FEDERAL COURT OF AUSTRALIA

 

Patty v Commonwealth Bank [2000] FCA 1072

INDUSTRIAL – TERMINATION OF EMPLOYMENT - review of Judicial Registrar’s decision dismissing employee’s application – whether employer had established on balance of probabilities that it had a valid reason for termination

 

JURISDICTION – application for review of Judicial Registrar’s decision filed in Federal Court – subsequent change in law raising jurisdictional question – whether Industrial Relations Court of Australia has exclusive jurisdiction to determine application – hearing conducted in Federal Court before Judge of both Federal Court and Industrial Relations Court of Australia – whether discretionary power to rectify consequence of finding that jurisdiction possessed by Industrial Relations Court and not Federal Court.

Industrial Relations Act 1988 (Cth)  ss 377, 419, 481

Workplace Relations and Other Legislation Amendment Act 1996 (Cth) Sch 16

Federal Court of Australia Act 1976 s 23

Autistic Association of New South Wales v Dodson [1999] FCA 439 (unreported, 14 April 1999)

Kumar v. Prima Furniture (NSW) Pty Ltd (1997) 75 FCR 477

Zechner v Department of School Education [1999] FCA 445;  (1999) 88 IR 142

Konrad v Victoria Police [1999] FCA 988;  (1999) 165 ALR 23

Jackson v Sterling Industries Ltd (1987) 162 CLR 612

Victoria v The Commonwealth (1996) 187 CLR 416

Qantas Airways Limited v Cornwall (1998) 83 IR 102

Cosco Holdings Pty Ltd v Thu Thi Van Do (1997) 77 IR 94

Murdoch University v Mainsbridge (1998) 84 IR 111

Sangwin v Imogen Pty Ltd (von Doussa J, IRCA, 8 March 1996, unreported)

Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371

Associated Dominion Assurance Society Pty Ltd v Andrew (1949) 49 NSWSR 351

Allied Express Transport Pty limited v Anderson (1998) 81 IR 410

DEAN PATTY v  COMMONWEALTH BANK OF AUSTRALIA (ACN 123 123 124)

VI 2542 of 1996

 

 

RYAN J

MELBOURNE

4 AUGUST 2000

 

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VI 2542 of 1996

 

 

BETWEEN:	DEAN PATTY Applicant
AND:	COMMONWEALTH BANK OF AUSTRALIA ACN 123 123 124 Respondent
JUDGE:	RYAN J
DATE OF ORDER:	4 AUGUST 2000
WHERE MADE:	MELBOURNE

 

MINUTES OF ORDER

 

THE COURT ORDERS:

 

1.         That the application for review be adjourned to a date to be fixed.

Note:       Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VI 2542 of 1996

 

 

BETWEEN:	DEAN PATTY Applicant
AND:	COMMONWEALTH BANK OF AUSTRALIA ACN 123 123 124 Respondent
JUDGE:	RYAN J
DATE:	4 AUGUST 2000
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1                     There is before the Federal Court of Australia a motion pursuant to s 377 of the Industrial Relations Act 1988 (Cth) (“the Act”) for review of a decision of a Judicial Registrar dismissing an application under s 170EA of the Act for relief in respect of the termination of the applicant's employment by the respondent, the Commonwealth Bank of Australia (“the Bank”).  It was agreed between the parties that, subject to the evidence of Mr Patty and Ms Blencowe in its entirety being taken afresh and to further cross-examination of other witnesses as to whose credit the Judicial Registrar had made findings which the applicant disputed, the evidence before the Judicial Registrar should be treated as evidence before the Court on the hearing of the review. 

Jurisdiction

 

2                     By notice of motion dated 4 February 2000 the applicant moved for orders:

“1.       That the proceedings in VI 2524 of 1998 in its entirety including the appeal, statement of claim, all orders, evidence and submissions which were made or placed before the Federal Court be transferred to the Industrial Relations Court of Australia or deemed a proceeding of the Industrial Relations Court of Australia.

 

2.         That leave be granted for any other order, including extensions of time, necessary to enable the transfer of the proceedings or the deeming of the proceedings as set out in paragraph 1.”

3                     That action by the applicant was prompted by a decision of a Full Court of this Court in Autistic Association of New South Wales v Dodson [1999] FCA 439 (unreported, 14 April 1999) (“Autistic Association”).  That judgment concerns the jurisdiction conferred by s 377 of the Act, which is in the following terms:

“A party to proceedings may apply to the Court to review a Judicial Registrar’s exercise in the proceedings of a power delegated under section 376. An application must be made within the period prescribed by the Rules of Court or such further period as is allowed in accordance with the Rules.”

4                     Autistic Association has overruled the received understanding (as explained by Moore J in Kumar v Prima Furniture (NSW) Pty Ltd (1997) 75 FCR 477 (“Kumar”)) as to whether this Court, or the Industrial Relations Court of Australia (“IRCA”), has jurisdiction to hear a review initiated under s 377 of the Act where the substantive hearing before a Judicial Registrar began before 25 May 1997.  The conclusion of the Full Court in Autistic Association (at para 26) was:

“If a proceeding for review of a Judicial Registrar’s decision is initiated, that proceeding does not define a new matter but is a further proceeding in proceedings which seek resolution of the one matter.”

5                     That conclusion has the consequence that, in the transfer of jurisdiction from IRCA to this Court on 25 May 1997 (the “transfer date”), the matter in respect of which these proceedings were issued was not subject to the operation of Item 63 of Sch 16 of the Workplace Relations and Other Legislation Amendment Act 1996 (“WROLA Act”), in that the “substantive hearing” before the Judicial Registrar had begun in April 1997.  It is under Sch 16 of the WROLA Act that matters, in which the “substantive hearing” had not begun, were transferred by operation of legislation from IRCA to this Court.

6                     Item 63 of Sch 16 provided for a “transfer” of jurisdiction and powers as follows:

“63(1)             This item applies to jurisdiction and powers vested in or exercisable by the Industrial Relations Court or a Judge of that Court immediately before the transfer day in relation to an act or omission occurring before the transfer day, except in relation to matters for which:

 

(a)        the Industrial Relations Court had begun the substantive hearing in proceedings in that Court; or

 

(b)        proceedings had been completed in the Industrial Relations Court before that day.

 

  (2)      On and after the transfer day, the jurisdiction and powers to which this item applies:

 

(a)        cease to be vested in or exercisable by the Industrial Relations Court or a Judge of that Court; and

 

(b)        are, subject to subitem (3), vested in the Federal Court.

 

…”

7                     Item 64 of Sch 16 provided for the transfer of proceedings:

“64                  (1)        …this item applies to proceedings commenced in the Industrial Relations Court but in respect of which the Industrial Relations Court had not begun the substantive hearing before the transfer day.

 

(2)        On the transfer day, proceedings to which this item applies are transferred to the Federal Court.

 

(3)        If proceedings to which this item applies are transferred under subitem (2):

 

(a)        all documents filed in the Industrial Relations Court in relations to the proceedings are to be transmitted to the Federal Court; and

 

(b)        any money lodged with the Industrial Relations Court in relation to the proceedings is to be transferred to the Federal Court and is taken to be money lodged with the Federal Court in relation to the proceedings; and

 

(c)        everything done in or in relation to the proceedings in the Industrial Relations Court is taken to have been done in the Federal Court.

 

…”

8                     Some difficulty with the judgment in Autistic Association is occasioned by the contrary decision of Zechner v Department of School Education [1999] FCA 445;  (1999) 88 IR 142, in which a Full Court differently constituted applied the decision in Kumar without reference to Autistic Association, which had been handed down only one day earlier.  Subsequently, Finkelstein J in a further Full Court judgment in Konrad v Victoria Police [1999] FCA 988;  (1999) 165 ALR 23 accepted the correctness of Autistic Association, but found that it did not apply to deprive the Federal Court of jurisdiction in the particular case.

9                     In the circumstances, I am inclined to follow the decision in Autistic Association.  The difficulty which results in the present case is that the application for review under s 377 has, in light of that conclusion, been filed in the Federal Court which has no jurisdiction to deal with the matter.  This conclusion does not entirely dispose of the matter.  For a variety of reasons, it would not be in the interests of justice to fail to exercise the jurisdiction of one or other of the Federal Court or IRCA, to make orders substantively determining the matter.  At the forefront of those reasons are the following:

·        Both parties have always accepted, and conducted their respective cases, until the filing of the notice of motion, on the basis that the Federal Court had jurisdiction to deal with the matter;

·        The case was reserved for judgment on the conclusion of the parties’ cases, and before the jurisdictional issues were exposed;

·        The motion pursuant to s 377 was filed on 12 May 1998 in the Federal Court on the understanding of the law as then applied in Kumar;

·        The respondent has indicated that, should leave be given to extend time for filing of the motion in IRCA, it would not oppose an application that IRCA treat the evidence adduced and submissions advanced in the Federal Court as having been adduced or made in IRCA;

·        Substantial time, effort and money have been expended in the presentation of evidence before me in my capacity as a Judge of the Federal Court;

·        I am also a Judge of IRCA, entitled to exercise the powers of that Court in relation to a matter properly within its jurisdiction; and

·        The Federal Court was invested with the same jurisdiction as was previously exercised by IRCA, and, accordingly, nothing of substance turns on the fact that the case was conducted in this Court rather than IRCA.

10                  The question remains, however, whether there is power in this Court, or in IRCA, which may be exercised to allow the matter to be determined without further steps being taken by the parties.  IRCA has a general power to make orders conferred by s 419 of the Act in the following terms:

The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds … as the Court thinks appropriate.

11                  The wide powers available to IRCA under that section are subject, as I apprehend it, to the same limitations as those attracted by the similarly-expressed s 23 of the Federal Court of Australia Act 1976, which have been discussed by the High Court in Jackson v Sterling Industries Ltd (1987) 162 CLR 612 at 620-625 (“Jackson”).  In that case,  Brennan J noted that s 23 confers on the Federal Court “such powers as are necessary or incidental to the exercise of [the] Court’s jurisdiction.” Brennan J then observed:

“But that is not to say that the Court’s discretion to mould relief is at large.  The relief which the Court is authorised to give does not extend beyond the grant of remedies appropriate to the protection and enforcement of the right or subject-matter in issue.”

