Federal Court of Australia

Flageul v WeDrive Pty Ltd [2021] FCAFC 102

ORDERS

THE COURT ORDERS THAT:

1.    The appeal is dismissed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

FLICK J:

1    The Appellant in the present proceeding, Mr Yan Flageul, was the Chief Executive Officer of the First Respondent, WeDrive Pty Ltd (“WeDrive”). His services as such were terminated on 21 December 2017 by the Second Respondent, Mr Steven Mace, who was a non-executive director of WeDrive. The Third Respondent was Mr Gregg Taylor, another director of WeDrive.

2    Mr Flageul commenced proceedings in this Court seeking the payment of pecuniary penalties and damages under the Fair Work Act 2009 (Cth) (the “Fair Work Act”), and also damages pursuant the Corporations Act 2001 (Cth) (the “Corporations Act”) and the Australian Consumer Law. By way of an Amended Statement of Claim dated 16 October 2019, Mr Flageul (in very summary form) contended that there had been a contravention of s 340(1) of the Fair Work Act “because” he had exercised a “workplace right” within the meaning of s 341(1) of that Act. He also alleged oppressive and unconscionable conduct on the part of the Respondents.

3    On 18 November 2020, a Judge of this Court dismissed Mr Flageul’s proceeding: Flageul v WeDrive Pty Ltd [2020] FCA 1666.

4    Mr Flageul appealed.

5    The opportunity has been taken to read in draft form the joint reasons of Murphy and O’Callaghan JJ. Gratitude is expressed to their Honours for their careful exposition of the facts. Concurrence is expressed with their Honours reasons for rejecting all of the Grounds of Appeal. The opportunity has nevertheless been taken to separately address the claims made pursuant to the Fair Work Act and the reasons for also concluding that the primary Judge committed no appellable error in rejecting those claims.

6    The appeal is to be dismissed.

The Fair Work Act – ss 340, 341, 360 & 361

7    Although also set forth in the joint reasons of Murphy and O’Callaghan JJ, it is prudent to again set forth the provisions of the Fair Work Act of immediate relevance to the present appeal.

8    Section 340(1) of the Fair Work Act prohibits the taking of “adverse action” and provides as follows:

340    Protection

(1)    A person must not take adverse action against another person:

(a)    because the other person:

(i)    has a workplace right; or

(ii)    has, or has not, exercised a workplace right; or

(iii)    proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right; or

(b)    to prevent the exercise of a workplace right by the other person.

…

It is s 341(1) which identifies a “workplace right” and that sub-section provides as follows:

341    Meaning of workplace right

Meaning of workplace right

(1)    A person has a workplace right if the person:

(a)    is entitled to the benefit of, or has a role or responsibility under, a workplace law, workplace instrument or order made by an industrial body; or

(b)    is able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument; or

(c)    is able to make a complaint or inquiry:

(i)    to a person or body having the capacity under a workplace law to seek compliance with that law or a workplace instrument; or

(ii)    if the person is an employee – in relation to his or her employment.

…

When applying s 340(1) to the facts of a particular case and in the identification of the reason or reasons why action has been taken, ss 360 and 361 assume importance. Section 360 provides as follows:

360    Multiple reasons for action

For the purposes of this Part, a person takes action for a particular reason if the reasons for the action include that reason.

Section 361(1) provides as follows:

361    Reason for action to be presumed unless proved otherwise

(1)    If:

(a)    in an application in relation to a contravention of this Part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and

(b)    taking that action for that reason or with that intent would constitute a contravention of this Part;

it is presumed that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise.

…

9    The legislative intent sought to be achieved by the Commonwealth Legislature by ss 360 and 361 is to “provide a balance between the parties to a workplace dispute by, first, establishing a presumption in favour of an employee who alleges that an employer had taken, or is taking, adverse action against him or her because of a particular circumstance or fact of the kind specified in any of ss 340, 346, 351 or 354 and, secondly, enabling the employer to rebut that presumption”: Rumble v The Partnership (t/as HWL Ebsworth Lawyers) [2020] FCAFC 37 at [33], (2020) 275 FCR 423 at 430-431 per Rares and Katzmann JJ (“Rumble”). Their Honours continued on to summarise the effect of these presumptions by stating that the “presumption and onus that ss 360 and 361(1) create are necessary because the employee cannot know or prove what was in the decision-maker’s mind when he or she took the adverse action.” The employer or decision-maker acting on its behalf who took the alleged adverse action, it was said, “must prove, as a fact, that none of his or her reasons for that action included as a substantial and operative factor any reason or intent that the Act proscribed…”: [2020] FCAFC 37 at [34], (2020) 275 FCR 423 at 431. In providing this summary, their Honours relied upon Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32, (2012) 248 CLR 500 (“Barclay”). In that decision, French CJ and Crennan J observed (inter alia) that it would be “extremely difficult to displace the statutory presumption in s 361 if no direct testimony is given by the decision-maker acting on behalf of the employer”: [2012] HCA 32 at [45], (2012) 248 CLR 500 at 517.

10    It was common ground that the “adverse action” relied upon was the dismissal of Mr Flageul by Mr Mace. But the Appellant put in issue, inter alia, whether ss 360 and 361 had been properly understood and applied by the primary Judge.

The reasons of the primary Judge & the absence of error

11    For the purposes of resolving the claim as to an alleged contravention of s 340(1), the reasons for decision of the primary Judge addressed in turn:

    the facts of relevance to each of the eleven events relied upon by the Appellant and as pleaded in the Amended Statement of Claim ([2020] FCA 1666 at [185] to [219]);

    whether any of the events which had been pleaded constituted the making of a “complaint” or an “inquiry” for the purposes of s 341(1)(c) ([2020] FCA 1666 at [249] to [259]);

    whether any of those “complaints” or “inquiries” were “in relation to [Mr Flageul’s] employment” as required by s 341(c)(ii) ([2020] FCA 1666 at [262] to [272]); and

    whether any of the “complaints” or “inquiries” which had been made were “anchored in a legal entitlement of some kind” ([2020] FCA 1666 at [282] to [297]), that question involving the application of PIA Mortgage Services Pty Ltd v King [2020] FCAFC 15, (2020) 274 FCR 225 (“PIA Mortgage Services v King”) and the primary Judge’s earlier decision in Maric v Ericsson Australia Pty Ltd [2020] FCA 452, (2020) 293 IR 442;

That part of his Honour’s reasons relevantly concluded as follows:

[297]    It follows that for the foregoing reasons, Mr. Flageul did not exercise any workplace rights in making the alleged complaints/inquiries that he made, save in the case of the fifth alleged complaint/inquiry.

12    The primary Judge then turned his attention to “the reasons for Mr. Flageul’s dismissal”, which included giving attention to s 361 of the Fair Work Act and the onus upon the Respondents of “proving on the balance of probabilities the actual ‘operative and immediate reason’ for Mr. Flageul’s dismissal”: [2020] FCA 1666 at [299] to [300].

13    Irrespective of any of the preceding conclusions of his Honour as to whether one or other of the eleven events relied upon constituted a “complaint” or an “inquiry”, and irrespective of whether any such complaint had to be “anchored in a legal entitlement of some kind” and be “in relation to [Mr Flageul’s] employment”, if Mr Flageul failed to make out his claim that adverse action had been taken against him “because” he exercised a workplace right, his case founded upon s 340 of the Fair Work Act was doomed to failure.

14    And it was upon this central question that he in fact failed. His Honour concluded as follows:

[302]    With very great respect to Mr. Flageul, I have concluded that Mr. Mace’s evidence concerning his reasons for the dismissal of Mr. Flageul is reliable and I prefer it to Mr. Flageul’s account of what happened, which I do not accept. It follows that the respondents have thereby displaced the presumption created by s. 361 of the F.W. Act and have shown that Mr. Flageul was not dismissed because of the exercise by him of a workplace right. There are a number of reasons for reaching this conclusion.

There then immediately followed eight separate matters upon which his Honour relied in reaching that conclusion: [2020] FCA 1666 at [303] to [311]. These matters are extracted in the joint reasons of Murphy and O’Callaghan JJ and need not be repeated.

15    The reasons for Mr Flageul’s dismissal to which reference is made in para [302] had been set out in a letter dated 22 December 2017 and forwarded to Mr Flageul by way of email on that date. That letter provided in relevant part as follows:

Notice of termination of employment

We refer to the Executive Services Agreement between WeDrive Pty Ltd ACN 621 317 324 (Company) and you (Employee) referred to as the (Agreement)

As discussed with you, the Company has been and continues to undertake investigations regarding your conduct as an employee of the Company and your dealings with respect to the recent transaction under which the Company purchased certain assets from WeDrive Australia Pty Ltd as trustee of the WeDrive Melbourne Trust (Transaction). In particular, the Company remains concerned about your failure to disclose material issues to the Company both before and after completion of the Transaction.

…

In addition, both Mr Flageul and Mr Mace had filed affidavit evidence and were cross-examined at the hearing. The primary Judge had previously set forth in his reasons for decision the accounts given by Mr Flageul and Mr Mace as to discussions held on 20 December 2017 and the meeting held on 21 December 2017 at which Mr Mace dismissed Mr Flageul: [2020] FCA 1666 at [121] to [140]. In resolving the differences in the accounts given by Mr Flageul and Mr Mace and others who took part in those discussions and the meeting, the primary Judge concluded:

[147]    On balance, and subject to what I say below, I generally prefer the recollections of Messrs. Mace, Taylor, Barker and Russell. Each person broadly corroborated the others. I find that the reasons given by Mr. Mace for Mr. Flageul’s termination included the non-disclosure issue and the performance of WeDrive. These reasons are largely in line with the issues raised by Mr. Mace in his 20 December 2017 email described above. That document also corroborates the evidence of Messrs. Mace and Taylor. I otherwise am not satisfied that Mr. Flageul has proven his account of what took place and I do not prefer it. Contrary to Mr. Russell’s impression of Mr. Flageul, I am prepared to accept that Mr. Flageul was very upset with his termination as C.E.O. WeDrive was his dream; that dream was shattered on 21 December 2017.

