FEDERAL COURT OF AUSTRALIA

Tran v Kodari Securities Pty Ltd [2019] FCA 968

ORDERS

THE COURT ORDERS THAT:

1.    The parties provide, by email to the chambers of Justice Bromwich, agreed or competing draft orders to give effect to these reasons within 14 days.

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

REASONS FOR JUDGMENT

BROMWICH J:

1    In the period from July 2015 to November 2016, the applicant, Mr Steven Tran, was employed by the first respondent, Kodari Securities Pty Ltd, a family owned investment services firm, with premises in Chifley Tower, Sydney. The second respondent, Mr Yashar (Michael) Kodari (Mr Kodari), has been the sole shareholder and thus owner, and sole director (styled managing director) of Kodari Securities since December 2010. Mr Kodari is the son of Mr George Kodari, the third respondent. George Kodari was a consultant employed or retained by Kodari Securities at the time of the events to which this proceeding relates, having assisted his son on a paid and unpaid ad hoc basis since Kodari Securities was established, and being employed full-time from about 9 November 2016. Kodari Securities has always been a small business, employing some 16 persons in 2016 when the events giving rise to this litigation took place.

2    This proceeding concerns the circumstances by which Mr Tran’s unwritten contract of employment (existing contract) with Kodari Securities ceased. It largely, but not entirely, turns on a meeting that took place on the evening of Friday, 11 November 2016 and the events that took place between then and the early hours of Saturday, 12 November 2016. The meeting took place between Mr Tran, Mr Kodari and George Kodari, although Mr Kodari was not present when it began. The purpose of the meeting concerned a new written contract of employment that Kodari Securities, via Mr Kodari, required Mr Tran to sign (new contract). The respondents also rely upon aspects of Mr Tran’s conduct in the months prior to the events of November 2016.

3    Mr Tran alleges, and seeks remedies by way of damages, compensation and civil penalties in respect of:

(1)    adverse action taken against him, namely that his existing contract was terminated because he exercised or proposed to exercise a workplace right, which he describes as the right to seek legal advice before signing the new contract, in breach of s 340 of the Fair Work Act 2009 (Cth) – this formulation was made clear at the trial immediately before Mr Tran was called to give evidence;

(2)    coercion not to exercise that workplace right in breach of s 343 of the Fair Work Act; and

(3)    further, or in the alternative, a repudiation of his existing contract or breach of his existing contract by reason of not being given reasonable notice of termination.

4    A cross-claim by the respondents was abandoned at the commencement of the hearing, and formally dismissed.

5    The respondents’ primary position is that Mr Tran resigned at the meeting, so that there was no termination of his exiting contract and no entitlement to any of the relief he seeks. The respondents therefore contend that there was no workplace right involved, as articulated by Mr Tran at the commencement of the hearing by way of refinement of the pleadings, and thus there could be no adverse action and no coercion. The respondents also advance cascading alternative arguments in the event that their primary position does not prevail.

6    The version of events described by Mr Tran and by the respondents were starkly different in a number of key respects. The conflicting evidence as to what transpired at the meeting falls to be considered in the context of the prior relationship and dealings between Mr Tran and Kodari Securities via Mr Kodari, and in the context of what took place after the meeting, especially contemporaneous conduct and communications. A number of legal issues also require determination.

Mr Tran’s employment history with Kodari Securities up to 11 November 2016

7    While there are some nuanced differences in the competing accounts as to how Mr Tran came to be employed by Kodari Securities, in the greater part the questions of how that came about, what his position was, and what work he was required to do were not in dispute. The following narrative summarises the events that were apparently not in dispute.

8    Mr Tran is a martial arts expert who began working as a security guard or bodyguard in the late 1980s. He has worked in a variety of security positions, or as a bodyguard, since then, including for a number of celebrities and other persons with particular security needs. He was not employed between the time that he left Kodari Securities in mid-November 2016 and the three-day trial on 18 to 20 March 2019.

9    In about July 2015, Mr Tran responded to an advertisement seeking a personal bodyguard for Mr Kodari. The advertisement referred to payment of between $25 and $35 per hour, but Mr Tran was ultimately retained at a rate of $50 per hour.

10    In the period between July 2015 and April 2016 Mr Tran acted as Mr Kodari’s personal bodyguard on an ad-hoc basis. His duties were largely limited to accompanying Mr Kodari to various nightclubs and functions. On 16 April 2016, he met with Mr Kodari at the Star City Casino and had a conversation about him accepting employment with Kodari Securities. The basis for that employment was the subject of an oral agreement and included a pay rate of $150,000 per annum, plus superannuation and the use of a company car and mobile telephone. That employment started about two weeks later in early May 2016.

11    Between May 2016 and October 2016, Mr Tran’s duties involved setting up an internal administrative structure for Kodari Securities. He was given the title of Chief Operations Officer and performed a role, subject to Mr Kodari’s direction, of managing everything in the business that was not in and of itself financial securities trading. His unchallenged account of the changes that he introduced were described in his affidavit in chief as follows:

a.    in or around August 2016 setting up matters and the provision of advice from a law firm (HWL Ebsworth Lawyers) in response to various ongoing legal matters against the first respondent and Mr Michael Kodari;

b.    in or around October 2016, setting up an accounting team in order to assist with ongoing compliance issues concerning staff payment of wages, superannuation, and record-keeping obligations;

c.    in or around August 2016, hiring a marketing contractor to assist with the corporate image of the company and Mr Kodari;

d.    in or around October 2016, engaging an IT contractor to implement IT security procedures and password processes for the protection of the business and Mr Kodari against cyber-attacks;

e.    in or around August or September 2016, I recommended moving Laurence from a sales role to a new role asa [sic] training and development manager due to his qualifications and communication skills. He helped me to implementa [sic] system to improve workplace conditions, curtail staff turnover, and increase workplace health and safety; and

f.    in or around August 2016, I implemented a recruitment system.

12    Mr Tran and Mr Kodari gave conflicting accounts as to whether certain financial transactions were authorised or unauthorised. To the extent those matters were relied upon, or were in some other way of importance or significance, they are dealt with below.

Events leading up to the meeting on 11 November 2016

Mr Tran’s account leading up to 11 November 2016

13    Mr Tran described the events leading to the end of his employment with Kodari Securities. He said that following a court case involving a former employee of Kodari Securities, he had a discussion with Mr Kodari about implementing new employment contracts for all employees of the company. On behalf of the company, he engaged two lawyers at the law firm HWL Ebsworth to prepare two types of employment contracts, one for award employees and the other for non-award employees. By way of background leading to the meeting and to provide a basis for what he said was Mr Kodari’s disposition towards him at the time of the meeting, he referred to an adverse article about Mr Kodari that was published in the Australian Financial Review newspaper’s Rear Window gossip column on Thursday, 3 November 2016. He said that when he returned to the office the following Monday, 7 November 2016, he noticed that Mr Kodari was not as friendly towards him as usual. The meeting took place that Friday, 11 November 2016.

George Kodari’s account leading up to 11 November 2016

14    George Kodari’s affidavit is very short and did not include much about the period leading up to the meeting. He first met Mr Tran briefly in late October 2016. He gave evidence as to the fact of certain concerns about Mr Tran being expressed by Mr Kodari earlier in the week of the meeting, but this was restricted to being evidence of the fact of those things being said, and not as to the truth. That conversation ultimately was of no consequence to this proceeding.