In Jackson at 622 Deane J said:

“Section 23 of the Federal Court of Australia Act 1976 (Cth) confers upon the Federal Court a broad power to make orders of such kinds, including interlocutory orders, as it “thinks appropriate.”  Wide though that power is, it is subject to both jurisdictional and other limits.  It exists only “in relation to matters” in respect of which jurisdiction has been conferred upon the Federal Court.  Even in relation to such matters, the power is restricted to the making of the “kinds” of order, whether final or interlocutory, which are capable of properly being seen as “appropriate” to be made by the Federal Court in the exercise of its jurisdiction.”

12                  The consequence of the conclusion that this matter was not transferred under Item 63 of the WROLA Act, is that IRCA retains jurisdiction over the whole of the matter which was instituted on 9 September 1996, including the matter raised by any proceedings for review of the decision of the Judicial Registrar, such as the proceedings filed in the Federal Court on 12 March 1998.  The High Court in Jackson has indicated the limits of powers conferred on the Federal Court in terms similar to those conferred on IRCA by s 419.  Those limits do not, I consider, preclude IRCA in the circumstances of the present case, from directing that evidence adduced and submissions made, mistakenly, as it now appears, in the Federal Court, be treated as having been adduced and made in IRCA.  I do not think it is an impermissible exercise of the powers reposed in IRCA by ss 419 and 481 to make such an order to rectify the mistake to which I have just referred, and to ensure that the right or matter arising on the institution of proceedings for review of the decision of the Judicial Registrar is determined by the Court having jurisdiction to entertain it.

13                 It follows from the conclusion as to jurisdiction which I have just expressed that the Federal Court is unable to make an order transferring to IRCA a matter over which it has never had jurisdiction.  Accordingly, to that extent, I am unable immediately to give effect to the orders sought in the applicant’s notice of motion.  However, that does not mean that the applicant cannot obtain in any forum, any substantive relief to which he would be entitled if he were to succeed on the merits.

14                  I do not consider, in these circumstances, that it is either necessary or in the interests of justice to allow the applicant leave to file a notice of motion for review out of time in IRCA, or to require that the extensive proceedings before me be re-litigated in any way.  However, if it would be wrong to make any of the orders foreshadowed at the end of these reasons, which are intended to procure a final determination, subject only to appeal, on the merits of the matter, I indicate that I would be prepared to take whatever other steps are necessary to achieve such a determination by a court having jurisdiction to entertain the matter.

The factual background

 

15                  The applicant was employed by the respondent, (“the Bank”) until 26 August 1996.  On the weekend of 10 and 11 February 1996 the applicant and another Bank officer, Mr Dino Centofanti, were rostered as a team to be “on call” to provide service and maintenance attention to automatic telling machines (“ATMs”) operated by the Bank in the Brunswick/Coburg region.  The following description of the Bank’s practice for the servicing of its ATM’s is taken from the reasons for decision of the learned Judicial Registrar:

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

 

16                  Early in the afternoon of 10 February 1996, the applicant and Mr Centofanti, in response to a request from the Information Services Department, attended the Bank’s Collingwood Service Centre, a sub-branch of the Bank at 150 Smith Street, Collingwood.  They were present at those premises from 1.43 to 2.22 pm.  During that time difficulties were encountered in establishing the A and B codes to open the ATM.  What occurred at the Collingwood Service Centre on that occasion has been the subject of detailed findings of fact by the Judicial Registrar none of which has been significantly challenged in the course of the present hearing.  The Judicial Registrar’s findings were as follows:

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

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

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

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

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

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

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

 

17                  At 7.43 pm on 10 February 1996 it was electronically recorded at the Bank’s Central Data Recording and Control Centre that the ATM doors at 150 Smith Street had been opened, and, almost simultaneously, it was similarly recorded that the service door and the currency/depository area door were open.  Within nine minutes and perhaps as early as 7.44 pm the cartridges or canisters containing various denominations of banknotes to a total value of $27,400.00 were removed.  However, for various reasons which have been indicated by the Judicial Registrar, the theft was not discovered or investigated until shortly before 1 pm on 11 February.  At that time, the applicant and Mr Centofanti again attended as an ATM service team at 150 Smith Street.  The learned Judicial Registrar summarised as follows his findings of fact as to what then happened:

“They have given conflicting accounts as to the advice provided which led to the team revisiting the branch but they agree that:

·        they had been directed to attend the branch

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

·        Centofanti remained in the bank car ‘about three shops away out front’

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

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

·        shortly thereafter police arrived and commenced their investigations.”

 

18                  Subsequently, an extensive police investigation was undertaken in the course of which records were made of interviews by police officers of the applicant, Mr Centofanti, Mr Moragiannis, another Bank officer who was known to have had a key to the premises at 150 Smith Street, Collingwood, Ms Natalie Bartle, also a Bank officer, who admitted being implicated with Nick Mustafa, an ex-Bank employee, in an unrelated deception involving $25,000.00, and Lisa Wong who was alleged also to have been an associate of Mustafa.   Police also conducted a search of the applicant’s home and interviewed his girlfriend, Ms Blencowe, with whom he was then living, before she had any opportunity to communicate with the applicant.

19                  After the police investigators had decided not to pursue the matter unless more evidence became available, the Bank continued to conduct its own internal investigations.  Those investigations continued over some months and identified nine Bank officers, in addition to Patty and Centofanti, who had access to the A and B combinations for the ATM at 150 Smith Street after the combinations had been changed in September 1995.  A report by one of the Bank’s investigators, Ms Clare, contained this passage:

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

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

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

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

 

20                  On 13 June 1996 the Bank’s investigating officers, Ms Clare and a Mr Forkgen, interviewed the applicant, principally about two cash deposits, one into Ms Blencowe’s bank account of $100 in $50 notes on 21 February 1996 and another of $250, also in $50 notes, into the applicant’s bank account on 29 April 1996.  That matter, it seems, had first been raised in an interview of the applicant by Ms Clare, Mr Forkgen and a Mr Wilson of the Bank’s Investigation Section on 7 May 1996.  In the course of that interview, the applicant at first suggested that the $240 had come from Ms Blencowe "to pay a phone bill".  He was unable to indicate from what source Ms Blencowe had obtained the cash and was unaware, at that time, whether Ms Blencowe had been working at Franklins which might have explained her possession of $250.00 in cash.  Later in the same interview, the applicant surmised that the cash might have come from Emperor Marine Aquarium.

21                  At some time, presumably after 7 May 1996, Ms Blencowe gave to Mr Patty some six or so pay envelopes which she had received from her employer, Franklins, since 28 February 1996 and which had contained cash in the amounts respectively indicated on the front of each pay envelope.  According to Mr Patty, he provided those pay envelopes to the Bank’s investigating officers and photocopies were made of them but they were returned to Mr Patty in a dismissive way as being of no assistance in casting light on the cash deposits in the accounts of himself and Ms Blencowe.  They were tendered in evidence late in the hearing before the Judicial Registrar.

22                  On 24 June 1996, Mr Medland, the Bank’s Senior Manager, Network Services, wrote to Mr Patty in these terms:

“Theft of Cash - $27,400.00

From ATM, 150 Smith Street, Collingwood

As you are aware, investigations into the above matter have been exhaustive.

The decision has been made to conclude our investigations, finalise a report to Human Resources, Head Office with our findings and recommendations and return the file to investigating police at Fitzroy CIB.

During our many discussions, a number of issues surrounding your statements to both police and officers of this Department have been raised.  To date, these issues have not been satisfactorily resolved.

We therefore take this opportunity to formally raise these issues with you and to provide you with the opportunity to reply, in writing, prior to our submission and final recommendation to Human Resources.

Following is a list of outstanding issues requiring your reply.

You should consider your replies very carefully and provide documentary evidence where appropriate.

1.      In your original statement to police, you advised that during your first visit to 150 Smith Street on the afternoon of Saturday 10 February 1996, you went downstairs and only attended the male toilets.  In later interviews, you conceded that when you returned upstairs, you mentioned to Dino CENTOFANTI that ‘you should use the back car park next time you attend the branch’. We have ascertained that the rear car park can only be viewed from inside the premises from either the window in the kitchen or by opening the back door.  To date, you have not adequately explained from which vantage point you viewed the rear car park.  Please now do so.

2.      You advised that after servicing the ATM at Fitzroy Branch you drove Dino home and returned home yourself, arriving at 4:00pm approximately.  You stated that you were home alone until Kristine arrived some 20 minutes later.  However, in our discussions with Kristine, she advised that from her recollection, she was home when you arrived that afternoon and that you arrived home closer to 5:00pm.  Please clarify.

3.      You advised that you spent part of the evening of Saturday 10 February 1996 at your Uncle’s home in Wattle Glen.  You claimed to have left his home at 7:20pm.  You claim that you can be precise about the time you left Wattle Glen as your cousin Dale had a party to attend and had to depart to be at the party on time.  Your cousin Bradley was also leaving and there would be no one home but your Uncle so you decided to leave as well.  In our discussions with your Uncle ‘Bob ADAMS’, he advised that Dale did not leave to attend the party until 9:30pm.  Kristine advised that you left your Uncle’s place closer to 7:30pm.  Please now provide us with your final version of these events.

4.      You then claim that after leaving Wattle Glen, you went directly to Greensborough Civic Video and remained there for 45 minutes minimum.  Trish, Manager of Greensborough Civic Video, confirms that you spent a minimum of 45 minutes in the store.  You provided a copy of a computer record printout, showing that you finalised your transaction at the store at 8:01pm on the evening of Saturday 10 February 1996.  This indicates that on information provided, you arrived at the store at approximately 7.15pm on the evening of Saturday 10 February 1996.  Therefore, despite your emphatic advice that you departed Wattle Glen at 7:20pm, you clearly must have left earlier in order to attend the video store by 7:15pm.  Please clarify.

5.      You claim that you and Kristine both attended the video store and that you spoke briefly with Trish when you arrived, which Trish has confirmed.  Kristine advises that she was also greeted by Trish when you arrived, however, Trish is unable to recall seeing Kristine at all during that evening and stated that you were alone.  Can you offer any further evidence that Kristine was with you at the store?

