would be transferred to East Claremont Primary School, and as instructed she reported to the school for duty.
During the period 24 February 2006 to 5 March 2009 (3 years 12 days) the defendant did not perform any work duties. She did not report to her school, nor did she report to any other workplace of the plaintiff. During this time she was absent from work without authorisation or justification. Her non-attendance at work went unnoticed by the plaintiff – she was 'lost in the system'.
Due to an administrative error by the plaintiff's payroll staff and its accounting systems, the plaintiff continued to pay into the defendant's bank account, on a fortnightly basis over the three years, the defendant's full salary as a cleaner.
The plaintiff discovered its mistake on 25 February 2009 when the financial officer responsible for the closed school obtained a payroll certification report which indicated the defendant was being paid as a cleaner at the site. The plaintiff's officer (Ms Allanson) at the time had no knowledge of the defendant.
After preliminary inquiries were made of the defendant (who at the time was in El Salvador), the plaintiff stopped payment of the defendant's salary. On 24 September 2009, after proper inquiry and due process was afforded to the defendant, the plaintiff formally terminated the defendant's employment as a cleaner.
The total amount paid by the plaintiff to the defendant over the three years, and which is sought to be recovered by this action, is $79,290.49.
The plaintiff seeks an order for the return of the $79,290.49 on the basis the money was paid under a mistake of fact or because the consideration for the payment completely failed, and says that as a result the defendant was unjustly enriched at the cost and expense of the plaintiff.
| 8 | The defendant is self-represented. In her defence and counterclaim she contends in good faith that the payments she received constitute her |
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salary which she says she was entitled to be paid during the relevant period. The defendant says the money was not paid under a mistake and she was entitled to be paid until she was relocated which, she says, did not occur due to the negligence of the plaintiff.
Further, the defendant asserts she was always available and willing to attend to perform her work duties and that she was expecting at all material times to be contacted by the plaintiff for this purpose. Although at the time the defendant indicated that she was not prepared to work as a cleaner, she pleads that, if she had been made aware of the findings of Dr Silbert about her illness, then she would have been prepared to return to work on the basis outlined by him. She contends the principle of unjust enrichment does not apply.
By counterclaim, the defendant seeks a declaration that she was entitled to receive the payment as her salary for the relevant period and, in addition, she seeks compensation for cessation of her salary for the period from 5 March 2009 until 24 September 2009 when her employment was terminated.
The defendant also seeks 'compensation for damages' for breach of a fundamental duty of care that she alleges is owed to her by the plaintiff 'whether in common law; and, statutes' and relies on a decision in an action she commenced in the Western Australian Industrial Relations Commission. The defendant also seeks compensation for 'suffering' on the basis that she alleges she suffered 'a latent injury for three years as the diagnostic [sic] of her illness was denied by the plaintiff'. The defendant pleads:
One of the fundamental human rights of a human being is the right to know about her health; and, therefore to receive appropriate medical treatment.
Finally, in the pleadings the defendant seeks damages for loss of her motor vehicle which was destroyed in a motor vehicle accident she suffered while driving home after attending hospital for treatment for a rash. She says the rash was caused by her employment with the plaintiff.
At trial the defendant abandoned some of her claims against the plaintiff but maintains she is entitled to keep 'her salary', and, that she is entitled to be paid for the period up until the formal termination of her employment.
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| Plaintiff's submissions |
Ms Allanson, an employee of the plaintiff, discovered the administrative error which resulted in the defendant being paid her salary as a cleaner for three years in February 2009, when she obtained a pay certification report (exhibit 1.26). In short, the defendant's details had become lost on a 'closed site', in reference to the plaintiff's records of its accounting systems. As a result of this mistake the plaintiff did not follow up with the defendant as to her position or employment status in February 2006. Equally, the defendant did not formally contact the plaintiff in the three-year period to inform it of her position.
To the extent that the defendant had a medical issue in early 2006, the medical evidence is inconclusive as to the full nature or cause of the skin condition. It has not been established whether it was an injury arising out of work or elsewhere. In any event, it is common ground that the defendant did not 'close out' the medical inquiries into her condition and by mid-2006 she was not receiving any further medical treatment for her alleged condition.
The plaintiff says it is entitled to recover the salary paid to the defendant (the overpayment) during the three-year period on the basis of unjust enrichment, mistake of fact or total failure of consideration. Each payslip the defendant received during the overpayment period referred to her place of employment as City Beach High School. The plaintiff says the defendant knew she had been relocated to East Claremont Primary School by reason of the closure of City Beach High School. The plaintiff does not accept the defendant made any proper or genuine attempt to inform it of its error. The plaintiff properly observes the defendant has not produced evidence of letters and emails which she alleges she sent to the plaintiff during the three-year period.
The plaintiff's position is that there is insufficient medical evidence for the defendant to be entitled to sick leave and, in any event, she had used her sick leave entitlements to the extent she was contractually entitled to them. The overpayment period relied upon by the plaintiff gave the defendant her maximum entitlement in this regard.
The plaintiff says there was no application for worker's compensation. This is common ground. Therefore, the defendant is not entitled to receive her salary on the basis of a claim for worker's compensation entitlements.
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The plaintiff says the defendant was not on approved leave. This is accepted by the defendant.
The plaintiff says it ultimately terminated the defendant's employment as a cleaner in 2009, when she made it plain that she was not prepared to return to work as a cleaner. The plaintiff contends that, by reason of the mistake in its administrative accounting procedures, the defendant was paid her salary for the overpayment period when she had no lawful entitlement to receive it. In the circumstances, the plaintiff says it is entitled to judgment for the overpayment.
Defendant's submissions
The defendant appeared in person and was assisted in the presentation of her defence and her contentions appropriately by Ms Martino as an officer of the court. She assisted the defendant to find documents and parts of her submissions relied upon.
The defendant says she is entitled to keep the overpayment because it is 'my salary'. She says 'they didn't allow me, give me a place to work'. She does not accept that there was 'an error’ but rather asserts that the mistake was an 'omission' by the plaintiff.
The defendant also says her relocation by Mr Ware (exhibit 1.5, letter dated 16 January 2006) was temporary and not permanent. Therefore, she maintains she was 'abandoned' by the plaintiff and not required to work specifically at any location. She says she has 'done nothing wrong'. Her position is she was not relocated after mid-July 2006 and 'was not allowed to see the proper person or access to forms'. She says, having been precluded access to her relocation officer, the fault lies with the plaintiff.
The defendant says she sought legal advice and it would appear the possibility that her salary was being paid by way of worker's compensation was raised, although no action was taken to confirm this was in fact the position. She did not make a claim for worker's compensation and had no reason to think she was being paid her salary as worker's compensation especially when, to her knowledge, she admits she was fit for work. The medical certificates produced do not indicate the reason for any alleged unfitness for work. Without more information, including evidence from the certifying general practitioner, it is not possible to know the reason for the issue of the certificates; or for the plaintiff to test if the defendant was genuinely unable to return to work, and if so, why.
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The defendant says she was 'not supported by the plaintiff' and was 'left abandoned'. She maintains she was wrongfully dismissed in 2009 and says 'there was no mistake'.
Notwithstanding how the defendant says she felt in retrospect at the time she was receiving the overpayments, she made no proper attempt to inform the plaintiff of her true position and certainly was not ready, willing and able to return to work as a cleaner for two four-month periods when she was in El Salvador.
The defendant maintains that as a 'human being' her position 'should have been taken into account' and contends 'they didn't want me there'.
The defendant accepts that after six months she was not unwell, but then adopts the position she was entitled to be employed in a different work category. This is rejected by the plaintiff on the basis the defendant was employed as a cleaner and that she had no contractual entitlement to, in effect, require the plaintiff to employ her in a different capacity.
Plaintiff's witnesses
| (a) | Ms Nadia Reece |
The plaintiff's first witness was Ms Nadia Reece, who at the relevant time was employed as a senior labour relations consultant for the Department of Education. In this role, her function was primarily to give managers and supervisors advice and information on employee conditions pursuant to the relevant agreement or award of the employee.
According to Ms Reece, the Department of Education is the largest employing authority in Western Australia, employing over 50,000 employees in 800 schools or educational centres throughout the State.
She described the recordkeeping systems of the plaintiff. The plaintiff has two primary systems for recording information regarding its employees. The first is known as HRMIS (Human Resource Management Information System). It records what and when employees are paid, and stores information on their leave, sick leave, allowances, and entitlements. It is concerned with payments to employees.
| 32 | The second is TRIMS (Total Records Information Management System), which records electronically all documents to and received from |
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employees pursuant to the plaintiff's obligations under the State Records
Act 2000.
Ms Reece was contacted by Ms Jenny Allanson in February 2009, when she uncovered the defendant's position as a result of obtaining a current employee certification report for the former City Beach High School site.
Ms Reece identified the defendant's employee details form dated 16 May 2003 as part of the plaintiff's business records. According to Ms Reece, the defendant was employed by the plaintiff as a cleaner and her terms and conditions of employment were governed by the Cleaners and Caretakers (Government) Award 1975 (the Award).
Clause 2.1.3 of the Award relevantly provides:
The employer shall be under no obligation to pay for any day not worked upon which the employee is required to present themselves for duty, except where such absence from work is on account of holidays or leave to which the employee is entitled to under this or any other relevant award.
Clause 6.2 is concerned with 'sick leave'. It defines the sick leave entitlements of employees and provides:
An application for sick leave exceeding two consecutive days shall be supported by evidence that would satisfy a reasonable person of the entitlement. (cl 6.2.3(a))
The employee is also required 'as soon as reasonably practicable' to 'notify the employer of their inability to attend for work due to illness or injury, and the estimated duration of the absence' (cl 6.2.3(c)). Under the Award, the defendant is entitled to 10 full days' sick leave entitlement per year as a full-time employee.
Annual leave is dealt with under cl 6.1. It provides each employee is entitled to four weeks leave for each year of continuous service. This entitlement accrues pro rata on a weekly basis and is cumulative.
According to Ms Reece, the defendant's current entitlements are recorded on the bottom of her payslip based on the information in the HRMIS system. It is common ground the defendant received her payslips in the usual way throughout the course of the period in question.
By reference to the plaintiff's business records, the following evidence was adduced through Ms Reece.
