Cretney v Director General, New South Wales Department of Education and Training (No 2) [2009] NSWIRComm 107 (15 July 2009)

Last Updated: 17 July 2009

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION :
Cretney v Director General, New South Wales Department of Education and Training (No 2) [2009] NSWIRComm 107



FILE NUMBER(S):
IRC 1422

HEARING DATE(S):
10 March 2009

DATE OF JUDGMENT:
15 July 2009

PARTIES:
Patricia Cretney (Appellant)

Director General, New South Wales Department of Education and Training (Respondent)

CORAM:
Boland J President Walton J Vice-President Backman J


CATCHWORDS: APPEAL – Unfair contract – School – School assistant – Breaches of discipline – Whether appellant accorded procedural fairness – Whether appellant guilty of conduct for which she was accused – Damage to reputation – Compensation for medical expenses, pain and suffering – Appeal upheld – Compensation ordered.

UNFAIR CONTRACT – Appeal – School – School assistant – Breaches of discipline – Whether appellant accorded procedural fairness – Whether appellant guilty of conduct for which she was accused – Damage to reputation – Compensation for medical expenses, pain and suffering – Appeal upheld – Compensation ordered.

LEGAL REPRESENTATIVES
Ms C M Howell of counsel (Appellant)
Turner Freeman Lawyers
Ms K T Nomchong of counsel (Respondent)
Hicksons Lawyers


CASES CITED:
Abboud v The State of New South Wales (Department of School Education) (1999) 92 IR 32
Amalgamated Television Services Pty Ltd v Marsden [2002] NSWCA 419
Australian Air Express Pty Ltd v Langford [2005] NSWCA 96; 147 IR 240
Baker v National Distribution Services (1993) 50 IR 254
Beahan v Bush Boake Allen Ltd (1999) 47 NSWLR 648; 93 IR 1
Bowker & Anor v Software Engineers Australia Pty Ltd & Ors [2004] NSWIRComm 104
Commissioner of Police v Dobbie [2006] NSWIRComm 285; (2006) 157 IR 44
King v State Bank of New South Wales (No 2) [2002] NSWIRComm 353; 126 IR 407
Patricia Cretney v State of New South Wales [2008] NSWIRComm 131
Port Macquarie Golf Club v Stead (1996) 64 IR 53
Rothmans Distribution Services Ltd v Full Court of the Industrial Court of New South Wales (1994) 53 IR 157
State of New South Wales v Banas [2004] NSWIRComm 255; 137 IR 63
Walker v Hussmann (1991) 24 NSWLR 451; 38 IR 180
Westfield v Helprin (1997) 82 IR 411

LEGISLATION CITED:
Industrial Relations Act 1996


TEXTS CITED:




JUDGMENT:

- 1 -

INDUSTRIAL COURT OF NEW SOUTH WALES

FULL BENCH

CORAM: BOLAND J, President
WALTON J, Vice-President
BACKMAN J

Wednesday 15 July 2009

Matter No IRC 1422 of 2008

PATRICIA CRETNEY v DIRECTOR GENERAL, NEW SOUTH WALES DEPARTMENT OF EDUCATION AND TRAINING (NO 2)

Application by Patricia Cretney for leave to appeal and appeal against a judgment of Justice Kavanagh given in Patricia Cretney v State of New South Wales [2008] NSWIRComm 131

JUDGMENT OF THE COURT
[2009] NSWIRComm 107

1 Patricia Cretney ('the appellant') is employed on the administrative staff of Penrose Public School (‘the School’) as a part-time senior school assistant. On 24 December 2003, the appellant filed a summons for relief under s 106 of the Industrial Relations Act 1996. The application was amended a number of times, the latest being on 9 April 2008 (‘second further amended summons’).