6.      After you were asked if you had touched the inside of the ATM at 150 Smith Street at any stage during the weekend of 10 and 11 February 1996, you replied by indicating that you had found a glove in a cupboard by the ATM and that you put the glove on your hand and made a joke of it with Dino CENTOFANTI.  You disposed of the glove in a bin under the tellers box.  Dino cannot recall this incident taking place.  You also have not adequately explained the relevance of your information regarding the glove in relation to the abovementioned question.  Did you or did you not touch the inside of the ATM with or without a glove on 10 or 11 February 1996?

7.      You advise that early on the morning of Sunday 11 February 1996, you received a telephone call from the ‘Help Desk’ advising you to attend 150 Smith Street as a priority.  There is no record of this call on the Information Services log.

8.      Furthermore, you advised that when you contacted Dino later that morning and explained to him that you were both required to attend 150 Smith Street as a priority, he replied ‘I know’.  Dino denies this conversation and indicates that he was surprised when you phoned him and told him you had received a phone call from the Help Desk.  Please now explain why you took the decision to visit 150 Smith Street when no direction had been given to you by the Help Desk.

9.      You advised that on your attendance at 150 Smith Street, you completed a security check of the premises and that you were immediately alerted to the fact that the ATM was opened and the cartridges were missing.  Despite being aware of the events that had taken place whilst you were in a secure position, you stated that you continued to undertake a check of the premises, even to the extent of starting down the stairs and noticing the rear door was opened.  These actions are contrary to bank instructions and placed you at grave risk.  You have not adequately explained why you continued to undertake a security check of the premises, despite being aware almost immediately after entering the premises that the ATM had been robbed.  Please now provide me with your explanation as to your thought process at the time.

10.    You have been shown two (2) cash deposits that have been uncharacteristically made to yours and Kristine’s accounts since 10 February 1996.  The cash component of these deposits was in $50 notes.  You are in possession of photocopies of the deposit vouchers in question.  During early discussions, you advised that the cash represented monies paid to you and Kristine by Antony BROWN of Emporer [sic] Marine Aquarium for the sale of fish.

         In discussion with Antony BROWN, he indicated that he does not make payments in cash.  When you were advised of this in later discussions, you changed your information and indicated that the cash represents salary payments made to Kristine from ‘Franklins Big Fresh’, where she was employed casually at the time.  Discussions with Franklins payroll section indicate that whilst cash salary payments do occur, these are not commonplace.  Despite this, Kristine’s normal salary payments were electronically deposited to her account on either the day following or proceeding each cash deposit.  The source of the cash deposits in question remains unsubstantiated.  It is now vital that you provide us with your final version.

11.    In our latest discussion, you were asked if you had been in contact with Antony BROWN since our discussion began, to which you replied that Kristine had borrowed Antony’s mobile phone over the weekend of 10 and 11 February 1996.  You indicated that she did so as you were being held by police for questioning and she wanted to be able to contact legal assistance if necessary.

         Once again, the relevance of this reply based upon the question put to you at the time is yet to be established, but will be followed up by Fitzroy CIB.  We also need to establish why Kristine sought assistance from Antony BROWN, who you claim is merely her employer from time to time, when we were advised in previous discussions that she had a family member residing very close by.

The relevance of each of the issues raised forms an integral part of our investigation process and, in order to properly evaluate your position, we require clarification on each issue.

A formal reply to this letter is required and we would be please [sic] if you could provide this reply by Friday June 28.

You are entitled to discuss the contents of this letter with your Union Representative and please do not hesitate to contact either Peter FORKGEN or Mary CLARE for clarification of any of the issues raised herein.”

 

23                  After obtaining legal advice for himself and Ms Blencowe, Mr Patty declined to respond to that letter or otherwise comment on any of the eleven issues raised in it.

24                  On 16 July 1996, a report compiled by Ms Clare and addressed to the Bank’s Human Resources Department, Victoria was signed by Mr Medland.  That report contained these passages:

“Subject           Staff : Dean Michael PATTY S/N : 135549

                          Theft of Cash : $27,400.00 from ATM

                          situated 150 Smith Street, Collingwood

                          10/2/96

After several months of extensive and exhaustive investigations into this matter, we have concluded our investigations and have determined that, on the balance of probabilities Dean Michael PATTY, at the very least, orchestrated the theft of $27,400.00 cash from 150 Smith Street, Collingwood ATM.

Investigations into this matter have been protracted due mainly to the extremely poor control exercised by management at Collingwood, coupled with inaccurate and often misleading information.

…

All possible avenues of investigation have been undertaken and all possible identified suspects researched and where considered necessary interviewed.

Eventually it was concluded that the following events certainly took place on Saturday February 10^th.

At approximately 1.45pm Dean PATTY and Dino CENTOFANTI attended 150 Smith Street as part of normal ATM servicing requirements.  They both acknowledge experiencing problems obtaining combinations through the VRU and eventually locating a written record of ATM top combination (Combination ‘A’) in a desk drawer.

Although CENTOFANTI held the ‘B’ combination packet and should only have been responsible for removing the bottom combination, he removed the top combination, using the record located in the desk drawer.  (He acknowledges this breach of dual control requirements.)

CENTOFANTI continued to attempt to log onto VRU to obtain the bottom combination and was eventually successful, however, PATTY had already rectified the ATM problem by resetting the controller.

CENTOFANTI recorded the ATM bottom combination on a scrap piece of paper and, despite the fact that the problem appeared to be rectified, removed the bottom combination and opened the secured area of the ATM only to perform a ‘COCO’ Test.  (A COCO Test simply determines that the ATM is functioning properly.)

CENTOFANTI cannot recall with any certainty how he disposed of the written record of the bottom combination but states that he is certain he did not leave the premises with the combination on his person.

PATTY states that he returned the record of the top combination to the drawer from which it was located.

During this attendance at 150 Smith Street PATTY went downstairs for a period of time that remains in dispute.

At approximately 7.43 pm that evening a person or persons unknown entered the premises located at 150 Smith Street by means unknown, deactivated the ATM security monitored alarm by inputting the correct code, opened the ATM, removed the cartridges containing the cash and decamped via the rear door.  We have established that the code was removed only a matter of seconds prior to the ATM door being opened;  we conclude, therefore, that the combinations were likely to have been removed prior to deactivation of the alarm.  (It has been established that the alarm is only activated in the event that the ATM doors are opened without inputting the correct deactivation code.  The combinations can be successfully removed without activating the alarm providing the door is not opened.)

I.S. received an ‘open door’ alarm at 7:43 pm on 10 February however took no action until 9:30 pm when Trevor HOWELL (of our Security Section) contacted them.  HOWELL had already been alerted by Central Monitoring Services (CMS) that the ATM alarm had been put into ‘access’ mode out of hours.  HOWELL requested I.S. have the ATM service team attend 150 Smith Street as their first port of call the following day.

At 12.10 pm on 11 February HOWELL rang I.S. to ensure 150 Smith Street had been given a priority listing.  It was then that he learned that 150 Smith Street had not been given any urgency but was simply logged onto VRU in the normal manner.

Information Services advises that when Dino CENTOFANTI logged onto VRU on Sunday morning, February 11, he was simply given a list of branches to attend.  ATM problems are not advised at this time, and subsequent interviews with CENTOFANTI reveal that he was unaware of the particular problem at 150 Smith Street.  PATTY also states he was not told by I.S. that there was an ‘open door’ situation at 150 Smith Street.

Having arrived at 150 Smith Street PATTY elected to undertake the security check of the premises and was immediately alerted to the fact that the ATM was open and the cartridges were missing.  He also discovered that the rear door to the building was ajar.

Wormalds and Police were immediately contacted and attended 150 Smith Street where CENTOFANTI and PATTY were asked to provide statements.

A comprehensive search of the premises was conducted by attending police officers, Rod MEDLAND (Senior Manager Network Services) and Trevor HOWELL (Security Section Network Services), all of whom failed to locate the written records of the combinations used by CENTOFANTI and PATTY the previous afternoon.

Investigating police immediately identified Dean Patty as a probable suspect due to inaccuracies and inconsistencies in statements and information that he provided.  PATTY and CENTOFANTI were asked to accompany officers from Fitzroy CIB back to the Fitzroy Police Station for further questioning.

CENTOFANTI was released shortly thereafter when Police authenticated his alibi and were satisfied with his statement.

PATTY however, was questioned at length and a search conducted of his home in Reservoir.  He was later released, due to time constraints, even though Police had yet to authenticate his alibi.

Comprehensive details of circumstances surrounding his release are provided in attachments to this memorandum.

The end result of our investigation has determined that in the commission of the theft, both written records of the ATM combinations previously described were used to successfully remove the combinations and that the offender fled the premises with these written records on his/her person.  These written records still remain unlocated.

The only people who knew the exact location of both written records immediately prior to the theft were Dean PATTY and Dino CENTOFANTI.

…

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

On the advice of his Solicitors PATTY subsequently provided a ‘no comment’ response.

In our opinion the following events transpired:

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

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

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

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

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

 

25                  On 5 August 1996, the applicant was notified orally and by letter that he was to be suspended from duty with pay.  The letter was in these terms:

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

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

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

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

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

Yours sincerely                                     I acknowledge receipt of the above

                                                             letter and attachment and understand

                                                             its contents.

                                                             .......................................

R L Fletcher                                         D M Patty s/n 135549   5 August 1996”

Senior Manager

 

26                  On 27 August 1996 the Bank advised the applicant by the following letter that he was forthwith dismissed from its employ:

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

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

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

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

27                  On 25 September 1996, the applicant's present solicitors who had been retained in place of those who had given the advice described in para 23 above, wrote to the Bank in these terms:

“We advise that we act for Mr Patty.

We are instructed that our client was dismissed from his employment as Customer Services Officer with the bank on the 27th of August 1996.

Our client was advised that in the bank's view he was implicated in the theft of cash amounting to $27,400.00 and our client strenuously denies the allegation.

We confirm that our client has issued proceedings in the Industrial Relations Court of Australia where he will seek orders for re-employment and or compensation.

We confirm that we attended the conciliation conference scheduled for the 23rd of September 1996.  In the meantime there are various documents that we require from you namely:-

1.         All transcripts of interview conducted with our client.

2.         The departmental report received by the bank which lead the bank to conclude that our client was implicated in the theft.  This report is referred to in the bank's correspondence to our client dated 5th of August 1996.