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By letter dated 16 January 2006, Mr Peter Ware, District Operations Support Officer (South) of the West Coast Education District Office of the Department of Education and Training, wrote to the defendant directing her to report to East Claremont Primary School from the commencement of the 2006 school year. The letter informed the defendant that she would be carrying out the duties of a school cleaner while located at East Claremont Primary School. Mr Ware indicated that, although he was currently on leave, he would be available to discuss any issues from 23 January 2006.
It appears that on 25 January 2006, the defendant telephoned Mr Ware with respect to her work position. By letter dated 3 February 2006, Mr Ware said:
As you have not provided me with any medical evidence that cleaning duties are unable to be carried out by you, you will be required to undertake these duties at a Department of Education site. You should report to Ms Tamara Kochan at City Beach High School on Monday, 6 February 2006. You will be carrying out the duties of a school cleaner while you are located at City Beach High.
On 7 February 2006, the defendant saw Dr Masel, a dermatologist, on referral by Dr M De Galvez 'for an opinion regarding her itch'. By letter of the same date, Dr Masel said it was his opinion that the defendant had 'very mild atopic dermatitis and some irritant dermatitis on the hands related to her work as a cleaner'.
In a subsequent medical report dated 13 March 2006, Dr Joel Silbert, a consultant occupational physician, confirmed the defendant's clinical symptoms as consistent with a contact irritant dermatitis. However, Dr Silbert said it 'may be due to exposure to a variety of, as yet unidentified, chemicals either in the workplace or at home'.
Dr Silbert noted that the defendant also presented with a history consistent with a dust mite allergy and that further investigation was outstanding with Dr Bandouvakis. In his opinion, the defendant would benefit from a comprehensive allergy assessment by Dr Bandouvakis.
Further, as to the defendant's fitness for work, Dr Silbert's only concern was that she should not be exposed to chemicals. Importantly, Dr Silbert said the defendant 'represents an acceptable risk to undertake all manner of activities on a full-time basis, with the avoidance of chemical exposures at present'.
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In his report, Dr Silbert noted the defendant reported a deterioration of her rash after a change in her work location from City Beach High School to East Claremont Primary School that she described as 'becoming more florid and increased itchiness'. He noted the defendant reported a significant deterioration when she assisted her husband to clean their old home. She was unsure whether the aggravated symptoms were related to dust mite or other exposures.
Dr Silbert's opinion, which is later in time, is consistent with the opinion of Dr Masel who in his report of 7 February 2006 confirmed his advice to the defendant that 'she use white cotton gloves under non-latex gloves to protect her hands from irritant dermatitis'. Critically, and importantly, neither specialist considered the defendant was unfit for work.
In her letter to Mr Ware dated 8 February 2006, the defendant advised that she had seen Dr Masel the previous day, 'but because I have been taking antihistamines he was not able to see my skin reaction, but asked me to return to see him after a month'. She also noted in the letter that her general practitioner had told her that she needed to
….. identify the allergen that is creating on me this condition and I had a test done by an allergist last year. His report shows that I am becoming allergic to many things. I suffered this condition in my childhood, but it disappeared when I reached adulthood.
Interestingly, the defendant copied the letter to Mr Gary Bryant, the principal of East Claremont Primary School at the time. The defendant wrote a similar letter to Mr Bryant, also dated 8 February 2006, and copied it to Mr Ware.
By letter dated 13 February 2006 the defendant wrote to Mr Bryant
as follows:
Dear Mr. Bryant
Re: Permission
Please accept my apologies because I have not being [sic] able to attend to work regularly, but my health condition does not allow me to perform my job properly. As soon I can have the evidence from my GP and specialist, I will submit that to you.
I am sending with Alex a medical certificate for Tuesday 7th and
Wednesday 8th February current year.
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For all of the above, I need to ask you for one week personal leave from work hoping that by that time I will be in a better position to decide what I am going to do in regards to my cleaning job with the Department.
Thanks for your time and understanding of my current situation.
In cross-examination the defendant confirmed she wrote this letter after she had met and spoken to Ms Kochan at City Beach High School about a week earlier. She said knew she had to obtain permission from the plaintiff in order to access her entitlements under the Award. The letter itself does not disclose details of any actual inability to work but rather a choice not to go to work. It admits to the fact that the defendant was, at the time, considering whether she would return to work, bearing in mind that her work position had changed back to City Beach High School, her old school, which was no longer a functioning school.
In 2009, three years later, the defendant provided the plaintiff with a copy of a medical report from Dr De Galvez dated 14 February 2006 indicating that she was receiving treatment from a dermatologist and 'could you please take this into consideration for her placement'. The report does not say that the defendant was unfit for work by reason of her irritant dermatitis. The report suggests that the defendant was hoping for a new position with the plaintiff as a result of the closure of her school – which, in subsequent communications, she pressed for.
The report of Dr De Galvez also does not refer to a purported medical certificate dated 14 February 2006 from Dr De Galvez which seeks to certify that the defendant is 'unable to work' or 'will be unable to work' from 13 February 2006 to 17 February 2006. The medical certificate does not state any reason for the opinion expressed. It is not consistent with previous or subsequent medical reports concerning the defendant with respect to her ability to undertake her work duties.
Although not referred to in evidence during the trial, exhibit 1 also contains a medical report from Dr Kiran Ramegowda, a junior medical officer in the emergency department of Sir Charles Gairdner Hospital, dated 11 March 2006 which records:
This lady has developed a rash which is probably chemical induced while working at home. The rash is now resolving and she needs to stay away from work for a couple of days at least. (emphasis added)
| 56 | Similarly, exhibit 1 contains an emergency medicine summary from Sir Charles Gairdner Hospital which confirms the defendant presented on 11 March 2006 when the provisional diagnosis was possibly 'adverse drug |
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reaction rash over body'. On 12 April 2006, the defendant attended Dr John Bandouvakis evidenced by part of an allergen table (exhibit 1.20).
The defendant also produced two further purported medical certificates issued by Dr De Galvez, dated 29 April 2006 and 16 May 2006. The first indicates that the defendant is 'unable to attend school' for the period 18 March 2006 to 30 June 2006. The second indicates the defendant 'will be unable to attend work/attend school' for the period 16 May 2006 to 31 July 2006. The medical certificates are suspect.
The defendant was put on notice at the commencement of the trial that she should give consideration to calling Dr De Galvez to give evidence if she wanted to rely upon the medical certificates. The defendant did not call Dr De Galvez, even though the trial was adjourned part-heard to enable her to prepare her case and to arrange her witnesses. It is also noteworthy that it is common ground the defendant was overseas in El Salvador, her country of birth, for the period 27 May 2006 to 27 September 2006. The two medical certificates do not state any reason why the defendant is unable to attend her workplace.
It appears on her return to Western Australia in September 2006, the defendant complained to the office of Health Review because Dr Silbert had informed her by letter dated 13 November 2006 that he was unable to provide her with a copy of his medical report, because it had been prepared for the Department of Education and Training.
Dr Silbert suggested to the defendant that, to obtain a copy of the report, she would need to contact Mr Gary Bryant at the Department of Education and Training or obtain a signed consent by the plaintiff for the release of the report to her. However, she did not contact Mr Bryant. There is no direct evidence from the defendant in this regard, possibly consistent with her not wanting to upset the status quo, which was the ongoing payment of her salary by the plaintiff into her bank account whilst she was not performing any work duties. This is not an unreasonable inference in view of the defendant's own concession that she did not claim to be medically unfit from 30 July 2006 onwards. Accordingly, I make a finding to this effect.
As a result of her involvement in the matter through Ms Allanson, Ms Reece, by email dated 3 June 2009, wrote to the Department of Education, Personnel and Payroll West Coast, to inform it of the defendant's position. The communication was also copied to Standards
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and Integrity, a section of the Department of Education that deals with allegations of misconduct and investigations. Relevantly, the email provided:
Further to our phone conversation today and as requested please see below further information regarding Ms Hartmann:
Ms Hartmann was employed as a Cleaner at City Beach Senior High School, her records should have been transferred to East Claremont Primary School when City Beach High School closed down at the end of 205. Although she physically commenced work for a short period of time (unknown as to the length of her commencement) at East Claremont in 2006 she soon became ill. I have a copy of a medical certificate dated 14 Feb 2006 which states Ms Hartmann is suffering from irritant dermatitis but does not declare her unfit for work.
Ms Hartmann remained on the City Beach Senior High School HRMIS records and continued to be paid until Jenny Allanson ceased her pay for ppe 5/3/09.
I have spoken to John Serich and he agreed to Ms Hartmann utilising her sick leave entitlements as at the beginning of February 2006 until her sick leave credits are exhausted. A debit note should then be raised from the period her sick leave credits are exhausted in 2006 until ppe 19/2/09, which should equal approximately 3 years of pay.
Ms Hartmann is refusing to return to work as a Cleaner and Labour Relations are in the process of reviewing her employment within the Department.
Standards and Integrity, Ms Debbie Pelham, are also involved in this case. Can you please notify me of the gross and net amount of her overpayment.
The information contained in the email was obtained by Ms Reece from the records of the plaintiff and her communications with Ms Allanson. In summary, Ms Reece recommended that the defendant be allowed to use any sick leave entitlements she had at the time owing to her and any other entitlements due to her.
Ms Reece gave evidence that she had been in contact with the defendant by email and telephone, and had asked her to meet to see if she could get the defendant to return to work as a cleaner. Ms Reece was of the opinion that the defendant was refusing to return to work as a cleaner, which is consistent with the position adopted by the defendant at the time, namely that she wanted to be relocated to a different position. Ms Reece became involved in the defendant's matter because it went beyond the
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scope of the duty of Ms Allanson and had become a labour relations
matter.
As mentioned, Ms Allanson obtained a payroll certification report for City Beach High School on 25 February 2009. As a result, she became aware of the existence of the defendant on the plaintiff's records and, importantly, that she was being paid as a cleaner at a school that had been closed since the end of the 2005 school year. Ms Allanson had assumed interim responsibility for the former City Beach High School site, but was not aware of who the defendant was and had no knowledge of her working at the school.
The attempts by Ms Allanson to identify the defendant, and to understand her position, are summarised in her letter to the defendant dated 9 April 2009. The letter provides:
CEASATION OF PAY – Cleaner ID 2061039/1
Your salary was ceased from pay period ending 5 March 2009 due to your absence from work with no sick leave applications and no outstanding workers compensation claims.
I contacted your home phone on 27 February 2009 and spoke to your husband Alex who informed me that you were sick.