Mr Kodari’s account leading up to 11 November 2016

15    Mr Kodari’s evidence about events prior to the meeting did not substantially diverge from that of Mr Tran until 1 November 2016. From that date he deposed to certain concerns he had about Mr Tran, largely it seems to establish a case for an alternative basis for terminating Mr Tran’s employment. Those issues, concerning the purchase and use of mobile telephones and other expense related issues are addressed, to the extent relevant, below.

The events of 11 November 2016

Setting the scene

16    It is common ground that it transpired at the meeting that:

(1)    Mr Tran was not happy with the terms of the new contract, or its applicability to him and the position he had occupied, although his account and those of each of Mr Kodari and George Kodari are somewhat different as to the nature of the concerns he expressed and other things that were said on that topic;

(2)    Mr Tran signed the new contract and then tore it up; and

(3)    Mr Tran subsequently left the room where the meeting took place, and left the Kodari Securities premises, with some difference in the accounts of how that took place.

17    Mr Tran’s account of events describes how he said that he wanted to seek legal advice before signing the new contract, but that taking this step was not acceptable to Mr Kodari or George Kodari, both of whom deny anything was said about obtaining legal advice. Mr Kodari’s and George Kodari’s account of events describe, in a somewhat different sequence of events, that Mr Tran said “I resign”, or words to that effect. Mr Tran denies this. There was also a collateral dispute concerning whether or not any reprinting of the new contract occurred after Mr Tran tore up the copy he had signed, or at all, and whether that ultimately mattered.

18    The core of the different accounts are effectively summarised in a text message that Mr Kodari sent to Mr Tran after the meeting at 8.28 pm on 11 November 2016, and the response that Mr Tran sent a short time later (reproduced verbatim), each of which is the only contemporaneous record of what took place at the meeting:

(1)    Mr Kodari’s 8.28 pm text was:

Hi Steven, I refer to our meeting this afternoon. It is unfortunate that you have decided to no longer be an employee of kodari securities and have resigned. I accept your resignation. You will not be required to attend/return to work on Monday. We will make payment of all outstanding wages/entitlements early next week. Formal written notification of the cessation of your employment will also be provided at the same time. You will need to return your mobile telephone, laptop and the company car by no later than 9:00 am on Monday, 14 November 2016. Best wishes for your future endeavours.

(2)    Mr Tran’s text in response a short time later was:

Michael, as you and Mr Kodari truthfully know, I did not resign in our meeting this evening. You will recall I left the meeting saying I will come back into the office on Monday to sign the contract after I have reviewed it but you refused to give me a copy of the contract after I had torn up the earlier copy. This is a malicious text from you to falsely orchestrate my resignation which did not occur. You and Mr Kodari both tried to force me against my will to sign an unjust and unfair employment contract which I had not read and even after I had made it clear that I would like to seek legal advice. My solicitor will be in contact to resolve the issues. Please do not contact me again. Our solicitors can address all communications between us from this evening onwards. Best wishes to you. Steven Tran.

19    Thus:

(1)    Mr Tran’s case is that he wanted to seek legal advice, but did not resign; and

(2)    the respondents’ case is that Mr Tran resigned, but said nothing about wanting to seek legal advice.

20    Those two stances cannot be reconciled. The possible conclusions available on the evidence are that during the course of the meeting, as discussion ensued and as different points of view were expressed, Mr Tran:

(1)    said both:

(a)    that he wanted to seek legal advice on the proposed new contract; and

(b)    that he resigned from his position at Kodari Securities; or

(2)    said neither; or

(3)    said one, but not the other – the position contended for by both parties, but in opposite directions.

21    The following is an analysis of the conflicting evidence as to what took place at the meeting by reference to affidavit evidence of each of the three witnesses and the parts of their cross-examination that I consider is sufficiently relevant to recount, taking into account the entirety of the affidavits, exhibits, and cross-examination of each witness.

22    By way of a general observation, the accounts given by both Mr Kodari and George Kodari were in a narrow compass, describing a quite simple and short meeting and conversation and, as they describe it, what amounts to quite irrational behaviour on the part of Mr Tran. Each recounted Mr Tran’s unwillingness to sign the new contract, Mr Tran then signing that contract, and Mr Tran either saying “I resign” and then ripping the contract up, or doing those two things in reverse order, and then leaving. In their affidavits, and in their evidence, both denied Mr Tran said anything about seeking any legal advice about the new contract. It is noteworthy that there was never any contemporaneous record by either Mr Kodari or George Kodari containing any rejection of Mr Tran saying that he wanted to obtain legal advice, as set out in Mr Tran’s contemporaneous text message. Such a rejection does not feature in Mr Kodari’s text message above and was not denied in any further text or in legal correspondence the next week.

23    By contrast, the account given by Mr Tran described a much longer and more detailed meeting, of considerably greater passion. It is convenient to summarise their much shorter accounts first and then Mr Tran’s account. Before I do so, it is important to say something about the fact-finding exercise required to be carried out.

24    Conflicts in the evidence on key topics must be resolved by reference to the standard and burden of proof, both legal and evidentiary, having regard to the quality of evidence required before making a finding as to conduct with serious consequences, such as contravention of civil penalty provisions: see s 140 of the Evidence Act 1995 (Cth). Section 140(1) restates the common law standard of proof for civil proceedings, however serious, being the balance of probabilities. Section 140(2) then restates the principle expressed in Briginshaw v Briginshaw (1938) 60 CLR 336 at 362 (and the many cases that have followed and applied it) as to the sufficiency of evidence required to meet that civil standard on a sliding scale according to the seriousness of the allegations sought to be proven. Briginshaw, and s 140(2), are therefore directed to the sufficiency of evidence, that is to say, the quality of the evidence, necessary to discharge the ordinary civil onus or burden of proof, before making a finding as to conduct with serious consequences, rather than to describing any different standard of proof: see Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; 110 ALR 449 at 449-450, especially at 450.2. The cases cited in Neat Holdings at footnote 1 on page 450 are also informative: Hocking v Bell (1945) 71 CLR 430 at 500.5 per Dixon J and Rejfek v McElroy (1965) 112 CLR 517 at 519-521, especially at 521.6.

25    With the above in mind, the basis for preferring the account of Mr Tran or the account of either George Kodari or Mr Kodari as to a particular fact in issue was in places quite difficult to ascertain, with the determination ultimately being more about the reliability of conflicting recollections and assertions as to what took place, than to do with honesty. While I was concerned about the honesty and truthfulness of aspects of the evidence of George Kodari and Mr Kodari, that did not rise above a sense of unease. There ended up being little substantive basis for concluding that either George Kodari or Mr Kodari was deliberately giving evidence known by them to be false. I did not have any such concerns about Mr Tran, although limited aspects of his evidence ended up being unreliable, albeit on points that ultimately did not matter.

26    I gave considerable weight to such things as support from contemporaneous records, a general sense of whether an account given was, or was likely to be, comprehensive, and the sequence and logic of events, including the action and reactions of the participants. This included the candour and responsiveness of the three witnesses who gave evidence – Mr Tran, George Kodari and Mr Kodari – which was important in assessing the credibility and reliability of each of them. I paid close attention to what was, and was not, in each of their affidavits, and observed closely how each gave evidence, mostly in cross-examination. The following was based on notes made during the cross-examination, after court each day, and immediately after the hearing concluded. Overall, in part based on evanescent impression, and in part for the reasons detailed below, I found Mr Tran to be a more credible and reliable witness on the key issues in dispute than either George Kodari or Mr Kodari.

