Wilczak v Alpine Refrigeration & Air Conditioning Pty Ltd
[2004] FMCA 17
•12 February 2004
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WILCZAK v ALPINE REFRIGERATION & AIR CONDITIONING PTY LTD & ANOR | [2004] FMCA 17 |
| TRADE PRACTICES – PRACTICE AND PROCEDURE – Misleading and deceptive conduct – alleged representation as to ethical and legal employment – alleged unconscionable conduct – alleged dishonest and illegal trading activity. CONTRACT – Employment – implied terms – breach. COSTS – Indemnity costs – whether costs should be paid by a non-party. |
Trade Practices Act 1974 (Cth), ss.51AC, 52, 53, 53B, 82, 87
Workers’ Compensation Act 1987 (NSW)
Briginshaw v Briginshaw (1938) 60 CLR 336
Mt Isa Mines v Pusey (1970) 125 CLR 383
P & R [2002] FMCAfam 65
Queensland Corrective Services Commission v Gallagher (unreported, QLD CA, de Jersey CJ, Pincus JA, White J, 18 December 1998)
| Applicant: | ANNA WILCZAK |
| First Respondent: Second Respondent: | ALPINE REFRIGERATION & AIR CONDITIONING PTY LTD HARRY SISSANES |
| File No: | SZ586 of 2003 |
| Delivered on: | 12 February 2004 |
| Delivered at: | Sydney |
| Hearing dates: | 17 – 18 November 2003 |
| Judgment of: | Driver FM |
REPRESENTATION
The applicant appeared in person
| Counsel for the Respondent: | Mr D A McLure |
| Solicitors for the Respondent: | Bahlmann Burke Lawyers |
ORDERS
The application is dismissed with costs, to be assessed on an indemnity basis.
Each party has liberty to apply for an order within 28 days that costs pursuant to order 1 be paid by Mr Philip Hardcastle.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SZ586 of 2003
| ANNA WILCZAK |
Applicant
And
| ALPINE REFRIGERATION & AIR CONDITIONING PTY LTD |
First Respondent
HARRY SISSANES
Second Respondent
REASONS FOR JUDGMENT
Introduction and background
The applicant, Anna Wilczak, is a former employee of the first respondent. The second respondent is a director and principal officer of the first respondent. Ms Wilczak is suing the respondents for damages. Her application, filed on 10 March 2003, seeks damages and declaratory relief under ss.82 and 87 of the Trade Practices Act 1974 (Cth) (“the Trade Practices Act”) for alleged breaches of ss.51AC, 52, 53 and 53B of the Trade Practices Act. The applicant also seeks relief under the accrued jurisdiction of the Court for negligence, breach of contract and also seeks equitable compensation. Further, the application seeks punitive, exemplary and aggravated damages as well as costs and interest.
The applicant also filed a statement of claim on 10 March 2003. In that statement of claim, the applicant alleges that she was employed by the first respondent from 10 September 2001 until 5 February 2003. The applicant states that she received a certificate of separation from the first respondent dated 14 February 2003 following a facsimile received on 29 January 2003 advising of the termination of her employment.
The statement of claim asserts misleading and deceptive conduct by the first respondent through the second respondent in that Mr Sissanes, the second respondent, is alleged to have made false or misleading representations that the first respondent acted in compliance with Australian law and that the applicant would not be required to do any act that was illegal, unethical or unconscionable. These are also alleged to be implied terms of the employment contract. It is alleged that Mr Sissanes adopted the practice of issuing incorrect invoices to customers, in particular to ensure that the manufacturer of parts or equipment supplied by the first respondent would be liable to bear the cost of faulty installation conducted by servants or agents of the first respondent. It is also alleged that Mr Sissanes arranged for the first respondent to over quote for particular customers and inflated the cost of goods and parts, billed for services not performed and failed to remit to the Australian Taxation Office goods and services tax which the first respondent was liable to remit.
The applicant asserts that the first respondent, through Mr Sissanes, required the applicant to alter invoices improperly and that this amounted to unconscionable conduct. The applicant also alleges unconscionable conduct in relation to cash payments received by the first respondent. Further, the applicant alleges a breach of a duty of care owed to her as an employee by the respondents in that she was directed to undertake transactions that were unconscionable, unethical, illegal or contrary to her oath and office as a justice of the peace.
The applicant alleges that she has suffered loss and damage in the form of lost wages, superannuation, holiday pay and leave loading, a loss of future employment prospects and that she has also suffered non economic loss in the form of pain and suffering.
Apart from the admission of basic facts concerning the identity of the parties and the employment of the applicant, the respondents deny the allegations made by the applicant.
At the commencement of the proceedings, the respondents tendered to the applicant without admission of liability, and she accepted without admission, a cheque for $54.87 being a payment in relation to unpaid employee entitlements. The applicant does not accept that the cheque fully discharges the respondents from liability in respect of unpaid employee entitlements.
The applicant represented herself, although I permitted her to be assisted by Mr Philip J Hardcastle as a Mackenzie friend. Mr Hardcastle had represented Ms Wilczak at directions hearings in this Court, and earlier in the Federal Court, by leave as a lay advocate but I did not permit Mr Hardcastle to appear for the applicant on the trial of this matter as I considered that no extraordinary circumstances existed warranting a departure from the general position that applicants in the Court may only be represented by a legal practitioner or by themselves: P & R [2002] FMCAfam 65. In addition, Mr Hardcastle was a witness in the proceedings and it would have been inappropriate for him to be an advocate as well as a witness.