You then contacted me on 30 March 2009 requesting reinstatement of your salary and you were advised you [sic] that I needed to investigate your circumstances further before I am able to action this.
I tried calling you on your mobile to discuss this matter further but this number is disconnected. I then left messages on your home number to contact me but I still have not heard from you.
Can I now please ask you to give me a call on 9406 7376 and let me know whether you are now able to return to work as a cleaner so that I can make the necessary arrangements to reinstate your salary.
I look forward to hearing from you with this information.
At the time, the defendant's husband did not inform Ms Allanson that the defendant had been in El Salvador from 1 February 2009 (admitted by the defendant in cross-examination) and was still there. Instead, he maintained the defendant was 'sick'. This was not true and a continuation of the deception. The defendant was in fact in El Salvador at the time. In this regard, in the defendant's written closing submissions, she asserted her second trip to El Salvador in 2009 was made by her 'with
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the only purpose to find employment'. On her own admission, she was
not 'sick'.
The defendant's response appears to have been sent by her by email to her husband on 3 May 2009 (exhibit 1.29) and then provided in the form of a letter to Ms Allanson by the defendant's husband on 4 May 2009 (exhibit 1.30).
In defence of her position the defendant informed the plaintiff:
I have been waiting to return to work in an area other that [sic] cleaning as I am allergic to dust and chemicals. I must say that after City Beach High School's closure, I once asked the relocation officer of that time Mr Peter Ware whether I could be given the opportunity to work in an area other than cleaning and I was told that can be possible after a three months probation period, which I don't mind.
I have skills other than cleaning and wish to be given the opportunity to work in an administrative or clerical position with the Department. I have completed an Office and Secretarial Studies Course, a Certificate IV in Tourism in Australia plus a Law Degree from an overseas recognized University in Australia. But please be sure that I am not asking you for a job in the Legal filed within the Department, but an administrative or clerical position only. I just mentioned my Law Degree to be granted your confidence in my capacity to work in the Administrative or clerical field in Australia.
Furthermore, as my salary was ceased from pay period ending 5 March 2009, I am hereby taking this opportunity to ask you to reinstate my salary while I am waiting to be relocated into a new position. I have done nothing wrong according to the best of my knowledge and belief to deserve a cesation [sic] of pay and I am willing to return to work at your call.
If you need some further information, please do not hesitate to call my phone home 9 344 5202, to my husband's mobile phone 0420 783 431 or you can always write to me at our PO Box in South Perth.
Thank you for your time and understanding of my situation.
Unwittingly, in breach of the Award, the defendant indicated to the plaintiff that she was in effect not prepared to return to work as a cleaner but was prepared to do so in an administrative or clerical field.
Ms Allanson replied by letter dated 12 May 2009 as follows:
Thank you for your letter in response to my letter dated 9 April 2009 handed to me at our offices in Joondalup by your husband Alex Nieto.
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I acknowledge this letter together with a document from the South Street
Medical Centre dated 14 February 2006.I would like to point out that the document from South Street Medical Centre is not a medical certificate and does not certify you unfit for work since 14 February 2006 to the present time. Between the time of 14 February 2006 and 5 March 2009 there is no evidence of any incapacity on your part.
The Department is therefore currently undertaking enquiries in relation to your unauthorised absence from work and the salary you were paid during the three year absence.
I therefore request immediate notification as to your intention to return to work as a cleaner. Until such time as you return to work as a cleaner you will remain on cease pay. If you are unable or unwilling to return to work as a cleaner the Department will have to reconsider your employment status.
Please contact me with your intentions by Friday 22 May 2009.
By letter dated 19 May 2009, the defendant responded to Ms Allanson. In her communication she acknowledged the letter from the South Street Medical Centre was not evidence of her incapacity to return to work as a cleaner but merely a request for the plaintiff to consider giving her an opportunity to be relocated in an area other than cleaning. The defendant confirmed that while she was not currently unwell she did not want to risk getting ill again as a result of contact with cleaning substances (even though she did not complete the medical inquiries set in train in 2006 to identify the cause of her skin allergy because, according to her, she could not afford too). In reiterating that she was not prepared to return to work as a cleaner, the defendant said:
I also need to point out to you that I do not want to be put in working compensation either, but to return to work in a position other than cleaning.
The defendant's letter of 19 May 2009 also states the position of the
defendant as:
I was never relocated from my previous job for reasons that I do not know and I do not want to blame anyone for that, but I must say that it is not my fault.
The defendant added she would not resign from the Department of Education and she did not consider it was her responsibility to apply for an alternative position within the department. It appears from the rhetorical question she posed in her communication that, if she did that,
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then what was the duty of the relocation officer? With respect, the defendant appears to have confused her legal position at the time she was relocated to East Claremont Primary School and appears, retrospectively, to have interpreted it as an opportunity to require the plaintiff to employ her in a different position other than as a cleaner.
It is also noteworthy that, in this letter, the plaintiff says she engaged a solicitor for advice and, according to her, it was his recommendation
then to give you time to do your job of relocating me in a position other than cleaning. But wait until such time when you stop paying me and then go back to him to initiate proceedings against the Department. I have not done that yet. I have not done that yet.
On any view, the defendant's legal advice appears to have been that she should not 'rock the boat' while she was still being paid her full salary, and to only assert her contention that she was entitled to be employed in a different position other than as a cleaner when 'the gravy train' ran out.
By letter dated 27 May 2009, Ms Reece sought to make an appointment to meet with the defendant on 29 May 2009. The request was also communicated by email sent 27 May 2009 to the defendant. On 28 May 2009, the defendant responded to Ms Reece indicating:
Unfortunately, I won't be able to make it on that date. As a matter of urgency I needed to leave Perth for family issues, but I will be there by next week as planned.
This assertion by the defendant conflicts with the contention in her written closing submissions that the only reason for being in El Salvador at this time was to find employment. It reflects adversely on her credibility. In cross-examination the defendant said she came back to Australia on 2 June 2009. She also said in cross-examination that she was 'looking for a job and left in February 2009', when she was still in receipt of her full salary from the plaintiff.
Ms Reece, by email dated 29 May 2009, indicated she was happy to re-schedule the meeting to Friday, 5 June 2009. On 2 June 2009 the defendant acknowledged the re-schedule of the meeting and said, 'I am now back in Perth'. In her email she re-stated her position as follows:
In the same way that I explained to Peter Ware, the Relocation Officer at City Beach, when this problem arised [sic], I have also explained to Jennifer Allanson and now to you, I am not in the position to return to work as a cleaner for the Education Department for the only reason that, I am allergic to chemicals and dust.
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I believe you can hace [sic] access to my file and see that the cause of my allergy was related to my job as a cleaner with the Education Department and therefore, in my opinion, the less you can do is to broad your criteria to give me the opportunity to work in an area other than cleaning.
This is a matter of negotiating a win/win situation for both parties and not to reamain [sic] reluctant to what can not be done.
I have many skills other than cleaning that I can offer to the Department that I am not going to mention in this e-mail as I consider unnecesary [sic].
I know that there is an option to be train in the job, but If [sic] you think that the fact that I was born overseas put me in a position of disadvantage among others, I can assure you that is not the case.
The English language has been an essential part of my life since I was very young.
I have no intention to resign my position either;
With Best Regards,
Liza Hartmann Nieto.
Ms Reece responded by informing the defendant that there is no provision in the Award or the Government Services Miscellaneous General Agreement 2007 (the Agreement) to simply transfer her to a clerical position. Therefore, she asked the defendant to confirm she was not willing to return to work in her employed capacity as a cleaner.
The evidence of Ms Reece was that the Agreement, in effect, sits on top of the Award and the Agreement prevails over the Award if there is conflict. In the Agreement, sick leave is covered under the term 'Personal Leave' at cl 29 which provides, relevantly:
An application for personal leave exceeding two consecutive working days shall be supported by evidence that would satisfy a reasonable person of the entitlement. (Clause 29.4)
The effect of the provision is the same as the equivalent clause in the Award. In cross-examination the defendant accepted that the Agreement applies in this way.
The defendant replied by email dated 4 June 2009, as follows:
With all my respects madam, my case is not an ordinary case.
You have my file and you have the evidence on your hands, but you are adamant to sustain your position.
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I am not in a position to confirm anything, but to ask you to be human and compasionate [sic]. I believe you have a moral obligation towards myself.
I have suffer [sic] enough by getting sick because of that job.
I took that job as I needed to eat and the job was honest, but you all know that I have qualifications.
I just need an opportunity.
In view of the defendant's response, on the same day Ms Reece confirmed by email that there was no need to meet the following day because the defendant was not prepared to return to work on any basis as a cleaner. Ms Reece said again that there would be no transfer to another position. Further, the department, by email dated 5 June 2009 asked the defendant for a copy of any reports from Dr Bandouvakis in her possession, and whether she was interested in returning to work as a cleaner if she was not required to use any chemicals.
The defendant replied by email dated 6 June 2009 which, relevantly,
provided:
I believe I had two appointments with Dr.Boundavakis and I must have a copy on my files. I will look for it so, I can send you a copy for your files.
I am also allergic to dust mites and I do not see a cleaning job where you can not be exposed to dust. As I previously have mentioned to you, my illness developed when I was sent to East Claremont Primary. That School was in a very poor condition regarding cleaning and the chemicals being used by the previous cleaning staff were very strong in comparison with those used at City Beach.
After the closure of City Beach, some staff were attach to some Schools as super numerary so, I need my salary to be reinstated as soon as possible.
The Department of Education is a huge Institution and considering the circumstances of my case, I can not see why I can not be allocated as an assistant for the clerical area of a School.
Thank you for your flexibility and offering of a cleaning position. I think we are making real progress; however, I really need a position in an area other than cleaning.
Finally, I must not omit that I have completed a higher research degree in Perth; hence, there is a possibility that I would easy your task by finding a job accordingly, but by now I really need your help and consideration.
| STEVENSON DCJ | [2014] WADC 70 |
Three days later, on 9 June 2009, the defendant followed up Ms Reece as follows:
Hi Nadia
I have lost contact with you and I wonder if anything of what I said upset you in anyway. If so, I apologize for any inconvenience, but all what I have said to you is the truth, the whole truth and nothing, but the truth.
Would you be able to help me?
To have a better view of my situation, just try to be in my shoes.
I really need to go back to work!