[148]    The one qualification concerns the issue as to whether Mr. Mace threatened to sue Mr. Flageul. When, very properly, this was put to Mr. Mace in cross-examination he said that he did not “recall saying anything to [Mr. Flageul] about legal action…” In the context of Mr. Mace’s anger towards Mr. Flageul (he conceded that on 19 December he was “fuming”), I think he may have told Mr. Flageul on 21 December 2017 that he was going to sue him, or that he was considering doing this. As it happens he never did. But I do not accept, based only on Mr. Flageul’s recollection, and nothing else, that Mr. Mace told him that unless he sold his shares for $1 he would be sued. There is insufficient evidence to support that claim. However, I accept that Mr. Mace generally threatened to sue Mr. Flageul, but no more than this, because he was angry with him. In other words, I do not accept that Mr. Flageul has demonstrated that Mr. Mace’s threats were made to force a sale of his shares. Having said that, those who aspire to high corporate office, with all the rewards that follow from attaining it, must expect to receive the occasional hard knock when times are hard or during a crisis. These hard knocks, such as threats to sue to recover perceived loss, which if made impolitely I do not excuse, are a reality of the responsibilities of high office. But without more, and in the ordinary case, they are unlikely to justify a cause of action and an award of significant damages.

Notwithstanding submissions to the contrary advanced by Mr Flageul, it may be noted in passing that the account given by Mr Mace during cross-examination as to his reasons for dismissal largely accorded with the reasons in the letter of termination.

16    This assessment of the competing accounts and the primary Judge’s lack of satisfaction that Mr Flageul had “proven his account” ([2020] FCA 1666 at [302] and [147]) cannot be read in isolation of an earlier assessment of the evidence of Mr Flageul, namely the following:

[25]    I was not entirely impressed with the evidence given by Mr. Flageul. He had a great interest in the outcome of this case, and so I have treated his evidence with considerable caution. My general impression of him is that he at times exaggerated his evidence. That is not to say that he was dishonest; I think he tried to give his evidence truthfully. But he seemed overeager to explain his story, which when combined with a degree of exuberance, led him to embellish his account of what occurred. At times he introduced new parts of his story which had not appeared in the very many affidavits he had affirmed and which had been read into evidence. He often became argumentative. He was sometimes evasive. The language used in his affidavits did not help. His recollection of key events, in which he alleged he had exercised a workplace right, was often expressed in highly conclusionary language. …

A series of examples were then given and his Honour continued:

All of the alleged exercises of workplace rights were described in this way in Mr. Flageul’s first affidavit. Expressed in such conclusionary terms, it is difficult to give extensive weight to this type of evidence. That is especially because, on many occasions, it was never effectively corroborated.

17    The conclusion at para [302] was addressed specifically to the only complaint which his Honour found to have been the exercise of a workplace right for the purposes of s 341(1)(c)(ii) of the Fair Work Act, namely the fifth complaint: [2020] FCA 1666 at [297] to [298]. Following the eight matters relied upon by the primary Judge to support his conclusion at para [302], his Honour thereafter went on to nevertheless express as follows his finding as to whether any of the other “complaints” or “inquiries” could have impacted upon an assessment of Mr Mace’s reasons:

[311]    Finally, it follows that the respondents have demonstrated that none of the reasons for Mr. Flageul’s dismissal included the making by him of the fifth alleged complaint/inquiry. If it matters, I am also satisfied that the respondents have shown that the reasons for Mr. Flageul’s dismissal did not include, whether individually or in aggregate, the making of any of the other alleged complaints/inquiries relied upon by Mr. Flageul.

18    Contrary to the submission of the Appellant, no error is exposed in the findings made at paras [302] and [311] of the primary Judge’s reasons for decision.

19    There are at least two reasons for that conclusion.

20    First, Mr Flageul has failed to make good any error of the kind summarised by French CJ, Bell, Keane, Nettle and Gordon JJ in Robinson Helicopter Co Inc v McDermott [2016] HCA 22 at [43], (2016) 331 ALR 550 at 558 to 559. Their Honours there set forth as follows what was required in order for an appellant to set aside finding of facts made by a primary Judge:

[43]    The fact that the judge and the majority of the Court of Appeal came to different conclusions is in itself unremarkable. A court of appeal conducting an appeal by way of rehearing is bound to conduct a “real review” of the evidence given at first instance and of the judge’s reasons for judgment to determine whether the judge has erred in fact or law. If the court of appeal concludes that the judge has erred in fact, it is required to make its own findings of fact and to formulate its own reasoning based on those findings. But a court of appeal should not interfere with a judge’s findings of fact unless they are demonstrated to be wrong by “incontrovertible facts or uncontested testimony”, or they are “glaringly improbable” or “contrary to compelling inferences”. In this case, they were not. The judge’s findings of fact accorded to the weight of lay and expert evidence and to the range of permissible inferences. The majority of the Court of Appeal should not have overturned them.

(footnotes omitted)

But one of the authorities referred to by their Honours in this passage included the following oft-repeated observations of Gleeson CJ, Gummow and Kirby JJ in Fox v Percy [2003] HCA 22, (2003) 214 CLR 118 at 128:

[29]    …In some, quite rare, cases, although the facts fall short of being “incontrovertible”, an appellate conclusion may be reached that the decision at trial is “glaringly improbable” or “contrary to compelling inferences” in the case. In such circumstances, the appellate court is not relieved of its statutory functions by the fact that the trial judge has, expressly or implicitly, reached a conclusion influenced by an opinion concerning the credibility of witnesses. In such a case, making all due allowances for the advantages available to the trial judge, the appellate court must “not shrink from giving effect to” its own conclusion. Finality in litigation is highly desirable. Litigation beyond a trial is costly and usually upsetting. But in every appeal by way of rehearing, a judgment of the appellate court is required both on the facts and the law. It is not forbidden (nor in the face of the statutory requirement could it be) by ritual incantation about witness credibility, nor by judicial reference to the desirability of finality in litigation or reminders of the general advantages of the trial over the appellate process.

(footnotes omitted)

21    The preference given by the primary Judge to Mr Mace’s account of the reasons for the dismissal of Mr Flageul and his findings at paras [302] and [311] do not manifest any error. The findings can in no sense be described as “glaringly improbable” or “contrary to compelling inferences”. By way of contrast, the reasons of the primary Judge expose a careful and meticulous exposition of the facts and reasons in support of the findings made. The finding at para [302], most specifically, is followed by a detailed setting forth of eight factors supporting the finding that “Mr. Mace’s evidence concerning his reasons for the dismissal of Mr. Flageul is reliable” and why he preferred it to Mr Flageul’s account.

22    Second, the findings of the primary Judge at [302] and [311] are not surprising given the fact that Mr Mace does not seem to have been cross-examined in any manner to suggest either that:

    the reasons being relied upon were not the real reasons for the dismissal of Mr Flageul but were (for example) a mere contrivance to give effect to some pre-determined decision to achieve that outcome; or

    the reasons being relied upon were not the sole or the substantial reasons for the dismissal and that part of the reasoning process behind the dismissal included the making by Mr Flageul of what he sought to characterise as “complaints” or “inquiries”.

This was a matter, not surprisingly, which also occupied the attention of the primary Judge when he noted in his reasons for decision – as one of the eight matters taken into account when preferring Mr Mace’s account – the following:

[308]    Fifthly, the cross-examination of Messrs. Mace, Taylor, Barker and Russell did not, with very great respect, cause me to change my impression of the evidence they all gave. Strikingly, it was never put to Mr. Mace that the reason for Mr. Flageul’s dismissal was one of the complaints or inquiries as alleged, or all of them in aggregate. And this was so, notwithstanding that this was a case where credit was so important an issue. The rule in Browne v. Dunn (1894) 6 R. 67 ordinarily obliges counsel to put to a witness the nature of the case that will be put that contradicts the evidence of that witness. Whilst Mr. Flageul’s statement of claim set out his alleged reasons for his dismissal, I am not confident that Mr. Mace had notice of them; Mr. Mace was not questioned about those alleged reasons during his cross-examination: … The failure to observe the rule in Browne v. Dunn goes some way, in the particular circumstances of this case, to support the truthfulness of Mr. Mace’s evidence, although I note that in civil proceedings that may not amount to very much: …

The submission advanced by Mr Flageul that the contrary account as to the reasons for dismissal had been “put to” Mr Mace in the Amended Statement of Claim is to be summarily rejected. No authority was even attempted to be cited by Mr Flageul that compliance with the rule in Browne v Dunn (1894) 6 R 67 could be satisfied by way of pleadings rather than cross-examination. In the absence of some reason to question the identification by Mr Mace of his reasons for the dismissal, those reasons set forth in his affidavit evidence and his cross-examination, the sole factual question to be resolved was: whose account do you accept? Either Mr Mace’s or Mr Flageul’s? Even in the absence of any cross-examination of Mr Mace as to his reasons for dismissal, it did not necessarily follow that Mr Mace’s evidence was necessarily to be accepted. Even in the absence of cross-examination, a primary Judge need not necessarily accept a witness’s evidence. But the absence of any relevant cross-examination of Mr Mace as to his reasons certainly did not assist the case advanced on the Appellant’s behalf. Repeated requests for the Appellant to direct the Court’s attention to any cross-examination of potential relevance were met with silence.

23    Nor was any appellable error exposed in the primary Judge’s application of the “reverse onus” of proof provision set forth in s 361(1) of the Fair Work Act. Concurrence is expressed for the reasons given by Murphy and O’Callaghan JJ and (in particular) their Honours’ reasons for not discerning error in para [300] of the primary Judge’s decision: at para [58]. That paragraph of the reasons of the primary Judge was expressed as follows:

[300]    Because of s. 361 of the F.W. Act, practically speaking it is the respondents who bear the onus of proving on the balance of probabilities the actual “operative and immediate reason” for Mr. Flageul’s dismissal. In that respect, I find that it was Mr. Mace who terminated Mr. Flageul’s employment. By reason of the operation of s 360 of the F.W. Act, the question then becomes: have the respondents proven that Mr. Mace’s actual reasons for Mr. Flageul’s dismissal did not include the exercise by Mr. Flageul of a workplace right that comprises, individually or cumulatively, the alleged complaints/inquiries I have described above, and, in particular, because of the making of the fifth alleged complaint/inquiry?