George Kodari’s affidavit account of the meeting

27    George Kodari deposed to the following:

(1)    his son, Mr Kodari, asked him to meet with Mr Tran on Friday, 11 November 2016, and gave him the following instructions:

George can you please meet with Steven [Mr Tran] and ensure that he [Mr Tran] has signed an employment contract with his new position title. He has been meeting with other staff to issue contracts prepared by HWL Ebsworth. He [Mr Tran] is employed so make sure he signs one. We don’t have a contract on file for him.

(2)    he met with Mr Tran at about 5.00 pm, at which time the following conversation took place:

George Kodari:     Steven thanks for meeting me. As you are aware, all other employees have confirmed the terms of their employment with new contracts of employment. You need to enter into one as well. Since I’ve come on board, you’re [sic] role will now be Risk Manager and your pay and conditions will remain the same.

Mr Tran:    I have already signed a contract.

George Kodari:    We don’t have any record of a signed employment contract for you on file. If you have signed it before why don’t you sign this one so we can keep a copy for our records.

Mr Tran:    I won’t sign that. That is for normal employees, not me.

George Kodari:    You’re being paid by KOSEC [Kodari Securities] so we need a document confirming the terms and conditions on file. I don’t understand. You instructed HWL Ebsworth to prepare these documents. You know what’s in them. There shouldn’t be an issue.

Mr Tran:    I don’t want to sign.

(3)    he left the room and asked Mr Kodari to join the meeting, after which the following conversation took place:

Mr Kodari:    What’s wrong Steven? Why don’t you want to sign the contract?

Mr Tran:    I told George, I have already signed it.

Mr Kodari:    We don’t have a copy of your signed contract.

Mr Tran:    I have no problems signing it.

(4)    Mr Tran then signed the new contract (making no reference to anyone other than the three men being present for the signing of the contract);

(5)    Mr Tran then (without apparently anything else being said) started to become agitated, started speaking to someone on his mobile in a foreign language, and then said:

Mr Tran:    There is no position for me here anymore.

George Kodari:    You don’t need to resign now. If that’s what you want to do, you should think about it for a week first.

Mr Tran:    No.

(6)    Mr Tran then ripped up the contract, said words to the effect of “I resign”, and immediately left the premises;

28    George Kodari said that neither he nor Mr Kodari raised their voices, nor made any threatening or intimidating remarks. He said that at no time did Mr Tran ask to take the contract for legal advice or for any other reason, and denied taking any action to assist Mr Kodari to take any action as a result of Mr Tran exercising or proposing to exercise any workplace rights. The denial of any action taking place as a result of Mr Tran exercising or proposing to exercise any workplace rights was somewhat formulaic and imprecise, perhaps by reason of the blanket denial of any such right being asserted by Mr Tran. It is therefore no more than a formal denial, which did not require a ritualistic challenge in cross-examination given the obvious dispute on this topic at the centre of this proceeding, a topic which I return to below.

29    An immediate difficulty I have with George Kodari’s affidavit account of what took place is that it does not, on either first impression, or on a more detailed consideration, read as being a complete account of what took place. This is perhaps not surprising as his affidavit bears a date of finalisation of 15 June 2018, over 18 months after the key events of 11 November 2016. There was no evidence and not even a suggestion that he took any notes at any time, let alone proximate to the events of 11 November 2016. His affidavit was formally sworn on 19 March 2019, without alternation. Instructions had to be taken prior to the filing of a defence much earlier on 2 May 2017, but the portion at [11] to [18] of that defence is sparse, does not reflect much of the detail given in his evidence and therefore affords no substantial basis for inferring that the details of what took place on 11 November 2016 were recorded at any time prior to a period proximate to his affidavit being prepared in about June 2018. The defence does not refer to Mr Tran signing the new contract, but it does refer to him tearing it up.

30    George Kodari’s affidavit reads like an incomplete summary, reflective of an incomplete recollection. What is missing is a sense of any substantial reaction to a senior employee ripping up a contract that he had just signed, and unexpectedly resigning. His affidavit bears the hallmarks of a much later reconstruction of what took place. My impression of George Kodari as a somewhat garrulous witness was that he would have been unlikely to have said and done so little in response to what he alleged Mr Tran said and did.

Mr Kodari’s affidavit account of the meeting

31    Mr Kodari deposed to the following:

(1)    his father, George Kodari, met with Mr Tran at around 5.00 pm on 11 November 2016 for the purpose of providing Mr Tran with his new contract of employment confirming his responsibilities and his new (and hitherto unannounced) position as Risk Manager;

(2)    he was called into the meeting about 15 minutes later by George Kodari, a passage of time that reinforces the sense of George Kodari’s account being incomplete given how little was supposedly said in that period of time. The conversation between them was:

George Kodari:     Michael please come into the boardroom. Steven is acting suspiciously.

Mr Kodari:    What is he saying?

George Kodari:    He does not want to sign the contract. He [Mr Tran] has said that the document is for normal employees and not him. I told him that everyone had already signed their contracts and that if he was getting paid by KOSEC, then there needs to be documentation.

(3)    upon joining the meeting, the following conversation ensued:

Mr Kodari:    Steven, George tells me that you said you won’t sign the contract.

Mr Tran:    I told George that I have already signed the contract.

George Kodari:    Well, I was not able to find it in your folder and you had prepared the contracts with the lawyers. If you have signed the same document previously which you prepared and had everyone else sign, why would this now be an issue.

(4)    Mr Tran signed the contract in the presence of George Kodari and another Kodari Securities employee, Mr Michael Wayne;

(5)    Mr Tran then (without apparently anything else being said) started to become agitated, started speaking to someone on his mobile in a foreign language and then said:

Mr Tran:    I have no position at KOSEC anymore. It’s clear I have no position, I resign.

George Kodari:    You do not need to resign, you should think about it for a week first, if that is what you want to do. You should leave on good terms.

(6)    Mr Tran then tore up the contract and immediately proceeded to leave the room, at which time the following was said:

Mr Tran:    I am going to the car to get KOSEC’s [Kodari Securities’] things and then I am gone.

Mr Kodari:    OK.

(7)    Mr Tran left the Kodari Securities premises in an agitated and hurried manner, making loud comments in a foreign language.

32    Mr  Kodari denied making any threatening or intimidating remarks to Mr Tran, or witnessing George Kodari doing so. He said Mr Tran did not ask to take the new contract with him for legal advice or for any other reason. He said that neither he nor Kodari Securities took any action as a result of Mr Tran exercising or proposing to exercise any workplace rights. As with George Kodari, the denial of any action taking place as a result of Mr Tran exercising or proposing to exercise any workplace rights was somewhat formulaic and imprecise, again perhaps by reason of the blanket denial of any such right being asserted by Mr Tran. As with George Kodari, given the obvious dispute on this topic at the centre of this proceeding, this formal denial did not require a challenge in cross-examination.

33    As with George Kodari’s account of what took place, it does not read as being a complete account of what took place, but rather as an incomplete summary. Again, this is perhaps not surprising as his affidavit is dated 26 June 2018, approaching 20 months after the key events leading up to 11 November 2016 and longer for earlier events. Again there was no suggestion that he took any notes at the time that the events he deposed to occurred. While again noting that instructions had to be taken prior to the filing of a defence much earlier on 2 May 2017, as already observed, the portion at [11] to [18] of that defence is sparse, does not reflect much of the detail given in his evidence and therefore affords no substantial basis for inferring that the details of what took place on 11 November 2016 were recorded at any time prior to a period proximate to his affidavit being prepared in about June 2018. As noted above, the defence does not refer to Mr Tran signing the new contract, but does refer to him tearing it up.