2 It was alleged in the summons that following a Management Review into certain staffing matters at the School in 2000, ten allegations of ‘breaches of discipline’ were put to Ms Cretney. Subsequently, a ‘Recommendation’ was made by the ‘Review Team’ that Ms Cretney be transferred from the School (that Recommendation was not finally acted upon). In August 2000, the contents of a ‘short version’ of a Final Report (‘Report of the Management Review’) handed down by the Assistant Director General of the Department of Education and Training was published. The Report contained statements that Ms Cretney alleged were false, inaccurate and defamatory. The appellant claimed she suffered anxiety, distress, hurt and humiliation as a consequence of the Report's publication and other events. It was asserted in the second further amended summons for relief that the contract of employment between the appellant and the respondent (State of New South Wales (Department of Education and Training)) was unfair, harsh and unconscionable and contrary to the public interest in that it did not contain certain specified terms to prevent or avoid the unfairness and that it permitted the respondent to conduct itself towards the appellant in the adverse manner set out in the summons. The appellant sought compensation totalling $101,500 for: pain, anxiety, hurt, humiliation and distress; damage to reputation; and the costs of medical treatment and medication.

3 In a decision (Patricia Cretney v State of New South Wales [2008] NSWIRComm 131) given on 6 August 2008, Kavanagh J dismissed the appellant's application for relief. Ms Cretney now seeks leave to appeal and, if leave is granted, to appeal from the first instance decision.

Factual background

4 Ms Cretney commenced employment at the School in 1989. She resigned her employment in July 2003 and recommenced employment on 27 April 2004. She is presently so employed. The School is a small one and its permanent staff generally consisted of a principal, an assistant teacher and the senior school assistant.

5 In March 2000, the respondent decided to hold a Management Review under the School Development Policy in respect of the School. The sole term of reference for the Review was to:

review, report upon and make recommendations about the circumstances relating to staff leaving Penrose Public School after short periods of service.

6 The trial judge noted that the School had four principals between 1989 and 2000 and a number of relieving principals. Most had asked for a compassionate transfer within a short period after appointment. In May 1999, another principal left on compassionate grounds. The matter became a concern for the respondent and so the Review was instituted.

7 It is apparent there was a good deal of opposition to the Review from Ms Cretney herself, parents with children at the School and Mr Robert Randazzo, the School's assistant teacher, who was at the centre of the controversy. Paragraph [4] of her Honour's decision gives a flavour of the tension at the School:

Mr Robert Randazzo was the school's Assistant Teacher. He had been Acting or Relieving Principal for many periods between 1989 and 2000 on the departure of each Principal. He had strong support from within the school community including, at the time of the proposed review, Mr Chris Mullett, President of the Penrose School Council and Mr Ben Hall, President of the school's P&C Association. One Principal revealed he sought compassionate transfer on the grounds Mr Randazzo was undermining his authority and affecting the proper functioning of the school; another because Mr Randazzo had factionalised the community/parents and had the support of Mrs Cretney; a third because she felt she had to do battle with Mr Randazzo and his supporters and her health was being affected. A number of casual teachers also refused to work at the school citing difficulties including altercations with Mr Randazzo.

8 The Management Review was conducted between March and June 2000 by Mr Bob Chalmers and Mr David Ashford, both of whom gave evidence in the proceedings. Mr Chalmers and Mr Ashford were both Chief Education Officers, School Improvement. As her Honour noted at [17], both were senior and experienced educationalists. Each had over 30 years' experience, acted as principals of schools and also served in senior positions within the Department.

9 The Review team interviewed Ms Cretney for the first time on 30 March 2000. A representative of the Public Service Association accompanied her. On that occasion, Ms Cretney provided a range of information she considered to be relevant to the terms of reference to the Committee, including notes of a telephone conversation concerning the situation at the School between Ms Cretney and Ms Beverley Baker, then President of the NSW Federation of P & C Associations. The trial judge stated at [24]:

Mrs Cretney revealed she thought Ms Baker did not realise she was recording the conversation. The notes were very comprehensive and recorded the views of Ms Baker as well as repeating other alleged views about the Assistant Teacher. They were some two pages in length detailing viewpoints. Mr Chalmers, when hearing this evidence and seeing the notes, thought this statement from Mrs Cretney implied some subterfuge on Mrs Cretney's behalf. Mrs Cretney also gave the Review Team recorded notes by her of a meeting she had had with the District Superintendent in May 1997 which occurred after she had approached the Department to express her concerns about the school management and the community atmosphere around the school. A representative from the PSA accompanied her to that meeting. At the time, Mr Randazzo was Acting Principal. At the meeting Mrs Cretney acknowledged there was community unrest around the school, including false rumours slandering Mr Randazzo. She expressed her support for Mr Randazzo. In 1997, Mrs Cretney requested the Department ‘prove or disprove accusations against Rob (the assistant teacher) and the school community’.

10 On 31 May 2000, the Review Team conducted second interviews with both Mrs Cretney (with a support person) and Mr Randazzo. As the trial judge noted at [26]:

At the beginning of the interview Mr Chalmers read out the following as an introduction:

1. . . .

2. . . .

3. During our interviews at that time, and as we synthesised the information available to us, we became aware of issues that we considered may have related to breaches of discipline. Keeping in mind Section 4.2 of the guidelines of the School Development Policy we had concerns about the continuation of the review.

4. In accordance with section 4.2 and 4.3 of the School Development Policy the panel sought the advice of the Assistant Director-General (Mr Sutton) who determined that the review would continue and that the issues we raised should be discussed with the relevant staff members giving them an opportunity to respond appropriately.

5. . . .

6. . . .

11 Mr Chalmers read out to Ms Cretney some 10 questions at the interview. These were as follows:

1. It was reported to the review that you kept extensive personal diaries and files on the actions of various principals. Do you wish to respond to this?

2. It was reported to the review panel that in your position as senior school assistant you were privy to many confidential school matters that you reported to the assistant teacher knowing that these matters were supposed to be confidential. Do you wish to respond to this?

3. During the review you gave the panel a record of a private telephone conversation you had transcribed from the longhand notes. Some would see this as a breach of confidentiality. Do you wish to respond to this?

4. It was reported that when asked by the current principal about the telephone in the assistant teacher's classroom, you replied that it was not connected. It was in fact connected and you had been paying the accounts. Do you wish to respond to this?

5. During the review a fax was received at the school addressed to the review team leader, Bob Chalmers. You photocopied the fax, gave it to Mr Chalmers in an envelope and did not provide him with the original. This could be seen as a breach of normal and appropriate confidentiality procedures. The question arises as to whether other copies of the fax were made and, if so, who has them. Do you wish to respond to this?

6. The above fax was sent from Queensland by your daughter yet you failed to mention your family relationship in the matter. Your daughter also failed to mention the family relationship when the fax was discussed with her. Do you wish to respond to this?

7. Many respondents to the review mentioned a number of instances of conflict between the assistant teacher on the one hand and principals and casual teachers on the other. You mentioned only one conflict between Stewart Cameron and Rob Randazzo. Your responses at interview either did not mention or found no fault with the assistant teacher's actions in these conflicts. Do you wish to respond to this?

8. It was reported that one of your daughters was employed to set up the OASIS library system, but that she was untrained in the OASIS library program. It was reported that trained personnel were available to do this but were not employed. Do you wish to respond to this?

9. Respondents reported to the review panel that you had fuelled criticism of past principals in the community by discussing school matters in public. Do you wish to respond to this?

10. It was reported that you had been critical of the current principal in public. Do you wish to respond to this?

12 Ms Cretney sought a copy of the questions but her request was refused. Nevertheless, she took notes of all the questions. When some of the questions were put to her, Ms Cretney requested further particulars. Sometimes she inquired who had made the allegations. Generally, she refused to answer on the advice of her Union.

13 On 19 June 2000, Mr Chalmers read out to the staff of the School the proposed Recommendations of the Review Report. The Report relevantly stated:

Reasons for principals and teachers leaving Penrose Public School

Three principals indicated they left because of the stressful situation in which they found themselves in the school. Many former staff identified the lack of support by the assistant teacher as a reason for leaving. Other respondents believed that the choice of principal was inappropriate in some cases and that some principals could not handle the role.