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

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

We look forward to receiving these documents and should you wish to discuss this matter further please do not hesitate to contact Mr John Kotsifas of our office.”

28                  That letter elicited the following “without prejudice” reply from the Bank's solicitor:

"I refer to your letter of 25 September 1996 and advise that the Bank is prepared to, and indeed would like to, receive written answers to those questions previously posed to your client, on a number of occasions, in relation to the theft of cash amounting to $27,4000.00.

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

The Bank is also not prepared to furnish your client with any documentation as requested in your letter under reply.  The answers to the questions are exclusively within your client's knowledge and would not be gleaned from documents provided by the Bank.  The Bank is also weary of a pre-emptive “fishing expedition” being conducted by your client without him first providing the outstanding answers to the Bank questions.

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

It is suggested that you notify the Industrial Relations Commission that the matter be adjourned for say 2 weeks in order to give your client time to provide those answers and for the Bank to assess them.

I look forward to hearing from you.”

The Judicial Registrar's conclusions.

 

29                  The learned Judicial Registrar concluded that he was not satisfied on the balance of probabilities that the applicant had personally removed the cash from the ATM on the evening of 10 February 1996.  However, he went on to express himself satisfied, also on the balance of probabilities, that Mr Patty had been involved and implicated in the theft.  The reasons for reaching these conclusions were expressed as follows:

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

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

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

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

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

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

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

 

30                  The Judicial Registrar seems to have based his conclusion, not on any extrinsic evidence directly implicating Mr Patty in the theft, but on circumstantial evidence pointing to his having had an opportunity for complicity.  He also relied on what he regarded as inconsistencies and conflicts between the various accounts given by Mr Patty and those of other witnesses and on the failure of the applicant to respond to requests by the Bank to clarify or explain some of those inconsistencies.

 

Inconsistencies found by Judicial Registrar in applicant’s accounts.

 

31                  Because I have been unable to reach the same conclusion on the balance of probabilities that Mr Patty was implicated in the theft without personally removing the cash from the ATM, it is appropriate to indicate my views about each of the conflicts or inconsistencies identified by the Judicial Registrar.

(i)    Whether Ms Blencowe or Mr Patty arrived home first on the afternoon of 10 February.

32                  Mr Patty consistently maintained that he arrived home about twenty minutes before Ms Blencowe.  Ms Blencowe did not contradict that account until interviewed by Ms Clare, the Bank’s investigation officer, during a lunch hour at the Broadmeadows Shopping Centre on 2 May 1996.  Ms Clare’s notes of that interview do not suggest that Ms Blencowe was pressed to recall who arrived home first or told that any significance attached to that question.  Ms Blencowe has since said that she realised later that she had been mistaken in what she told Ms Clare.  However, the Judicial Registrar noted that no attempt was made before the trial before him by the applicant or Ms Blencowe to acquaint the Bank or the applicant’s legal advisers with the fact of that mistake in Ms Blencowe’s account.  The answer to the question of who arrived home first on the afternoon of 10 February does not assist in determining whether or not Mr Patty was implicated in the theft.  Having heard evidence from both Mr Patty and Ms Blencowe and seen them both cross-examined, I am satisfied that Mr Patty’s version was correct and that Ms Blencowe was mistaken in the account which she gave to Ms Clare almost three months after the event.

(ii)   Whether the applicant received a pager message on the morning of 10 February.

33                  The Judicial Registrar’s conclusion on this question is expressed as follows:

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

 

34                  As with the inconsistency discussed in (i) above, this arose from the statement made by Ms Blencowe to Ms Clare on 2 May 1996.  The applicant has never asserted that he had a pager before leaving home on 10 February and agreed that he was provided with one by Mr Centofanti.  I accept the evidence of Mr Patty and Mr Centofanti on this point.

(iii)  The telephone call on the morning of 11 February.

 

35                  The evidence given by Ms Blencowe on this point before the Judicial Registrar on 18 August 1997 as quoted in his reasons for decision was:

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

 

36                  The applicant, by contrast in the course of a police interview late on 11 February, said that he had risen at about 9.15am, showered and dressed and played with his computer until a telephone call from the Bank’s Voice Response Unit aroused Ms Blencowe.  That telephone call instructed Mr Patty and Mr Centofanti to go to 150 Smith Street, Collingwood as a matter of priority because there was a problem at that ATM.  The applicant was inclined to accept the correctness of a Bank record which, according to the police, fixed that call as having been made at 10.45am.

37                  Ms Blencowe, in her statement given to Ms Clare on 2 May 1996, said no more than that “On Sunday, Dean received a call from the ‘Help Desk’ early about 10am telling him to go directly to 150 Smith Street Collingwood and ignore the other calls until after 150”.

38                  I accept the evidence given by Ms Blencowe before me that she had been awakened by the telephone call, whenever it occurred, and assumed that Mr Patty had similarly been awakened and got out of bed to answer the call.  That assumption was mistaken and was probably due to Ms Blencowe’s reconstruction of events which she was not asked to recall in any formal way until May 1996.

(iv)  Ms Blencowe’s reaction when approached by police on 11 February.

39                  The learned Judicial Registrar, at the invitation of Counsel for the Bank, attached considerable significance to what he called “the spontaneous and unsolicited comment” made by Ms Blencowe when the police visited her at home on the evening of Sunday, 11 February.  In her evidence before the Judicial Registrar, Ms Blencowe said that after the police identified themselves, she burst out crying and, after being assured that Mr Patty was unharmed, said something to the effect:

“...‘it’s about Collingwood isn’t it?  It’s about the Collingwood Service Centre’ because of the phone call we’d gotten that morning.  I thought that – I just sort of put two and two together because it’s not usual for help desk to ring us at home but because they had that morning before Dean had actually logged on and started work.”

 

40                  The Judicial Registrar referred to cross-examination of Ms Blencowe on that part of her evidence but there is nothing in her answers as he recorded them which contradicts the explanation given in evidence-in-chief that her enquiry about the Collingwood Service Centre had been prompted by her recollection of the call from the help desk on the morning of the same day directing Mr Patty to go first to the Collingwood Service Centre.  There is also evidence that another call was made to Mr Patty's home early in the afternoon of 11 February to enquire why the problem at the Collingwood Service Centre had not yet been rectified.  That call was apparently answered by Ms Blencowe, although she has no recollection of doing so.  That evidence provides a further or separate explanation of her reference to the Collingwood Service Centre when first confronted by the police.  It is significant that it was never put to Ms Blencowe in cross-examination or otherwise that her enquiry about the Collingwood Service Centre had been a spontaneous revelation of guilty knowledge either because she herself had participated in the theft on the evening of 10 February or had been told by Mr Patty before he left home on the morning of 11 February that he had been implicated in the theft.  I therefore accept her explanation.

 

(v)   Conflicting accounts of the applicant and Ms Blencowe about events on the morning of 10 February.

 

41                  The learned Judicial Registrar recorded that the applicant and Ms Blencowe had given conflicting evidence about certain activities on the morning of Saturday 10 February.  He noted that Ms Blencowe stated in evidence before him “that she could not remember the applicant receiving a pager call at home on the Saturday morning and that she did not think she was home but out first to visit a chiropractor and then to shop and that she thought she was out from 9.30am to approximately 12.30pm.”  In cross-examination she indicated that “[she] did not recall telling Ms Clare that the applicant received a pager from the VRU just before 12 noon but that it was possible that she had told Ms Clare and that she could not recall one way or the other.”

42                  The actual evidence of Ms Blencowe before the Judicial Registrar on this point was:

“Saturday morning I got up I had a chiropractic appointment, I went to the chiropractors. I went and did some grocery shopping; when I got home I think, I’m not quite sure, I think I got home just as Dean was leaving or he might have even left, I’m not quite sure but I knew he was on the ATM service team that weekend.”

 

43                  Under cross-examination before the Judicial Registrar, Ms Blencowe was asked whether Mr Patty had received a pager call at home on the morning of Saturday 10 February.  She replied “I can’t remember; I don’t think I was home.”

44                 In her evidence-in-chief on the hearing of this review, Ms Blencowe said that on the morning of Saturday 10 February “I got up, I went to a chiropractic appointment, I went and did the weekly grocery shopping and whatever other errands I had to do and then I went home.”

45                  Ms Clare, however, had given evidence before the Judicial Registrar that Ms Blencowe had told her that she had returned home from her chiropractic appointment at about 11.30am.  Mr Patty has consistently asserted, since he furnished a handwritten note to the police on 11 February, that he had been telephoned by Mr Centofanti at about 10.00am on 10 February and had been told that they had six fault calls to attend to.  On his version, he then told Ms Blencowe that he would be gone all day and left to collect Mr Centofanti. 

46                  Under cross-examination before the Judicial Registrar, it was put to Mr Patty that he had been told by Mr Centofanti at about 9.30 to 10.00 o’clock in the morning of 10 February, of the ATMs which required attention.

47                  The only doubt cast on Mr Patty’s account was whether Ms Blencowe had been at home when he left.  On a review of the whole of the evidence I am satisfied that Ms Blencowe was at home and left between 9.30am and 10.00am to keep her chiropractic appointment. 

 

(vi)  The applicant’s failure to substantiate the source of the cash funds credited to his account on 29 April 1996.

 

48                  The learned Judicial Registrar, in his reasons for decision, noted that the Bank’s investigators had been pursuing the source of a cash deposit of $250 to the credit of the applicant’s bank account on 29 April 1996.  The applicant was first taxed about that matter when interviewed by Mr Forkgen on 7 May 1996.  He suggested that he had obtained the money in cash from Ms Blencowe to pay her share of the telephone bill.  Mr Forkgen then suggested (erroneously as it seems) that Ms Blencowe was not working at the time and, after some inconclusive discussion about whether she could have accumulated $250 from unemployment benefits, Mr Patty surmised that it may have come from the sale of fish to Mr Brown of Emperor Marine.  However, Mr Forkgen apparently did not adopt that surmise because he then said:

“Alright well I’ll ask you again, where did the $250.00 in cash come from?”