During the trial, I became concerned about the role being played by Mr Hardcastle. He, rather than the applicant, appeared to be making decisions about the conduct of the proceedings. Ms Wilczak was reduced at times to reciting verbatim what she was told to say by Mr Hardcastle. At one point I referred to the performance as a puppet show – a description which Mr Hardcastle took offence to, but which I consider apt.
The evidence
The applicant relies upon her two affidavits made on 17 September 2003 and 7 November 2003, as well as three affidavits by Mr Hardcastle made on 19 June 12003, 25 August 2003 and 7 November 2003. Mr Hardcastle’s first affidavit relates to matters arising between the parties this year shortly before the commencement of the litigation. The second affidavit deals with an issue of discovery. The third affidavit replies to evidence by Patricia Afonso for the respondents. Ms Wilczak deposes as to the circumstances in which she was interviewed and engaged by Mr Sissanes, the alleged improper dealings which Ms Wilczak says she became aware of and the instructions given to her to alter invoices, and of the facts and circumstances relating to a workers’ compensation claim made by Ms Wilczak arising out of her employment with the first respondent.
Ms Wilczak’s second affidavit is responsive to the affidavit of Harry Sissanes, the affidavit of Adrian Giuliani, the affidavit of Patricia Afonso and the affidavit of Steven Marstaeller. Ms Wilczak denies that she had difficulty performing her duties with the first respondent or that she was the subject of repeated criticism or correction by Mr Sissanes in the course of her employment. She also gives evidence about her financial circumstances and her efforts to obtain alternative employment.
Mr Hardcastle, in his affidavit of 7 November 2003, deposes as to conversations between himself and Patricia Afonso concerning the present legal proceedings and the possibility of Ms Afonso giving evidence in the proceedings. He denies suggestions that he has conspired with the applicant to commit a fraud. He also deposes as to the emotional upset suffered by Ms Wilczak during and after her employment with the first respondent.
Mr Hardcastle was cross-examined first so that he would not need to absent himself from court while Ms Wilczak gave her evidence.
I allowed Mr Hardcastle to give additional oral evidence concerning his knowledge of the apparent state of happiness or unhappiness of the applicant during the course of her employment and afterwards. He gave evidence that the applicant was initially happy in her employment but became unhappy during 2002 and was particularly distressed on 27 May 2002 when the applicant left work and consulted a medical practitioner.
Under cross-examination Mr Hardcastle accepted that Ms Wilczak had been offered a return to work with the first respondent if she undertook further training. He agreed that he had written a letter dated 4 September 2002 to Mr Sissanes which was approved by the applicant and which set out the applicant’s conditions on a return to work: exhibit R2. He agreed with the suggestion from Mr McLure, for the respondents, that Ms Wilczak was upset at the suggestion that she undergo retraining as a condition of returning to work with the applicant and that she was unwilling to return to work on the basis offered. She was willing to return to work on her own terms. Mr Hardcastle agreed that Ms Wilczak would only return to work for the first respondent if Mr Sissanes agreed to cease the alleged illegal activity detailed in exhibit R2.
Prior to the cross-examination of the applicant, I permitted her to give short oral evidence clarifying paragraph 25 of her affidavit of 17 September 2003. Ms Wilczak gave evidence that she was concerned that Mr Sissanes had, on a number of occasions, instructed her to change invoices in circumstances where, in her view, a claim against a manufacturer for faulty equipment under warranty would be made improperly. Under cross-examination, Ms Wilczak admitted that she was not responsible for warranty claims against manufacturers and was only generally familiar with the process by which the first respondent would make such a claim. She appeared not to be aware that the procedure involved the first respondent purchasing replacement parts or equipment and then returning faulty parts or equipment to the manufacturer on a warranty claim. Ms Wilczak asserted that she might have been asked to prepare false invoices to customers between 10 and 50 times but could recall only one particular instance in which she was asked to do so by Mr Sissanes. Ms Wilczak was not aware of any complaints from customers about this alleged practice and explained this on the basis that customers were unlikely to complain as the faulty work was corrected at no cost to the customer. On reflection, she could recall one complaint from a customer about a service call for equipment under warranty. She could not recall any complaints from manufacturers about warranty claims.
Ms Wilczak admitted that she was receiving treatment for depression from 1999 through 2000 and into 2001 and said that this related to some earlier employment problems and ongoing litigation in another matter. She denied the suggestion from Mr McLure that her depression affected her work performance with the first respondent.
Ms Wilczak admitted that, particularly in the early stages of her employment with the first respondent, Mr Sissanes had on occasion corrected her work in relation to the dispatch of technicians, the co‑ordination of jobs and her rearrangement of the filing system. She could recall only one instance where Mr Sissanes made a legitimate criticism of her invoice preparation. Ms Wilczak resisted suggestions that there were more frequent problems in her performance of her duties and claimed that she was hurt by false criticism of her. Ms Wilczak admitted on occasions seeking assistance from Patricia Afonso in relation to her operation of the MYOB database. She also admitted that she had declined an offer of training from Mr Sissanes in relation to a possible new database.