34    Like his father’s affidavit, Mr Kodari’s affidavit is reflective of an incomplete recollection of what took place. Again, what is missing is any substantial reaction to a senior employee unexpectedly resigning before ripping up a signed contract. Mr Kodari was not a witness who gave the impression of being a person would be a passive or minimalist contributor to a significant conversation or event. I did not find it credible that he would have said and done so little in response to what he alleged Mr Tran said and did.

Mr Tran’s account of the meeting

35    Mr Tran’s affidavit account of the meeting was considerably more detailed than that of either Mr Kodari or George Kodari. While he did not affirm his primary affidavit in chief until 2 March 2018, more than a year after the events he relies upon, the originating application was dated and filed on 3 March 2017, necessitating the taking of instructions which would inevitably have formed part of the basis for his primary affidavit. Key aspects of the account that is in his affidavit are also in the originating application, with one important difference, being that he pleads that he refused to sign the contract, and makes no reference to tearing it up, contrary to his affidavit. Whilst perhaps falling short of being comprehensive, his affidavit was reasonably detailed and reflected a reasonably clear recollection at the time it was prepared. His cross-examination revealed that his memory was not as clear by the time of the trial, especially on the topic of signing the new contract and tearing it up.

36    Mr Tran’s affidavit was largely unchallenged, except on the topic of reprinting the contract that had been torn up, and on events prior to the meeting taking place. He said that on Friday, 11 November 2016 at about 5.30 pm, an account executive at the company approached him and told him that Mr Kodari wanted to see him in the boardroom. He went to the boardroom and met with George Kodari. He said he had not been provided with any notice of the meeting and was shocked and apprehensive at being called into a meeting so abruptly. He said that George Kodari started the meeting in a happy and grateful mood, thanking him for all that he had done for Mr Kodari and Kodari Securities, referring to him as “family, one of our family”.

37    Mr Tran said that George Kodari then took out an HWL Ebsworth template contract, which he recognised because he had been issuing the same contract to the staff of Kodari Securities that week. He said he looked at the new contract and said “this contract is for normal staff, not for me”. He saw that in the contract his job title had changed from Chief Operations Officer to Risk Manager, with the same salary package of $150,000 plus superannuation, but with no job description. He said that George Kodari said to him “we have to stay low from now on, no more sitting in the board room, you have to sit in the back of house”.

38    Mr Tran deposed to his state of mind at the meeting, which was admitted with a restriction to that end under s 136 of the Evidence Act and also subject to relevance. He said he was nervous and uncomfortable about the new contract, referring to what he described as how he was being treated. He referred to there being details in the new contract that he could not be across on short notice. He said that although he been handing out these contracts to other employees which were designed for them, he was not across all the details and would not be comfortable signing it with at least an opportunity to read through it. He also said that he was conscious that this version of the contract was probably “tweaked” by a solicitor from the law firm who had drafted the contracts, HWL Ebsworth, who had made reference to making the contract “stronger”. I am satisfied that this evidence of state of mind is relevant to the facts in issue, especially in light of it providing an explanation for, on his account, having said to George Kodari “I will take it to a lawyer to review”.

39    Mr Tran described George Kodari’s face changing at hearing that he wanted to speak to a lawyer. He said that George Kodari’s voice became angry and that he raised his voice when he said “it’s your contract!” That was an account of events that Mr Tran was unlikely to have invented: it was, at least at first blush, against Mr Tran’s interest to be recounting a basis upon which he would not need to obtain legal advice about the new contract, namely that he was the one who had commissioned the creation of the employee contracts from HWL Ebsworth. He said that George Kodari then yelled at him “I will not pay you if you don’t sign it now. If you don’t sign now, it shows you are not loyal”. In cross-examination, George Kodari denied saying these things and denied shouting, but I did not find his denials either credible or convincing. On this particular aspect of the evidence I prefer and accept the evidence of Mr Tran.

40    Mr Tran said that George Kodari also asked of him “what value do you bring to the company when we pay you $150,000, car, no fringe benefits tax, nearly $200,000?” In light of George Kodari’s concern, expressed to Mr Kodari, at the costs that had been increasing for the company since Mr Tran had been there, I find Mr Tran’s account of what George Kodari said as being credible and I accept that this was said.

41    Mr Tran said that George Kodari called a company analyst by the name of Michael Wayne to come into the boardroom to sign the new contract as a witness. Mr Tran said that Mr Wayne signed in the witness space as directed, despite the fact that he had not himself signed the new contract at that time. George Kodari denied this in cross-examination, stating that Mr Kodari called Mr Wayne into the meeting, and that Mr Tran signed first and then Mr Wayne. Although a person purporting to sign as witness in circumstances when the person whose signature is being witnessed has not signed the document is hardly creditable behaviour, in terms of the facts that are necessary to decide, nothing directly turns on whether this did or did not occur. It does, however, indicate the atmosphere in which the meeting was conducted and to that end Mr Wayne’s presence is a collateral circumstance which is relevant to the assessment of what transpired.

42    Mr Kodari referred in his affidavit to Mr Wayne being present when Mr Tran signed the contract, but not as to why he was there. In cross-examination, Mr Kodari stated that he had called Mr Wayne into the boardroom to witness Mr Tran signing the contract, and that Mr Wayne signed the contract after Mr Tran had done so. George Kodari made no reference in his affidavit to Mr Wayne being there at all. In cross-examination, George Kodari stated that Mr Wayne signed the contract after Mr Tran. George Kodari said that he did not think it was necessary to refer to Mr Wayne in his affidavit.

43    Mr Wayne did not swear an affidavit and there was no explanation for him not having done so or for him not being called as a witness. In cross-examination, Mr Kodari could not recall whether Mr Wayne had been asked to prepare an affidavit for the proceedings, but confirmed that there was no reason why Mr Wayne could not have done so. Mr Tran asked me to draw an adverse inference from Mr Wayne’s absence to the effect that he was not called because his evidence would not have assisted the respondents. In all the circumstances it is appropriate to draw that inference. However, the absence of Mr Wayne and the drawing of that inference does not of itself constitute any evidence that Mr Wayne had signed the contract as a witness prior to Mr Tran signing it. That evidence only comes from Mr Tran given the sparseness and unsatisfactory nature of the evidence of Mr Kodari and of George Kodari on this topic.

44    As was pointed out in Weissensteiner v The Queen (1993) 178 CLR 217 at 227.7 (per Mason CJ, Deane and Dawson JJ):

… when a party to litigation fails to accept an opportunity to place before the court evidence of facts within his or her knowledge which, if they exist at all, would explain or contradict the evidence against that party, the court may more readily accept that evidence. It is not just because uncontradicted evidence is easier or safer to accept than contradicted evidence. That is almost a truism. It is because doubts about the reliability of witnesses or about the inferences to be drawn from the evidence may be more readily discounted in the absence of contradictory evidence from a party who might be expected to give or call it.

45    Following Weissensteiner reasoning, the unexplained absence of any evidence from Mr Wayne allows me to more readily accept Mr Tran’s evidence and thereby to accept that the contract was purportedly witnessed by Mr Wayne prior to it being signed by Mr Tran. That conclusion then provides a basis for accepting that Mr Tran had legitimate grounds for concern about the new contract, making more credible his evidence that he had then said to George Kodari “I need to take it to a lawyer”, and also that he asked George Kodari whether his entitlements would stay the same, to which George Kodari said “yes”. It is not necessary to reach a concluded view as to whether that confirmation was shouted aggressively as Mr Tran said had happened, or whether it was said in a more neutral way, as George Kodari maintained, as little turns on the difference. That sort of difference may be little more than a disparity in the recollection of detail. Mr Tran is also likely to have been more sensitive about what was taking place, and to more readily perceive an adverse reaction to his question as being reflected in a louder or more aggressive tone.