Error in the correct application of ss 360 and 361, and a failure on the part of the primary Judge to direct attention to whether any one or other of the pleaded “complaints” or “inquiries” may have played some part in the reasoning of Mr Mace to dismiss Mr Flageul, it was submitted on his behalf, was manifest from the primary Judge’s:

    reference in para [300] to “the actual ‘operative and immediate reason’ for Mr. Flageul’s dismissal” – rather than an inquiry as to whether the making of any of the “complaints” or “inquiries” – for the purposes of s 360 – “include[d] that reason”; and also

    the reference in para [147] of the primary Judge’s reasons to the finding that “the reasons given by Mr. Mace for Mr. Flageul’s termination included the non-disclosure issue and the performance of WeDrive” – the submission being that the “inclusion” of specified reasons does not exclude the prospect of further reasons also including a consideration of the exercise by Mr Flageul of his pleaded “workplace rights”.

As was the conclusion of Murphy and O’Callaghan JJ, any such submission is sufficiently answered by the primary Judge directing attention to (and answering in the negative) a question as to whether Mr Mace’s reasons “include[d] the exercise by Mr. Flageul of a workplace right…” Although not bound to do so, Mr Mace gave “direct testimony” (Barclay at [45]) as to his reasons. And the primary Judge correctly found as “a fact, that none of his … reasons … included as a substantial and operative factor any reason … that the Act proscribed”: cf. Rumble at [34] per Rares and Katzmann JJ. This finding of fact discloses no appellable error; nor is there any error in the primary Judge’s application of the presumption and onus imposed by ss 360 and 361 of the Fair Work Act. The primary Judge made a finding of fact that correctly identified where the onus lay and what was necessary to discharge that onus.

24    Grounds 1.1 to 1.8 of the Notice of Appeal are dismissed.

CONCLUSIONS

25    Subject to these short observations directed solely to the claims made by the Appellant pursuant to the Fair Work Act, concurrence is expressed with the reasons of Murphy and O’Callaghan JJ.

26    Like their Honours, no view is expressed as to whether the decision in PIA Mortgage Services v King is “plainly wrong” and whether preference should be given to the obiter views expressed by Bromberg J (with whom Mortimer J agreed) in Cummins South Pacific Pty Ltd v Keenan [2020] FCAFC 204, (2020) 302 IR 400 (“Cummins South Pacific v Keenan”). That question simply does not arise for resolution in the present appeal. Nor were the competing views addressed in sufficient detail by opposing Counsel in the present proceeding so as to place the Court in a safe position to even express any tentative opinion. Separate from the failure of the Appellant to make good his contention that he was dismissed “because” of the exercise of any workplace right, stands the further difficulty confronting the Appellant in respect to his contention directed to PIA Mortgage Services v King being “plainly wrong”. This difficulty is that the primary Judge “accepted” that the fifth complaint was “anchored” in a “legal right”: [2020] FCA 1666 at [285]. Irrespective of whether PIA Mortgage Services v King was applied to the facts, or the broader view expressed by Bromberg J in Cummins South Pacific v Keenan be applied, this was not an issue which would have led to any different result.

27    The appeal is to be dismissed. There is to be no order for costs.

Associate:    

Dated:    15 June 2021

REASONS FOR JUDGMENT

MURPHY AND O’CALLAGHAN JJ:

Introduction

28    This is an appeal by Mr Flageul against a decision of a judge of this court dismissing his proceeding against the respondents, in which Mr Flageul sought the payment of pecuniary penalties under s 546 of the Fair Work Act 2009 (Cth) (the FW Act), and damages pursuant to the FW Act, the Corporations Act 2001 (Cth) (the Corporations Act) and the Australian Consumer Law (set out in Sch 2 to the Competition and Consumer Act 2010 (Cth)) (the ACL). His causes of action comprised claims of adverse action, breach of s 358 of the FW Act, oppression and unconscionable conduct on the part of the respondents.

29    It is sufficient to describe the facts in the following broad terms, which are taken from the reasons of the primary judge: see Flageul v WeDrive Pty Ltd [2020] FCA 1666 at [4]-[12].

30    For many years Mr Flageul sought to develop an application or “app” called “WeDrive”. The app was intended to permit a member of the public who had driven to an event, but did not want to drive home, to be allocated a driver who would arrive at the event and drive the member of the public home in their car; that driver would then be collected by another driver (a co-driver). By early 2017, considerable work had been completed in the development of this app, which was owned by Mr Flageul’s company, WeDrive Australia Pty Ltd (WeDrive Australia).

31    Mr Steven Mace, the second respondent, was a majority shareholder, director and executive chairman of Multi Services Solutions Group Pty Ltd (MSS Group). Mr Christopher Russell was at the time the CEO of this company. It owned six subsidiaries which carried on a number of businesses, including MSS Transport Services Pty Ltd (MSS Transport), which carried on a business of outsourced car detailing for hire car companies. This included, for this purpose, the provision of staff to collect hire vehicles. Mr Matthew Barker was at all relevant times the managing director of MSS Transport. Mr Taylor, the third respondent, was the non-executive chairman of MSS Group. He was also a director of other unrelated companies.

32    In 2017, Mr Barker told Mr Mace that MSS Transport needed to acquire certain technology to enable it to develop that company’s business. Mr Barker was of the view that it would be more expensive and more difficult for MSS Transport to develop that technology itself from inception. Mr Barker told Mr Mace that Mr Flageul, whom he had met earlier, had developed technology that might suit the needs of MSS Transport. In May 2017, Messrs Mace and Barker met with Mr Flageul. He gave them a presentation in which he demonstrated how the WeDrive app worked. Mr Flageul told Messrs Mace and Barker that his business was breaking even and that he needed assistance to expand it. Mr Mace decided to investigate the WeDrive business with a view to investing in it.

33    Due diligence ensued. It was conducted largely by Mr Taylor. Mr Flageul answered a due diligence questionnaire. Questions were asked about ownership of the core assets of his business. Mr Flageul failed to disclose that WeDrive Australia did not own all of the intellectual property required for the app, something he conceded at trial had been a “mistake”.

34    In August 2017, when WeDrive was incorporated, WeDrive Australia assigned its intellectual property rights to this company. Mr Flageul (as trustee of the We Drive Melbourne Trust) was issued 20% of WeDrive’s shares. Mr Taylor’s company was issued 19% of WeDrive’s shares. Mr Mace’s company was issued 51% of WeDrive’s shares in consideration of the payment of $400,000 by his company to WeDrive. That payment was subsequently made in two tranches of $200,000.

35    Thereafter, work commenced on the further development of the app. The cost of doing this was much more expensive than anticipated. Mr Flageul contended at trial that from August to December 2017 he made 11 complaints or inquiries to, amongst others, Messrs Mace and Taylor. He alleges that each of these constituted the exercise of a workplace right. Eventually, Mr. Flageul was dismissed. He contends that he was dismissed because of the complaints and/or inquiries he made, in contravention of s 340 of the FW Act.

36    Mr Flageul also contended below that his dismissal, the sale of his shares and his resignation as a director was the product of oppressive conduct by Messrs Mace and Taylor within the meaning of s 232 of the Corporations Act.

37    The respondents’ case, which the learned primary judge accepted, was that the reason for Mr. Flageul’s dismissal was his failure to disclose WeDrive’s lack of ownership of the intellectual property associated with the app. Until resolved, this left WeDrive without the legal ability to exploit its technology fully. Whilst that issue was subsequently cured, Messrs Mace and Taylor felt that they could no longer trust Mr Flageul. They considered that they had been misled. The business was also costing more than expected, and was generating much less revenue than anticipated. By December 2017, the WeDrive business was nearing insolvency. Mr Mace had effectively lost all of the money he had invested. Both he and Mr Taylor also sold their shares to the MSS Group for $1. The judge found that they had offered to sell those shares to Mr Flageul for that price, but that he had declined that offer. Messrs Taylor and Mace also resigned as directors of WeDrive.

38    Finally, Mr Flageul also contended that he was subsequently engaged as an independent contractor to perform the same or substantially the same work he had previously undertaken as a CEO over January 2018. The respondents denied that claim, contending that Mr Flageul had never been offered any ongoing employment following his termination in December 2017.

39    The primary judge dismissed each of those claims and Mr Flageul appeals in respect of each of them, except that he did not appeal the primary judge’s dismissal of the claim of unconscionable conduct under s 20 of the ACL.

40    Taking each in turn.

The adverse action claims

Applicable legislation

41    Mr Flageul’s adverse action claims are governed by the general protections provisions in Pt 3-1, Division 3. Section 340 of the FW Act relevantly provides:

Protection

(1)    A person must not take adverse action against another person:

(a)    because the other person:

    (i)    has a workplace right; or

    (ii)    has, or has not, exercised a workplace right; or

(iii)    proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right; or

(b)    to prevent the exercise of a workplace right by the other person.

42    Section 341(1) defines the term “workplace right” as follows:

A person has a workplace right if the person:

(a)    is entitled to the benefit of, or has a role or responsibility under, a workplace law, workplace instrument or order made by an industrial body; or

(b)    is able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument; or

(c)    is able to make a complaint or inquiry:

(i)    to a person or body having the capacity under a workplace law to seek compliance with that law or a workplace instrument; or

(ii)    if the person is an employee – in relation to his or her employment.

43    Section 342 sets out the circumstances in which a person takes “adverse action” against another person. Adverse action relevantly includes the dismissal of an employee by her or his employer.

44    Section 360 provides:

Multiple reasons for action

For the purposes of this Part, a person takes action for a particular reason if the reasons for the action include that reason.

45    Section 361(1) is in these terms:

Reason for action to be presumed unless proved otherwise

(1)    If:

(a)    in an application in relation to a contravention of this Part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and

(b)    taking that action for that reason or with that intent would constitute a contravention of this Part;

it is presumed that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise.