Ms Wilczak admitted that she had been upset by an offer from the first respondent that Ms Wilczak return to work on condition that she undertake further training. She stated that she did not need further training. She admitted that she imposed her own condition on the return to work that Mr Sissanes would cease illegal activity. She also admitted that she had offered to withdraw her workers’ compensation claim if the workers’ compensation insurer would pay for her to be retrained in the real estate industry. Ms Wilczak stated that she was hurt by suggestions that she needed retraining in order to resume her employment with the first respondent. She admitted that Mr Sissanes had also offered, in relation to her workers’ compensation claim, to assist with retraining that might be necessary for her to take up employment with a different employer.
Ms Wilczak was shown a letter from Mr Sissanes dated 18 November 2002 which advised her that as of 25 November 2002 her position with the first respondent would be terminated. The letter went on to say that the position would be available for her to return to, when she had made a full recovery as per the Workers’ Compensation Act 1987 (NSW). Ms Wilczak stated that she could not recall receiving the letter prior to February 2003. The letter is exhibit R3.
In re-examination, Ms Wilczak told me that while she was hopeful that Mr Sissanes might accept the offer set out in exhibit R2, she recognised that he might not accept it, given the conditions on which the offer was made. Ms Wilczak also stated that criticism made of her work performance now by Mr Sissanes is inconsistent with oral compliments he had given to her at Christmas time in 2001 and the fact that she had been kept on with the first respondent for approximately nine months.
The respondents rely upon the affidavit of 17 October 2003 by Harry Sissanes, the affidavit of Patricia Afonso of the same date, the affidavit of Stephen Ronald Marstaeller of 15 October 2003 and the affidavit of Adrian Giuliani of 14 October 2003. All of the deponents were required for cross-examination and were cross-examined.
Mr Sissanes deposes that the applicant responded to an advertisement for an employment vacancy placed on 17 August 2001 and that he interviewed her in late August 2001. He deposes that the applicant claimed previous experience in air conditioning sales and office administration, including working with MYOB, Excel and Word and said that she had been running her own business for about two years but due to difficulties with her business partner, the business was closed. He deposes that for an initial period of two months the employee who Ms Wilczak was replacing stayed on to train Ms Wilczak and that subsequently Ms Wilczak received a lot of assistance from other staff, including Patricia Afonso and Stephen Marstaeller, although Mr Sissanes was not aware of this at the time. He also provided some assistance. Mr Sissanes deposes that he experienced difficulties with the applicant’s work performance but, nevertheless, on 24 January 2002 he was of the view that she was working reasonably well. He decided to give her a pay rise to $15 per hour.
Mr Sissanes deposes that from March 2002 Ms Wilczak became significantly involved in the preparation of invoices for the first respondent. He noted inappropriate terminology used in the invoices and drew this to Ms Wilczak’s attention. He also was informed by Mr Marstaeller that Ms Wilczak had reorganised an office filing system relating to installation work of the first respondent and was concerned that the manner in which Ms Wilczak had reorganised the filing system made it difficult to find files. He instructed her to restore the filing system to the way it was before. Subsequently, he took more notice of Ms Wilczak’s work and was surprised to find that she had a very limited capacity to undertake the office tasks assigned to her.
Mr Sissanes deposes that he gave the applicant time off for her to attend court in litigation she was then involved in. He deposes that he observed Ms Wilczak to be very stressed in relation to this litigation. He deposes that on 23 May 2002 he met with Ms Wilczak in his office to express concern about invoices. On Monday, 27 May 2002, following complaints about Ms Wilczak made to him by Mr Marstaeller and Ms Afonso, Mr Sissanes deposes that he had a further conversation with Ms Wilczak in which he criticised her work. Subsequently, Ms Wilczak left the office and did not return. Ms Wilczak made a claim for workers’ compensation.
Mr Sissanes denies the factual allegations in Ms Wilczak’s affidavit supporting her claims. Specifically, he denies the conversations attributed to him by Ms Wilczak. He denies that he ever instructed Ms Wilczak to act improperly or unlawfully.
Mr Sissanes was cross-examined at length by the applicant, with the assistance of Mr Hardcastle, mainly about issues of office procedure, record keeping and work practices. He was also questioned at length by the applicant about his efforts to locate documents required to be discovered pursuant to orders I had made earlier in the proceedings. Mr Sissanes stated that he had difficulty locating documents contained in folders relating to maintenance work because the folders were in a disorganised state following the departure of the applicant. He stated that these folders were kept separately from the installation filing system which contained files relating to installation work carried out by the first respondent.
Mr Sissanes was also asked why cash book records relating to cash receipts for certain work did not tally with a register of invoices extracted from the MYOB database. Mr Sissanes explained that there could be a time lag between the receipt of the cash payment and the entry of the relevant details into the computer database and the preparation of a receipt from the computer database so that the computer entry would not appear in the same time period as the cash book entry. In response to a question from me, he also conceded the possibility that not all cash receipts were entered into the MYOB database. He further conceded that the accountant of the first respondent did not examine the cash book but prepared accounts from the computer records.
Mr Sissanes was also asked about the personnel record of the applicant. The personnel file of Ms Wilczak is remarkable for the very few documents it contains. It contains a tax file number declaration, basic employee details and a handwritten note prepared on 12 December 2002, which appears of little consequence. Mr Sissanes stated that he was surprised and concerned about the absence of documents from this personnel file. In particular, a letter of offer he believes was sent to the applicant at the time of the commencement of her employment is missing. Also missing is a record of the interview he conducted with the applicant prior to her being employed.
