Keillor v Pologon Pty Ltd & Maria Aidinis [1996] HREOCA 2 (6 March 1996)

Human Rights and Equal Opportunity Commission

Sex Discrimination Act 1984 (Cth)

Nos: H95/18 & H95/35

Between :

Amanda Keillor

Complainant

And

Pologon Pty Ltd

First Respondent

Maria Aidinis

Second Respondent

REASONS FOR DECISION

OF

COMMISSIONER HILARY CHARLESWORTH

Date of Decision: 6 March 1996

Hearing: Adelaide, South Australia

Dates: 21-22 September & 9 October 1995

Appearances: Mr Peter Scragg, Barrister & Solicitor, for Complainant

Mr Rick Manuel of RJ Manuel & Co, Barrister & Solicitor, for First Respondent

Mr Carey Goodall of Thompsons, Barristers & Solicitors, for Second Respondent

The complaint

Ms Amanda Keillor (the complainant) alleges that the two respondents have discriminated against her on the basis of her sex contrary to sections 14 and 105 of the Sex Discrimination Act 1984 (Cth) ("SDA"). Her complaints against each of the respondents were first made on 17 January 1994 to the office of the Commissioner for Equal Opportunity for South Australia, acting as agent for the Human Rights and Equal Opportunity Commission ("HREOC") under section 16 of the Human Rights and Equal Opportunity Commission Act 1986 (Cth). The Commissioner for Equal Opportunity inquired into and endeavoured to settle the complaints, without success. The Sex Discrimination Commissioner then referred the matters on 10 January 1995 for inquiry by HREOC. The two complaints were joined for the purposes of the inquiry under section 61 of the SDA.

Background to the complaint

The complainant is a qualified builder in Adelaide, trading as Keillor Building Associates. On 2 January 1994, with a builder friend, Mr Tony Ciccozzi, she met Ms Anna Maria De Minico who was a director of the first respondent, a company, Pologon Pty Ltd ("Pologon"). At that time Pologon was negotiating to lease a property, 236 Pulteney Street, in the heart of Adelaide, to operate as a gelataria and cafe. Some internal renovations of the building were necessary for it to serve its required function. The planned building works were relatively substantial in the sense that some demolition was involved. Pologon had initially tried to obtain the services of a builder, Mr Joseph Pinneri, who had previously done work for the building designer in charge of the project, Mr Frank Barilla. By early January 1994 it seemed that Mr Pinneri might not be able to do the work because of the continuing uncertainty about the lease and the very tight timetable for the renovations. The directors of Pologon were anxious to complete the building works quickly because their business would be at its most lucrative in the summer, and because they had already purchased some perishable stock. Also, two of the directors of Pologon planned to return to Italy for the European summer to run another gelati business there and they were keen to have the

Adelaide business established before their departure.

At the chance meeting on 2 January, Ms De Minico told the complainant and Mr Ciccozzi of Pologon's problems in finding a builder willing to do the work almost immediately. She asked Mr Ciccozzi if he were willing to tender for the job, but he replied that he was too busy. He suggested that the complainant might be able to do the work. Ms De Minico then asked Ms Keillor if she would tender for the work, and Ms Keillor agreed to do so. She was interested in breaking into commercial building work and this would be her first such project.

The complainant prepared the tender documents and gave them to Ms De Minico and her husband, Nadio, another Pologon director, on January 11. Ms De Minico was impressed by the quality of the documents and the reasonable cost. There was, later, a dispute between the complainant and Ms De Minico about the terms of the tender. The covering letter to the tender documents stated that 'This tender remains the property of the builder otherwise may be purchased for the sum of $650.00 to cover consultation and specification costs. If tender is successful this service is complimentary to total cost of building works'. In her evidence, Ms De Minico stated that the sum was never agreed to so was therefore not paid. In any event, this is not a matter relevant to the complaints under the SDA. On January 12, 1994, Ms De Minico advised the complainant that her tender had been accepted and it was intended that work begin on January 15. An amended tender document, dated January 14, was later prepared by the complainant.