 

49                  Mr Patty replied, “I presume it was Christine’s for her phone bill.  When exactly, I don’t know.”

50                  In his evidence before the Judicial Registrar, the applicant claimed that he had offered a collection of Ms Blencowe’s pay envelopes to either Ms Clare or Mr Forkgen.  Much was made of the fact that neither Ms Clare nor Mr Forkgen was cross-examined about any such offer from Mr Patty.  The Judicial Registrar noted that Ms Clare and Mr Forkgen were adamant that the applicant had not provided them with pay envelopes.  He also pointed out that substantiation of the receipt of $250 had been requested of Mr Patty by paragraph 10 of the Bank’s letter of 24 June 1996 which has been set out above.

51                  In the body of the same decision, the Judicial Registrar noted that “very late in the trial, the applicant produced evidence which suggests that these cash deposits could very well have represented cash salary payments to Blencowe”.  That was clearly a reference to a collection of pay envelopes which became Exhibit A2.  However, the Judicial Registrar made no finding about their authenticity or about whether Ms Blencowe had received a cash payment of at least $250 on or shortly before 29 April 1996.  Ms Blencowe, on the hearing of the review, identified photocopies of the documents in Exhibit A2 as photocopies of her pay packets and denied having written or concocted them herself.  She explained that it was usual before a particular Franklins store had been established for wages to be paid manually.  “Once the office was set up and the office team leader had all records and all those details were in place, then all pays would have gone through electronically.  But initially it would not unusual to get a manual pay packet, no.”  In the light of that evidence, corroborated by the Franklin’s computerised payroll (Exhibit R11A), I am satisfied that she received a cash payment of $356.50 from Franklins by way of salary in respect of the week ending 29 April 1996.  I am further satisfied that part of the cash so received was paid to the credit of Mr Patty's account on 29 April 1996. 

 

(vii)  The applicant’s knowledge of a carpark at the rear of 150 Smith Street, Collingwood.

 

52                  The learned Judicial Registrar considered that the applicant's evidence as to his knowledge of a carpark at the rear of the premises at 150 Smith Street, Collingwood did not reflect favourably on the applicant's credibility.  The applicant claimed to have told Mr Centofanti of the carpark after he (the applicant) returned from the toilet while they were both at the Service Centre on 10 February.  However, in cross-examination before the Judicial Registrar, the applicant said that he did not recall how he knew of the carpark's existence, or how he came to learn of the carpark.  The Judicial Registrar also drew an inference adverse to the applicant from his failure to suggest that he and Centofanti should use the carpark when they returned to the Service Centre on 11 February and from his failure, on that occasion, to carry out a perimeter check, including the carpark, in accordance with the Bank's security procedures. 

53                  It will be recalled that the applicant's ability to have seen the carpark was the first point raised as requiring explanation in the Bank's letter of 24 June 1996 which is set out at para 8 of these reasons.  That letter asserts that “in later interviews, you conceded that when you returned upstairs, you mentioned to Dino Centofanti that “you should use the back carpark next time you attend the branch.””  That assertion is borne out by the record of interview of 7 May 1996 where Mr Forkgen said:

“I'll just run through something you said to use again on Friday Dean, when you went upstairs you said you conversed with Dino and said “next time we come here if we're struggling for parking, we'll park at the back 'cause there's a big carpark out the back.”

54                  The applicant agreed with what had there been attributed to him, whereupon Mr Forkgen said:

“Well I put it to you you definitely went into the lunchroom or opened the back door, because that they are the only two spaces, places in that branch that you can see the Bank carpark from.......  You can't see it from anywhere else apart from either opening the back door ..... or the lunchroom.”

55                  Mr Patty then insisted that he did not open the back door, and shortly afterwards in the same interview, said in relation to the layout of the Service Centre premises:

“It's hard to say without being there or a diagram.”

56                  Despite that intimation, it does not appear that any attempt was made in the course of the Bank's investigation to have the applicant return to 150 Smith Street and indicate the position from which he believed he had observed the carpark.

57                  As I understand the hypothesis on which the Bank based its belief that Mr Patty had been implicated in the theft, it included his unlocking the back door while he and Centofanti were at the Service Centre on 10 February, and leaving it open for re-entry later that day by himself or an accomplice.  On that hypothesis, it would have been most unlikely for Mr Patty to have mentioned the carpark to Mr Centofanti, as the Bank's investigating officers accept he did.

58                  From a photograph tendered in evidence before the Judicial Registrar of a view of the rear carpark from the lunchroom window, it appears that the carpark was enclosed by a cyclone wire fence at least two metres high.  If that was the view which Mr Patty had, it is understandable that he did not suggest to Mr Centofanti on the next day that they should use the carpark.  Since it was a Sunday when they returned to the Service Centre, it is likely that parking was readily available in Smith Street and they were not “struggling for parking” which Mr Patty is said to have suggested to Mr Centofanti as the condition on which they would resort to the rear carpark.  Moreover, if the gate in the cyclone wire fence surrounding the carpark had been locked, as I infer it was, that would explain, if not excuse, Mr Patty's omission to carry out a perimeter check including the carpark as such a check would have required an approach from a rear lane, presumably parallel to Smith Street. 

(viii)  Applicant's conflicting statements about touching the inside of the ATM.

 

59                  The learned Judicial Registrar noted that, in evidence-in-chief before him, the applicant had denied touching the inside of the ATM but, under cross-examination, acknowledged that he “told the police he opened it and flicked a switch which caused the machine to display a code indicating a communications problem.”  The written statement which the applicant supplied to the police on 11 February 1996 contained this passage:

“I came inside and checked the A.T.M. when we entered the bank we rang security to let them know we were here, and we put the code in and deactivated the alarm.  Dino de-activated the alarm.  I then opened the ATM and flicked a switch which causes the ATM to bring up a code which tells what the fault is.  The code indicated that the fault was a communication problem.  I then opened a cupboard which contains a “Motorola” Modem which communicates between the ATM and Sydney.  This was where the communication problem was.  I then powered the Modem down and between 15 and 30 seconds later I powered it up again.  This repaired the communication problem and the ATM was on line again.  We then shut the ATM door and waited for the ATM to open again.  We then rang up the SMC security told them we were finished and Dino turned the alarm back on.  We then rang and logged off the repair job, and logged on to go to the Collingwood Branch down the road.”

 

60                  However, in the course of a recorded oral interview by police officers at about midnight on the same evening, this exchange occurred:

"Det. Heal:                    “You got into the ATM machine?”

Applicant:                                             “That's correct.”

Det. Heal                      “Serviced it?”

Applicant:                                             “Yes.”

Det. Heal                      ...........................

Applicant:                                             “I watched him, I also went over the ............ modem which was in a cupboard towards the stairs and unplugged it for ten to thirty seconds a period time, 'cause it was a communication problem which means that the ATM basically wasn't talking to the central computer in Sydney.  We have experienced this problem at other branches before, and there's various ways of fixing that.  There's either turning off all the teller's terminals and reset the branch controller for them then resetting the Autobank, sometimes you just switch the modem off.  Being the ORC, I decided to switch the modem off, because there's a little diagram at the back of my folder which has a picture of the unit, and it tells you what light should be flashing and what shouldn't and it wasn't consistent in what I had the notes, and I said okay, I thought to myself, I'll switch it off, I'll plug it back in, it comes up, if it's wrong, we ring up for help.  If it comes good, we're out of here and off to the next call.”

Det. Heal:                     “O.K. Obviously it came good.”

Applicant:                                             “It came good.”

Det. Heal:                    “What happened then.”

Applicant:                                             “I rang Wormald, Dino shut the ATM, I rang them and told them that we had finished, everything is fine now, I gave them my staff number again which is the password and I motioned to Dino to turn off the alarm on the key pad, which he did.  And I watched him do that and then he rang up the help desk, the voice response unit, logged off this call and logged on to Collingwood down the road, .......”

 

61                  The written statement furnished to the police by Mr Centofanti at about the same time contained this passage:

“When I earlier said that I rang the other team members first - this was incorrect.  I remember now that I found this paper first and then rang the team members when the second combination didn't work.  It was after I spoke to Carolin and obtained the Branch Code that I rang the VRU and obtained the other combination number which was mine, being the bottom one.  I wrote this number on a piece of paper.  I then used this to gain access to the ATM.  While I was waiting to get through to the VRU, Dean went downstairs for a short time.  After I had obtained my number, he returned.  I told him that I had got the combination but he told me that he had already fixed the problem.  I assumed that he had done something at the control box.  I don't know whether there is a control box downstairs.

I told him that as we now had the combinations we should try to open the machine and make sure everything is working all right.  As his number had earlier been entered, I entered my combination number and the ATM door opened.  I then closed the door and spun the combination dial. Then I saw the machine went down again.  My initial thought was that I shouldn't have spun the combination dial as I had to now ring up again to the get the numbers.

I waited 5 mins and the machine opened up again by itself.  It is not unusual for this to happen to this type of machine."

 

62                  The question of whether Mr Patty touched the inside of the ATM on 10 February does not appear to have assumed particular significance in the minds of the Bank's investigators in the course of their inquiries.  The relevant part of the record of interview of the applicant by Mr Forkgen on 7 May 1996 recites:

"“...... he then logged on did he?”

                        “I believe he did, I ____________ have got his combination, um, um, I he took the combination off, opened the machine, I went and um with my book, went to the modem and um because it was a communication error it could have been either at the ATM or could have been with the modem, so I decided to have a look at the modem to see if that was the fault, which it was.”

“So you, powered that down and ......”

                        “Yep.  Powered it back up half a minute later.”

“And it corrected itself?”

                        “It corrected itself, it usually does.”

 

63                  Against that background, I do not consider that the applicant unequivocally asserted to the police that he himself had touched the inside of the ATM on 10 February as well as re-booting the modem.  There was some infelicity of expression in his written statement to the police, but I consider that the effect of the totality of his accounts before the hearing before the Judicial Registrar was, consistently with Mr Centofanti's written statement, that “we” (himself and Centofanti in combination) had opened the ATM.

(ix)  Applicant's conflicting accounts of the times when certain people left Bob Adams' house on the evening of 10 February.