My Grand Father just to say:
'Work, bread and peace is all you need!'
I look forward to hear from you soon
Yours respectfully,
Liza Nadine Hartmann Nieto.In reply, Ms Reece asked for a copy of Dr Bandouvakis' report on 10 June 2009. On 11 June 2009 the defendant, advised by email: 'yes, I must have it somewhere' and later in the communication, said she did not see the need to provide the plaintiff with any more reports for its files.
On 30 June 2009, Mr Eamon Ryan, Director, Standards and Integrity of the Department of Education and Training, wrote to the defendant informed her that she may have acted in a manner which could constitute an act of misconduct contrary to her terms of employment. The specific allegation put to the defendant was:
Between April 2006 and February 2009 you were absent from work as a cleaner without authorisation and contrary to the Cleaners and Caretakers (Government) Award, 1975 number 32.
Particulars of the allegation included:
By way of further clarification, in 2005 you were employed as a cleaner at City Beach High School (CBHS). In Term 4 of that year, CBHS closed and you claim you were transferred to East Claremont Primary School (ECPS). A medical certificate dated 14 February 2006 states you had dermatitis due to an exposure to chemicals at ECPS, however the certificate does not state you were unfit for work. Furthermore the Department has a report from Prime Health Group stating you were to
| STEVENSON DCJ | [2014] WADC 70 |
have a specialist appointment with Dr Bandouvakis on 11 April 2006 to assess your suitability to work with chemicals. No further communication or contact was received from you until you were contacted by Ms Jenny Allanson, Business Manager, West Coast Education District on the 27 February 2009. Between 11 April 2006 and 5 March 2009, you continued to be paid.
The defendant wrote to Mr Ryan by letter dated 27 July 2009 and, relevantly, informed him as follows:
•
I was employed by the Education Department as a Cleaner Level 1, 2 in the year 2003 at City Beach High School Campus. This School was close [sic] to students by the end of 2005 and all the staff was to be relocated to other Schools, apparently with similar working conditions.
•
A relocation officer was appointment at that time by 'The Department'. In my particular situation on January 2006, I received a letter from the Relocation Officer telling me that for the moment I had to assist the cleaning at East Claremont Primary School, located at Claremont until new instructions arrived.
•
The Principal of City Beach and The Head Cleaner were relocated to East Claremont Primary School too. We, The Head Cleaner and I did the vacational cleaning and after that, we continue doing the normal cleaning for that period. I consider important to say that, East Claremont Primary School had being [sic] without a cleaner for some time or the cleaners did not clean regularly so, the place was really dusty and The Head Cleaner and I got flu shortly after that deep cleaning we performed at that School.
•
After several weeks of cleaning at East Claremont Primary School, I began to develop problems with skin allergies. I went to see the Doctor several times and she gave me medical certificates on several occasions, which were submitted to The School and later a letter addressed to The School Principal asking him to consider my skin condition for my relocation.
•
The School Principal Mr. Gary Bryant one day told me that I had an appointment with a Doctor at a place called Prime Health. I went there and the Doctor to whom I talked to at that place told me that I was allergic to chemicals and dust and that he would do a report about my condition for 'The Department'. After this appointment, I continue going to work normally expecting to receive new instructions at any time from 'The Department' through the Relocation Officer, but the time passed by and I was never informed about my relocation. In fact, I was never relocated indeed.
| STEVENSON DCJ | [2014] WADC 70 |
• As my salary was paid normally every fortnight that made me think that perhaps, I was put in a sort of sick leave or working compensation. That was what I really thought. • I tried on many occasions to enquire with 'The Department' at my own initiative about my situation, but I was never able to speak by phone to the relocation officer and, even though; I left messages for him with the receptionist, my calls were never returned. • So, since then I lost contact with 'The Department' until March, this year when a lady called home saying that she was locating were [sic] I was working for 'The Department'. I must say that I was receiving my pay slips at my PO Box and according to what it said on the pay slips I was located at City Beach High School still. • For all of the above said, I have been living in a situation of uncertainty that makes me remember one day at East Claremont Primary School when the School Principal, Mr. Gary Bryant told me 'You have been put in the hard basket' 'There is no position for you at the School'.
Mr Ryan responded to the defendant by letter dated 14 August 2009, indicating that the matter would now be investigated and determined according to the appropriate legal processes.
However, the investigation was not concluded because the defendant's employment was terminated instead by the plaintiff by letter dated 24 September 2009. As a result, Mr Davis, Acting Director of Standards and Integrity, informed the defendant he did not believe it would serve any useful purpose to continue further with the investigation, as she was no longer currently employed by the Department of Education and Training. Mr Davis said:
It is my intention to mark your employment record to reflect this decision and to ensure that should you, in the future seek further employment with the Department, this matter, will be considered at that time. The Department reserves the right to continue with the disciplinary process outlined in this letter.
Although the plaintiff's claim is not dependent on issues arising out of its termination of the defendant's employment, it is necessary to set out Mr Cliff Gillam's (Executive Director, Workforce) letter to the defendant dated 24 September 2009. It contains a history of the matter and the basis for the plaintiff terminating the defendant's employment as a cleaner:
Dear Ms Hartmann-Nieto
| STEVENSON DCJ | [2014] WADC 70 |
I am writing to you in regard to your employment as a cleaner with the Department of Education and Training. A review of your employment record since January 2006 indicates you were absent from work from approximately mid February 2006 to the present date.
The review also determined that you were not at work, not on sick leave with evidence, not on worker's compensation and not on any approved leave. However, you received full pay including allowances from mid-February 2006 to mid-February 2009 a period of approximately three years.
An employee of the Department contacted your home on 27 February 2009 and spoke to your husband Alex who informed us that you were sick. We also tried calling you on your mobile to discuss the matter further but the number provided to us was disconnected. A number of phone messages were left for you on your home number to contact us but we did not hear from you.
Your salary was then ceased from the pay period ending 5 March 2009. You contacted us on 30 March 2009 requesting reinstatement of your salary and we wrote to you on 9 April 2009 requesting you to return to work as a cleaner so that we could make the necessary arrangements to reinstate your salary.
An appointment was made to meet you at the Department on 29 May 2009 but you emailed the Department stating you were out of the country due to an urgent family matter and could not make the appointment.
You then emailed us on a number of occasions clearly stating that you have no intention of returning to work as a cleaner, in any capacity. You also indicated that you have been waiting to return to work in an area other than cleaning.
Ms Nadia Reece, Labour Relations Advisor, emailed you on 3 June 2009 stating there was no provision under the Cleaners and Caretakers (Government) Award 1975 or the Government Services Miscellaneous General Agreement 2007 that allowed your transfer to a position other than cleaning. However the Department were prepared to offer you a cleaning position with complete avoidance of exposure to any chemicals.
You emailed Nadia Reece on 6 June stating 'you really need a position in an area other than cleaning'. You again emailed Nadia Reece on 11 June 2009 stating 'I believe I have made it very clear to you that I cannot return to cleaning for obvious health reasons'. No medical evidence has ever been provided to the Department that indicates you are unfit to carry out the duties of a cleaner.
Therefore the Department has determined that you have repudiated your employment as you have not contacted your employer for three years, there was no agreement from the Department to utilise any type of leave,
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leave without pay, sick leave with evidence or any type of other leave and there was no medical certificates or evidence stating you were unfit for work for three years.
Your employment with the Department of Education and Training has now been terminated. You will shortly receive a letter from the Department's Payroll Section concerning the incorrect salary you received for the last three years.
I encourage you to contact PrimePsych, the Department's counselling employee assistance services, on 9492 8900 for an appointment.
By letter dated 5 October 2009 from the Shared Services Centre of the Department of Education and Training, the defendant was informed 'with regret' of the overpayment, which had been validated by an investigation. At the same time, the defendant was issued with an invoice dated 5 October 2009 for 'salary overpayment' for $79,290.49. Reminders of the overpayment were sent to the defendant by Shared Services Centre on 5 November 2009 and 26 November 2009.
The defendant acknowledged the plaintiff's letter dated 26 November 2009 by letter dated 3 November 2009 [sic] and advised that the matter was still in dispute in the Western Australia Industrial Relations Commission.
By letter dated 9 November 2009 Mr Ryan, Director, Standards and Integrity, requested that the defendant's employment record be noted that the investigation was concluded without any findings on the basis that the defendant was no longer an employee and for a note to this effect to be placed on the defendant's employment record 'so that should she re-apply for employment with the Department in the future these matters can be re-examined'.
By letter dated 4 October 2010 (which the defendant does not admit receiving), a payroll operations manager informed the defendant that the plaintiff had recommenced action to recover the overpaid salary. The matter was to be referred to a debt collection agency because the West Australian Industrial Relations Commission, on 29 July 2010, dismissed the defendant's application for orders that the termination of her employment was harsh, oppressive and unfair.
| 97 | In her evidence, Ms Reece said that the plaintiff's records did not contain any claim for worker's compensation by the defendant. She said there was nothing on the HRMIS system recording medical certificates or |
| STEVENSON DCJ | [2014] WADC 70 |
medical reports or any evidence produced by the defendant in relation to
the three years during which she continued to be paid her salary.
Ms Reece also confirmed there was no approved leave or other entitlements due to the defendant under her contract of employment for the relevant period. She said in her evidence that the plaintiff's calculation of the overpayment took into account all employee entitlements, including sick leave and annual leave which the defendant had accrued.
In short, there was no authorisation for the defendant to be absent from her workplace during the relevant period. The plaintiff's claim was calculated by allowing the defendant to utilise all of her lawfully accrued entitlements until they had been exhausted. The combination of these entitlements was exhausted as at 24 February 2006.
The defendant's position is that she should have been paid up until July 2006 because she was entitled to sick leave or worker's compensation payments. No reason is proffered by the defendant for the remainder of the three-year period based on sickness or any other proper reason.
Ms Reece gave evidence that, if anybody had authorised leave or the defendant not to attend for work, then records would be contained in the HRMIS or TRIM systems evidencing the position. Ms Reece said there were no records in the possession of the plaintiff to this effect.
This evidence is also relevant to the defendant's contention that she made every effort to contact the plaintiff to inform them of her position, particularly in the early period, but that she had been, in effect, denied access. Her evidence was that she could produce her records confirming these attempts to communicate her position to the plaintiff but, according to her, they are on an old computer and she has not had the opportunity to access the alleged communications. Ms Reece justified her finding that the defendant had not contacted the plaintiff for the three-year period based on her examination of the HRMIS and TRIM records.