46    In relation to all of the claims in the proceeding, the primary judge set out his views as to the credibility and probative value of the evidence of the witnesses (at [23]-[33]). In regard to Mr Flageul’s evidence his Honour said (at [25]-[26]:

I was not entirely impressed with the evidence given by Mr. Flageul. He had a great interest in the outcome of this case, and so I have treated his evidence with considerable caution. My general impression of him is that he at times exaggerated his evidence. That is not to say that he was dishonest; I think he tried to give his evidence truthfully. But he seemed overeager to explain his story, which when combined with a degree of exuberance, led him to embellish his account of what occurred. At times he introduced new parts of his story which had not appeared in the very many affidavits he had affirmed and which had been read into evidence. He often became argumentative. He was sometimes evasive. The language used in his affidavits did not help. His recollection of key events, in which he alleged he had exercised a workplace right, was often expressed in highly conclusionary language…

All of the alleged exercises of workplace rights were described in this way in Mr. Flageul’s first affidavit. Expressed in such conclusionary terms, it is difficult to give extensive weight to this type of evidence. That is especially because, on many occasions, it was never effectively corroborated.

Another difficulty I had with Mr. Flageul’s evidence is that he sometimes added to his account of what had occurred with each successive affidavit. In the first, he appeared to give a comprehensive account of his version of what had occurred. The second contained some corrections to the first. But in the third, fourth and fifth affidavits, sometimes perhaps as an understandable reaction to the evidence filed and served on behalf of the respondents, he introduced new details with no real explanation as to why those details had not appeared in his first affidavit. Unless otherwise corroborated, it was hard to give a great deal of weight to these additions, which were sometimes no more than a denial of the truth of the evidence contained in the respondents’ affidavits. Mr. Flageul added further details in the virtual witness box. For example, he claimed for the first time to have received an offer from, and to have reached agreement with, Mr. Mace to become an independent contractor on 23 January 2018. In finding facts, I have accordingly focused upon Mr. Flageul’s first affidavit, and the transcript of his cross-examination, unless what had been affirmed in the further affidavits was material in some way.

47    The primary judge expressed similar reservations as to the evidence of Ms O’Donovan, Mr Flageul’s partner (at [27]-[28]):

I have also treated the evidence of Ms. O’Donovan with similar caution. It was led in an attempt to corroborate Mr. Flageul’s evidence about the exercise by him of workplace rights. Because Ms. O’Donovan was and is Mr. Flageul’s life partner, she shares a similar interest in the outcome of this matter. But there were other difficulties with her evidence. For example, she gave hearsay evidence of conversations she overheard whilst Mr. Flageul was on the telephone with, for example, Messrs. Mace or Taylor. She tried to corroborate Mr. Flageul’s recollection of the day he was terminated by giving hearsay evidence of Mr. Flageul ringing her to give his account of what occurred. I have decided that none of this evidence can be given any real weight. That was so for a number of reasons. First, the language used in her affidavits was often conclusionary in nature, argumentative and speculative…

…Secondly, in her second affidavit, she added statements to describe an important conversation between Messrs. Flageul and Mace which did not appear in her first affidavit. No sufficient explanation was given for this discrepancy. In cross-examination, she said that her first affidavit had been prepared using notes she had made at the time of this conversation. These notes were never produced because they had not been kept. No adequate explanation was given about their loss. Thirdly, I also find that in cross-examination, Ms. O’Donovan tried too hard to align her testimony with that of Mr. Flageul, especially in relation to the issue concerning how automated the app was in the second half of 2017…

48    Ultimately, the primary judge accepted little of Mr Flageul’s and Ms O’Donovan’s account in relation to the key events underpinning Mr Flageul’s claims, including his adverse action claims. His Honour usually preferred the evidence of Mr Mace, Mr Taylor, Mr Barker and Mr Russell in relation to the key events or else preferred to rely on contemporaneous emails and documents.

49    In relation to the adverse action claims his Honour:

(a)    addressed the relevant facts (at [185]-[219]);

(b)    then turned to address whether any of the 11 events which had been pleaded constituted the making of a “complaint” or an “inquiry” under s.341(1)(c) (at [249] to [259]). His Honour found that Mr Flageul had made the first to ninth alleged complaints or inquiries, but was not satisfied that he had made the 10th alleged complaint or inquiry or that the 11th alleged complaint or inquiry was such; and

(c)    then addressed whether any of those complaints or inquiries were “in relation to [Mr Flageul’s] employment” as required by s.341(c)(ii) (at [260] to [272]). His Honour found that the first, second, third, seventh and ninth alleged complaints or inquiries were not “in relation to” his employment, whereas the fourth, fifth, sixth and eighth complaints or inquiries were.

50    Then (at [273]-[274]) the primary judge adopted his earlier observations in Maric v Ericsson Australia Pty Ltd [2020] FCA 452; (2020) 293 IR 442 at [55] where his Honour said that “[f]or a person to be “able” to make an inquiry, that capacity must be anchored in a legal entitlement of some kind, whether it be statute, contract law, the common law of Australia, or some other instrument or thing that confers legal rights.” His Honour’s conclusion was based in the Full Court decision in PIA Mortgage Services Pty Ltd v King [2020] FCAFC 15; (2020) 274 FCR 225 at [50]-[55] (Rangiah and Charlesworth JJ).

51    The primary judge found (at [285]) that, except for the fifth alleged complaint or inquiry, none of the complaints or inquiries which his Honour found had occurred were made or anchored in a legal entitlement of some kind. Thus his Honour held that all but the fifth alleged complaint or inquiry asserted and relied upon by Mr Flageul did not constitute the exercise of a workplace right for the purposes of s 341(1)(c)(ii) of the FW Act (at [273]-[297]).

52    His Honour then proceeded to consider the reason for Mr Flageul’s dismissal on the assumption that, contrary to his earlier findings, each of the 11 alleged complaints or inquiries constituted the separate exercise of a workplace right. That is, his Honour addressed whether the respondents had proven on the balance of probabilities the actual “operative and immediate reason” for Mr Flageul’s dismissal, putting to one side his Honour’s earlier conclusions as to whether one or other of the eleven events constituted a complaint or an inquiry; whether one or other of the complaints or inquiries was “in relation to” Mr Flageul’s employment; and whether they were “anchored in a legal entitlement of some kind”.

53    The primary judge taking that approach meant that, if the appellant could show some error in his Honour’s approach to those issues, it was not material to the ultimate conclusion. If Mr Flageul failed to establish his claim that adverse action had been taken against him “because” he exercised a workplace right, his case founded upon s 340 of the FW Act could not succeed.

54    His Honour set out the applicable principles as follows (at [299]-[301]), correctly in our respectful view:

299    There was no dispute about the applicable legal principles. Relevantly, s. 340 of the F.W. Act is breached if it is found that adverse action has been taken against a person “because” that person has exercised a workplace right. It is not in dispute that the adverse action here was the dismissal of Mr. Flageul as C.E.O. of WeDrive. In Lamont v. University of Queensland (No 2) [2020] FCA 720, Rangiah J. relevantly observed that a mere causal nexus between the exercise of a workplace right and the taking of adverse action would not sufficiently engage s. 340. His Honour said at [86]:

[A] mere causal nexus between the exercise of a workplace right and the adverse action is not enough. In Barclay at [104], Gummow and Hayne JJ considered that the word “because” in s 340(1) requires an enquiry as to the “substantial and operative” reason or reasons for the relevant action. In BHP Coal, Gageler J described the enquiry as being into the “operative and immediate” reason or reasons. The mere application of a “but for” test is insufficient. Otherwise, the outcomes in Barclay and BHP Coal would have been different. The closeness of the connection between the exercise of the workplace right and the adverse action must be examined. A qualitative judgment must be made as to whether the adverse action was taken because the employee exercised a workplace right.

I very gratefully adopt the foregoing summary of principle.

300    Because of s. 361 of the F.W. Act, practically speaking it is the respondents who bear the onus of proving on the balance of probabilities the actual “operative and immediate reason” for Mr. Flageul’s dismissal. In that respect, I find that it was Mr. Mace who terminated Mr. Flageul’s employment. By reason of the operation of s. 360 of the F.W. Act, the question then becomes: have the respondents proven that Mr. Mace’s actual reasons for Mr. Flageul’s dismissal did not include the exercise by Mr. Flageul of a workplace right that comprises, individually or cumulatively, the alleged complaints/inquiries I have described above, and, in particular, because of the making of the fifth alleged complaint/inquiry?

301    In their written submissions, the respondents summarised the applicable principles in the following way which did not appear to be disputed by Mr. Flageul:

(a)    The central question to be determined is one of fact. It is: ‘Why was the adverse action taken?’

(b)    That question is to be answered having regard to all the facts established in the proceeding.

(c)    The Court is concerned to determine the actual reason or reasons which motivated the decision-maker. The Court is not required to determine whether some proscribed reason had subconsciously influenced the decision-maker. Nor should such an enquiry be made.

(d)    It will be “extremely difficult to displace the statutory presumption in s. 361 if no direct testimony is given by the decision-maker acting on behalf of the employer.”

(e)    Even if the decision-maker gives evidence that he or she acted solely for non proscribed reasons, other evidence (including contradictory evidence given by the decision-maker) may render such assertions unreliable.

(f)    If, however, the decision-maker’s testimony is accepted as reliable it will be capable of discharging the burden imposed on the employer by s. 361.

55    His Honour set out his view as to the reasons for Mr Flageul’s dismissal as follows (at [302]-[312]):

302    With very great respect to Mr. Flageul, I have concluded that Mr. Mace’s evidence concerning his reasons for the dismissal of Mr. Flageul is reliable and I prefer it to Mr. Flageul’s account of what happened, which I do not accept. It follows that the respondents have thereby displaced the presumption created by s. 361 of the F.W. Act and have shown that Mr. Flageul was not dismissed because of the exercise by him of a workplace right. There are a number of reasons for reaching this conclusion.

303    First, there is the objective fact that, just days before his dismissal, Mr. Mace learned about Mr. Flageul’s failure to disclose Contact Point’s ownership of the relevant intellectual property. Mr. Flageul frankly conceded that he should have revealed this and that it was “madness” that he had not done so. If I may repeat the following salient answer given by Mr. Flageul during his cross-examination:

But I remember, on 21 December, Mr Mace questioned me on that, and he said, “Did you actually commit a lawyer to read over that agreement that you signed with Contact point?” And I said, “No.” And I remember him shaking his head, probably thinking, “What an idiot”, and I would have agreed with that, because I should have. That probably would have saved me a lot of that trouble.