 

64                 The Judicial Registrar referred to this matter without elaborating it.  Bob Adams was the applicant's uncle and also an officer of the Bank.  According to the applicant, he and Ms Blencowe had visited Mr Adams' home at Wattle Glen early in the evening 10 February to see two of the applicant's cousins, Dale and Brad Adams.  In the written statement which Mr Patty prepared at the requested of the police on 11 February 1996, he said in relation to this matter “at about 5.30 pm or 6.00 pm my girlfriend and I went to my cousin's place.  My cousin and his family live at, I think, 24 Mannish Rd, Wattle Glen.  We left there at about 7.20 pm and went to Civic Video in Greensborough.  We hire six movies from there.  They were the "X-Files", "Point Break" and four others.  After this we went home.”

65                 The applicant referred to the same visit in less detail when orally interviewed by the police on 11 February.  When interviewed by Mr Forkgen on 7 May 1996 the applicant said that he and Ms Blencowe had arrived at Wattle Glen “six'ish maybe.  I can't remember.”  There was some inconclusive discussion in that interview about the time it would have taken for the applicant and Ms Blencowe to have travelled from Reservoir to Wattle Glen and the route which they took.  Mr Patty then suggested that each of his cousins, Dale and Brad had been separately collected by a friend at around 7.20 or 7.30 pm whereupon he and Ms Blencowe left for the Greensborough Video Library which they reached between 7.30 and 7.40 pm.  It was put to him by Mr Forkgen that Mr Adams' recollection was that Mr Patty and Ms Blencowe had left his place while it was still light and that one of his sons, Dale, had left for a party at around 7.15 pm whereas his other son, Brad, had not been collected to return to Shepparton until 9.30 pm.  Mr Patty conceded, in the course of that interview, that Mr Adams' account “could be correct” and later that “it is possible”.  I find nothing in the account of his visit to Mr Adams' home which reflects adversely on the credibility of the applicant, particularly when it is remembered that there is unassailable documentary and independent evidence that the applicant was present at the Greensborough Video Library at 8.01 pm.

(x)  Applicant's failure to mention the difficulties experienced in accessing the ATM on 10 February.

 

66                 As to this matter, the learned Judicial Registrar said in his reasons:

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

67                  As noted in para 50 above, there are some infelicities of expression in the written statement which Mr Patty prepared at the request of the police.  However, he did mention, in the course of his oral interview by police which commenced at 8.35 pm on the same day, the difficulties to which the Judicial Registrar referred.  In the circumstances, I am unable to draw from the fact that his initial written statement was not as comprehensive as Centofanti’s, the inference, which the Judicial Registrar favoured, that the applicant was implicated in the theft.

The applicable law.

 

68                  The termination by the Bank of the applicant’s employment has to be examined against the provisions of s 170DE(1) of the Act which provided:

“An employer must not terminate an employee’s employment unless there is a valid reason, or valid reasons, connected with the employee’s capacity or conduct or based on the operational requirements of the undertaking, establishment or service.”

69                  In Victoria v The Commonwealth (1996) 187 CLR 416, the High Court struck down s 170DE(2) of the Act which provided that a reason referred to in s 170DE(1):

“is not valid if, having regard to all of the circumstances of the case, including the employee’s capacity and conduct and those operational requirements, the termination is harsh, unjust or unreasonable.  This subsection does not limit the cases where a reason may be taken not to be valid.”

70                  A Full Court of this Court (Burchett, Cooper and Finn JJ) in Qantas Airways Limited v Cornwall (1998) 83 IR 102, later construed s 170DE(1) in the light of the High Court’s examination of s 170DE(2) and made this observation, at 104:

“It should be observed that the reasoning of the majority of the High Court towards its conclusion of the invalidity of s 170DE(2) has a bearing on the construction of s 170DE(1).  For the view that Parliament did not recognize its “harsh, unjust or unreasonable” test as being a subset of grounds that fell within the validity test in sub-s (1) necessarily leads to a construction of the expression “valid reason” as expressing a test which excludes the impugning of a reason on the ground that it leads to a harsh, unjust or unreasonable decision.  Furthermore, if, in the hands of the Legislature, a “harsh, unjust or unreasonable” test could not be considered “appropriate and adapted to implementing the Convention obligations” under Article 4, no more, in the hands of the court, could such a test be appropriate and adapted to implementing the same obligations, as statutory obligations, under s 170DE(1).”

71                  Reference was then made to the reasoning of another Full Court of this Court (Northrop, Lindgren and Lehane JJ) in Cosco Holdings Pty Ltd v Thu Thi Van Do (1997) 77 IR 94, where it was emphasised that the word “valid” in s 170DE(1) has to be given effect by assessing whether the reason for the termination is genuinely connected with the employee’s capacity or conduct or genuinely based on the operational requirements of the employer.  The Full Court in Qantas v Cornwall then compared the reasoning in Cosco with that of a Full Court of IRCA (Ryan, Marshall and North JJ) in Murdoch University v Mainsbridge (1998) 84 IR 111 and continued, at 107:

“Plainly, the Industrial Relations Court could have held against the university’s motion perfectly consistently with the decision in Cosco Holdings.  Adapting the words of Northrop J which have been quoted earlier in these reasons, the court could have said that the university’s reason would only be “valid” if it was “sound, defensible or well-founded with respect to the foundation, namely, the employee’s conduct”.  The reason could not have been valid in that sense if the conduct had not occurred.  What Cosco Holdings excluded was not an examination of the conduct, but an investigation of the consequences for the employee of a dismissal validly grounded in the conduct.  Indeed, the university’s motion might have been dismissed by an application of the reasoning of Lord Atkin in his dissenting judgment, now accepted as orthodox, in Liversidge v Sir John Anderson [1942] AC 206, where his Lordship said (at 227-228):

“‘Reasonable cause’ for an action or a belief is just as much a positive fact capable of determination by a third party as is a broken ankle or a legal right. … [T]he plain and natural meaning of the words ‘has reasonable cause’ imports the existence of a fact or state of facts and not the mere belief by the person challenged that the fact or state of facts existed … .”

.....

Similarly, when s 170DE(1) says “[a]n employer must not … unless there is a valid reason”, it does not and cannot mean “an employer must not … unless he thinks there is a valid reason”.  This, of course, is not at all to say that there may not be cases where the mere possibility that a state of affairs exists may constitute a valid reason for action, as is demonstrated by the examples given by von Doussa J in Sangwin v Imogen Pty Ltd (unreported, Industrial Relations Court of Australia, 8 March 1996).”

72                  In Sangwin v Imogen, von Doussa J had to consider an allegation that a dismissed employee had been implicated in an attempt to steal a tool and a box of fasteners from the employer.  His Honour found, after reviewing the evidence, that the applicant had not been implicated in an attempted theft.  However, the inquiry did not end there, because his Honour took the view that “valid reason” in s 170DE(1) includes an honest belief by the employer on reasonable grounds after sufficient inquiry, that the employee has been guilty of serious misconduct.  That conclusion was reached by a process of reasoning which his Honour explained in these terms (at pp 12-14):

“Examples of factual situations that might arise help to elucidate the meaning of "valid reason" in s 170DE(1).  Take a situation where a person is employed as a skilled operator of equipment where human life depends on its proper operation or performance, and the employer receives a report that the operator is suspected of suffering a medical condition that is likely to impair his ability to perform his duties.  The employer would be duty bound to ensure human safety.  If after sufficient inquiry the suspected diagnosis could not be excluded would not the employer then have a sound and well founded, i.e. "valid", reason connected with the employee's capacity, or alternatively connected with the operational requirements of the undertaking, establishment or service for terminating the operator's employment (assuming, of course, that there is not some other position reasonably available to which the employer can transfer the employee)?  It would be odd if, after dismissal, it was later held that no valid reason existed at the time of dismissal because later events, e.g. the passing of time or a new diagnostic procedure, proved that the operator had not been suffering the suspected medical condition.

            An employer of a health worker or child care provider against whom was made an allegation of serious physical abuse that threatened the health and safety of those in that person's care would be duty bound to act to protect those under care.  If, after sufficient inquiry, the employer honestly believed on reasonable grounds that the allegation was correct the employer would be in dereliction of duty to those in care if the employee were allowed to return to duty.  Again, would not the employer have a sound or well founded reason connected with the operational requirements of the undertaking, establishment or service for terminating the operator's employment even if, after dismissal, a tribunal or court held that it was not satisfied that the misconduct alleged had occurred, or that it did not occur? 

            These are extreme examples based on human safety issues.  Other examples based on the serious risk of property damage or monetary loss which might arise if employees against whom serious allegations of a breach of safe operating practices or dishonesty had been made were allowed to continue performing their normal employment duties would pose similar rhetorical questions.  Although the examples may not be representative of the risk of harm that could arise in many workplace situations, they lead me to the view that s 170DE(1) should not be construed so as to exclude from the notion of a "valid reason" an honest belief held on reasonable grounds by the employer, after inquiry of the type envisaged in Bi-Lo Pty Ltd v Hooper, that a state of fact exists which justifies termination of the employment.  In my opinion if the employer honestly believes on reasonable grounds after sufficient inquiry that the employee has been guilty of serious misconduct a valid ground within the meaning of s.170DE(1) exists for terminating the employment of the employee.”

Was the Bank’s belief a valid reason?

73                  For reasons already indicated, I have been unable to find, even on the barest balance of probabilities, that the applicant was implicated in the theft from the ATM.  That raises the subsidiary inquiry indicated by von Doussa J in Sangwin v Imogen into whether the Bank’s belief that the applicant had been implicated was based on reasonable grounds and was formed after sufficient inquiry.  It is to be borne in mind in answering this question that my inability to be satisfied of the applicant’s guilt has not resulted from new exculpatory evidence which came into existence after the completion of the Bank’s investigations or was not reasonably discoverable by its investigators. 

74                  It will be recalled in this context that the Bank’s belief, as formulated in its letter of 5 August 1996, was that Patty was “implicated” in the theft of cash from the ATM.  That belief was based on the report prepared by Ms Clare, which has been reproduced at para 24 of these reasons.  Much of that report consists of uncontroversial narrative, but some parts of it which were unfavourable to the applicant, fell far short of the objectivity which it is reasonable to impute to a Bank investigator in these circumstances.  For example, the report records:

“CENTOFANTI was released shortly thereafter when Police authenticated his alibi and were satisfied with his statement.

PATTY however, was questioned at length and a search conducted of his home in Reservoir.  He was later released, due to time constraints, even though Police had yet to authenticate his alibi.”