The defendant cross-examined Ms Reece in relation to the plaintiff's records, including records of leave taken. Ms Reece confirmed the plaintiff's records disclosed the defendant had been on sick leave with evidence for the period 14 February 2006 to 22 February 2006 totalling 5.25 days. She was taken in cross-examination to sick leave in 2005 and the defendant was keen to make the point that she had a medical operation in 2005 (which is irrelevant to the issues in the trial).
| STEVENSON DCJ | [2014] WADC 70 |
The defendant cross-examined Ms Reece about the Western Australia Government/Liquor, Hospitality and Miscellaneous Union Redeployment, Re-training and Redundancy Certified Agreement 2004 (Liquor agreement 2004). The agreement is dated 25 October 2004 and has a nominal expiry date of 31 July 2007.
Ms Reece was unfamiliar with the Liquor agreement and indicated the plaintiff was subject to different legislation concerning redeployment and re-training. Her evidence is that the Liquor agreement was not binding upon the plaintiff and had no relevant application to the position of the defendant. The defendant's contention was that it applied because, she said, she and her husband were members of the union referred to in the Liquor agreement, an agreement which may have been signed on behalf of some TAFE colleges (as distinct to the Department of Education and Training). I am not persuaded on the materials before me that the defendant has any legal or contractual rights against the plaintiff arising out of the Liquor agreement 2004.
I assume the purpose of this line of cross-examination was to bolster the defendant's contention that the plaintiff was obliged to re-employ her in a different position than as a cleaner, which the plaintiff has at all material times denied. The plaintiff's position is that the defendant is able, of course, to apply for any positions advertised by the plaintiff; and that she will be judged on her merits for the relevant position, but that the plaintiff is not obliged to offer her a different position other than cleaner or to re-train her in a different capacity.
There is no doubt from the evidence that the defendant was, at all material times, intent on creating a circumstance whereby the plaintiff would feel obliged to offer her employment in a different position than as a cleaner. The defendant made this plain to the plaintiff in her own written communications after the plaintiff discovered it had mistakenly continued to pay her salary as a cleaner.
The defendant also sought to cross-examine Ms Reece in relation to the decision of the Western Australian Industrial Relations Commission dated 29 July 2010 whereby it dismissed the defendant's application that the plaintiff's termination of her employment on 24 September 2009 was harsh, oppressive or unfair.
| 109 | In the reasons for decision, Commissioner SM Mayman said at [94] the dismissal of the defendant was not unfair 'in light of the extended period of time that has elapsed; the limited communication by the |
| STEVENSON DCJ | [2014] WADC 70 |
applicant with the respondent regarding her ongoing medical condition; and the rejection by the applicant of the respondent's offer of alternative work in June 2009'. The finding was that the defendant did not establish on the balance of probabilities that the plaintiff unfairly terminated her employment on 24 September 2009.
I sought to clarify the defendant's position when she asserted she was asking for a relocation, noting the evidence discloses she was not prepared to work as a cleaner. In response, the defendant said she could not work as a cleaner, and:
I was doing my post-graduate degree at that time and I needed a job so I took it and I think I will regret it for the – for as long as I live. And then they did not show any consideration towards me because I got sick. According to the agreement, I should have been given an opportunity to be transferred to another position. (ts 160 - 161)
The defendant holds the belief that because, in her mind, she was unable to work as a cleaner, therefore the plaintiff is obliged to redeploy her or re-engage her in some different capacity. This, of course, overlooks the fact that the defendant was employed as a cleaner and, as such, had rights, such as sick leave and worker's compensation, which she did not utilise but which were available to her. The issue of whether or not she was in fact disabled from working as a cleaner was never raised by her with the plaintiff. In any event, this is inconsistent with the medical evidence at the time, which did not disclose she was unable to continue in her employment as a cleaner. In cross-examination Ms Reece explained to the defendant that she could not simply turn up to work because she says she is sick. Ms Reece explained that the defendant is required to produce 'some evidence' if extended sick leave is sought (which it was not).
It became plain during the cross-examination of Ms Reece that the defendant was concerned about the investigation into her alleged misconduct by Standards and Integrity. The evidence is (and this was explained to the defendant) that the investigation was discontinued, without any findings being made, because of the termination of her employment.
In cross-examination, Ms Reece based on her previous employment as a redeployment officer, explained the operation of the redeployment and redundancy rules. Ms Reece maintained the purpose of her communication with the defendant was to ascertain if she was prepared to return to work as a cleaner, on the basis that the plaintiff would take into
| STEVENSON DCJ | [2014] WADC 70 |
account her concerns about exposure to chemicals, bearing in mind the expert evidence with respect to the use of gloves. Redeployment or relocation did not arise because the conditions required to be met were not invoked, as the defendant would not return to work. If the defendant had been prepared to return to work and, if there had been a future ongoing problem which caused a disability, then Ms Reece left open the possibility she might meet the criteria for redeployment. In any event, this is irrelevant to the plaintiff's claim that, by reason of its mistake, the defendant's salary was paid.
By reference to the Award, the defendant cross-examined Ms Reece in an effort to demonstrate she was entitled to be paid for the period March 2009, when her salary was ceased, until her dismissal on 24 September 2009. Ms Reece gave evidence that the defendant was not dismissed for 'misconduct' as provided for in the Award but, rather, the defendant's employment was terminated by reason of her repudiation of her contract of employment as a result of non-attendance. The act relied upon was the non-attendance of the defendant at her workplace at all material times, without excuse or authorisation. The defendant indicated that up until this point in time in the trial, she had understood she had been dismissed for misconduct. Again, it was explained that there had been no finding of misconduct. The investigation was discontinued by reason of the termination of her employment because of her repudiation. As an aside, the defendant noted in evidence at the time, 'I love legal jargon', no doubt as a result of her legal qualification.
In cross-examination, Ms Reece confirmed the plaintiff's records for the defendant were marked 'Do not re-employ without prior approval of the Director, Eamon Ryan, of Standards and Integrity'. Ms Reece did not agree that the notice on the plaintiff's record went to all government agencies. As a matter of fairness to the defendant, it was explained to her in the course of the trial, that any judgment of the court would be a matter of public record, particularly given her expressed concern about obtaining future employment. The defendant said she understood the position and what was being indicated to her.
| (b) | Ms Jennifer Anne Allanson |
At present Ms Allanson is the corporate services manager for the Department of Education at Shenton College. Prior to this, she worked for the district office as a business manager where she was concerned with non-teaching aspects of the plaintiff's business and, in particular, financial matters. While in this role, she was asked to take responsibility for the
| STEVENSON DCJ | [2014] WADC 70 |
closed site at City Beach High School. In 2008 and 2009, Ms Allanson visited the former school when the need arose and dealt with the only two employees on the site, a gardener and a cleaner.
At the time, a pay certification report for the site was printed on a fortnightly basis in another part of the organisation and, consequently, Ms Allanson did not see the report. However, in early 2009 the gardener at the school transferred to another school and Ms Allanson obtained a replacement gardener for the position. She was concerned to ensure that he had been entered on the system correctly. In the course of making inquiries for this purpose, she was provided with a pay certification report dated 25 February 2009.
On examination of the report Ms Allanson noticed that the defendant was listed as a cleaner at the school, and had been paid $1,144.46 per fortnight for the period 20 February 2009 to 5 March 2009. Ms Allanson immediately realised she had never met the defendant and contacted Mr Hyde, the head cleaner at the school, who informed her that he too had never heard of the defendant.
As a result, Ms Allanson said she contacted the payroll department to ascertain where the defendant was actually working. Records disclosed that the defendant had been in contact with East Claremont Primary School and so Ms Allanson then contacted the registrar, who advised that the defendant had been there for one week but left after she had some allergies. Ms Allanson was informed there was no worker's compensation claim.
Ms Allanson said she attempted several times to contact the defendant using the contact telephone number on the plaintiff's file but was unsuccessful. However, Ms Allanson finally managed to speak to the defendant's husband who, as mentioned already, told her that the defendant 'couldn't come to the phone because she was sick'. The truth is that, on her own admission, the defendant was in El Salvador looking for work. According to Ms Allanson, Mr Nieto, the defendant's husband, told her that the defendant 'was waiting for a letter from the department to go back to work'.
After returning from a short period of leave Ms Allanson said the defendant telephoned her and asked her to reinstate the defendant's pay, as it had been ceased by the payroll department as a result of inquiries made about the matter. As mentioned, Ms Allanson then wrote to the defendant by letter dated 9 April 2009 confirming her salary had been
| STEVENSON DCJ | [2014] WADC 70 |
stopped from the pay period ending 5 March 2009 due to her absence from work with no valid leave application and no outstanding worker's compensation claim. In the circumstances, Ms Allanson said she referred the matter to the plaintiff's employee relations, industrial relations department (Ms Reece).
Ms Allanson signed a movement advice on 17 June 2009, which document was prepared by industrial relations to record retrospectively the relocation of the defendant from City Beach High School to East Claremont Primary School, with effect from 19 January 2006. In cross-examination, Ms Allanson said the movement advice was prepared so that the plaintiff's records could formally record the relocation of the defendant.
Ms Allanson said at that time Mr Peter Ware was a human resources consultant and had responsibility for relocation of employees. He is now retired. Ms Allanson was cross-examined about the possibility of the defendant being given a different role. The following cross-examination by the defendant of Ms Allanson is relevant to understand the state of mind of the defendant (ts 248):
After that, after that I contact him and then the second time I talk to you you change your mind and you said, no, no position, there's no position for you unless it's cleaning, that's all? – Well, because all the records that you had given to us, there was nothing that you said you couldn't be a cleaner. It said you couldn't have exposure to chemicals, but there was nothing there that said you couldn't be a cleaner in any other way. There's lots of leaning (sic) jobs in schools that do not require you to use chemicals because people like myself work with the staff and if staff has got an allergy to something, we don't put them in that area. We give them a different cleaning job to do where they're not exposed to those chemicals, so you could still have worked in a school, but you weren't interested in – in discussing working as a cleaner so that's why I had to pass it on.
Yeah. I believe I – I had a disability in cleaning? – Sorry, you had?
Were you aware that I had a disability in cleaning? – A disability? You had allergies.
In cleaning, yes? – Yeah, allergies, but that doesn't stop you cleaning.