46    The more important conflict is as to whether Mr Tran said that he needed to take the new contract to a lawyer, as he recounted in his text message reply to Mr Kodari soon after 8.30 pm on the night of, and after, the meeting. There is little doubt that the motivation in getting Mr Tran to sign the new contract was not to improve his position, but rather to clarify and improve the position of Kodari Securities, especially when regard is had to a new probation period. That is a commercially legitimate stance for Kodari Securities to take via both Mr Kodari and George Kodari, even though the new contract on its face did appear to be reducing the scope of Mr Tran’s role. Employment contracts are able to change over time, as the interests and bargaining positions of one side or the other improve or worsen. The party set to be worse off may not wish to lose the contractual position already held. In these circumstance, Mr Tran would have been prudent in wanting to obtain legal advice before changing from the existing contract to the new contract.

47    Jessup J pointed out in Murrihy v Betezy.com.au Pty Ltd [2014] FCA 908; 238 IR 307 at [142] that “[p]erhaps more than ever before, it must realistically be accepted that individual employees, without the benefit of union representation, will often need to seek their own advice and representation in relation to rights arising under federal industrial legislation.” That observation extends to the right to obtain legal advice about employment contracts more generally, as Mr Tran asserts he wanted to do, knowing as he did that Kodari Securities had the benefit of such advice in preparing two template contracts. Overall, and in all the circumstances, I accept that Mr Tran did say to George Kodari that he needed to take the new contract to a lawyer.

48    Mr Tran said that he then asked Mr Kodari to join the meeting and when he did so, said to him, “what’s going on? You’re treating me unfairly. You embarrassed me in front of staff and in front of Open Market”. Mr Tran said that Mr Kodari did not reply and that George Kodari then said “[y]ou must sign now, we trust you, you are like family”. George Kodari did not deny that he had made references to Mr Tran being like family, but suggested that was a general way of speaking to people working within the business, rather than signifying any special relationship. On balance I accept Mr Tran’s account of this being said by him, which is not something that would necessarily have been remembered by either Mr Kodari or George Kodari.

49    Mr Tran described himself as feeling immense pressure from both George Kodari and Mr Kodari and that they were both raising their voices at him and saying “just sign” and “we won’t pay you otherwise”. Mr Tran said that with them standing over him he reluctantly signed the contract. He says that he then initiated the following conversation with Mr Kodari:

Mr Tran:    What do I do in the office now?

Mr Kodari:    Don’t worry, you’ll be working with George, assisting him.

Mr Tran:    What operations? And which staff would I look after?

Mr Kodari:    I don’t know, just help.

50    Mr Tran described Mr Kodari’s tone as having changed towards him now that he had signed the contract and that he “didn’t seem to care anymore”. Mr Tran alleged that he said to George Kodari and Mr Kodari, “I need my job secured. I am very worried about this probation clause. What about notice of termination?” George Kodari replied, “Don’t worry, we’ll look after you”.

51    Mr Tran then ripped up the contract which he had just signed, but he said that he did not do this in an aggressive manner. In my view, it was not an irrational response for Mr Tran to rip up the signed new contract in the face of not getting answers to his questions, and therefore not wanting to be bound by the new contract. The undisputed fact of having ripped up the new contract aligns better with his account of the lead up to this event. On Mr Tran’s version of events, Mr Kodari and George Kodari obfuscated about what the change to his employment contract would mean, and pressure was being placed on him to sign. This is more plausible than the accounts given by Mr Kodari and George Kodari of a spontaneous and unexplained event. It also better aligns with the instructions that Mr Kodari gave to George Kodari to secure the signing of the new contract by Mr Tran.

52    Mr Tran then deposed to the following conversation with Mr Kodari:

Mr Tran:    I’ll review the contract and will bring it back on Monday.

Mr Kodari:     (in a loud aggressive voice) You fucked me, I trusted you. You should have stopped Joe Aston. You should have protected me.

Mr Tran:    Are you blaming me?

Mr Kodari:    I’m blaming you and I am blaming myself.

Mr Tran:    That’s an insult to me, I have never put my clients into this situation.

Mr Kodari:    You fucked me! I trusted you!

Mr Tran:    It’s not about trust, I just need my lawyer to have a look at the contract.

Mr Kodari:    I gave you a Maserati.

Mr Tran:    I don’t care about the Maserati.

53    This part of the conversation is explained by reference to the newspaper article by Mr Aston, to which Mr Tran recorded Mr Kodari taking badly. I accept that this conversation took place, being consistent with the burden of Mr Tran’s evidence and having clear logic and a ring of truth about it. I reject Mr Kodari’s denials in relation to this conversation. I therefore find that Mr Tran said to Mr Kodari “I just need my lawyer to have a look at the contract”.

54    Mr Tran deposed to placing the keys to the Maserati on the table, that George Kodari told Mr Kodari to print another copy of the new contract, and that this reprinted copy was put in front of him. This aspect of Mr Tran’s evidence did not survive well under cross-examination. But rather than this ultimately counting against him, I perceived him as doing his best to give an honest account of his current recollection of what had taken place. He said in cross-examination that he could not recall Mr Kodari bringing a fresh copy of the new contract into the room. After the luncheon adjournment, he said in further cross-examination that he now recalled the additional copy being brought in, but could not recall what happened to it.

55    Mr Tran deposed to Mr Kodari yelling and screaming and pacing the room and to George Kodari as staring him down. It was suggested to him in cross-examination that this had not occurred, but he held his ground. I am unable to reach a concluded view that this was a reliable account, as opposed to an emotional over-reaction to what was taking place. However, I accept that the act of Mr Tran tearing up the contract was not well-received, that both Mr Kodari and George Kodari remained determined to have him sign the contract, and that neither of them was as calm or sanguine about this as their evidence would suggest. Mr Tran said that he decided to leave, and said “I will take the contract home with me, actually read it properly, and get back to you on Monday”.

56    Mr Tran was cross-examined to the effect that it did not make sense to say this if Mr Kodari was refusing to give him a further copy of the contract. Mr Tran said this was a reference to the ripped up contract (which was reassembled and put into evidence as the only version of the contract before the Court, such that it remained both able to be read, and able to be reassembled). However, this is seemingly at odds with his text message later that night, reproduced at [18] above, wherein he said “You will recall I left the meeting saying I will come back into the office on Monday to sign the contract after I have reviewed it but you refused to give me a copy of the contract after I had torn up the earlier copy.” However, despite this, I did not find this evidence as inherently implausible, even if it is not entirely clear as to which copy was being referred to at each point in time. It is consistent with Mr Tran wanting to take an unsigned reprinted copy if he was given it, but being willing to make do with the torn up copy if not. The significance of the reprinting of the new contract falls away once it is appreciated that no opportunity to obtain legal advice was going to be permitted and he was not going to be able to take any copy of the contract with him. It follows that I do not accept the arguments advanced on behalf of the respondents that Mr Tran was untruthful about what was done with the second copy of the new contract.