75                  The report does not indicate that the search of the applicant’s home, although undertaken before he had any opportunity to return there or communicate with Ms Blencowe, discovered no incriminating material.  As well, although recording that the police had authenticated Mr Centofanti’s alibi, the report notes that the applicant was released “even though Police had yet to authenticate his alibi”, but does not record, as was later demonstrated, that the applicant had established an almost impregnable alibi by proving conclusively that he had been at the Greensborough Video Library at 8.01 pm. 

76                  Each of the inconsistencies in Patty’s accounts and between those accounts and the statements of Ms Blencowe and Mr Centofanti on which the report of 5 August 1996 relied and which the learned Judicial Registrar adopted in reaching his conclusion that the applicant had been implicated in the theft, have been examined and discounted in paras 32 to 67 of these reasons.  Nor were any reasons, convincing or otherwise, advanced in the report of 5 August 1996, or elsewhere, for the supposition that Ms Blencowe left the Greensborough Video Library at about 7.25 pm and, possibly assisted by Mr Brown, entered the premises at 150 Smith Street Collingwood by means of the rear door, deactivated the Chubb alarm and removed the canisters of cash by 7.43 pm.  In my view, all of the known facts tend to support the hypothesis that the person who actually removed the money from the ATM had previous “inside” knowledge of the premises at Smith Street or, at least of the workings of the Bank’s ATMs and its alarm systems.  There was no basis in the evidence for imputing any such knowledge to either Ms Blencowe or Mr Brown.

77                  These reflections have the added significance, that once the preferred hypothesis involves a Bank “insider” as the actual thief, the need for an accomplice circumstanced as Mr Patty was is correspondingly diminished.  That is particularly so if the matters which qualified Mr Patty to render the assistance, which on the Bank’s hypothesis he did, only arose fortuitously when the grey wallet was discovered and the “A” and “B” combinations were ascertained in the way which occurred as events unfolded during his attendance at Smith Street with Mr Centofanti between 1.43 pm and 2.22 pm on 10 February 1996.

Sufficiency of the Bank’s inquiries

 

78                  Even if, contrary to the conclusion which I have just reached, the Bank’s belief in the applicant’s guilt was reasonable on the facts as they were known on 27 August 1996, I do not consider that it had conducted a “sufficient inquiry” in terms of the test postulated by von Doussa J in Sangwin v Imogen.  Some of the deficiencies in the Bank’s inquiry are attributable to the course which events took and to the overlap between the police investigation and the internal collection and evaluation of evidence by the Bank’s officers.  As Ms Clare acknowledged in her report of 16 July, and the Judicial Registrar found in the passage reproduced at para 16 above, there had been many departures from established security procedures at Collingwood and elsewhere.  It was specifically acknowledged, in an overview report of the investigation prepared by Ms Clare after both Patty and Centofanti had been interviewed at length, that:

“There were five known front door keys in existence.  These are held by the OIC, 2IC in treasury at 211 Smith Street, by the ATM service team and with Chris MORRAGIANNIS.

It was also determined very early during investigations that breaches in dual control at 150 Smith Street were frequent and common place as was it common place for keys, including front door key, to be left in easily accessible areas at 150 Smith Street and 211 Smith Street.

It was therefore determined that the offender was most likely to have had intimate knowledge or access to knowledge of ATM operations since September last year.”

Those breaches and oversights, I consider, significantly widened the range of persons who could reasonably be suspected of implication in the theft.  In some respects, the Bank’s own investigation was hampered by misunderstandings or omissions which bedevilled the police inquiries.  It is inappropriate to attempt, in these reasons, an exhaustive catalogue of those shortcomings.  They are illustrated, for example by the fact that the police put to the applicant in the course of the interview on 11 February that the Bank’s records disclosed that he had been telephoned at home at 10.45 am on that day by the Bank’s voice response unit (“VRU”) or help desk.  However, the entries for 11 February in the handover book kept by the VRU or help desk had been destroyed by the time the Bank’s investigators took over the inquiry.  Ms Clare’s final report makes no mention of Mr Patty’s claim to have been telephoned at home by the VRU and told to go to Collingwood Service Centre as a matter of priority.  However, a senior Bank officer, Mr Trevor Howell, telephoned the VRU or help desk early on Sunday morning and, I find after reviewing the evidence of Ms Bourne and Ms Firth, that it was highly probable that a call was made to the applicant’s home as he claims. 

79                  A good deal of attention was directed during the hearing of the present review to whether the code needed to de-activate the Chubb alarm had been supplied to the applicant as part of the “kit” which he possessed as an ATM team member before his attendance at Smith Street on 10 February.  In the course of their investigation, the police took possession of the applicant’s “kit” which he had taken to use in his calls with Mr Centofanti on 10 February.  As reproduced in the Court Book, that kit did not contain a copy of the Bank’s memorandum of 5 December 1995 advising the current access code for the Collingwood Service Centre.  The evidence of Mrs Lopiccolo tended to suggest that the code had not been supplied to the applicant’s home branch until after 10 February 1996.  However, Ms Clare maintained that the applicant had admitted having another kit or set of papers at his home which contained the access code for 150 Smith Street.  This issue was not exposed until the hearing of the review because, I consider, the applicant and his advisers on the one hand, and Ms Clare and the Bank on the other, were at cross-purposes over it.  It is unnecessary for me now to resolve the issue, but its existence highlights a failure at an early stage of the investigation to establish conclusively and objectively a matter which may have been critical to whether the applicant was implicated in the theft.

80                  It will be apparent from the facts recited earlier in these reasons and the findings made by the Judicial Registrar that any convincing investigation of the theft required a detailed and informed understanding of the Bank’s ATM technology and the security systems and the accompanying computer records.  None of the investigating police officers could claim any knowledge of that kind.  Nor could Ms Clare or Mr Forkgen.  However, it was apparently not until shortly before the hearing by the Judicial Registrar that either of the Bank officers with the requisite expertise, being Ms Toogood and Mr King (a program analyst), were asked to interpret the available computer records.  In the course of his evidence to the Judicial Registrar, Mr King indicated that the ATM at 150 Smith Street had been out of communication from 17:05 to 18:46 on 10 February and that in his opinion it was highly probable that communication had been restored as a result of human intervention within the Branch.  It was also established that the ATM had been fully operational and actually utilised by a member of the public from outside the premises shortly before 19:43, the time ascribed to the unauthorised opening from within. 

81                  Other instances of shortcomings in the investigation of the theft have been identified earlier in these reasons.  They include the failure to take up directly with Ms Blencowe’s employer (Franklins) the suggestion (discussed at para 51 above) that her wages from that employment (the fact of which was known to Ms Clare at least from 2 May) had been the course of a payment of $250.00 to the credit of the applicant’s account on 29 April.  Although there is a dispute about whether or not the applicant offered a collection of Ms Blencowe’s pay packets to Ms Clare and Mr Forkgen on 13 June 1996, the attitude of the Bank’s investigators appears to have been that it was incumbent on the applicant to allay their suspicions that the $250.00 represented part of the proceeds of the theft.

82                  There was also the failure discussed in paras 53 to 56 above to attempt to establish conclusively whether or not the applicant observed the rear carpark from the lunchroom at 150 Smith Street, or must have seen it after opening the back door.

83                  Equally as telling as the combined effect of the individual deficiencies in the investigation, which I have just illustrated, is the refusal of the investigators at any stage of their inquiries to make a detached overall assessment of the various matters, both incriminatory and exculpatory, of Mr Patty or any other suspect, which had been revealed to that point.  Most significantly, it seems that no attempt was made to assess, as a matter of individual psychology, whether the applicant, after ten years of unblemished service to the Bank, was likely to have participated in a crime of this complexity and audacity and to have been able thereafter, more or less successfully, to conceal and deny his involvement.  A similar criticism can be made of the investigators’ inclination to identify Ms Blencowe as the applicant’s most likely accomplice.

84                  The conclusions which I have just outlined reflect the Bank investigators’ credulity of hypothesis and their resolve, after more than four months of inconclusive inquiry, to bring the investigation to a positive end.  That was done by a largely intuitive attribution of guilt to Mr Patty, who was regarded with suspicion principally because of apparently inconsistent or incomplete statements which he had made about largely peripheral matters.  The whole process, I consider, fell far short of the sufficient inquiry which von Doussa J postulated in Sangwin v Imogen postulated as a condition of an employer’s reasonable belief that an employee has been guilty of serious misconduct.

 

Possibility of implication in theft as a valid reason for dismissal.

 

85                  Counsel for the Bank pointed to part of the extract from von Doussa J’s reasons in Sangwin v Imogen reproduced at para 72 above as supporting the proposition that a reasonable belief in the possibility that an employee has been guilty of theft or similar serious misconduct can constitute a valid reason for termination within the meaning of s 170DE(1).  It will be recalled that in that passage von Doussa J suggested that if, after sufficient inquiry, an employer honestly believed on reasonable grounds that an allegation of serious physical abuse by a health worker or child care provider was correct, it would be a dereliction of duty to allow that employee to return to work.  His Honour then went on to say:

“These are extreme examples based on human safety issues.  Other examples based on the serious risk of property damage or monetary loss which might arise if employees against whom serious allegations of a breach of safe operating practices or dishonesty had been made were allowed to continue performing their normal employment duties would pose similar rhetorical questions.”

86                  That passage was taken up by the Full Court in Qantas v Cornwall in a passage which I have also reproduced above (para 71) when it said:

“Similarly, when s 170DE(1) says “[a]n employer must not … unless there is a valid reason”, it does not and cannot mean “an employer must not … unless he thinks there is a valid reason”.  This, of course, is not at all to say that there may not be cases where the mere possibility that a state of affairs exists may constitute a valid reason for action, as is demonstrated by the examples given by von Doussa J in Sangwin v Imogen Pty Ltd.” [original emphasis]

87                  It was argued on behalf of the Bank that theft from a financial institution of a significant sum, apparently by an insider, falls within those cases adverted to by the Full Court where the mere possibility that a particular employee was implicated may constitute a valid reason for termination.