During the lease negotiations with Pologon, the owner of 236 Pulteney Street, Mrs Maria Aidinis, the second respondent, had indicated her concern that the alterations to her property be done with great care and she had displayed considerable interest in the detail of the renovation process. She had met Mr Pinneri, the original choice of Pologon as builder, on site on January 7 1994 and had discussed the proposed renovations with him. In her evidence, Mrs Aidinis stated that she had made particular mention to Mr Pinneri of the significance of the need for Contract Works Insurance to cover the building process. Mr Pinneri corroborated this evidence. Mr Barilla confirmed Mrs Aidinis' concern about such insurance but could not remember if it had been raised at the January 7 meeting. Similarly, Ms Anna Maria De Minico testified that she could not recall Contract Works Insurance being raised at that stage. Both respondents argued that in the building industry, licensed builders are required to carry their own professional indemnity insurance, which covers them for liability for negligence, and usually also obtain separate insurance to cover a particular job, known as Contract Works Insurance. Contract Works Insurance can be taken out by the builder or the owner of premises and covers the actual building works. The industry practice was not challenged by the complainant. Indeed her own insurance broker, Mr Tony De Conno, testified that Contract Works Insurance was standard practice.

Ms De Minico contacted Mrs Aidinis on January 13 to inform her that Mr Pinneri was unable to do the building work and that a new builder, the complainant, had been engaged. At this time, the lease on 236 Pulteney Street had not been signed. Mrs Aidinis asked about the complainant's qualifications and insurance cover and Ms De Minico agreed to deliver relevant documentation to Mrs Aidinis' house. Ms De Minico then obtained the complainant's permission to collect a copy of her professional indemnity insurance from Ms Keillor's insurance brokers. Ms De Minico testified that she called into the offices of De Conno and Blanco Insurance Brokers and spoke to Mr Tony De Conno. He produced the policy, which had been issued in August 1993. Ms De Minico observed that the policy only had Ms Keillor's name on it and was concerned that Mrs Aidinis would not consider that adequate. She testified that she raised this concern with Mr De Conno who then went away and returned with Mrs Aidinis' name typed on the schedule to the policy, saying that he would alert the insurers, AMP General Insurance Ltd (AMP) to the amendment the following day. Mr De Conno did not recall this transaction, and stated that he assumed others in his office had arranged for the amendment directly with AMP, at the complainant's request. At some stage two other amendments were made in handwriting to the policy: one was the words 236 Pultney (sic) St; and one was the phrase, after Mrs Aidinis' name, 'for her rights and interests'. It is unclear who made these amendments.

In his statement and oral evidence Mr De Conno stated that he considered that the addition of Mrs Aidinis' name on the complainant's professional indemnity insurance offered Mrs Aidinis some useful protection as landlord of the premises. For example, his statement reads 'As I understand the effect of the amendment to the schedule was that Mrs. Aidinis could claim directly against AMP on the policy for any breach by Mandy Keillor of her obligations in her capacity as the builder carrying out improvements to Mrs. Aidinis' property including any acts of negligence'. This reading of the amendment was challenged by counsel for both respondents in cross examination. Looking at the terms of the professional indemnity policy, it is clear that the addition of Mrs Aidinis' name offered her very little protection. Whether or not her name was on the policy, Mrs Aidinis could not have claimed directly against AMP for any negligence by the complainant. Moreover, the professional indemnity policy did not cover the actual building works at 236 Pulteney Street. Mr De Conno stated that because AMP had accepted the amendment, he assumed it offered the required protection.

At about 5 pm on January 13, Ms De Minico and her husband called on Mrs Aidinis and left the amended professional indemnity policy with her. Mrs Aidinis testified that, after reading the policy that evening, and becoming concerned about its legal effect, the next morning she had telephoned AMP to enquire about the nature of the building insurance held by the complainant. At AMP's suggestion she had also telephoned the complainant's insurance brokers. Mrs Aidinis claimed that she was perturbed by the responses to her inquiries, to the effect that neither AMP nor De Conno and Blanco knew anything about the addition of her name to the policy. Mrs Aidinis then telephoned Ms De Minico to express concern about both the building qualifications and nature of the insurance cover held by the complainant. She stated that there must be Contract Works Insurance before she would sign the lease.