304    As already mentioned, Mr. Flageul tried to downplay the significance of this event by contending that the problem was solved just before 21 December 2017 when Contact Point assigned the necessary intellectual property to WeDrive. I do not think that his attempt succeeded. That is so for two reasons. First, there is the answer given by Mr. Taylor during his cross-examination as set out above. He said the key point was around integrity, trust, and the relationship that Messrs. Mace and Taylor had with Mr. Flageul. I find in the circumstances here that this relationship was unworkable because Messrs. Mace and Taylor could no longer trust Mr. Flageul. Whether they felt that Mr. Flageul had lied to them about this issue was less clear; at the very least they felt he had neglected to address a vital issue for them, namely full ownership of the intellectual property. They had both been misled. I accept Mr. Taylor’s evidence that this could not be ignored. The second reason is bound up with the next reason for accepting Mr. Mace’s evidence.

305    Secondly, I do not accept that the intellectual property ownership issue was the only reason for Mr. Flageul’s dismissal, although it was a substantial reason. The very poor performance of the WeDrive business, and the failure of the app to perform adequately were, generally speaking, the other reasons for Mr. Flageul’s dismissal. During Mr. Mace’s cross-examination it was put to him that the letter giving Mr. Flageul notice of his termination only referred to the intellectual property issue. However, Mr. Mace pointed out that it also referred to the failure to disclose other “issues”, and I observe that the letter also adverts to the undertaking of “investigations”. In my view, whether rightly or wrongly, Mr. Mace thought that the app that WeDrive had acquired was capable of working in the way in which it was demonstrated to him in May 2017. He thought it was automated. Rightly or wrongly, Mr. Mace thought that the app needed little further development. He also thought, rightly or wrongly, that the business had only been making losses of $8,000 per month that needed to be covered. Instead, far more cash had been needed to develop the app. Days before Mr. Flageul’s dismissal, Mr. Mace saw the profit and loss statement for WeDrive. It disclosed substantial losses. It disclosed the payment of $101,677 in “IT Expenses”; $39,000 had been paid to “other contractors” and $45,045 had been paid in directors fees. The return on sales was, in contrast, negative. It does not matter whether these figures were or were not accurate. The fact is that this was the picture presented to Mr. Mace at this time concerning the financial performance of WeDrive. In my view, he was justified in thinking that the business was worthless and would shortly become insolvent. Its only significant asset was cash at bank. I accept that Mr. Mace genuinely thought that Mr. Flageul had contributed significantly to WeDrive’s poor performance because the app did not fully work, more money was needed to develop it, and as a result sales were poor. The catastrophe of the “Paul Gallen” event described above was emblematic of the state of the business in November 2017. However, I would not lay all of the blame at Mr. Flageul’s feet. It is possible that, for example, Mr. Nicholson contributed to a lack of success in the Sydney market. Nonetheless, all of these matters contributed to Mr. Mace’s decision to terminate Mr. Flageul’s employment. They also explain why the assignment of the necessary intellectual property by Contact Point to WeDrive did not ‘fix’ the problems Mr. Mace had with Mr. Flageul.

306    Thirdly, Mr. Taylor’s evidence corroborates that of Mr. Mace. He was at the meeting at which Mr. Flageul was dismissed. I accept the veracity of his evidence. In addition, Messrs. Russell and Barker gave evidence to corroborate the evidence of Mr. Mace concerning both the condition of the WeDrive business in December 2017 and the discovery that WeDrive did not own all of the necessary intellectual property. Mr. Russell vividly told Mr. Mace on 18 December 2017 that “this was a disaster.” I accept that this is what Mr. Russell generally said to Mr. Mace and I otherwise accept his evidence and that of Mr. Barker.

307    Fourthly, I would have inferred, in any event, that the objective failure of the WeDrive business and Mr. Flageul’s serious mistake in not disclosing Contact Point’s ownership of the relevant intellectual property would have supplied Mr. Mace with obvious and compelling reasons to dismiss Mr. Flageul. These problems vastly overshadowed each of the alleged complaints/inquiries said by Mr. Flageul to constitute the exercise of workplace rights, whether considered individually or in aggregate. Some, like the complaint about the debit card, I would have characterised as trivial in nature, when compared to the “disaster” that was WeDrive in December 2017.

308    Fifthly, the cross-examination of Messrs. Mace, Taylor, Barker and Russell did not, with very great respect, cause me to change my impression of the evidence they all gave. Strikingly, it was never put to Mr. Mace that the reason for Mr. Flageul’s dismissal was one of the complaints or inquiries as alleged, or all of them in aggregate. And this was so, notwithstanding that this was a case where credit was so important an issue. The rule in Browne v. Dunn (1894) 6 R. 67 ordinarily obliges counsel to put to a witness the nature of the case that will be put that contradicts the evidence of that witness. Whilst Mr. Flageul’s statement of claim set out his alleged reasons for his dismissal, I am not confident that Mr. Mace had notice of them; Mr. Mace was not questioned about those alleged reasons during his cross-examination: c.f. Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v. Visy Packaging Pty Ltd (No 3) (2013) 216 F.C.R. 70 at 120 [251]. The failure to observe the rule in Browne v. Dunn goes some way, in the particular circumstances of this case, to support the truthfulness of Mr. Mace’s evidence, although I note that in civil proceedings that may not amount to very much: MWJ v. The Queen [2005] HCA 74; (2005) 80 A.L.J.R. 329 at 339 [40].

309    Sixthly, I am not persuaded that the failure to plead a reason for Mr. Flageul’s dismissal in the defence filed by the respondents results, in combination with an application of s. 361 of the F.W. Act, in any necessary rejection of Mr. Mace’s evidence or to the inexorable failure of the respondents’ case. This contention was only raised by Mr. Flageul in his closing submissions. It is true that the defence contains a “bare denial” to the allegation that Mr. Flageul was sacked because he had exercised a workplace right or rights. But it also pleaded that on 18 December 2017, Mr. Mace had confronted Mr. Flageul “about misrepresentations [Mr. Flageul] had made about the business and assets of [WeDrive].” I also find that Mr. Flageul already had substantial notice of the reasons as to why he had been dismissed. That is because I accept Mr. Mace’s evidence of what he said to Mr. Flageul on 21 December 2017, which is set out in his first affidavit (sworn on 13 March 2019). It is also because of the contents of the letter giving notice of termination sent to Mr. Flageul on 22 December 2017, and the witness statement of Mr. Mace filed in May 2018 in the Fair Work Commission proceedings, and the affidavits sworn by Mr. Mace in this proceeding, the first of which was served over a year before the trial. This is not a case where Mr. Flageul was in any way taken by surprise during the trial before me. He had sufficient prior notice of the reasons for his dismissal.

310    Seventhly, I do not think that the contention, which had never been pleaded, that Mr. Flageul was in a “quasi-partnership” with Messrs. Mace and Taylor makes any difference to the outcome here. Whatever that term might mean, it does not bear upon my acceptance of Mr. Mace’s evidence.

311    Finally, it follows that the respondents have demonstrated that none of the reasons for Mr. Flageul’s dismissal included the making by him of the fifth alleged complaint/inquiry. If it matters, I am also satisfied that the respondents have shown that the reasons for Mr. Flageul’s dismissal did not include, whether individually or in aggregate, the making of any of the other alleged complaints/inquiries relied upon by Mr. Flageul.

312    For the foregoing reasons, I would dismiss Mr. Flageul’s adverse action claims.

56    Before us Mr Flageul submitted, first, that the reasoning of the Full Court in PIA Mortgage is “plainly wrong” and that we should instead prefer the obiter reasoning of Bromberg J (with whom Mortimer J agreed) in Cummins South Pacific Pty Ltd v Keenan [2020] FCAFC 204; 302 IR 400 at 419 [67]. However, having regard to the view we take about the primary judge’s reasoning regarding the reasons for Mr Flageul’s dismissal, the question does not arise and it is unnecessary to decide.

57    Second, Mr Flageul submitted that the primary judge erred in holding that the respondents’ had discharged the reverse onus in s 361 in respect of the claims of contravention of s 340 of the FW Act. That submission was based in two contentions:

(a)    that the primary judge misunderstood the reverse onus in s 361; and

(b)    the primary judge erred in finding, on the evidence, that none of the reasons for Mr Flageul’s dismissal included the making by him of any of the alleged complaints or inquiries. That included the contention that the primary judge erred in finding that:

(i)    Mr. Mace’s evidence concerning his reasons for the dismissal of Mr Flageul was reliable and to be preferred to Mr Flageul’s account of what happened, which his Honour did not accept (at [302])

(ii)    a “substantial reason” for his dismissal was the intellectual property ownership issue (at [305]), which, among other matters including the very poor performance of the WeDrive business, “vastly overshadowed each of the alleged complaints/inquiries said by Mr Flageul to constitute the exercise of workplace rights, whether considered individually or in aggregate” (at [307]);

(iii)    the other reasons for Mr Flageul’s dismissal were “[t]he very poor performance of the WeDrive business, and the failure of the app to perform adequately” (at [305]); and

(iv)    the respondents demonstrated that none of the reasons for Mr Flageul’s dismissal included, whether individually or in aggregate, the making of any of the alleged complaints/inquiries relied upon by Mr Flageul (at [311]).

58    The contention that the primary judge misunderstood the reverse onus in s 361(1) of the FW Act is unfounded. The judge patently understood and applied the meaning and effect of that provision. See, by way of example, the primary judge’s reasons:

(a)    at [300] where his Honour said “practically speaking it is the respondents who bear the onus of proving on the balance of probabilities the actual ‘operative and immediate reason’ for Mr Flageul’s dismissal…the question then becomes: have the respondents proven that Mr Mace’s actual reasons for Mr Flageul’s dismissal did not include the exercise by Mr Flageul of a workplace right…”; and

(b)    at [311] where his Honour said “I am also satisfied that the respondents have shown that the reasons for Mr Flageul’s dismissal did not include, whether individually or in aggregate, the making of any of the other alleged complaints/inquiries relied upon by Mr Flageul” (emphasis added).