That was exposure to chemicals. It said you were fit to work as a cleaner.
What kind of jobs can you perform in cleaning without contact to dust? –
Well …I was allergic to dust, I was allergic to chemicals. What kind of job? – Well, there's mopping floors with soapy water. I mean, there are things we
| STEVENSON DCJ | [2014] WADC 70 |
can find you to do, but, I mean, like I say, it was out of my hands, anyway. I haven't got any control to place you in another position because you were – you were at City Beach and I had nothing to do with City Beach at all until I came in in 2008, three years after it was, to look after what I thought was two people.
| (c) | Ms Alanna Orso |
Ms Orso is a public service officer and service improvement coordinator for the Department of Education in the personnel and payroll branch. Her branch is responsible for receiving all documentation regarding the plaintiff's employees and the input of that data into the payroll system, namely the HRMIS system. Ms Orso said that the HRMIS is responsible for generating all payments to employees and therefore contains all relevant employee records in this regard.
Ms Orso said the period of the defendant's overpayment was between 24 February 2006 and 19 February 2009, totalling $79,290.49. The pay period for the last payment ended on 5 March 2009 but the overpayment was only made up until 19 February 2009. Ms Orso explained the position with respect to the Australian Taxation Office (ATO) when an employee is overpaid and the process for recovery, bearing in mind that, if a full year is involved, the employer will have paid the tax to the ATO on behalf of the employee.
Ms Orso identified a number of payslips confirming the salary paid to the defendant during the relevant period and, in particular, that the salary was paid into the defendant's bank account (which is not in dispute).
The defendant's evidence
Dr Hartmann is self-represented.
The defendant says she is a qualified lawyer and Notary Public of the Supreme Court of the Republic of El Salvador with five years' experience in family and civil practice. She holds a First Class Bachelor of Law degree with honours from the University Dr Jose Matias Delgado, at Nueva San Salvador, El Salvador. According to her, this degree has been assessed as comparable to the educational level of an Australian Honours Bachelor Degree.
| 129 | In Australia in 2003 she obtained work as a cleaner for the plaintiff to support her living expenses while she did a post-graduate degree. I understand the defendant obtained a Doctor of Philosophy degree from |
| STEVENSON DCJ | [2014] WADC 70 |
Edith Cowan University in the field of comparative law in Australia. She describes herself as a specialist comparatist (common law/civil law). She does not hold a legal practice certificate in Western Australia.
As the defendant is self-represented, the trial process was conducted in a manner which was sympathetic to her position. Counsel for the plaintiff, Ms Martino, was cooperative and appropriate in accordance with her role and duty as an officer of the court: see Kenny v Ritter [2009] SASC 139. For example, she continually assisted the defendant to identify documents which the defendant wanted to refer, and did not stand on legal form, for example, with respect to the admissibility of documents into evidence.
The defendant prepared a trial index bundle with a number of documents including affidavits sworn by her for the purpose of the proceedings. To facilitate the trial, this file was received as a bundle as exhibit 2, without objection.
In addition, the trial was heard in different tranches over a period of time solely to accommodate the defendant. The court also received a written statement of evidence prepared by the defendant dated 3 March 2014 to assist her to adduce her evidence.
Finally, for the purpose of preparing these reasons for decision, I have taken into account what the defendant said at different stages of the trial, including the statements she made from the bar table in the course of the trial, as her evidence: SZRUR v Minister for Immigration and Border Protection (2013) 305 ALR 557.
However, as mentioned to the defendant in the course of the trial, the duty of a trial judge does not extend to advising an unrepresented litigant how his or her rights should be exercised: R v Gidley (1984) 3 NSWLR 168. Nor is it the function of the court to give judicial advice, or conduct the case on behalf of an unrepresented litigant: Clark v New South Wales (No 2) [2006] NSWSC 914. As to the duty of the trial judge to afford a fair trial to all parties when one party is an unrepresented litigant: see Hamod v State of New South Wales & Anor [2011] NSWCA 375 [316]:
The position can be stated no more clearly than reiterating that the judge must remain at all times the impartial adjudicator of the matter, measured against the touchstone of fairness.
| STEVENSON DCJ | [2014] WADC 70 |
| (a) | Dr Liza Hartmann |
The foundation of the defendant's is found in her opening address before she gave evidence. In this regard, relevantly, the defendant said:
The defendant did not provide employment duties to the plaintiff due to the negligent mishandling of the defendant's case. I was not given a place where I can go to because I was abandoned or lost. I would rather prefer that than think that they did it intentionally. Initially the defendant, myself, became ill due to chemical exposure used at work. I did present a medical certificate which I handed over to the plaintiff's representatives.
The period of my illness was from 2 February to 31 July 2006. Secondly, after the medical certificate expired, it is my understanding that the plaintiff remained obliged by the respective award certified industrial agreement to relocate the defendant to another position outside the cleaning area. My contract of employment was standing still while pending the location and that relocation was never performed due to the inadvertence or ignorance of the plaintiff's representatives in charge of the relocation, with no offence.
…
I was left abandoned or unnoticed in the process of relocation. The – the issues are that the relocation officer in charge ignored all my attempts to get in contact with him in every possible way that I could have done that.
…
The defendant admits myself that I received some legal advice to this process after the – I was waiting to be relocated. That solicitor practice was at Beaufort Street. I was referred to them by the main officer – centre and they were of the impression or the belief that the department knew what they were doing and I needed to wait for them to get back to me and do the right thing.
So they make me think that I was put in working compensation because of the allergy that I developed. I was at that point in time not familiar with the Australian Employment Law Regulations concerning working compensation. I was only former lawyer from El Salvador in those days. In that country, the process of transferring an employee to working compensation is done automatically.
When an employee got sick due to chemical exposure, as long as you make your employer aware of the issue which I believe I did in this case with my former employer, the Education Department of Western Australia on 6 February 2006 following instructions of the relocation officer that I needed to be – present myself with the officer in charge of the site which I did.
| STEVENSON DCJ | [2014] WADC 70 |
In her evidence the defendant said she commenced employment as a cleaner for the Education Department in 2003 to pay her living expenses while she undertook a post-graduate degree in Australia.
In February 2006, the defendant said she developed 'a kind of rash' on her arms. She saw her general practitioner and, later, a specialist dermatologist, Dr Masel. She said she was treated with antihistamines which 'supressed' her illness.
The defendant referred to correspondence and discussions with the plaintiff concerning her relocation to East Claremont Primary School. She said she reported to City Beach High School (her former place of employment) as directed to Tamara Cochan. As the defendant said in her evidence:
… that's what instructed, and I did that but she really wanted me to perform the job and she was not really pleased with the fact that I was sick. I told her that I couldn't do the job but she got upset and said that she was going to call the relocation officer to make me do that job. So she did that. She called him and she put him on the phone for me and I explain to him that I was sick, that I couldn't do the job, and he said that I need to present some medical certificate to him, which I believe I did afterwards.
The defendant said that on 11 March 2006 there was a rash all over her body, and she attended Sir Charles Gairdner Hospital for treatment. At the time she was told it was an allergic reaction but she did not know, and was not told, what caused the rash. Her evidence was that she decided to visit an allergist, namely Dr Bandouvakis. According to her, 'that was my initiative and I went to see him'.
The defendant said she did not continue to see Dr Bandouvakis to ascertain the cause of her allergic reaction because of the cost involved. The defendant said she wanted to see if her sister could help find the cause because she is a pathologist at the University of El Salvador. According to her, this was reason she went back to El Salvador. While there she says she was prescribed antibiotics. According to the defendant, she saw 'one doctor over there, and they told me allergy on the skin and things like that' but she did not give any further evidence about the cause of the allergy or the persistence of any symptoms. There is no documentary evidence to support these contentions.
| STEVENSON DCJ | [2014] WADC 70 |
The defendant said when she returned to Australia she went back to the former site of City Beach High School. According to her:
… I needed to find out about the relocation, about the job, because at that time I felt better, stronger, away from the allergens. I felt that I could do some job, so I went to the campus and there was only the gardener here. I inquired about the relocation officers. The gardener didn't know anything about. I – I asked also him if he knew some – someone who I can contact. Nobody – no, he didn't know anything. He was not allocated because the gardening of the school always remained there so he need to remain there. City Beach was a very nice school and well maintained. Then I tried to contact the relocation officer by email, by letters, by phone calls, by leaving messages . My husband at that time was still in contact with the Department because he had – he has worked for them for, like, say, maybe 12 years, something like that . He also tried to send a message to the relocation officer by the Officer in Charge of Infrastructure. His name is Gary Sampson and he said to him that 'Don't worry, that I have given your message to Peter and he will definitely reply to you'. But no, he didn't. I lost – I lost contact with him completely so I couldn't contact him. My – the principal told me that I was not under his jurisdiction. My husband knew that he – I was not his – under his jurisdiction, so I was definitely under the jurisdiction of the relocation officer. The District Officer – Office was the one in charge of me, but I presume I got lost in the process up to this time. That – that's why I – I tried to inquire, contacted a solicitor. Everybody seems to want to presume that the Department was doing the right thing, that they should do – they should knew what they were doing, that I should wait for them to contact me. And they knew about the Working Compensation Scheme and they thought that I probably was getting paid from there. That's what they thought. So I wasn't familiar with the legislation of industrial law in Australia. As I said previously when I introduced the case, in El Salvador you only have to notify the employer and that is automatically because it's not an insurance. It – that is provided by the Government (indistinct). But in here I now know that is different, that I should have been given a form and within three days they should have notified the insurance and they have provide me with the forms, but also medical certificate from my doctor, but this one needed to be done in a proper form knowing the way we did it, but I didn't know. I just – I only did what I thought I could do. I didn't know. I now know the forms, that they've got their special condition that you have to fill it out. I didn't know. But anyhow, time was passing on and I (indistinct) because on the last time that I talk with the relocation officer, Mr Peter Ware, he told me 'Look, we can put you in working compensations'. I clearly remember he said that to me, and I said to my husband 'Maybe it'd be better to put me in working compensation'. That's the explanation. And I should not do anything, just they – they will – I guess they will contact me when they – and they – I will – I will see what's going on. I – I lost – I – I thought that – that I better stop. Maybe they didn't want to (indistinct), maybe it wasn't necessary. I try everything I could. My husband try everything I could. The other man trying
| (b) | Mistake of fact |
Accordingly, if the payments by the plaintiff to the defendant were made as a result of a mistake of fact, unjust enrichment will impose a prima facie legal obligation on the defendant to make restitution, by repaying the money to the plaintiff. The payments the subject of the plaintiff's claim were made, and only made, to the defendant as a result of a mistake of fact.