57    It is convenient at this point to similarly note that while Mr Tran’s evidence concerning the number of mobile phones he had at different points in time, and how they came to be bought, and by whom, and what he had told police, was inconsistent and unreliable, it was also entirely peripheral and did not rise to the level of demonstrating falsity or dishonesty as relied upon by the respondents. Mr Tran’s evidence as to his state of mind was that he was shocked or surprised when he realised he still had one of the mobile handsets, a state of mind inconsistent with dishonesty. His evidence on this topic generally reflected confusion rather than dishonesty. I therefore will not dwell on the detail of that evidence as it is more of a distraction than any assistance on the central issues in dispute. For completeness, I am similarly not satisfied that this rose to the level of conduct that could have justified Mr Tran’s dismissal.

58    Mr Tran said that the following conversation then ensued, perceiving George Kodari as using a menacing tone:

George Kodari:        If you don’t sign it now, you will not be working here.

Mr Tran:        Are you firing me?

George Kodari:        You said that, not me.

Mr Tran:    I just want to read it and consider it. I’m not resigning. I’ll speak to you on Monday.

59    For the reasons already given, I accept that this conversation took place, with at least an element of forcefulness on the part of George Kodari.

60    Mr Tran said that he then got out of the boardroom at about 7.30 pm. He said that he had not realised that all of this had been going on for about two hours. While that seems to be a longer time than would be needed for what Mr Tran said had taken place, that time better aligns with the timing of the text message sent by Mr Kodari about an hour later at 8.28 pm that night.

The respondents’ alternative case for dismissal

61    The respondents argue that if, contrary to their primary case, Mr Tran was dismissed, then he would have been dismissed in any event within a very short time after the day of the meeting on 11 November 2016 by reason of having misappropriating $3,816.01 of funds belonging to Kodari Securities to pay for the servicing of his own car. I do not propose to spend any substantial amount of time on this allegation or claim, because I am not satisfied that any impropriety of the kind alleged took place. There was an arrangement deposed to by Mr Tran, which I accept, by which sometimes Mr Tran paid for things for Kodari Securities and was reimbursed; and sometimes Kodari Securities (as in this instance) paid for things for Mr Tran and was reimbursed.

62    This was not an entirely satisfactory way for a company to conduct its financial affairs, but that was the environment in which Mr Tran was working closely with Mr Kodari. The particular transaction in question took place on 24 August 2016, well before any of the events of November 2016, and was known by Mr Kodari to have occurred well before November 2016. Indeed, the evidence suggests that Mr Kodari approved the transaction in advance. Even if that was not so, no warning was issued. To the contrary, the new contract contemplated Mr Tran being given the title of risk manager, which was wholly inconsistent with such a concern that would have given rise to the contemplation of dismissal, let alone have justified that taking place. Moreover, the evidence supports the conclusion that the money was reimbursed. In all the circumstances, I regard this claim as no more than an attempt to provide an ex post facto justification for the conduct that took place on the night of 11 November 2016, if that amounted to termination of employment without a proper basis. Had Mr Tran been dismissed upon this basis, it is likely that it would not have survived whatever legal proceedings would have been available to Mr Tran. The same conclusion applies to allegations made about the mobile phone handsets, which were returned by Mr Tran once he had been dismissed.

The competing arguments on Mr Tran’s case

63    The parties provided both written and oral submissions on what I should make of the evidence and the conclusions that I should draw. This is not a case in which laborious reproduction of those arguments is of assistance. It suffices to say that counsel for both sides, aided by their instructing solicitors, assisted the Court by the way in which they conducted their respective cases and in the submissions that they made.

Findings arising from the assessment of the conflicting evidence

64    I am satisfied as to the following on the balance of probabilities, with the evidence being of sufficient quality as to the underlying seriousness of the facts in issue that the following further factual and legal conclusions should be made on the evidence.

65    At the meeting, Mr Tran did say that he wanted to seek legal advice before signing the proposed new contract. He said that both to George Kodari and to Mr Kodari. Seeking such legal advice was a workplace right under s 341(1)(c)(ii) of the Fair Work Act, following the decision of Jessup J in Murrihy at [142]-[143].

66    The conduct of George Kodari, on his own part, and on behalf of Kodari Securities on whose behalf he was acting at the direction of its sole shareholder and sole director, Mr Kodari, in saying to Mr Tran “If you don’t sign it now, you will not be working here” – that is to say, that if he did not sign the new contract immediately – not long after Mr Tran had said he needed to take the new contract to a lawyer, was an unconscionable threat to take action directed towards Mr Tran wanting to exercise his workplace right to seek legal advice about the new contract affecting his existing contract of employment. That is, there was to be no waiting at all for Mr Tran to obtain legal advice in relation to a contract he had only been asked to sign a relatively short time earlier in the meeting. This was within the context of being summoned to a meeting at about 5.00 pm, without notice, to sign a contract that, if executed, would have contained a falsehood if executed at the meeting by virtue of cl 15.6, which stated “The Employee acknowledges that: (a) the Employee has received independent legal advice about the terms and effect of this Agreement …”.

67    The threat by George Kodari was made with intent to coerce Mr Tran in the sense of intending to negate his choice to exercise that workplace right and to instead sign the new contract: Esso Australia Pty Ltd v Australian Workers’ Union [2016] FCAFC 72; 245 FCR 39 at [174]. The presumption as to that intent under s 361 was engaged, and that presumption was not rebutted by any evidence of the nature or quality adverted to by the High Court in Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32; 248 CLR 500 (Bendigo TAFE v Barclay) at [41]-[45]. The bare denial in the affidavits of Mr Kodari and George Kodari did not suffice to rebut the presumption in s 361. That bare denial did not require the ritualistic and barren application of the rule in Browne v Dunn (1893) 6 R 67 by Mr Tran to a circumstance in which this was a live issue for which there was an obligation on the respondents (relevantly as it turns out, George Kodari and Kodari Securities) to negate coercion once material facts were pleaded and proven. As Campbell J in substance pointed out in West v Mead [2003] NSWSC 161; 13 BPR 24,431 at [94]-[99], the rule is one of pragmatism and fairness, which did not require those perfunctory paragraphs to be formally challenged. I therefore conclude that s 343(1)(a) of the Fair Work Act was contravened by both George Kodari and through him by Kodari Securities.

68    I find that Mr Tran did not resign from his employment with Kodari Securities. Rather, Mr Tran had his employment terminated by Kodari Securities. This took place in the following way. After the text message sent by Mr Kodari at 8.28 pm on 11 November 2016 and Mr Tran’s reply a short time later denying he had resigned, and reasserting the exercise of his workplace right to obtain legal advice about the new contract, Mr Kodari caused the police to contact Mr Tran, which took place at about 11.30 pm that night. Mr Kodari had the option of instead facilitating the exercise of that workplace right. The police told Mr Tran that he had to return all property owned by Kodari Securities by 12.00 pm the next day.

69    While the evidence in Mr Tran’s affidavit of being contacted by the police was only admitted as evidence that it was said, and not as evidence of the truth, Mr Tran was cross-examined on that evidence in a way that did not maintain that limitation, when it was put to him that the police had told him, as a fact and without any s 136 limitation, “We have a report from Michael Kodari who says you no longer work for the company and you have no permission to use their car and equipment and you need to return them by 12 noon tomorrow”, which Mr Tran confirmed was the case. Once the evidence is admitted, by s 60 of the Evidence Act it is also evidence of the truth, and thus is evidence of the fact that Mr Kodari caused the police to ring Mr Tran and require the return of the property.