Mr Sissanes was asked about the termination of the applicant’s employment. He gave evidence that he understands that the applicant’s employment was terminated in November 2002, although the applicant asserts that she did not receive a notice of termination prepared at that time. Mr Sissanes gave evidence that rather than dispute the matter, he arranged for the applicant to be paid her employee entitlements up to February 2003. Two payments were made. The second payment was the cheque for $54.87, which Mr Sissanes stated had been provided in order to deal with a possible calculation error in the first payment.
I permitted Mr McLure to lead additional evidence in chief from Mr Sissanes. Mr Sissanes gave evidence that he was not much involved in the preparation of accounts. He relied upon staff to prepare accounts and to chase up bad debts. He explained his understanding that the first respondent operates accounts on an accrual accounting basis. He also explained that the sales register prepared from MYOB is a record of invoices, not payments. He explained that when his employees undertook a job, they sought payment on the day and had the customer sign a worksheet, including an acknowledgment of any payment received. Where payment was received at the time the job was done, the customer would subsequently be issued with a zero dollar invoice to further verify payment. Mr Sissanes gave evidence that not all cash receipts were banked and he relies upon advice that he is under no obligation to do so, provided that cash is properly accounted for. Mr Sissanes further gave evidence that where a warranty claim was made on equipment, the procedure was for the first respondent to obtain a replacement part from its supplier and to return the faulty part to the supplier for a credit. No charge was made to the customer on such a warranty claim and the supplier paid the service charge at an agreed fixed rate.
Stephen Marstaeller is a salesman employed with the first respondent who has been so employed since 11 October 1999. He deposes that the applicant told him when she commenced her employment that she had previously been involved in air conditioning sales although, from comments made by the applicant and her request for assistance, he doubted that previous involvement. He deposes that he formed the view that the applicant was not familiar with the first respondent’s MYOB computer software package and in late December 2001 he spoke to Mr Sissanes to express his concern about Ms Wilczak’s work performance. Mr Marstaeller remained concerned about the work performance of Ms Wilczak and drew to the attention of Mr Sissanes her re-organisation of the filing system. He deposes that at 3.00pm most days Ms Wilczak would (literally) crow like a rooster and say words to the effect, “My brain has now ceased to function”. He deposes that on 30 or 40 occasions that he is aware of, Ms Wilczak made statements about being stressed after 3.00pm.
Mr Marstaeller deposes as to a particular problem concerning the preparation of an invoice to a client known as Wal’s Pharmacy. He also responds to Ms Wilczak’s affidavit relating to alleged conversations between them.
Under cross-examination Mr Marstaeller admitted that following the restoration of the filing system to its original form by Ms Wilczak he had no difficulty in finding files. He also agreed with a suggestion from me that the instruction on a post-it note left for Ms Wilczak in relation to the invoice to be prepared for Wal’s Pharmacy was not clear.
Adrian Giuliani is an employee of the first respondent, initially employed as an apprentice air conditioning mechanic and now employed as an air conditioning mechanic. He deposes that Ms Wilczak’s affidavit evidence concerning the under payment of his salary is not accurate. Under cross-examination he stated that he raised the problem with Ms Afonso and that both she and Ms Wilczak suggested that he speak to Mr Sissanes about it. He stated that he did not do so. He deposes that subsequently Ms Afonso advised him that the under payment would be rectified and it was rectified.
Patricia Afonso is a former employee of the first respondent. From 1 October 2001 to February 2003 she was employed as an office administrator and accounts officer. Her desk was located directly next to Ms Wilczak’s desk. She deposes that Ms Wilczak’s affidavit evidence is not accurate.
Patricia Afonso deposes that both Ms Wilczak and she prepared invoices as a MYOB document from worksheets returned by technicians. Ms Afonso deposes that she observed that Ms Wilczak had difficulties on almost a daily basis with the MYOB accounting package, as well as with Excel and Word. She deposes that almost every day Ms Wilczak would say in a joking way that her brain did not work after 3.00pm. She further deposes that around Christmas 2001 when the office was very busy Ms Wilczak suggested to her a number of times that the two should go on stress leave. She took it as a joke. However, she thought that it was more than a joke when just before Christmas 2001 Ms Wilczak said words to her to the effect:
We should both go on stress leave at Christmas time and that will really mess him up.
Ms Afonso deposes that in May 2002, when Mr Sissanes was on holidays, she found that she had to do a lot of Ms Wilczak’s work. On 27 May 2002, after Mr Sissanes returned from holidays she deposes that she went into Mr Sissanes’ office and said words to him to the effect:
Anna is not capable of performing her duties to a satisfactory level and I am sick of doing my work and helping her along every day. Something has to be done as I have had enough and I am going to leave otherwise.
She deposes that subsequently Ms Wilczak was called into Mr Sissanes’ office and after about five minutes she came out appearing flustered and in a huff. She deposes that about an hour later Mr Hardcastle telephoned her and told her that Ms Wilczak would be on stress leave for at least three months and suggested that she go on stress leave too.
Ms Afonso deposes that in a later telephone conversation Mr Hardcastle said that Ms Wilczak was too stressed to talk to her and sought her support “if this goes any further”. Ms Afonso was non committal. Ms Afonso deposes that Mr Hardcastle stated that Ms Wilczak would not be returning to work for at least 12 months.