59    The contention that the primary judge erred in the view that he took of the evidence failed to grapple with the significant advantage the primary judge enjoyed compared to the Full Court on appeal. In Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at [23] Gleeson CJ, Gummow and Kirby JJ explained that one of the relative advantages of a trial judge is that:

…the appellate court does not typically get taken to, or read, all of the evidence taken at the trial. Commonly, the trial judge therefore has advantages that derive from the obligation at trial to receive and consider the entirety of the evidence and the opportunity, normally over a longer interval, to reflect upon that evidence and to draw conclusions from it, viewed as a whole.

Those remarks are apposite in the present case.

60    More fundamentally, the contention failed to recognise that in a case such as this, where an appellant seeks to challenge findings of fact reached after assessing competing witnesses for their reliability and credibility, it is necessary for the appellant to show that such findings are demonstrated to be wrong by incontrovertible facts or uncontested testimony or that they are glaringly improbable or contrary to compelling inferences: see Devries v Australian National Railways Commission [1993] HCA 78; (1993) 177 CLR 472 at 479 (Brennan, Gaudron and McHugh JJ) where the plurality said “… a finding of fact by a trial judge, based on the credibility of a witness, is not to be set aside because an appellate court thinks that the probabilities of the case are against – even strongly against – that finding of fact”; Fox v Percy at 128 [28]-[29]; Robinson Helicopter Co Inc v McDermott [2016] HCA 22; (2016) 90 ALJR 679 at 686-7 [43] (French CJ, Bell, Keane, Nettle and Gordon JJ); Short v Ambulance Victoria [2015] FCAFC 55; 249 IR 217 at 236 [99]-[100] (Dowsett, Bromberg and Murphy JJ).

61    Before us, Mr Flageul submitted that the principle articulated in cases like Fox v Percy did not apply in the circumstances of this case: see transcript at pages 19-20. It was not, however, satisfactorily explained why that is so. Unsurprisingly, given that the appeal was not argued on the basis that it was necessary to meet that burden, Mr Flageul’s case did not do so.

62    The careful and detailed findings of fact of the primary judge were made after what his Honour described as “five long days” (at [2]), in which eight witnesses gave oral evidence that “had to be assessed, balanced and evaluated as the case unfolded”, and in circumstances where “[t]he trial judge had the advantages of seeing…witnesses in assessing their credit and reliability ‘… [and]… the opportunity to consider all of the evidence in its totality and to reflect upon its interaction’ ”: see Aldi Foods Pty Ltd v Moroccanoil Israel Ltd [2018] FCAFC 93; (2018) 261 FCR 301 at 307 [3] (Allsop CJ) citing Robinson Helicopter at 689 [57]. In those circumstances, an appeal against such findings of fact may only succeed if the appellant shows that they are wrong by reference to incontrovertible facts or uncontested testimony, or that they are glaringly improbable or contrary to compelling inferences. In our view, nothing that was said on Mr Flageul’s behalf in writing or during the course of oral addresses remotely suggested any such thing.

63    In our view, not only did Mr Flageul fail to establish that the primary judge’s findings are wrong by reference to incontrovertible facts or uncontested testimony, or that they are glaringly improbable or contrary to compelling inference, he failed to show that those findings were against the weight of the evidence or revealed appealable error. On our view the primary judge’s findings, including at [302], [305] and [311], were open on the evidence and unsurprising. Amongst other things, Mr Flageul did not take the Court to any occasion where Mr Mace had been cross-examined to suggest either that the reasons he relied upon to dismiss Mr Flageul:

(a)    were not the real reasons for his dismissal but were (for example) a contrivance to give effect to a pre-determined decision to take the company and its technology away from him without paying him for it, which was one of the reasons for dismissal put on appeal; or

(b)    were not the sole reasons for the dismissal and that part of the reasoning process behind the dismissal including the Mr Flageul making the alleged complaints or inquiries.

In all the circumstances we can see no error in his Honour reaching the factual findings that he did.

64    For those reasons, the appeal against the primary judge’s findings in the adverse action claims must fail. Grounds 1.1 to 1.8 of the Notice of Appeal are dismissed.

The oppression claim

65    Section 232 of the Corporations Act relevantly provides:

Grounds for Court order

The Court may make an order under section 233 if:

(a)    the conduct of a company’s affairs; or

(b)    an actual or proposed act or omission by or on behalf of a company; or

(c)    a resolution, or a proposed resolution, of members or a class of members of a company;

is either:

(d)    contrary to the interests of the members as a whole; or

(e)    oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members whether in that capacity or in any other capacity.

For the purposes of this Part, a person to whom a share in the company has been transmitted by will or by operation of law is taken to be a member of the company.

66    Section 233(1) provides:

Orders the Court can make

(1)    The Court can make any order under this section that it considers appropriate in relation to the company, including an order:

(a)    that the company be wound up;

(b)    that the company’s existing constitution be modified or repealed;

(c)    regulating the conduct of the company’s affairs in the future;

(d)    for the purchase of any shares by any member or person to whom a share in the company has been transmitted by will or by operation of law;

(e)    for the purchase of shares with an appropriate reduction of the company’s share capital;

(f)    for the company to institute, prosecute, defend or discontinue specified proceedings;

(g)    authorising a member, or a person to whom a share in the company has been transmitted by will or by operation of law, to institute, prosecute, defend or discontinue specified proceedings in the name and on behalf of the company;

(h)    appointing a receiver or a receiver and manager of any or all of the company’s property;

(i)    restraining a person from engaging in specified conduct or from doing a specified act;

(j)    requiring a person to do a specified act.

67    The primary judge’s reasons with respect the oppression claim were relevantly as follows (at [316]-[329]:

316    The essence of Mr. Flageul’s claim for oppression is that he had been treated unfairly. He claims that he spent seven years trying to develop the app by applying his own time and money. By the end of 2017, he claims that he had been marginalised and then excluded from his role as C.E.O., unfairly dismissed, wrongly required to resign as a director and obliged to sell his shares for no consideration. Mr. Flageul, in his written submissions, expressed the issue to be decided as follows:

The relevant issue before the Court is whether ‘reasonable directors, possessing any special skill, knowledge or acumen possessed by the directors and having in mind the importance of furthering the corporate object on the one hand and the disadvantage, disability or burden which their decision will impose on a member on the other, would have decided that it was unfair to make that decision.’

…

318    It is useful if I start with the position of the respondents which they summarised as follows:

In light of the matters submitted above, viewed objectively and taking into all [sic] of the evidence … there was no oppression on the facts:

(a)    It was Mr Mace and Mr Taylor who were deceived by Mr Flageul into investing in WeDrive thinking they were obtaining the IP in the App. It was Mr Mace who invested $400,000 and did not recover it;

(b)    It was Mr Flageul and his partner Ms O’Donovan who profited from those events, being remunerated on salaries of $150,000 and $100,000 per annum in circumstances where they had not been paid for at least 8 months prior on Mr Flageul’s account;

(c)    It was Mr Mace and Mr Taylor who were worried about the solvency and financial health of WeDrive, not Mr Flageul who despite being a director said he did not know what its financial position was;

(e) [sic]    It was Mr Mace who repeatedly tried to engineer mergers and arrangements to improve the performance of WeDrive to the benefit of all its members;

(f) [sic]    It was Mr Flageul who repeatedly incurred unbudgeted costs that placed WeDrive in financial peril;

   (f)    In all the circumstances, upon the discovery that they had been misled, it was not oppressive of Mr Mace and Mr Taylor to offer Mr Flageul the opportunity to purchase their shares, and to engineer an agreement for the sale of his shares as well as their own in a company which they considered to be facing insolvency.

319    Mr. Flageul submitted that from September to December 2017, he was excluded from the management of the WeDrive business. He submits that he was deprived of the ability to manage, monitor and report on the financial operation and performance of WeDrive. He says his debit bank card was cancelled without prior consultation. I accept that Mr. Flageul had no prior notice of the cancellation of his debit card. I otherwise reject these claims. There is no evidence that Mr. Flageul was excluded or marginalised from his role which I have found had a focus on the development of the app and the building of the WeDrive business. There are no contemporaneous records which show Mr. Flageul complaining about being excluded from the pursuit of these activities. In that respect, I do not think that preventing Mr. Flageul from accessing the Xero system deprived him of his ability to perform his role. I have accepted the explanation given by Mr. Taylor that it was not appropriate for him to have such access given that he was entitled to weekly management reports and given that Mr. Taylor was effectively the C.F.O. of WeDrive. I reject the suggestion that it was an inherent or intrinsic attribute of a person appointed as C.E.O. that she or he have access to the accounting software. All that matters is that they have an ability to read and interrogate the output or product of that software. More tellingly, Mr. Flageul was able to prepare his C.E.O. report for the inaugural 10 November 2017 board meeting without any apparent difficulty. There is simply no evidence that he complained that he could not prepare so important a document because he had been denied necessary access to the business records of WeDrive. In that respect, the report contains detailed financial data. Nor do I think that Mr. Taylor’s refusal to disclose to Mr. Flageul, Mr. Nicholson’s salary, or the failure to give him notice about the cancellation of his debit card, can be characterised as evidence that Mr. Flageul had been prevented from performing his role as C.E.O. Rather, the evidence, in particular in emails sent at the time, shows that Mr. Flageul was actively engaged as C.E.O. with a focus on innovation and sales up until the day of his termination. I otherwise observe that I have accepted Mr. Mace’s explanation of what happened with the debit card. If I may say so, and with very great respect, the importance of that event has been very greatly exaggerated.

320    Mr. Flageul then contended that it was unfair that he was not told about the opportunity of doing a deal with Ugo Transfers. I respectfully disagree. I accept the explanation that the consideration of that possibility was at such an embryonic stage that it was practical for it to be considered first by the M.S.S. Group before being considered by WeDrive. As it happens, this possibility never developed beyond that embryonic stage; there was nothing to tell Mr. Flageul. Mr. Flageul then complained that the proposed merger between WeDrive and M.S.S. Transport was discussed by M.S.S. Group executives such as Messrs. Mace, Barker and Russell, and by Mr. Taylor in emails before he was informed of the proposal. This complaint has no merit. The fact is that the proposal went to the WeDrive board and Mr. Flageul voted in favour of it. There is no evidence that he complained at the time about the process which led to the WeDrive board backing a possible merger with M.S.S. Transport.