Shortly after, the complainant phoned Ms De Minico to see what was going on. Ms De Minico told her that Mrs Aidinis wanted Contract Works Insurance. Ms De Minico testified that the complainant refused to pay for such insurance and that, although she was dismayed by this, Ms De Minico then said that Pologon would cover the cost. Ms De Minico then telephoned Mr De Conno and asked the approximate price of Contract Works Insurance for the 236 Pulteney Street renovations. Mr De Conno gave a rough estimate and Ms De Minico said that, if the project was still going ahead, she would contact him to arrange such insurance. Ms De Minico telephoned Mrs Aidinis to reassure her, and Mrs Aidinis then expressed concern about the description of the complainant's business in the schedule to the indemnity policy as 'Building consultant/supervisor'. The same morning, the complainant telephoned Mrs Aidinis. This was the only direct contact between the complainant and the second respondent. Their accounts of the conversation differ. The complainant testified that Mrs Aidinis did not seem interested to discuss her qualifications or insurance, but was dismissive of her and stated that she was not able to do the job. Mrs Aidinis recalled a more conciliatory conversation. The ten minute phone conversation ended with the complainant stating that she would deliver further credentials to Mrs Aidinis. The complainant was upset by the phone call and phoned the South Australian Equal Opportunity Commission to seek advice on the basis that she considered she was the victim of sex discrimination. Ms De Minico then phoned the complainant to say that she would try and sort the situation out with Mrs Aidinis and would phone the complainant that evening.

There is some dispute about what happened next. The complainant testified that she collected various documents relating to her building license, qualifications and experience, had a cover letter to Mrs Aidinis typed by her secretary, referring to the morning's conversation, and went to the offices of Mr Barilla, the building designer of the proposed renovations. No copy of the cover letter to Mrs Aidinis was tendered in evidence. The complainant's statement alleges that Mr Barilla was unavailable to see her, but that she left the documents and the cover letter with an unidentified person in Mr Barilla's office, requesting that they be passed on to Mr Barilla. The person made copies of the documents and returned them to Ms Keillor. Mr Barilla's evidence contradicted that of the complainant on this point. He testified that he actually met the complainant when she visited his office late in the afternoon on January 14. He claimed that she handed a bundle of documents relating to her qualifications and experience to him in order that he would bear her in mind for future building work. Mr Barilla denied that there was any request to pass the documents on to Mrs Aidinis. He kept the documents in a file in his office relating to Pologon and 236 Pulteney Street. In cross examination, the complainant stated that she was not certain about whether or not she had spoken to Mr Barilla that day.

At about 6 pm on January 14, Ms De Minico telephoned the complainant to say that Mrs Aidinis was continuing to resist signing the lease with Pologon because of her lack of satisfaction with the complainant as builder. The complainant testified that Ms De Minico said that she would need to find a man to do the job. Both Ms De Minico and the complainant were distressed by the call, although it ended relatively amicably.

Ms De Minico testified that shortly after her conversation with the complainant she received a phone call from Mr Tony Ciccozzi, the friend of the complainant who had originally introduced Ms De Minico to the complainant, saying that, if Pologon did not proceed with the complainant as builder, he would place a lien on 236 Pulteney Street and that this would prevent any work being done on the property. This evidence was not contested by the complainant, although she denied that she herself had known about Mr Ciccozzi's threats.

On January 17, Pologon entered into a contract with Mr Pinneri to do the alterations to 236 Pulteney Street and the lease was finally signed by Mrs Aidinis on January 19. In the end, no building work was ever done to the property because Pologon found another space suitable for their cafe. There has been a separate commercial dispute between Pologon and Mrs Aidinis about the failed lease venture.

Applications

During the hearing, the first respondent, Pologon, supported by the second respondent, Mrs Aidinis, made two separate applications that the matter be struck out under section 79 of the SDA, one at the commencement of the proceedings, and one at the end of the second day of hearings. Section 79 provides...

Where at any stage of an inquiry, the Commission is satisfied that a complaint is frivolous, vexatious, misconceived, lacking in substance or relates to an act that is not unlawful by reason of a provision of Part II, it may dismiss the complaint.

Mr Manuel, for the first respondent, argued that, on any analysis of the evidence, there was no case made out against Pologon, and that the complainant's case was misconceived and lacking in substance. I rejected the applications on the basis that the complainant's case, taken at its highest, indicated some matters of substance (Assal v. Department of Health, Housing and Community Services (1992) EOC 92-409).

Was the failure of Pologon to enter intobuilding contract with the complainantthe result of discrimination on the basis of sex?

Section 14(1) of the SDA provides in relevant part that:

(1) It is unlawful for an employer to discriminate against a person on the grounds of the person's sex ...-

(a) in the arrangements made for the purpose of determining who should be offered employment;

(b) in determining who should be offered employment;

(c) ........