Ms Afonso deposes that on 15 September 2003 Ms Wilczak called her at home and asked if she could get an affidavit from her about “what was going on at Alpine”. Ms Afonso deposes that she asked for an explanation and that Ms Wilczak had said, “what he is doing with his cash money”. She also referred to “illegal stuff he has been doing”. Ms Afonso declined to provide an affidavit on the basis that she did not think that Mr Sissanes did anything wrong.
Ms Afonso also responds to Ms Wilczak’s affidavit in respect of the conversations attributed to her.
I permitted Mr McLure to lead additional oral evidence from Ms Afonso. She stated that she is now employed with a business called Hymec and that she had been formerly employed with that business before she worked with the first respondent. She also stated that Ms Wilczak generally prepared and sent invoices and that she (Ms Afosno) got payments and entered them into the MYOB database. Ms Afonso was shown the cash receipt book of the first respondent. She stated it was used for noting cash receipts only and was an additional record to the MYOB database. She stated that all but about four of the entries in the cash book shown to her were hers. The cash book is exhibit R7. Ms Afonso stated that she was not aware of any complaints received in relation to warranty claims. She could not recall any customer complaints in relation to money matters.
Under cross-examination, Ms Afonso stated that she left the first respondent to earn more money with her current employer. She stated that she did have a concern in her prior employment with her current employer about unethical behaviour but the individual responsible for that behaviour was now gone. She stated that she had been distressed by that unethical behaviour. She stated that she was not aware of any unethical or illegal behaviour occurring while she was employed with the first respondent.
Ms Afonso was asked to identify from an extract from the cash receipts book invoices recorded in the MYOB database. She was unable to identify from the record of the MYOB database invoices for November and December 2001 certain cash book entries marked with an asterisk. She agreed that all cash book entries should have been recorded on MYOB. Ms Afonso agreed that before the filing system was changed by Ms Wilczak and that after it had been restored to its former state by Ms Wilczak she had no difficulty finding files.
In re-examination Ms Afonso accepted that there were two filing systems operating in the office, one in relation to installation work and the other in relation to service work. She also stated that she did not know the difference between cash and accrual accounting. Further, she stated that she was not generally responsible for entering details of business expenditure on MYOB. However, she did enter on MYOB receipts for business expenditure that were provided to her.
I found Ms Afonso to be an impressive and persuasive witness.
Submissions
Ms Wilczak filed 52 pages of written submissions on 2 December 2003. While these submissions are lengthy, they are not very helpful. They consist largely of bald and rather wild assertions of wrongdoing by the respondents which re-state in expanded form the allegations in the applicant’s statement of claim. The submissions purport to survey the evidence but descend to a discussion of situations of “hypothetical” rather than “real” wrongdoing. At paragraph 6(o) of the submissions Ms Wilczak states:
It is my testimony that such hypotheticals were in fact actualities that were not uncommon, though without documents I cannot prove that they did occur.
In the circumstances, I do not understand the point of the hypothetical scenarios in the submissions.
Ms Wilczak’s submissions place emphasis on the documents missing from her employment file and the asserted inadequate discovery of documents by the respondents. At paragraph 6(ar) I am invited to infer the existence of documents that “would have proved” Ms Wilczak’s allegations against the respondents. Again, at paragraph 8(a) Ms Wilczak states that:
It is clear and obvious that the abundance of any proof of the allegations made by me relating to improper invoicing and dealing, and resulting alleged breaches of the Trade Practices Act, would be contained in the documents not discovered.
Ms Wilczak then proceeds to make serious allegations against the respondents and Mr McLure in their conduct of the litigation (paragraphs 17 and 18). Mr Sissanes is accused of perjury and the respondents’ lawyers are criticised for resisting the extensive discovery sought by the applicant.
I am invited (at paragraph 18(p)) to find that the respondents should bear the onus of proving their “innocence” of the applicant’s allegations, on the basis that they are assumed to have concealed material documents.
Finally, at paragraph 18(s) Ms Wilczak states:
If this Court, in its judgment comes to a conclusion that the defendants have not committed fraud and/or a breaches (sic) of the Trade Practices Act then it would be, in my view, tantamount to this Court finding me guilty of committing a Fraud and Defamation against the Respondents.
Mr McLure makes the following submissions on behalf of the respondents:
The applicant’s case is legally and factually without foundation.
At paragraph 22 of the statement of claim, the applicant pleads three breaches of the Trade Practices Act (‘the TPA’) and a breach of the respondent’s duty of care to the applicant. Although put in various ways, the essence of the applicant’s claim is that the respondents caused the applicant to suffer stress and anxiety by:
b)wrongly charging clients and suppliers; and
c)concealing evidence of cash receipts for the purpose of avoiding tax obligations.
It is important at the outset to observe that in both respects, the applicant alleges serious unlawful conduct on the part of the respondents. The applicant does of course have the onus of proof. Having regard to the seriousness of the allegations made by the applicant, the standard of proof is to be determined according to Briginshaw v Briginshaw (1938) 60 CLR 336.
The respondents’ answer both allegations at two levels, namely:
a)they are factually wrong;
b)even if they are correct, the proof of them does not entitle the applicant to damages because there is no causal connection between the alleged acts and the applicant’s stress and anxiety. Moreover, there is no evidence that the applicant is or was suffering from a compensable injury or condition.
Wrongly charging clients and suppliers
The applicant alleges that the respondents were making warranty claims for parts that were not defective, but had in fact been damaged by the respondents’ employed technicians: see paragraph 13(a) and 19(a)(i) of the statement of claim and TP 65.