321    Mr. Flageul then contended that after the 10 November 2017 board meeting he was “sidelined” as C.E.O. and had to report to Mr. Barker. As discussed above, there was conflicting evidence about the role of Mr. Barker in November and December 2017. Mr. Russell did not consider him to be the new “C.E.O.” and no such formal appointment was ever made. Mr. Barker did consider himself the “C.E.O.” and I accept he took on a leadership role. But in my view, it was a leadership role very much focussed on seeing whether the WeDrive business could be salvaged with some form of ‘merger’, synthetic or otherwise, with M.S.S. Transport. It is otherwise unnecessary to resolve this issue. That is because there was clear evidence that Mr. Flageul wanted to work for and report to Mr. Barker. Until Mr. Flageul left WeDrive the relationship between them appeared to be warm and respectful. The text messages I have set out above bear this out. When Mr. Flageul texted Mr. Barker on the day of his dismissal to say, “I understand I’ll be working with/for you, which is what I want,” he was expressing a state of contentment; there is no suggestion that Mr. Barker’s leadership was unfair. In any event, throughout all this time there is no evidence that Mr. Flageul had ceased to work on his core responsibilities of innovation and sales. There is no evidence of him complaining that he had been usurped by Mr. Barker.

322    Mr. Flageul next contended that he was excluded from the decision not to proceed with the merger. I disagree. The clear evidence is that the M.S.S. Group did not want to merge with WeDrive. By December 2017, the merger proposal considered by WeDrive at its November board meeting had already been abandoned; at most the M.S.S. Group was by then only considering some form of back office union to save costs. I otherwise accept that on 20 December 2017, Mr. Flageul was not copied in on Mr. Mace’s email concerning another proposal involving the full acquisition of WeDrive by M.S.S. Transport and the possible issue of shares to him. But that is of no moment. That is because at the WeDrive board meeting the following day, Mr. Flageul was given the opportunity to buy the other shares in WeDrive for $1. That same opportunity was given to Messrs. Taylor, Russell, Mace and Barker. But Mr. Flageul declined to take advantage of this opportunity. It is also because the proposal outlined by Mr. Mace in his email went nowhere.

323    Mr. Flageul then submitted that he was summarily dismissed with no ‘prior warning or consultation.’ In my view, having regard to my findings about why Mr. Flageul was dismissed, this was not unfair or oppressive. He was given the opportunity to complete his period of notice of four weeks.

324    Mr. Flageul next complained that he was threatened with an insurance fraud lawsuit unless he sold his WeDrive shares for $1. He said that this claim was supported by his evidence that a Management Liability Insurance policy had been purchased on 22 December 2017. For reasons I have already given, I am not persuaded that these events took place. I accept that it is likely that Mr. Mace thought of suing Mr. Flageul and, as an expression of anger, probably told Mr. Flageul that this might or would happen. But that, I infer, is as far as it went. I also accept that a payment was made to Honan Insurance Group Pty Ltd on 22 December 2017. But again, the evidence does not establish what this payment was for and the hearsay evidence led by Mr. Flageul about this matter does not refer to the purchase of a policy of insurance.

325    Mr. Flageul next submitted that it was unfair that he received no “consideration” for the sale of his shareholding in WeDrive. In that respect, there was some confusion about whether Mr. Flageul had ever signed the share transfer form sent to him, although Mr. Flageul otherwise accepted that he was no longer the owner of any shares in WeDrive. He also signed the Heads of Agreement, set out above. It specifies that the vendors (which include Mr. Flageul as trustee of the We Drive Melbourne Trust) were to be paid in aggregate $1 to ‘be allocated in a manner agreed by the Sellers’. Mr. Flageul has taken no steps to receive his consideration. It follows that it cannot really be said that he sold his shares for ‘no consideration.’ I have already found that because WeDrive had incurred very substantial losses which had been booked in its profit and loss account, it would have been insolvent but for the cash which remained from Mr. Mace’s investment. Mr. Flageul made no contention about the presence of that cash at bank. I also accept that Mr. Flageul declined an offer to purchase WeDrive for $1 and I further accept that the same offers were made and then declined by Messrs. Mace and Taylor. Mr. Flageul led no expert valuation evidence to demonstrate that WeDrive was worth more than $1, and he did not establish that the WeDrive business has since become valuable or has generated any revenue for the M.S.S. Group. I am also satisfied that Mr. Mace lost a substantial amount of money when he invested in WeDrive. In these circumstances, in my opinion a sale of shares for nominal consideration was commercially sound and fair.

326    Before me in closing, senior counsel for Mr. Flageul emphasised that I should focus on the unfairness to Mr. Flageul in the context of him being in a ‘quasi-partnership’ with Messrs. Mace and Taylor. Leaving aside the fact that this had not been pleaded, I understand the point that was being made. It bore upon control of WeDrive and Mr. Flageul’s alleged exclusion from the management of its business. However, this point lost all force because of the factual and other findings I have made above.

327    In closing written submissions, Mr. Flageul for the first time submitted that it was not proper for him to be dismissed by Mr. Mace who, through his company, was the majority shareholder of WeDrive. It was submitted that this was a matter that should have been decided at a properly constituted board meeting. Alternatively, this matter should have been decided in a shareholders’ meeting in accordance with WeDrive’s constitution and subject to the contractual agreements which bound the parties. The latter I took to be a reference to the Subscription and Shareholders’ Deed. Once again, it was procedurally unfair for this point to have been raised so late and without prior notice. In any event it has no merit. Mr. Flageul never complained in December 2017 that Mr. Mace did not have the authority to terminate his employment. He did not call for a board meeting to consider this issue. He did not call for a shareholders’ meeting. He has not asserted any breach of the Subscription and Shareholders’ Deed. Rather, he accepted his fate at the time. That Mr. Flageul’s employment was terminated in a more informal way is hardly surprising for a company with only three shareholders and three directors.

328    I accept that Mr. Flageul and Ms. O’Donovan were each paid a salary by WeDrive. Inferentially, this was funded largely by the funds Mr. Mace had contributed to WeDrive. In Mr. Flageul’s case he was to be paid $150,000 per annum. In this sense, I accept that he profited to an extent from WeDrive. I also accept that it was wrong for Mr. Flageul not to have disclosed Contact Point’s ownership of the intellectual property associated with the app. But for Mr. Mullins’ determination, this issue may never have been discovered. Mr. Flageul agreed that it was ‘madness’ on his part to have failed to make this disclosure. I find that Messrs. Mace and Taylor formed the view that Mr. Flageul had misled them about this issue. I also find that Mr. Mace made a number of very genuine attempts to save WeDrive. He pushed for several different types of merger with M.S.S. Transport in a bona fide attempt to salvage WeDrive’s business, and thus to look after Mr. Flageul’s interests.

329    For the foregoing reasons and on the facts as I have found them, reasonable directors, possessing any special skill, knowledge or acumen possessed by the directors here, and having in mind the importance of furthering the corporate object on the one hand and the disadvantage, disability or burden which their decision would impose on a member on the other hand, would not have decided that the treatment of Mr. Flageul in 2017 and 2018 by WeDrive and its other directors was unfair for the purposes of s. 232 of the Corporations Act.

68    We commence by dealing with a question about the standard of review concerning an appeal in respect of an oppression finding. We note, however, that whether the standard submitted by Mr Flageul or that submitted by the respondents be appropriate, the result in the appeal would be the same.

69    The respondents relied on the decision of the Full Court in Wilmar Sugar Australia Limited v Mackay Sugar Limited [2017] FCAFC 40; (2017) 345 ALR 174 at 188-9 [45]-[46] (Dowsett, Jagot and White JJ), which is to the effect that appellate review of a finding that the conduct of a company was (or was not) oppressive to, unfairly prejudicial to, or unfairly discriminatory against a member is confined by the principles in House v The King [1936] HCA 40; (1936) 55 CLR 499 at 504-5 (Dixon (as his Honour then was), Evatt and McTiernan JJ). The Full Court said:

Deciding whether the conduct of a company is oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member involves an objective evaluation (from the posited perspective of a hypothetical reasonable by-stander) of the effect of the conduct in all of the relevant circumstances. As such, appellate review of the decision is confined by the principles in House v The King (1936) 55 CLR 499 at 504-505 in respect of discretionary decisions, which withstands repetition:

The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.

Although, strictly speaking, deciding whether conduct is oppressive does not involve the exercise of discretion, it is the character of the decision, involving as it does the weighing of potentially competing considerations and an overall contextual evaluation of the effect of the conduct, which requires the same approach to appeals as in House v The King (see, by analogy, Ghosh v NineMSN Pty Ltd [2015] NSWCA 334; (2015) 90 NSWLR 595 at [37]).

70    In the appeal Mr Flageul submitted that Wilmar must now be regarded as “plainly wrong” in light of the decision of the High Court in Minister for Immigration and Border Protection v SZVFW [2018] HCA 30; (2018) 264 CLR 541 (SZVFW). In that case Gageler J said (at [48]-[49]):

The course of High Court authority since Warren v Coombes has accordingly proceeded on a consistent understanding of how the line of demarcation is to be drawn between those of a primary judge's conclusions which attract the correctness standard of appellate review reaffirmed in that case and those which attract the deferential standard applicable to appellate review of an exercise of judicial discretion. Without excluding the potential for other considerations to affect the standard of appellate review in a particular category of case, the understanding provides a principled basis for making at least the principal distinction.

The line is not drawn by reference to whether the primary judge's process of reasoning to reach a conclusion can be characterised as evaluative or is on a topic on which judicial minds might reasonably differ. The line is drawn by reference to whether the legal criterion applied or purportedly applied by the primary judge to reach the conclusion demands a unique outcome, in which case the correctness standard applies, or tolerates a range of outcomes, in which case the House v The King standard applies. The resultant line is not bright; but it is tolerably clear and workable.

71    One difficulty with Mr Flageul’s submission is that SZVFW is not concerned with an action for oppression. The observations of Gageler J at [48]-[49] and those of Nettle and Gordon JJ at [85]-[87] upon which Mr Flageul relied, arose out of an appeal from a finding of legal unreasonableness made in an application for judicial review of an administrative decision. The relevant passages from the reasons of the Full Court in Wilmar, on the other hand, expressly dealt with oppression.