Section 4 of the SDA defines 'employment' to include work under a contract for services. 'Sex discrimination' is defined in section 5(1) as less favourable treatment than 'in circumstances that are the same or not materially different, the discriminator treats or would treat a person of the opposite sex'. Section 8 provides that the discriminatory motive need only be one of a number of matters, and need not be `the dominant or substantial' reason for the act complained of.

Mr Manuel for the first respondent argued that section 14 could not apply in this situation. He said that, as Ms Keillor's tender was accepted, it could not be said that she was denied employment. The tender was subject to a condition precedent, the signing of the lease, and it was the failure of the condition precedent that led to her loss of the building work. Mr Manuel contended that, accepting the complainant's allegation that Mrs Aidinis brought pressure to bear on Pologon not to employ a woman builder, Pologon's action would nevertheless not come within section 14 because it had initially offered the complainant a contract for services. I do not accept this submission, which in my view takes an unduly limited view of the coverage of the legislation. In my view section 14, together with section 105 clearly covers situations such as that here: if Pologon failed to engage the complainant on a contract for service because of Mrs Aidinis' objections to a woman builder, there would be little doubt that its actions would come within section 14. It would amount to discrimination by Pologon on the basis of sex in determining who should be offered employment. I discuss this further below.

I found Ms Keillor, the complainant, overall a credible witness. She has built up a business in a profession traditionally dominated by men and clearly felt that she had been unjustly treated in the whole transaction with Polygon. From the evidence presented to me, however, I am unable to conclude that Pologon's failure to conclude a building contract with the complainant was based on sex discrimination. I accept Ms Anna Maria De Minico's evidence that at least she and another Pologon director, Ms Sandra De Minico, were pleased that a woman builder had tendered for the job. I also accept the evidence of another director, Mr George Pozydajew, that he had no concerns about a woman doing the building work. The complainant testified that, on January 12, when Ms Anna Maria De Minico telephoned her to let her know that she had the job, Ms De Minico had said that she had had to fight to get the other Pologon directors to accept a woman builder, and she had admonished the complainant not 'to let her [Ms De Minico] down'. Ms De Minico denied having made such a statement. However, even if the statement had been made, it does not follow that the later failure to conclude the building contract with the complainant was based wholly or in part on the complainant's sex. Indeed, it was in Pologon's interest that the alteration work proceed as quickly as possible and changing builders at this late stage was likely to further delay the building work. In order to allay Mrs Aidnis' concerns about the complainant's insurance, Pologon had in fact agreed to pay the Contract Works Insurance for 236 Pulteney Street.

The evidence indicates that Pologon's failure to proceed with the building contract with the complainant was based entirely on Mrs Aidinis' refusal to sign the lease agreement, rather than on any residual antipathy to women as builders by its own directors. Of course, if Mrs Aidinis' refusal to sign the lease agreement was based on the sex of the complainant and Pologon was aware of, or wilfully blind to, this fact, Pologon would be jointly liable with Mrs Aidinis for sex discrimination. I now turn to this issue.

Was the sex of the complainant a reason for the second respondent's refusal to sign the lease with the first respondent?

Section 105 of the SDA provides that:

A person who causes, instructs, induces, aids or permits another person to do an [unlawful] act ... shall, for the purposes of this Act, be taken to have also done the act.

If the second respondent, Mrs Aidinis, refused to sign the lease with Pologon wholly or in part because she was not willing to have a woman builder working on her property, and if Pologon was either aware of, or wilfully blind to, this discriminatory motive for refusing to sign the lease, Mrs Aidinis would be jointly liable to the complainant for Pologon's failure to enter into a building contract with her. Counsel for the respondents argued that there would have to be a 'meeting of minds' before section 105 came into play, and that in these circumstances, where the relationship between the first and second respondents was quite adversarial in relation to the lease, no such meeting of minds could be assumed. I do not read section 105 to require actual collusion or common intent to discriminate. It is enough that the person who is either the applier of pressure (I use this term to cover the five forms of action referred to in section 105), or the object of the pressure to discriminate is aware of, or deliberately ignores, the discriminatory conduct of the other party (Howard v. Northern Territory of Australia & Ors (1995) EOC 92-672).

A central basis of the complainant's case against Mrs Aidinis was the telephone conversation the two had on January 14. The complainant testified that there had been no direct negative reference to the fact she was woman, but she believed that Mrs Aidinis had implied reservations about her sex. Mrs Aidinis testified that she had no reservations about the complainant's sex, but only about her qualifications and insurance. Her diary entry for that day, which was tendered in evidence, supports this, recording that 'Ms Mandy Keillor (building consultant) phoned, says will see into insurances'.