At TP 188 – 190, Mr Sissanes explained the process followed for making warranty claims on suppliers. In summary, when a replacement part was requested from the manufacturer, Alpine was billed for that part. Alpine would later send the defective part back to the manufacturer, which would then process the warranty claim by crediting Alpine’s account for the amount of the part. Clearly, if Alpine was making warranty claims for items that were not defective but had been damaged during installation (as alleged by Ms Wilczak), it is highly likely that the manufacturer would have detected this and refused to credit Alpine’s account.
It is clear that the applicant had no understanding of how warranty claims were accounted for as between Alpine and its suppliers and was therefore never in a position to perceive false warranty claims being made. She had never even read the warranty (TP 75). The applicant gave this evidence at TP 77-78:
Yes, under a warranty claim the supplier would charge Alpine for that part? --- I don't recall.
You don't know? --- I'm not sure.
And once Alpine had received that part from the supplier the responsibility was on Alpine to send the defective part back to the supplier following which - - -? --- Yes, we would send - yeah, we would send the defective part back to the supplier, yes.
And at that point - - -? --- Most of the time.
And at that point the supplier would credit Alpine's account for the amount of the part? --- That could possibly be correct.
Do you know or are you just guessing? --- I'm - I don't recall it off hand.
I'd have to look at the documents, I'm sorry.
Is that because that wasn't part of your job? --- I didn't do the accounts in crediting for the parts, no.
So it wasn't - - -? --- I was just doing the invoicing.
It wasn't your job to do the accounting - - -? --- No.
As between Alpine and the suppliers? --- No.
You just don't know, do you? --- I'm not familiar with it, no.
You don't know? --- I don't recall, no.
No, you don't know? --- All right, I don't know.
And you never knew because it wasn't your job; that's right, isn't it? --- No, that wasn't my job, no.
So you never knew? --- No
If the respondents had been making false warranty claims on their suppliers, it is improbable that the suppliers would not have made a complaint about such a practice. The applicant’s evidence about complaints from suppliers was as follows (TP 80):
Do you ever remember anyone receiving a complaint from suppliers about Alpine charging - sorry, seeking reimbursement under warranty claims for items that weren't defective? --- Not off hand, no.
At TP 82 the applicant gave evidence of a manufacturer’s agent requesting a change to an invoice, but it cannot be inferred from the vague nature of the applicant’s evidence that this was an attempt by the respondents to make a false warranty claim.
The applicant also alleges that the respondents were wrongly charging clients for work which they ought not to have been required to pay (TP 79). Mr Sissanes explained that work was (and is) almost always done pursuant to a quote provided to the customer (TP 189). It is difficult to understand why any customer would voluntarily pay more than the amount set by the quote. One would expect that customers who received invoices for amounts greater than the quote would complain. Mr Sissanes stated that he had never received a complaint from a customer about being charged for work for which they had not agreed to pay (TP 190). The applicant’s evidence about complaints from customers was as follows (TP 80):
Right, did you ever receive a complaint from a customer where the customer has said why am I being charged for work in addition to - sorry, why am I being charged for an amount in addition to what Alpine has provided me in a quote? --- I don't recall.
You never received such a complaint, did you? --- Not myself, no, not that I can recall.
And do you remember anyone else in the office telling you that they were receiving such complaints? --- Not that I can recall.
Concealing cash receipts from the ATO
The height of the applicant’s case in relation to concealing evidence of cash receipts is at paragraph 17 of her first affidavit. The respondents make the following submissions:
a)Ms Afonso denies the part of the conversation attributed to her: see paragraph 18 of Ms Afonso’s affidavit. Despite the applicant’s attack on Ms Afonso’s credit, she is a former employee of the respondents and has no reason to give favourable evidence for either side. Her evidence is independent of the parties and should be accepted;
b)Mr Sissanes denies the allegation. It is improbable that Mr Sissanes would have given the applicant such an instruction, as he would have to be extremely foolish and unsophisticated to openly instruct his staff to delete invoices in respect of cash receipts.
The applicant seeks to make much of the fact that some entries in the cash book do not appear in the sales register report which is annexure F to Mr Hardcastle's affidavit. There are any number of explanations for why that might be so. For example, the sales register may represent only the invoices that were generated in that month, but not the payments that were received that month (TP 181). It may even be the case that some cash payments have not been properly accounted for, however, it does not follow from this that Mr Sissanes has acted unlawfully. The reality is that Mr Sissanes did not perform any of the accounting functions, which he had delegated to his staff and the company’s accountant who attended on a monthly basis.
The only important issue in relation to this allegation is whether Mr Sissanes gave the instruction referred to at paragraph 17 of the applicant’s first affidavit. That allegation should not be accepted for the reasons given above.
Causation and damage
Putting aside the merits of the above allegations, to be entitled to damages the applicant must have suffered a recognisable psychiatric illness. Mere stress, grief or sorrow, however severe, does not sound in damages: Mt Isa Mines v Pusey (1970) 125 CLR 383 at 394. There is no evidence that the applicant suffered a recognisable illness. Self‑serving evidence from the applicant and Mr Hardcastle about the applicant’s mental state cannot be used to establish a recognisable psychiatric illness. In any event, this evidence should be viewed in the context of the opinions that were provided to GIO, namely that the applicant suffered from no psychological or psychiatric injury and was at all times fit to work: see the reports of Dr Gordon Davies dated 19 July 2002 (exhibit R4) and Dr Robert Kaplan dated 31 December 2002 (exhibit R5).