The mistake was the failure of the plaintiff to amend its records to record the change of location of the place of employment of the defendant from City Beach High School to East Claremont Primary School on closure of the former school. As a result of the plaintiffs failure to amend its employment records the plaintiff's accounting systems continued to make salary payments to the defendant even thought she was not working. But for this mistake the plaintiff would not have been paid her salary for the three-year period. Therefore, by reason of the identified mistake, there is a prima facie legal liability on the defendant to repay the monies received in error from the plaintiff.
Such a prima facie liability can be displaced by the defence of change of position. This involves a consideration of whether the defendant has acted to her detriment on faith of the receipt of the money such that it would be unjust to compel her to repay the money. The question is: has the payee (the defendant) changed her position in good faith in such a material way, that it would be unjust to order restitution? It is trite law that use of the funds by the payee for everyday living expenses is not sufficient to enliven the defence of change of position.
Where a party, in this case the plaintiff, has paid money under a mistake that causes it to make the payment, it is, as mentioned, prima facie entitled to restitution of the money paid. Restitution is available whether the mistake is one of law or fact: David Securities Pty Ltd, and s 124 Property Law Act 1969.
| STEVENSON DCJ | [2014] WADC 70 |
The plaintiff, to establish a right to restitution on the basis of mistake must not only have held the relevant mistaken belief (whether it is a mistake of fact or law) but also the mistake must be causative of the payment or conferral of the benefit: Salib v Gakas; Newport Pacific Pty Ltd v Salib [2010] NSWSC 505 [326]. In this case, but for the mistake of fact, the plaintiff would not have made any payments to the defendant. It is beyond doubt that the plaintiff must have been operating under a mistaken belief at all material times.
The prima facie entitlement to recover monies paid under a mistake depends upon the appearance that the monies were paid by the payer in the mistaken belief that he or she was under a legal obligation to pay the monies or that the payee was legally entitled to payment of the monies (also referred to in benefit: Salib v Gakas; Newport Pacific Pty Ltd v Salib).
In Glad Cleaning Service Pty Ltd v Vukelic [2010] NSWSC 422 Ms Vukelic (a cleaner) received worker's compensation payments from GIO (the plaintiff's insurer). At the same time she also received social security benefits from Centrelink. To prevent 'double dipping' Centrelink has a statutory charge over any settlement funds payable to Ms Vukelic. Due to an administrative error on its computer system, GIO paid the full settlement amount to Ms Vukelic. Pursuant to a demand, GIO paid the amount which should have been paid to Centrelink and then sought repayment from Ms Vukelic. On the facts, the court was satisfied that there was a prima facie liability on Ms Vukelic to repay the money which should have been repaid to Centrelink. According to the court, she had knowledge, in any event, of her obligation to repay Centrelink.
Similarly in the present case the plaintiff failed to change its system to reflect that the defendant was employed at the East Claremont Primary School site. The plaintiff paid the salary payment on the mistaken belief that the defendant was providing employment duties as a cleaner. When the mistake was identified in 2009 the plaintiff ceased payments to the defendant.
For these reasons, there is a prima facie legal liability on the defendant to repay the moneys received by her as a result of the mistaken belief of the plaintiff that she was performing her employment duties as a cleaner.
| STEVENSON DCJ | [2014] WADC 70 |
| (c) | Failure of consideration |
Alternatively, the plaintiff contends there was a failure of consideration, which thereby imposed a prima facie liability on the defendant to make restitution, by repaying the monies received. The plaintiff says it did not receive what it bargained for. It says the salary payments made to the defendant were premised on the basis that the defendant was performing her employment duties. The plaintiff says it received no benefit from the defendant during the three year period it made the salary payments to her.
Failure of consideration is judged from the perspective of the payer, in this case, the plaintiff. There was some doubt until David Securities Pty Ltd v Commonwealth Bank of Australia as to whether the failure of consideration had to be a total failure of consideration in the full contractual sense. In this case, the High Court confirmed the law does not require a total failure of consideration, before an order for restitution can be made (382 - 383):
So, in the context of failure of consideration, the failure is judged from the perspective of the payer. In Rover International Ltd v Cannon Film Ltd (4), Kerr LJ. stated:
'The question whether there has been a total failure of consideration is not answered by considering whether there was any consideration sufficient to support a contract or purported contract. The test is whether or not the party claiming total failure of consideration has in fact received any part of the benefit bargained for under the contract or purported contract.'
On the other hand, there has been an insistence that the failure of consideration be total. The law has traditionally not allowed recovery of money if the person who made the payment has received any part of the 'benefit' provided for in the contract (5). However, as the passage already quoted from Rover International Ltd demonstrates, the notion of total failure of consideration now looks to the benefit bargained for by the plaintiff rather than any benefit which might have been received in fact. Thus, in Rowland v Divali (6), the plaintiff succeeded in an action for repayment of the purchase price of a car he had bought from the defendant, unaware that the car had been stolen before it came into the defendant's possession. The defendant resisted the claim with the argument that the plaintiff could not prove total failure of consideration because he had used the car for several months. The Court of Appeal, however, dismissed this argument on the ground that the plaintiff had not received 'any part of that which he contracted to receive - namely, the property and right to possession' (1).
| STEVENSON DCJ | [2014] WADC 70 |
Similarly, in Rover International Ltd itself, the plaintiff succeeded in its claim for restitution of payments made to the defendant even though the defendant had performed some of its obligations under the contract. The plaintiff was to dub and distribute films provided to it by the defendant and receive a share of the box office receipts as its payment. The plaintiff was also required to make substantial payments to the defendant in advance of recovering its share of the receipts. The defendant supplied the films to the plaintiff and the plaintiff made the pre-payments before breaching the contract. The plaintiff was then able to recover the pre-payments on the basis that the delivery and possession of the films were not what the plaintiff had bargained for; the 'relevant bargain' was the opportunity to earn a substantial share of the gross receipts.
In Equuscorp Pty Ltd v Haxton the vitiating factor of 'failure of consideration' was also considered by the court. It reiterated that this factor may make retention of a benefit prima facie unjust (517):
Failure of consideration is one of the factors that makes retention of a benefit prima facie unjust. It was recognised by Lord Mansfield (69) as a ground for a claim for money had and received. It was a criterion of recoverability which survived the rejection in the United Kingdom and Australia of the implied contract theory. This Court has, on more than one occasion, described failure of consideration in terms set out by the late Professor Birks (70):
'Failure of the consideration for a payment … means that the state of affairs contemplated as the basis or reason for the payment has failed to materialise or, if it did exist, has failed to sustain itself.'
As Gummow J pointed out in Roxborough v Rothmans of Pall Mall Australia Ltd (71), failure of consideration for the purpose of a claim for money had and received is not confined by contractual principles (72). In that case there had been no failure of performance by Rothmans of any promise it had made. There was no question of repudiation by it of its contractual obligations. The question was whether it was 'unconscionable' for Rothmans as the recipient of payments to retain them in circumstances in which it was not specifically intended or especially provided that it should so enjoy them (73). The question of unconscionability, as his Honour explained, derived from the general equitable notions which found expression in the common law count for money had and received (74). This Court acknowledged in Australia and New Zealand Banking Group Ltd v Westpac Banking Corporation (75) that 'contemporary legal principles of restitution or unjust enrichment can be equated with seminal equitable notions of good conscience', albeit the action itself is not for the enforcement of a trust. The reference to conscionability in this context, however, does not mean that whether enrichment is unjust is to be determined by reference to a subjective evaluation of what is fair or unconscionable. As the Court reiterated in Farah Constructions Pty Ltd v Say-Dee Pty Ltd (76):
| STEVENSON DCJ | [2014] WADC 70 |
'recovery rather depends on the existence of a qualifying or vitiating factor falling into some particular category.' (Footnote omitted.)
Failure of consideration as a basis for a claim for money had and received may arise from a number of causes. One cause is illegality. Where a payment is made under a contract which is unenforceable for illegality, the unenforceability of the agreement may constitute a failure of consideration which is capable of supporting a claim for recovery of the payment. It is not necessary for present purposes to expatiate upon the concept of 'total failure of consideration' debated in the submissions to this Court, its amelioration by the concept of apportionment of consideration and the question whether 'total failure of consideration', however understood, is necessary to a claim for money had and received based upon failure of consideration (77). What is important for present purposes is the interaction between the foundation for the claims for money had and received in this case and the policy of the common law which renders unenforceable an agreement made for the furtherance of an illegal purpose.
The monies paid by the plaintiff to the defendant are also arguably recoverable, as money had and received to the use of the defendant, on the basis there was a total failure of consideration. The money paid by the plaintiff purported to be, and ostensibly was, the defendant's salary. It was only paid because the defendant, at the material time, was an employee of the plaintiff. But for this contractual relationship between the parties the payments would not have been made: see generally Baltic Shipping Co v Dillon (1993) 176 CLR 344 (McHugh J) (389 – 390):
When a contractual payment is made conditionally upon the performance of a promise by the payee, the right to retain the moneys after discharge of the contract is dependent upon whether the promise has been performed. If the promise has not been performed, there has been a total failure of consideration by reason of the non-fulfilment of the condition, and the money is recoverable as money had and received to the use of the payer (79). In this context, consideration is not necessarily the same concept as the consideration which supported the formation of the contract. In a case where a promise and not an act or forbearance is the consideration for the contract, it is the performance of the promise which constitutes the consideration for the purpose of the law of restitution (80). As Birks (81) says:
Failure of the consideration for a payment ... means that the state of affairs contemplated as the basis or reason for the payment has failed to materialize or, if it did exist, has failed to sustain itself.'
Furthermore, where the condition upon which the money was paid has failed, the payer is entitled to the return of the money advanced, even though that person has obtained some benefit from the contract. Work done or expense incurred by the payee or benefit enjoyed by the
| STEVENSON DCJ | [2014] WADC 70 |
payer will not constitute consideration unless it constitutes a partial performance of the condition upon which the money was paid. Thus, the purchaser of a motor vehicle is entitled to the return of the full purchase price of the vehicle if the vendor has failed to make title even though the purchaser has had the use of the vehicle for a considerable period (82). The seller cannot retain the purchase moneys because their retention is conditional upon the vendor making good his or her promise to transfer the title of the vehicle to the purchaser. Similarly, a solicitor who is paid money on account of costs to seek a court order cannot retain the costs if he fails to take reasonable care to seek the order even though he has incurred expense or done work on the case (83).