70    It is not to the point that Mr Tran did not appreciate that this meant that his employment had been terminated. What matters is that two hours later, at 1.30 am on 12 November 2016, Mr Tran returned to Kodari Securities the Maserati with its keys, three mobile phone handsets, being the property that he had been told that he had to return. Mr Tran then rang the police and reported that he had returned that property. By then his employment by Kodari Securities had undoubtedly ended. I do not accept that Mr Tran’s text amounted to a repudiation of his contract, and it certainly was a denial of having resigned. The tail end of his text suggests continued defiance of the position advanced in the immediately preceding text from Mr Kodari. Despite the emphatic language used, in light of his evidence and in all the circumstances, I am satisfied that this did not constitute an acceptance that his employment had ended.

71    This dismissal amounted to adverse action by Kodari Securities via the actions of Mr Kodari, because, as already found, that dismissal took place because Mr Tran had earlier that evening proposed to exercise a workplace right to seek legal advice, and thereby constituted adverse action and thereby a contravention of s 340(1)(a)(iii) of the Fair Work Act. The contravention was by Kodari Securities, and by Mr Kodari by reason of his conduct giving rise simultaneously to the conduct by the company and the necessary involvement by him: see Hamilton v Whitehead [1988] HCA 65; 166 CLR 121, as discussed in Parker v Australian Building and Construction Commissioner [2019] FCAFC 56; 365 ALR 402 at [246] to [250].

Penalties and compensation

Civil penalties

72    The dominant rationale of civil penalties is both specific and general deterrence. As the High Court pointed out in Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482 at [55] (footnotes omitted):

... whereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty, as French J explained in Trade Practices Commission v CSR Ltd [(1991) ATPR 41-076 at 52,152], is primarily if not wholly protective in promoting the public interest in compliance:

“Punishment for breaches of the criminal law traditionally involves three elements: deterrence, both general and individual, retribution and rehabilitation. Neither retribution nor rehabilitation, within the sense of the Old and New Testament moralities that imbue much of our criminal law, have any part to play in economic regulation of the kind contemplated by Pt IV [of the Trade Practices Act] ... The principal, and I think probably the only, object of the penalties imposed by s 76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act.”

73    The above decision and a number of other authorities concerning civil penalty determination principles were succinctly summarised in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113; 254 FCR 68 (Queensland Children’s Hospital case) (at [98], [100]-[107]):

General principles

Whereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty is primarily, if not wholly, protective in promoting the public interest in compliance: Trade Practices Commission v CSR Ltd [1991] ATPR 41-076 at 52,152; Commonwealth v Director, FWBII at [55] (per French CJ, Kiefel, Bell, Nettle and Gordon JJ). The principal object of a pecuniary penalty is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene; both specific and general deterrence are important: Chemeq at [90]; Ponzio at [93]. A pecuniary penalty for a contravention of the law must be fixed with a view to ensuring that the penalty is not to be regarded by the offender or others as an acceptable cost of doing business: Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640 (TPG Internet) at [66]; Singtel Optus Pty Ltd v Australian Competition and Consumer Commission  (2012) 287 ALR 249 at [62]-[63]. In relation to general deterrence, it is important to send a message that contraventions of the sort under consideration are serious and not acceptable: Australian Securities and Investments Commission v Southcorp Ltd (No 2) (2003) 130 FCR 406 at [32].

…

The fixing of a pecuniary penalty involves the identification and balancing of all the factors relevant to the contravention and the circumstances of the defendant, and making a value judgment as to what is the appropriate penalty in light of the protective and deterrent purpose of a pecuniary penalty. While there may be differences between the criminal sentencing process and the process of fixing a pecuniary penalty (cf. Commonwealth v Director, FWBII at [56]-[57]), the fixing of a pecuniary penalty may to an extent be likened to the “instinctive synthesis” involved in criminal sentencing: TPG Internet Pty Ltd v Australian Competition and Consumer Commission (2012) 210 FCR 277 at 294. Instinctive synthesis is the “method of sentencing by which the judge identifies all the factors that are relevant to the sentence, discusses their significance and then makes a value judgment as to what is the appropriate sentence given all the factors of the case”: Markarian v The Queen (2005) 228 CLR 357 (Markarian) at [51] (per McHugh J). Or, as the plurality put it in Markarian (at [37], per Gleeson CJ, Gummow, Hayne and Callinan JJ) “the sentence is called on to reach a single sentence which … balances many different and conflicting features”. Like the exercise of imposing a sentence for an offence, the process of fixing an appropriate pecuniary penalty should not be approached as a mathematical exercise involving increments to or decrements from a predetermined range of sentences: Wong v The Queen (2001) 207 CLR 584 at [74]-[76].

In fixing the amount of a civil penalty, reference is frequently made to the lists of factors or considerations identified by Santow J in Australian Securities and Investments Commission v Adler (No 5) [[2002] NSWSC 483;] (2002) 42 ACSR 80 at [126] and French J in Chemeq at [99]. Those lists of relevant considerations, which have been approved and elaborated on by many subsequent decisions of this Court, were not, and plainly were not intended to be, exhaustive. Nor was it suggested that each of the factors referred to in the respective lists was necessarily relevant or important in every case. These lists of factors should not be treated as a rigid catalogue or checklist of matters to be applied in each case; the overriding principle is that the Court should weigh all relevant circumstances: Australian Securities and Investments Commission v GE Capital Finance Australia [2015] ASC 155-203 at [72].

In general terms, the factors that may be relevant when fixing a pecuniary penalty may conveniently be categorised according to whether they relate to the objective nature and seriousness of the offending conduct, or concern the particular circumstances of the defendant in question.

The factors relating to the objective seriousness of the contravention include: the extent to which the contravention was the result of deliberate, covert or reckless conduct, as opposed to negligence or carelessness; whether the contravention comprised isolated conduct, or was systematic or occurred over a period of time; if the defendant is a corporation, the seniority of the officers responsible for the contravention; the existence, within the corporation, of compliance systems and whether there was a culture of compliance at the corporation; the impact or consequences of the contravention on the market or innocent third parties; and the extent of any profit or benefit derived as a result of the contravention.

The factors that concern the particular circumstances of the defendant, particularly where the defendant is a corporation, generally include: the size and financial position of the contravening company; whether the company has been found to have engaged in similar conduct in the past; whether the company has improved or modified its compliance systems since the contravention; whether the company (through its senior officers) has demonstrated contrition and remorse; whether the company had disgorged any profit or benefit received as a result of the contravention, or made reparation; whether the company has cooperated with and assisted the relevant regulatory authority in the investigation and prosecution of the contravention; and whether the company has suffered any extra-curial punishment or detriment arising from the finding that it had contravened the law.

Where the defendant is a body corporate, the size of the body does not of itself justify a higher penalty than might otherwise be imposed: Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [[2015] FCA 330;] (2015) 327 ALR 540 at [89]-[92]. The size of the corporation may, however, be particularly relevant in determining the size of the pecuniary penalty that would operate as an effective deterrent. The sum required to achieve that object will generally be larger where the company has vast resources: Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 3) (2005) 215 ALR 301 at [39]; Australian Competition and Consumer Commission v Apple Pty Limited [2012] ATPR 42-404 at [38].

Careful attention must also be given to the maximum penalty for the contravention. That is so for at least three reasons: first, because the legislature has legislated for the maximum penalty and it is therefore an expression of the legislature’s policy concerning the seriousness of the prescribed conduct; second, because it permits comparison between the worst possible case and the case that the Court is being asked to address; and third, because the maximum penalty provides a “yardstick” which should be taken and balanced with all the other relevant factors: Markarian at [31] (per Gleeson CJ, Gummow, Hayne and Callinan JJ).

Even where the maximum penalty for the contravention is high, and the amount necessary to provide effective deterrence is large, the amount of the penalty should be proportionate to the contravention and should not be so high as to be oppressive: Stihl Chainsaws at 17,896; NW Frozen Foods at 293.