Even if the applicant has sustained a recognisable psychiatric illness, the circumstances in which it was sustained were not reasonably foreseeable to the respondent. In Queensland Corrective Services Commission v Gallagher (unreported, Qld CA, de Jersey CJ, Pincus JA, White J, 18 December 1998), the Court of Appeal held that the question to be addressed was whether there was ‘reasonable objectively based foreseeability of injury of some such sort as the respondent suffered involved in the [employers] conduct’. de Jersey CJ indicated that it was necessary that evidence be led that the conduct of the defendant would have caused psychiatric injury in a person without pre-existing vulnerability. That is, psychiatric injury would have been caused in a person with ‘normal fortitude’. The evidence is that the applicant was formally counselled by Mr Sissanes on two occasions. Her reaction to that counselling was not that of a person of ‘normal fortitude’.
The real explanation for this claim
The real explanation for the applicant leaving the employment of the respondent and then bringing this claim is that she is hypersensitive to any form of criticism and not prepared to consider the possibility that her performance may have needed to improve.
The applicant’s evidence was that she was happy working for the respondents up to about Christmas 2001 (TP 70). The evidence of Mr Sissanes is that after that point, the applicant was spoken to formally on two occasion about problems with her performance. The applicant reacted strongly on both occasion and of course, on the second occasion she left. On any view, the criticisms of Mr Sissanes were neither exceptional nor un-called for. The applicant’s extravagant reaction cannot be justified.
The undisputed evidence is that on 3 September 2002 WIMS advised Mr Hardcastle that the applicant could return to work at Alpine on the condition that she agree to participate in some training (TP 47). That rather generous offer was met with Mr Hardcastle’s letter of 4 September 2002 (exhibit R2) which was sent with the full approval of the applicant (TP 47, P92, 93), knowing that it was unlikely that the conditions sought to be imposed in the letter would be accepted by the respondents (TP 108).
The respondents’ offer that the applicant could return to work was repeated by WIMS on 27 September 2002 and 2 October 2002 and met with the same response (TP 94).
The most vivid demonstration of the applicant’s hypersensitivity to criticism can be seen from her letter to WIMS dated 16 November 2002 (annexure I to the affidavit of Mr Sissanes). On or shortly before 16 November 2002, the applicant received an email from Catherine O’Grady of WIMS, which again repeated the offer that the applicant could return to work at Alpine if she agreed to undergo training (TP 95). The applicant’s remarkable response commenced as follows:
I firstly would like to let you know that upon receipt of your email I was enraged, emotionally upset and totally astounded that my competence at being able to seek employment would come under question. Your email was a stressful thing doing little for my self-confidence and esteem. It has deeply hurt me and it has taken me some time to regain my composure to write this letter.
and then later at paragraph 5:
…and I feel that you are suggesting that I am in need of retraining. This is almost a repeat of the lie by Sissanes that I need training to do my job.
The way in which the applicant reacted to Mr Sissanes’ criticism of her performance in May 2002 should be viewed in the context of her excessive reaction to WIMS suggestion that should undergo retraining.
All of this conduct should also be viewed in the context of the applicant having received treatment for depression on three occasions from 1998 to 2001 (TP 65-66). In particular, regard should be had to the applicant’s evidence that one instance of depression related to her perception of employees at another business engaging in illegal activities. Another instance of depression related to the applicant’s involvement in litigation in the Federal Court, which was ongoing throughout the time she was employed by Alpine.
Finally, the opportunistic way in which the applicant dealt with the GIO is relevant to the assessment of her credit. On 23 January 2002 the applicant met with a representative of WIMS and stated that she would be prepared to withdraw her workers compensation claim if the GIO paid for her to be retrained as a real estate agent. The applicant made the request knowing that:
a)she was only entitled to receive workers compensation benefits while she was injured and unable to work (TP 99);
b)she knew (or ought to have known) that it was not GIO’s responsibility to pay for her to trained in another occupation merely because she did not wish to work with the respondents any longer.
Conclusion
The applicant’s allegations of overcharging and concealment of cash payments are unsupported by the evidence. In any event, whatever the respondents did, it did not cause the applicant to suffer a recognisable psychiatric illness.
In her 28 page written response to Mr McLure’s submissions the applicant joins issue on each point, repeating her allegations of perjury on the part of the respondents “in respect of discovery”.
Reasoning
This application fails because of a lack of proof. There is a dispute between the parties as to whether the evidence ought to be assessed in accordance with the Briginshaw principles but I do not need to resolve that issue. Even on the ordinary civil standard of proof the application fails.
The application under the Trade Practices Act fails because the applicant must establish to my satisfaction on the balance of probabilities that Mr Sissanes represented to the applicant that she would not be required to do anything that was illegal, unethical or unconscionable. The representation was allegedly made at the applicant’s job interview in late August or early September 2001, as a result of the applicant informing Mr Sissanes that she was a justice of the peace and would have nothing to do with a business that had disregard for ethics, honesty and the law. The only reason why the applicant apparently felt the need to impart this gratuitous insult to a prospective employer was that she had been engaged in a copyright dispute with a former business partner or employee. Mr Sissanes admits that the applicant mentioned a problem with her former business partner. I find it very hard to believe that the applicant, at her job interview, would have sought a declaration of honesty and integrity from her prospective employer. It smacks of pomposity and is not behaviour likely to win favour with a prospective employer. Nevertheless, I am asked to believe that Mr Sissanes not only declared his own honesty and integrity but also that of the applicant. How could he possibly know? He had only just met the woman. The allegation is absurd.