72    Although neither the appellant or respondents referred to them, Spigelman CJ made the following observations in Fexuto Pty Limited v Bosnjak Holdings Pty Ltd [2001] NSWCA 97; (2001) 37 ACSR 672 at 674-5 [3] regarding the oppression provisions previously found in s 260 of the Corporations Law:

A determination that the affairs of a company are being conducted in a manner which is either “oppressive or unfairly prejudicial or unfairly discriminatory” pursuant to s 260(1) calls for a judgment on the part of the court. In theory, where such a judgment is required there is notionally one correct answer. When it comes, however, to the exercise of a discretion such as that for which s 260(2) provides, the court at first instance has a choice for which, notionally, there is no single correct answer. An appellate court will not interfere, save in restricted circumstances, with the exercise of a discretion. The formulation of a judgment is not subject to such inhibition unless the right of appeal is itself restricted, eg by being confined to questions of law. The distinction between judgment and discretion is of significance. (See Bennion “Distinguishing Judgment and Discretion” (2000) Public Law 368.)

73    In circumstances where the issue was not fully argued and where it does not matter to the result, we decline the invitation to find that the decision in Wilmar is plainly wrong.

74    On the basis that the relevant standard for appellate review is the standard in House v The King the appeal cannot succeed. Mr Flageul submitted that the primary judge erred in dismissing the oppression claim because “[i]n considering whether the Respondents engaged in conduct that was oppressive or unfairly prejudicial or unfair discriminatory conduct, the learned trial judge failed to properly consider the Respondents’ conduct vis-à-vis the Appellant’s capacity as: (a) the largest (and only) minority shareholder of WeDrive; and/or (b) the only full-time executive director of WeDrive. Instead, and erroneously, the learned trial judge predominately considered the Respondents’ conduct vis-à-vis the Appellant’s capacity as an employee of WeDrive”.

75    It is not altogether clear what that submission amounts to, but at no point, either in written submissions or in the course of oral address, was it submitted that the primary judge erred in in the manner described in House v The King, such that the exercise of the judge’s discretion to reject the claim may be re-exercised.

76    If the appropriate standard for appellate review in the present case is not the standard in House v The King, the result is the same. The primary judge found, amongst other things, that:

(a)    there is no evidence that Mr. Flageul was excluded or marginalised from his role as CEO (at [319]);

(b)    there is no evidence that Mr. Flageul complained at the time about the process which led to the WeDrive board backing a possible merger with MSS Transport (at [320]);

(c)    the evidence did not support the conclusion that Mr. Flageul had been sidelined as CEO by Mr Barker and had been usurped by him (at [321]);

(d)    Mr Flageul was not excluded from the decision not to proceed with the merger with the MSS Group. The evidence is that the MSS Group did not want to merge with WeDrive (at [322]);

(e)    Mr. Flageul was given the opportunity to buy the other shares in WeDrive for $1, which opportunity was also given to Messrs Taylor, Russell, Mace and Barker. Mr. Flageul declined to take advantage of that opportunity (at [322]);

(f)    Mr. Flageul was summarily dismissed, but having regard to the reasons for his dismissal that was not unfair or oppressive, and he was given the requisite notice (at [323]);

(g)    the evidence did not establish that Mr. Flageul had been threatened with an insurance fraud lawsuit unless he sold his WeDrive shares for $1 (at [324]);

(h)    Mr. Flageul did not establish that he received no consideration for his shares in WeDrive, which he claimed was unfair. He had signed Heads of Agreement which included a term that he be paid in aggregate $1 for his shares but he had taken no steps to receive that consideration. In any event it was not unfair that he gave up his shares for $1 when: (i) he had declined an opportunity to purchase the other shares in WeDrive for $1, and the same offers were also made and then declined by Messrs Taylor and Mace; (ii) WeDrive had made very substantial losses and would have been insolvent except for Mr Mace’s contributions; and (iii) the sale of the shares for nominal consideration was “commercially sound and fair” (at [325]);

(i)    Mr. Flageul did not establish that Mr Mace had no authority to dismiss him, which should have been decided by a properly constituted board meeting or at a shareholders meeting and subject to the Subscription and Shareholders’ Deed. Mr. Flageul did not complain at the time that Mr Mace had no authority and he did not call for a board meeting or for a shareholders meeting, nor assert any breach of the Subscription and Shareholders’ Deed. Given that the company only had three shareholders and three directors it was unsurprising that his employment was terminated in a more informal way (at [327]);

(j)    Mr. Flageul and Ms O’Donovan were each paid a salary by WeDrive, which was largely funded by the funds Mr Mace contributed. Mr. Flageul therefore profited from WeDrive (at [328]);

(k)    it was wrong for Mr. Flageul not to have disclosed that WeDrive did not own all of the intellectual property associated with the app; that Mr. Flageul agreed that it was “madness” on his part to fail to make that disclosure; and that Messrs Mace and Taylor formed the view that Mr. Flageul had misled them about that issue (at [328]); and

(l)    Mr Mace made a number of genuine attempts to salvage WeDrive’s business and thus to look after Mr. Flageul’s interests (at [328]).

77    As we said earlier, those factual findings were made after a five day trial in which eight witnesses gave oral evidence that had to be assessed, balanced and evaluated as the case unfolded, and in circumstances where the primary judge had the advantages of seeing the witnesses in assessing their credit and reliability, and the opportunity to consider and reflect upon all of the evidence in its totality. It is established that in an appeal against factual findings based in the credit and reliability of witnesses it is necessary for the appellant to show that they are wrong by reference to incontrovertible facts or uncontested testimony, or that they are glaringly improbable or contrary to compelling inferences. There was little or nothing in Mr Flageuls’ submissions to show that.

78    Indeed, we consider the primary judge’s findings to be open on the evidence and consistent with the weight of the evidence. We can discern no error in his Honour’s conclusion that the treatment of Mr. Flageul in 2017 and 2018 by WeDrive and its other directors was not unfair or oppressive for the purposes of s 232 of the Corporations Act.

79    It follows that Grounds 2.1 and 2.2 of the Notice of Appeal must be dismissed.

The claim under s 358 of the FW Act

80    The appeal in relation to this claim was the subject of submissions made in writing, but not mentioned in oral addresses.

81    The reasoning of the primary judge on this question comprised the following three paragraphs:

313    Section 358 relevantly applies if an employer dismisses, or threatens to dismiss, an employee in order to engage that employee as an independent contractor to perform the same or substantially the same work under a contract for services. For the reasons I have already given, the respondents have demonstrated that Mr. Flageul was not dismissed for this reason.

314    Further, I find that Mr. Flageul was never offered a contract for services, whether to undertake substantially the same work that he performed as C.E.O. of WeDrive or otherwise. During January 2018, Mr. Flageul was working (when not on holiday) during his notice period. An attempt was made by Mr. Barker to consider hiring him to work either for WeDrive or M.S.S. Transport, but he never obtained any instructions to make such an offer to Mr. Flageul. I reject Mr. Flageul’s evidence that he accepted an offer on 22 January 2018 and then worked in accordance with it on 23 and 24 January 2018. I also reject his evidence that Mr. Mace also made him an offer to be an independent contractor on 23 January 2018 which he then accepted. There is no contemporaneous evidence that supports these contentions, and I do not otherwise accept Mr. Flageul’s recollection of what occurred, without more, as persuasive. That is because, amongst other things, he admitted during his cross-examination that he never got ‘certainty’ about his role. As for Mr. Flageul’s email of 29 January 2018 declining the ‘offer of consultancy’, I find that it was either sent in a mistaken belief that such an offer had been made, or was a concoction on the part of Mr. Flageul.

315    Mr. Flageul’s case based on s. 358 is therefore rejected.

82    Mr Flageul made two submissions on appeal in respect of that reasoning.

83    First, he submitted that the use of the words “in order” in [313] constitutes an erroneous “gloss” on the construction of s 358 of the FW Act. Why that is so was not explained in the written submissions, and no mention was made of it in oral addresses. For those reasons, we say nothing more about it.

84    Second, he submitted that there were “fundamental inconsistencies” between a statement that Mr Barker had made to the Fair Work Commission and evidence that he gave in cross-examination before the primary judge. The written submission along those lines was as follows:

47.    There were fundamental inconsistencies between the Fair Work Witness Statement of Barker dated 11 May 2018 and the evidence he gave under cross-examination. Barker’s attempts to explain the inconsistencies concerning the Appellant being offered to work as an independent contractor (consultant) and offers of a consultancy agreement were, and are, unconvincing and the trial judge should have so found. In particular, the oral evidence of Barker directly contradicts his Fair Work Witness Statement dated 11 May 2018, which was the closest in time evidence from Barker about his offer to the Appellant to work as an independent contractor. In that Fair Work Witness Statement, Barker stated that on 22 January 2018 he met with the Appellant and they discussed the potential for the Appellant to be engaged by WeDrive on a consultancy basis and that on 29 January 2018, by email, the Appellant declined the offer of consultancy work and attached an invoice for his consultancy services provided to WeDrive. Ultimately, at the end of his cross-examination, Barker gave evidence that his Fair Work Witness Statement was true.

48.    Thus, all of the earlier evidence of Barker that contradicted and/or was inconsistent with his Fair Work Witness Statement should have been disregarded or regarded as untrue or self-serving.

(Cross-references omitted.)

85    That submission amounts to little more than an expression of disagreement with the primary judge’s factual findings. There were some inconsistencies between Mr Barker’s witness statement in the Fair Work Commission proceeding and the evidence he gave under cross-examination, but Mr Flageul’s submissions regarding the inconsistencies did not show that the primary judge’s factual findings are wrong by reference to incontrovertible facts or uncontested testimony, or that they are glaringly improbable or contrary to compelling inferences. Indeed, we consider his Honour’s factual findings to be open on the evidence and consistent with the weight of the evidence. We can discern no error in his Honour’s rejection of Mr Flageul’s claim that the respondents dismissed him in order to engage him as an independent contractor to perform the same or substantially the same work under a contract for services, in contravention of s 358 of the FW Act.

86    Accordingly, Grounds 3.1, 3.2 and 3.3 of the Notice of Appeal must be dismissed.

Disposition

87    For those reasons, the appeal must be dismissed.

Associate:    

Dated:    15 June 2021