74    The factors identified above, in keeping with any sort of checklist, are a guide and are not intended to be exhaustive, nor to replace the essential judicial function of fact-finding and consideration of all relevant circumstances. They must not become a rigid catalogue of matters for attention: Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union [2008] FCAFC 170; 171 FCR 357 at [58].

75    In this case, the following features warrant specific attention:

(1)    The contraventions were deliberate, but they were not pre-planned, as it was not apparently thought that Mr Tran would do other than submit to signing the new contract, albeit that it was evidently anticipated that some degree of persuasion might be necessary. However, it is clear that no resistance was to be tolerated: Mr Tran was to be made to sign the new contract. While not covert, nor was it merely reckless, negligent or careless. It was arrogant and callous.

(2)    The contraventions took place on a single night and there was no evidence of any prior contraventions. It cannot be characterised as other than an isolated event, although there are troubling indications from the way in which the meeting was conducted that other employees in a potentially similar scenario would not have fared any better if they had resisted signing a new contract. There is a need for specific deterrence given the ongoing employer role and the importance of respecting workplace rights and complying with the laws that protect them.

(3)    The nature of the contraventions went to a fundamental right both to freely enter into a new and different contract to that which was already in place, and to be able to do so with the benefit of legal advice. There was no prejudice to Kodari Securities in permitting a reasonable time in which that could take place.

(4)    The most senior person at Kodari Securities deployed his father to secure Mr Tran entering into the contract and then became involved himself.

(5)    Taking all the circumstances into account:

(a)    the coercion contravention was in the low to mid-range of objective seriousness in trying to force Mr Tran to sign the new contract, conduct that only continued for a very short time; and

(b)    the adverse action was at the higher end of objective seriousness as Mr Tran was terminated by reason of proposing to exercise a fundamental workplace right of obtaining legal advice before changing his employment contract.

In making this assessment, it should be noted that Mr Tran regarded the coercion contravention to be the more serious of the two, which is contrary to the view I have reached.

(6)    There was no evidence of any compliance systems, past, present or planned. Nor is there anything to indicate any contrition or remorse. A real sanction is necessary to deter in a meaningful way, both the current respondents, and anyone in a like position tempted to contravene in a similar way.

(7)    There was no direct evidence as to the financial position of Kodari Securities, or that of Mr Kodari or George Kodari. There is nothing to suggest that the sorts of penalties that would appropriate could not be paid without any undue hardship.

76    Under s 545(2)(b) of the Fair Work Act, an order may be made awarding compensation for loss suffered by reason of a contravention of that Act. Doing the best that it can, the Court is required to make a finding as to the additional amount of money that Mr Tran would have received but for the termination of his employment, by making an assessment of how long that employment would have continued absent the unlawful termination.

77    The respondents submit that if this point was reached, no penalties should be imposed. I reject that in light of the findings made above. Mr Tran submits that the following penalties should be imposed and compensation ordered, in each case to be paid to him:

(1)    In relation to the adverse action claim against Kodari Securities and ultimately Mr Kodari only:

(a)    a penalty of $35,000 against Kodari Securities (out of a maximum of $54,000 at the time);

(b)    a penalty of $10,000 against Mr Kodari (out of a maximum of $10,800 at the time);

(c)    compensation payable for economic loss of approximately $350,000 upon the basis that he would still be employed had his contract not been unlawfully terminated; and

(d)    compensation for hurt, distress and humiliation of $25,000, based on a table of comparative awards in other cases, including cases in which sums in this order of magnitude were awarded without medical evidence.

(2)    In relation to the coercion action claim against Kodari Securities and ultimately George Kodari only:

(a)    a penalty of $45,000 against Kodari Securities (out of a maximum of $54,000 at the time);

(b)    a penalty of $15,000 against George Kodari (which is above the maximum penalty of $10,800 for an individual at the time).

78    The question of how long Mr Tran’s employment would have continued if the key unlawful events of the night of the meeting had not taken place and Mr Tran had obtained legal advice and either continued with his existing contract, or signed the new contract, must be assessed for the purposes of the compensation claim that he brings. Falling between being terminated immediately as the respondents predicted, and still being employed now, as Mr Tran predicted, his employment could have continued for a year or more. However it is hard to avoid the conclusion that the trajectory of the relationship was not as good as it had been independently of what took place on the night of the meeting. There had to be mutual trust and confidence on the part of Mr Kodari in particular, and I accept that was at least waning by the time of the meeting. Although difficult to predict with certainty, doing the best that I can on the available evidence, I find on the balance of probabilities that the most likely scenario is that Mr Tran would have been employed for a further duration of approximately six months had his contract not been unlawfully terminated on a salary of $150,000 per annum (a claim for superannuation being expressly disavowed).

79    Having regard to the findings made above, especially as to the objective seriousness of the contraventions, the lack of substantial evidence to establish the degree of hurt, distress and humiliation and the unsustainable assumption that Mr Tran would still be employed by Kodari Securities, I am of the view that the conduct involved and the need for deterrence and compensation supports the following payment being made to Mr Tran within 60 days of these reasons being given, with formal orders to follow:

(1)    In relation to the adverse action claim against Kodari Securities and ultimately Mr Kodari only:

(a)    a penalty of $35,000 payable by Kodari Securities;

(b)    a penalty of $7,000 payable by Mr Kodari;

(c)    compensation payable by Kodari Securites and Mr Kodari, upon a joint and several basis, for economic loss of $75,000; and

(d)    compensation payable by Kodari Securites and Mr Kodari, upon a joint and several basis, for hurt, distress and humiliation, which I accept would have been present to some limited degree, of $10,000.

(2)    In relation to the coercion action claim against Kodari Securities and ultimately George Kodari only:

(a)    a penalty of $20,000 payable by Kodari Securities;

(b)    a penalty of $4,000 against George Kodari.

Contract compensation

80    As this claim was in the alternative, and in any event could not properly be accumulated upon the relief referred to above, there is, strictly speaking, no need to address it as the primary claim has succeeded sufficiently for this not to arise. However, for completeness, I should make some brief findings. I find that Kodari Securities also repudiated Mr Tran’s existing contract and also breached his existing contract by reason of not being given reasonable notice of termination, by reason of the fact that he was given no notice at all. I am unable to accept the argument for the respondents that, before the events of 11 November 2016, Mr Tran was on his way out the door in the immediate future, especially given the assurances given to him by George Kodari on behalf of Mr Kodari and thus Kodari Securities. I find that those assurances were, at the time, genuine, despite some concerns being expressed. I am not prepared to find that George Kodari was a liar in that respect.

81    I consider that a period of notice as long as 12 months urged upon me by Mr Tran was excessive in all the circumstances, noting that the assessment is to be carried out at the time of the termination, not in light of subsequent events. The reasoning in Guthrie v News Limited [2010] VSC 196 at [196]-[198], relied upon by Mr Tran, has been helpful in framing the approach as follows. Given Mr Tran’s indefinite employment, the highly trusted role he had occupied and the apparently still highly trusted role that he had been earmarked to fill, his age and the time that it should have taken him to find alternative equivalent employment, a reasonable period of notice would have been six months.

Costs and orders

82    Mr Tran asked to be heard on the question of costs. He may or may not wish to pursue that. Mr Tran also needs to state his position as to interest under s 547 of the Fair Work Act. The parties are directed to confer as to the future conduct of the proceeding if costs are to be sought, and as to the orders that should be made to give effect to these reasons.

Associate:

Dated:    21 June 2019