It is noteworthy that while records of job interviews of other employees of the respondents exist, the record of interview of the applicant is missing. The applicant would have me believe that the respondents have concealed or destroyed it. Through Mr Hardcastle, she has claimed conduct on behalf of the respondents in respect of discovery that would at least be a contempt of court. The respondents have made no such allegations against the applicant. However, it is just as likely that the applicant was responsible for the record of interview being lost or destroyed. She was, after all, an employee with access to the respondent’s files. It would have been unhelpful to the applicant if the record of interview supported Mr Sissanes’ evidence of the applicant’s claims at interview about her former experience in air conditioning sales.
Even if Mr Sissanes did make a representation about the respondents’ ethical business practices, there is no reliable evidence that such a representation was untrue. The applicant relies upon her own assertions. These centre upon allegations of false warranty claims against manufacturers. The documentary evidence does not support the allegations. The weight of evidence for the respondents rebuts them. I was impressed, in particular, with the evidence of Patricia Afonso. She worked in close proximity with the applicant and worked with her on the company’s accounts. She would be in an excellent position to know if something improper had been occurring. The applicant appears to have regarded Ms Afonso as a friend and confidante. The applicant and Mr Hardcastle attempted to recruit Ms Afonso to give evidence against the respondents. Ms Afonso resisted that attempt and gave evidence for the respondents. She is no longer an employee of the respondents and has no reason to be coerced by them or in fear of them. I regard her as an honest and reliable witness. Ms Afonso’s evidence is that there were no false warranty claims, or indeed any unlawful or unethical behaviour by the respondents.
The applicant would have me believe that the evidence of unethical business practices exists and that it must be in documents withheld from discovery. The applicant had sought discovery against the respondents that amounted to an oppressive fishing expedition. They were right to resist it. The limited discovery that I permitted was sufficient to reveal evidence of commercial wrongdoing over the relevant period if it existed. No commercial wrongdoing was revealed and the vituperative inventive about discovery indulged in by the applicant does her no credit at all.
Her own evidence under cross-examination showed that the applicant, as a former employee, had remarkably little understanding of the warranty claims system. She appeared not to appreciate that the first respondent was obliged to return faulty parts to the manufacturer in order to verify a warranty claim. If the respondents had been engaged in fraudulent warranty claims the manufacturers would have had to have been rather dimwitted not to spot them.
For the same reasons the claims of breach of contract and negligence also fail. There is no reliable evidence that the respondents breached any implied terms of contract or duty of care owed to the applicant in relation to her not being required to perform duties that were illegal, immoral or unconscionable. The applicant was, however, expected to perform her normal duties with reasonable efficiency. There is strong and persuasive evidence that she failed to do so. The applicant was not simply a bad employee; she was deplorable. What is remarkable is that Mr Sissanes allowed the situation to go on as long as it did. In the end, it required a good and reliable employee, Ms Afonso, to threaten to resign for Mr Sissanes to step in and seriously counsel the applicant about her work performance. The response of the applicant was to depart the workplace and to make a stress related workers’ compensation claim. In the pursuit of that claim the applicant has resisted the reasonable attempts by the respondents and the workers’ compensation insurer to get her back to the workplace. However not content with that claim, the applicant has brought this proceeding. It should never have been brought. The application had very poor prospects of success. It was pursued with venom, probably to put pressure on the respondents in relation to the workers’ compensation claim. The respondents have been put to completely unnecessary expense in responding to it. The Court’s process has been abused. The application should be dismissed with costs, to be assessed on an indemnity basis.
The only remaining question is whether the applicant or Mr Hardcastle should pay those costs. Ms Wilczak appeared to me to be person who could be manipulated. Mr Hardcastle played the clearly dominant role in the conduct of the litigation. He may well be the controlling mind behind the litigation. During the course of the trial I warned Mr Hardcastle that a non party such as him could become liable to pay costs. With that in mind, the applicant in her written submissions was at pains to stress that she rather than Mr Hardcastle was in control. At paragraph 17(d) and (e) of her first written submissions she states:
It is my submission that but for the assistance of good people like Mr Hardcastle, respondents like Alpine and Mr Sissanes, with their legal representatives, would always defeat people such as myself, people without legal skills, tactics and money.
I know that the Court, on the second day of the hearing, warned me that the Court could take the view that Mr Hardcastle is running this case, that it is his case. This is not the case, the case has always been my case, at my direction. The truth of the matter must be that I am entitled to be equal before the law with the respondents and that it would be unreasonable to punish me for asking my partner (de fact husband and soon to be husband) to help me fight for my rights under the law.
I have no wish to punish Ms Wilczak for the role played by Mr Hardcastle. On the contrary, I seek to protect her from what may be an unfair consequence of his involvement. Ms Wilczak’s claim to be in control of her case is at odds with what I observed during the trial. Also, I do not know who wrote her written submissions. In the circumstances, I am concerned to see that the parties, including Ms Wilczak, be given an opportunity to seek a costs order against Mr Hardcastle.
I certify that the preceding sixty-three (63) paragraphs are a true copy of the reasons for judgment of Driver FM
Associate:
Date: 12 February 2004
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