Moreover, 'once it does appear that the condition for retaining the money has failed the fact that it failed in response to the payer's own breach does not matter' (84). As Birks says (85), this is the best explanation of the much discussed case of Dies v British & International Mining & Finance Corporation (86) where a buyer in default was held entitled to recover instalments of the purchase price of guns and ammunition. Once the seller elected to accept the buyer's repudiation and terminate the contract, the consideration for the advance payment had wholly failed because the seller retained the guns and ammunition.
However, when a contractual payment is not subject to any condition or the condition for its retention has been fulfilled, discharge of the contract does not entitle the payer to the return of money advanced even though the payee is in breach of a promise going to the root of the contract. In such a case, the payer's remedy is for breach of contract for non-performance of the promise and not for restitution of the payment.
The plaintiff contends it did not receive what it bargained for, that is, the defendant did not attend her employment and perform employment duties. The plaintiff says as a result the contract of employment was discharged by the defendant's breach and, further, that it received nothing in return for the salary payment, that is, there was a total failure of consideration.
There can be no doubt that the plaintiff did not receive what it had bargained for from the defendant, and what it paid the defendant for. From the perspective of the plaintiff there was a total failure of consideration. The defendant did not perform any services for the plaintiff during the three year period she was receiving payments under the guise of an employee.
In any event, a claim for restitution on the basis of failure of consideration will not fail simply because the plaintiff has received something of value, if it was not what it bargained for: David Securities Pty Ltd v Commonwealth Bank of Australia. In this case, the defendant
| STEVENSON DCJ | [2014] WADC 70 |
does not point to anything of value that she provided to, or did for, the plaintiff during the relevant period because the true position is - there was nothing. It was all one way.
I agree with the plaintiff's submission, for this reason also, that in the circumstances it would be prima facie unjust for the defendant to retain the payments (ostensibly her salary), when the plaintiff did not receive what it bargained for, namely the performance of her employment duties. This qualifying or vitiating factor has been made out.
| (d) | Defendant's defence and change of position |
The defendant claims she is entitled to retain the salary payment on several grounds being, firstly, the plaintiff was negligent in not relocating her and continuing payment of her wages; secondly, on the basis that she was entitled to the salary payment because it was her salary; and, thirdly, that the defendant used the money to pay her living expenses. The third ground raises the defence of change of position which is discussed in Glad Cleaning Service Pty Ltd and s 125 Property Law Act 1969.
With respect to the first ground, the negligence, if any, of the plaintiff does not affect its right to recover: Commercial Bank of Australia v Younis [1979] 1 NSWLR 444.
The second ground fails because it attempts to raise the defence that the salary payment was made for good consideration. As mentioned, the plaintiff did not receive its bargain, that is, what the defendant promised to perform, namely cleaning services. There was a total failure of consideration.
Accordingly, there is no basis upon which the defendant can assert, whether in good conscience or not, that she had a lawful entitlement and expectation to receive and retain the payments. At all material times she must have known, and appreciated, that the payments were only being made to her bank account due to an ongoing error in the plaintiff's business and accounting systems.
The third ground attempts to raise the defence of change of position by the defendant in good faith and in reliance of the payments. The defence of change of position is relevant to the enrichment of the defendant precisely because its central element is that the defendant has allegedly acted to her detriment on the faith of the receipt of the payments.
| STEVENSON DCJ | [2014] WADC 70 |
In Glad Cleaning Service Pty Ltd v Vukelic Slattery J dealt with the defence of change of position as follows [51]:
The defence of change of position is relevant to the enrichment of the defendant precisely because its central element is that the defendant has acted to his or her detriment on the faith of the receipt: David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 385. To establish the defence of change of position the defendant must have acted to her detriment upon receiving the payment from the plaintiff. The New South Wales Court of Appeal has recently analysed the defence in Perpetual Trustees Australia Ltd v Heparu Pty Ltd (2009) NSWSC 84. The elements of the defence are conveniently identified in K Mason, JW Carter and GJ Tolhurst Restitution of Law in Australia (2nd ed)(2008) and LexisNexis Butterworths to be the following at [2407], page 860:
a) The onus of establishing the change of position defence, including the necessary reliance, lies upon the defendant. b) The defence may be applied pro tanto. c) Mere expenditure does not constitute a change of position. d) The defence is not available where the defendant has simply spent the money received on ordinary living expenses. e) Money spent solely in reliance on the payment, from which the defendant no longer retains a benefit, constitutes a good defence. f) The defence is available only to those who act in good faith. g) The expenditure made in reliance must be irreversible.
The plaintiff submits that the defendant has not changed her position and has merely stated that the salary payment has been used to fund her living expenses. In David Securities Pty Ltd the majority said (385):
If we accept the principle that payments made under a mistake of law should be prima facie recoverable, in the same way as payments made under a mistake of fact, a defence of change of position is necessary to ensure that enrichment of the recipient of the payment is prevented only in circumstances where it would be unjust. This does not mean that the concept of unjust enrichment needs to shift the primary focus of its attention from the moment of enrichment. From the point of view of the person making the payment, what happens after he or she has mistakenly paid over the money is irrelevant, for it is at that moment that the defendant is unjustly enriched. However, the defence of change of position is relevant to the enrichment of the defendant precisely because its central element is that the defendant has acted to his or her detriment on the faith of the receipt (21). In the jurisdictions in which it has been accepted (Canada and the United States), the defence operates in different
| STEVENSON DCJ | [2014] WADC 70 |
ways but the common element in all cases is the requirement that the defendant point to expenditure or financial commitment which can be ascribed to the mistaken payment (22). In Canada and in some United States decisions, the defendant has been required to point to specific expenditure being incurred because of the payment. Other cases in the United States (23) allow a wider scope to the defence, such that a defendant can rely upon it even though he or she cannot precisely identify the expenditure caused by the mistaken payments. In no jurisdiction, however, can a defendant resort to the defence of change of position where he or she has simply spent the money received on ordinary living expenses. (emphasis added)
The defendant's change of position defence must fail. Nowhere has she asserted that she undertook any expenditure of the quality or kind necessary to enliven the defence of change of position. The only inference, on the material before the court, is that she has utilised the payments for her everyday living expenses including travelling overseas on two occasions to El Salvador (her home country). She has not identified or elaborated upon any expenditure that would constitute a change of position and give rise to a consideration that it would be unjust to require her to repay the monies.
On the contrary, even if such expenditure were proved, it would be difficult for the defendant to prove that it had occurred in good faith because, as mentioned, there is a strong inference open that she appreciated that the only reason the payments were being made into her bank account was due to a mistake on the part of the plaintiff. Such an inference can be drawn, in part, from her conduct and behaviour, particularly after the mistake was identified by the plaintiff. There is no evidence from her conduct that she held a genuine but mistaken belief that she was entitled to retain the payments on the basis she had some legal right to do so. It is, with respect, difficult to comprehend how the defendant could have held any reasonable belief during the time she received the payments that she was entitled to retain them as her salary, as she asserted, when she obviously appreciated she was not performing any employment duties for the plaintiff.
Further, the plaintiff submits that the defendant has not acted in good faith and ceased to communicate with the plaintiff sometime after March 2006 and proceeded to travel overseas in 2006 and 2009 without any notification to the plaintiff as her employer. In my view this submission has merit.
For these reasons, any defence of change of position must fail.
| STEVENSON DCJ | [2014] WADC 70 |
| The defendant's counterclaim |
In the defendant's final written submissions dated 21 March 2014 she set out the orders she seeks as follows:
1. A declaration for the plaintiff to pay the defendant compensation in damages for all the suffering that the defendant experienced through the process of facing her illness alone. Secondly, by denying her the right to apply for worker's compensation due to a disability. Finally, for preventing her to find a job anywhere else in Australia for over five years, despite her Australian qualifications. 2. The defendant is a qualified legal researcher in Australia and the minimum wage she should have earned per annum is $60,000 working in a part-time position of six hours, the same hours she used to work for the plaintiff. 3. A declaration for the plaintiff to clear the defendant's employee file. 4. A declaration for the plaintiff to clear the defendant's credit report file from the misconceived debt that only exists in the minds of the plaintiff's representatives. 5. The defendant believes that the injured person in these proceedings is the defendant herself. The plaintiff in these proceedings should be entitled to nothing. 6. A declaration from this court that the plaintiff in these proceedings (the Education Department of Western Australia appearing as the State of Western Australia) to pay the costs in the cause.
As to the defendant's claim for payment of $29,000 and superannuation, there is no evidence that the defendant is entitled to payment of these sums. By reason of the plaintiff's successful claim in recovering the payments made to the commencement of the period used to calculate the $29,000, if it was to be paid, it would be repaid for the same reason. That is, there was an unjust enrichment by reason of the plaintiff's mistake of making the payments, or there was a total failure of consideration for the payments.
| 208 | In any event, the defendant was asked, by both Ms Allanson and Ms Reece, to return to her place of employment on discovery of the mistake by the plaintiff. She refused to do so and, instead, attempted to |
| STEVENSON DCJ | [2014] WADC 70 |
negotiate an employment position on a different basis. She was therefore, prima facie, consistent with the termination of her employment by the plaintiff acting in repudiation of her contract of employment and would therefore not be entitled to any further payments.
As to the defendant's counterclaim for the sum of $220,000, there is no evidence from the defendant in terms of how that sum is calculated nor was there any evidence which indicated that the plaintiff had caused the loss.
The premise upon which the counterclaim is based must be dismissed as misconceived. There is no evidence the plaintiff's internal records have been disclosed to any other party and no evidence that any prospective employer is aware of the same, or refused the defendant employment by reason of the marking of the defendant's file.
As mentioned, there is no evidence provided to constitute facts which would give rise to a cause of action by the defendant against the plaintiff in respect of any part of the counterclaim that she maintained at trial, or the final orders sought by her which went beyond that maintained by her in the trial.
Conclusion
For these reasons the plaintiff's claim is allowed and the defendant's counterclaim must be dismissed.
The orders to give effect to this judgment will be made after hearing submissions from the parties.
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