88                  There are two answers to this contention.  In the first place, the examples given by von Doussa J on which the Full Court erected its qualification were all predicated on an honest belief, on reasonable grounds, that “allegations” of dishonesty, breach of safety or other serious misconduct against a particular employee were correct.  His Honour did not suggest that a mere suspicion or possibility of guilt, falling short of an honest and reasonable belief that a particular employee had been implicated in the misconduct, would constitute a valid reason for dismissing that employee.  Moreover, even if Sangwin v Imogen or Qantas v Cornwall can be regarded as acknowledging that mere suspicion amounting, say, to a 10 per cent chance that a particular employee has been guilty of a specific offence may constitute a valid reason, the validity of that reason would have to be assessed in the practical context indicated by Northrop J in this oft-quoted passage from Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373:

“Section 170DE(1) refers to "a valid reason, or valid reasons", but the Act does not give a meaning to those phrases or the adjective "valid".  A reference to dictionaries shows that the word "valid" has a number of different meanings depending on the context in which it is used.  In the Shorter Oxford Dictionary, the relevant meaning given is "2  Of an argument, assertion, objection, etc; well founded and applicable, sound, defensible:  Effective, having some force, pertinency, or value."  In the Macquarie Dictionary the relevant meaning is "sound, just, or well founded; a valid reason."

In its context in subsection 170DE(1), the adjective "valid" should be given the meaning of sound, defensible or well founded.  A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of subsection 170DE(1).  At the same time the reason must be valid in the context of the employee's capacity or conduct or based upon the operational requirements of the employer's business.  Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them.  The provisions must "be applied in a practical, commonsense way to ensure that" the employer and employee are each treated fairly, see what was said by Wilcox CJ in Gibson v Bosmac Pty Ltd, 5 May 1995, unreported, when considering the construction and application of section 170DC.

89                  Such a practical assessment of whether the applicant had been treated fairly would require a comparison of his treatment with that accorded to other employees to whom a similar suspicion or possibility of guilt could reasonably be attached.  On the facts established or open to be inferred in the present case that assessment would be adverse to the Bank. 

90                  A second objection to this alternative argument is that the Bank did not, at the time when it decided to dismiss Mr Patty, regard the mere possibility or suspicion that he may have been implicated in the theft as an available reason for the termination of his employment.  The Bank’s letter of 5 August 1996 stated that the Clare/Medland Report of 16 July had led the Bank’s Network Services Department to believe that “you” [Patty] are implicated in the theft of cash amounting to $27,400.00 from an Automatic Teller Machine located at 150 Smith Street, Collingwood branch.”  In the same letter it was recited:

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

91                  Similarly, the actual letter of dismissal of 27 August commenced with the statement that:

“The Commonwealth Bank of Australia has concluded its enquiry into your involvement in the theft of $27,400 cash from 150 Smith Street, Collingwood branch on 10 February 1996.”

92                  Section 170DE(1) of the Act provides that “an employer must not terminate an employee’s employment unless there is a valid reason or valid reasons .....” (emphasis added).  That postulates the objective existence of a valid reason or reasons at the time of the termination but it does not require the employer to have been subjectively actuated by that reason or those reasons.  Nevertheless, the contemporaneous attribution by an employer of a particular reason or reasons goes a long way to negativing the availability of another, presumably less cogent, reason in the practical commonsense application of the sub-section to which Northrop J adverted in Selvachandran. 

93                  For each of these reasons, the alternative argument of the Bank based on a mere possibility of the applicant’s implication in the theft is rejected. 

 

Was the applicant’s failure to reply to the Bank’s list of unresolved issues a valid reason?

 

94                  It was contended on behalf of the Bank that the applicant’s failure to respond to the list of outstanding issues in Mr Medland’s letter of 24 June 1996 was a breach of his duty of fidelity and constituted an independent valid reason for his dismissal.  In support of that contention, reference was made to Associated Dominion Assurance Society Pty Ltd v Andrew (1949) 49 NSWSR 351 where Herron J observed, at 357:

“Furthermore, a duty lies upon an employee in general terms to give information to his employer such as is within the scope of his employment and which relates to the mutual interest of employer and employee.  If an employee is requested at a proper time and in a reasonable manner to state to his employer facts concerning the employee’s own actions performed as an employee, provided that these relate to the master’s business, the employee is bound, generally speaking, to make such disclosure.”

95                  However, it is clear from that passage that the duty of disclosure imputed to the employee is predicated on his or her possessing the information which the employer requires.  Moreover, the duty on the employee is conditioned by a corresponding obligation on the employer to seek the information by questions that are fair and reasonable.  As Herron J said in Associated Dominion Assurance Society Pty Ltd v Andrew, also at 357 shortly after the passage just quoted:

“Questions asked relating to the employee’s activities could be so reasonable and fair that to refuse the information may well be disobedience justifying dismissal.  Such conduct may be inconsistent with duty and may impede the employer’s legitimate business associations.  It certainly could destroy all confidence between master and servant which is an essential feature of such contracts.”

96                  In the present case, there is no indication that the applicant deliberately concealed anything or was untruthful or misleading in the course of the police interviews on 11 February.  Although the police investigation was discontinued or suspended in or about the last week of February 1996, the applicant, somewhat inexplicably, was not interviewed by the Bank’s investigators until 3 May.  Ms Blencowe was interviewed by Ms Clare in company with Mr Forkgen on the day before, 2 May, and there is no suggestion that she, either on her own initiative or at the applicant’s instigation, was less than fully co-operative.  A full record of interview with the applicant was made by Ms Clare and Mr Forkgen on 7 May and the applicant, together with Mr Centofanti, was interviewed again in the presence of a union representative on 20 May.  His last conversation with Ms Clare and Mr Forkgen occurred on 13 June and it was not until after the Bank’s letter of 24 June that the applicant refused to answer any further questions.

97                  The reasonableness of that refusal has to be assessed in the light of the level of co-operation which the applicant had previously extended to the Bank’s investigators, the readiness with which he had responded to those earlier requests for information and the terms in which the request of 24 June was cast.  In my view, it is understandable, in all the circumstances, that the applicant acted on the advice, which I infer he received from his then solicitors, to answer no further questions.  The Bank’s letter to the applicant of 24 June was prefaced with an intimation that a decision had been made to conclude the Bank’s own investigation, finalise the investigator’s findings and recommendations, and return the file to investigating police at the Fitzroy CIB.  When those prefatory remarks are read in conjunction with the accusatory tone of many of the subsequent paragraphs which imply that the applicant’s earlier responses had been inconsistent or unsatisfactory, the questions as a whole in the letter of 24 June cannot be regarded as reasonable or fair.  Some propositions which were said to indicate specific inconsistencies like that to the effect that no call had been made to Mr Patty’s home by the VRU or help desk on the morning of 11 February were, I have found, almost certainly wrong.  Other specific parts of the request taxed the applicant with having made responses the “relevance of which was doubted by the Bank”.  Understandably therefore, Counsel for the Bank conceded on the hearing of the review (transcript p 670) that “a number of these questions could have been formulated in a better fashion”.  It was therefore not unreasonable for the applicant to decline to take the risk by another response of creating further inconsistency which the police might regard as sustaining criminal charges.  The interpretation was also open that the applicant was no longer being asked to provide information to assist the Bank’s investigators in continuing inquiries, but rather was being given a last opportunity to rebut their provisional inculpatory conclusions. 

98                  It is also to be borne in mind that s 170DE(1) proscribes a termination of employment “unless there is a valid reason or reasons” for taking that course.  The presence of the words which I have just emphasised indicates that the validity of each available reason must be assessed separately.  It is not open to the Court to assess a combination of reasons as valid if it cannot attain the requisite degree of satisfaction in respect of any one of the constituent reasons.  I have already indicated that the Bank has failed to discharge the onus of proving that the applicant was probably implicated in theft.  As well, for the reasons indicated in paras 89 and 90 above, a mere suspicion or possibility of his implication could not amount to a valid reason for terminating the employment of the applicant alone.  It follows that neither of those reasons can be called in aid to render the applicant’s failure to respond to the letter of 24 June a valid reason for his dismissal, if that failure cannot independently attain that character.  For reasons for which I have endeavoured to explain, the applicant’s refusal to respond to the Bank’s letter of 24 June, when assessed, as Northrop J suggested in Selvachandran, “in a practical commonsense way to ensure that the employer and employee are each treated fairly”, did not independently amount to a valid reason for his dismissal;  see also Allied Express Transport Pty limited v Anderson (1998) 81 IR 410 at 413.  Indeed, it would seem, on a fair reading of its letters of 5 August and 27 August 1996, that the Bank itself did not regard the applicant’s refusal after 24 June to give further answers to its questions as constituting, without more, a reason for terminating his employment.

Conclusion

 

99                  I shall adjourn the proceedings in this Court to a date to be fixed to enable the parties and their legal advisers to consider these reasons.  On the adjourned date, subject to any further submissions which may be made by Counsel for either party, I shall, for the reasons explained in para 12 above, make an order as a Judge of IRCA that the proceedings instituted in the Federal Court on 12 March 1998 be treated for all purposes as having been instituted in IRCA.  In the same capacity, I shall order that all of the evidence adduced and submissions made in those proceedings be treated as having been adduced and made in IRCA.  For the reasons given above in discussing the merits of the application for review, the order of the Judicial Registrar of 19 February 1998 will be set aside and in lieu thereof there will be a declaration in IRCA that the Bank has contravened s 170DE(1) of the Act by terminating the employment of the applicant without a valid reason, or valid reasons for doing so.  I shall then forthwith receive such submissions and evidence (if any) as the parties consider appropriate on the question of whether any, and if so which, of the consequential orders contemplated by s 170EE of the Act should be made.  The application to the Federal Court will, if the course just outlined is followed, be formally dismissed on the date to which this matter is adjourned.

 

I certify that the preceding Ninety-Nine (99) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan.

 

 

Associate:

 

Dated:              4 August 2000

 

 

Counsel for the Applicant:	Mr N Kenyon
Solicitor for the Applicant:	Ryan Carlisle Thomas
Counsel for the Respondent:	Mr B Dennis
Solicitor for the Respondent:	Ian F Purbrick
Dates of Hearing:	8 - 10 - 12 February, 26 - 28 April, 16 - 18 June, 5 - 7 July 1999 and 31 March 2000.
Date of Judgment:	4 August 2000.