The complainant also stated that Ms De Minico had reported that Mrs Aidinis had referred to her as a 'girly'. Mrs Aidinis denied that this term had ever been used, although Ms De Minico and another Pologon director, Mr George Pozydajew, testified that Mrs Aidinis had used it once in relation to the complainant. I am not persuaded that the use of the term 'girly' in this context is necessarily pejorative.

Mrs Aidinis' response to the complainant's allegation of sex discrimination was essentially that she had not been satisfied with Pologon's arrangement with the complainant because she had not been convinced that the complainant carried adequate insurance for the work. I accept that she had a real concern that the builder hired to do the work at 236 Pulteney Street was fully covered by this form of insurance (somewhat confusingly, Mrs Aidinis referred to this at the hearing as 'Indemnity Insurance'). First, Mrs Aidinis testified that she had had a prior bad experience with a builder on another of her properties who had not taken out Contract Works Insurance. Second, I accept that Mrs Aidinis had raised the issue of Contract Works Insurance when she met Mr Pinneri on January 7. Mrs Aidinis' genuine concern about the Contract Works Insurance is also evidenced by the fact that, after the complainant was replaced as builder by Mr Pinneri, Mrs Aidinis continued to refuse to sign the lease until she had sighted Mr Pinneri's Contract Works Insurance. On the evidence, I cannot accept the submission of Mr Scragg, Counsel for the complainant, that this insistence was an elaborate subterfuge to avoid any claim for sex discrimination. Third, Mrs Aidinis' evidence that she had spent almost an hour on the morning of January 14 telephoning AMP and De Conno and Blanco about the nature and extent of the complainant's insurance coverage was not challenged.

In order to establish her ongoing insistence that the builder at 236 Pulteney Street be covered by Contract Works Insurance, Mrs Aidinis testified that she had requested her insurance broker, Mr Bruno Voivodich, to raise the matter of Contract Works Insurance with Ms Anna Maria De Minico on January 12, when Mr Voivodich visited Ms De Minico to receive payment to update fire insurance on 236 Pulteney Street. In his evidence, Mr Voivodich stated that he could not recall Mrs Aidinis making such a request and that he had not raised the issue with Ms De Minico. Ms De Minico confirmed this. I think it unlikely that in fact Mrs Aidinis did raise the matter with Mr Voivodich.

In cross examination, the complainant conceded that Mrs Aidinis' concern over Contract Works Insurance was not unreasonable. Her argument was that she had done everything within her power to convince Mrs Aidinis of her professionalism -- she had supplied further documentation through Mr Barilla, she had spoken to her insurance broker, Mr De Conno -- and that it was not just the insurance issue, but also the fact that she was a

woman that lay behind Mrs Aidinis' objections to her.

After considering all the evidence put before me, I cannot find that Mrs Aidinis' reaction to the nomination by Pologon of the complainant as the builder was based in whole or in part on the complainant's sex. Mr George Pozydajew confirmed Mrs Aidinis' anxiety about the use of the term 'building consultant' in the schedule to Ms Keillor's professional indemnity insurance. The complainant's brokers' initial attempt to provide adequate insurance cover by simply adding in Mrs Aidinis' name on her professional indemnity insurance certificate was clearly flawed. It did not respond to Mrs Aidinis' concerns, indeed it created new ones, and had little practical legal effect. I accept that the complainant was honestly relying on the advice of her insurance broker, but from Mrs Aidinis' perspective, the attempt must have appeared quite unprofessional. The complainant did not agree to take out Contract Works Insurance, although it was clear that this was critical for Mrs Aidinis. This was the complainant's first experience in commercial building work, and the evidence suggests that the complainant was not then experienced enough to appreciate the significance of the different forms of insurance and did not receive adequate advice as to their effect. The complainant's subsequent attempt to allay Mrs Aidinis' concerns by providing further documentation about her qualifications to Mr Barilla seems at best rather half-hearted. There remains some doubt about who the documents were delivered to, and whether or not there was a cover letter to Mrs Aidinis attached to them that the complainant's evidence was unable to dispel.

For these reasons, I dismiss both complaints of sex discrimination.

Dated this 6th day of March 1996

____________________________________________

Hilary Charlesworth

Inquiry Commissioner