Breakdown in interpersonal relationships

The most significant circumstance relating to staff leaving the school can be encapsulated under this heading. There appears to be no identifiable, single event that precipitated each teacher's departure however former principals indicated that the behaviour and actions of the assistant teacher were major factors in their decision to leave Penrose.

Criticism of principals

The review was informed that principals since 1989 have been the subject of wide community criticism. Past principals believe that the assistant teacher or the senior school assistant fuelled this criticism from within the school. There is perceived to be in the community a pro-assistant teacher / anti-principal group.

Community support for the assistant teacher

It was apparent to the review team that the assistant teacher's teaching ability is highly regarded by the majority of parents and community. The assistant teacher was seen as more influential than the principal and support for his direct appointment to the principal's position is high. Some respondents believed that the assistant teacher cultivated parent support and had developed a culture of indebtedness in the school community. Many respondents believed that a core group of parents formed a ‘fan club’ for the assistant teacher and supported him against other staff.

Other related issues

A number of issues were raised with the review team. These were as follows:

a) Sections of the Penrose community have a negative view of the Department and its employees other than the assistant teacher.

b) The community is either unaware or unaccepting of many department policies and procedures.

c) The School Council does not always act in accordance with its constitution.

The current situation

Respondents reported that many of the issues said to have influenced the departure of former principals and teachers were still apparent in the school.

Proposed Recommendations

1. Because we are still concerned that there may have been breaches of the Teaching Services Act 1980, the Teaching Services (Education Teaching Services) Regulation 1994, the NSW DSE Code of Conduct 1994, 1995, 1997 and the Professional Responsibilities of Teachers (97/227, S.209) we will recommend that the department carries out an investigation into a number of issues raised by the respondents to the review.

2. We will also recommend:

i) that the assistant teacher be transferred to large staffed school.

ii) that the senior school assistant be transferred to another school

iii) that the school community agrees on a discipline and welfare policy to be consistently applied by all teachers

iv) that community awareness be raised of the range of appropriate teaching strategies available to meet the needs of Penrose students

v) that the respective roles of principal and school council in school governance be clearly delineated and understood and that the school council be directed to act in accordance with its constitution

vi) that parents and community be made fully aware of appropriate channels of communication in school matters.

14 On 1 August 2000, the Assistant Director General, Mr Sutton, met with the School Council, parents and interested community members to reveal the determinations made in the Report to stakeholders. Approximately 100 people attended the meeting. An edited version of the Management Review Report was read out. Those present at the meeting were informed copies of the Review Report would be made available. A copy of the edited Report was then sent to each parent on 8 August 2000.

15 The edited version of the Management Review Report relevantly stated under the heading ‘Opportunity For Staff to Respond’ as follows:

Following 43 interviews with staff, parents and community members the panel offered the principal, the assistant teacher and the senior clerical assistant the opportunity to respond to a number of issues during the review.... This is in accordance with Stage 4 Section 4.4 of the School Development Policy.

The principal responded orally and responses have been incorporated in this report. The senior clerical assistant made little response orally and declined the opportunity on Public Service Association advice to respond in writing. The assistant teacher made little response orally, having sought and gained from the panel approval to tape the interview. He accepted the opportunity to respond in writing.

...

All responses have been considered in drawing the conclusions below.

The assistant teacher subsequently transcribed from the taped interview the issues raised by the panel. The document was photocopied and discussed by at least two parents in the presence of students at the school. It was also tabled by the assistant teacher and sections discussed at a P and C meeting on Tuesday 13 June.

On Friday 16 June the principal approved the school newsletter for distribution to parents. The principal found that without her knowledge the transcription of the issues raised with the assistant teacher was subsequently attached by the senior school assistant to the newsletter with the P & C minutes and distributed to students and parents.

16 At the meeting on 1 August 2000, the conclusions of the edited Review Report were read out:

CONCLUSIONS

1. Staff left Penrose Public School because of the breakdown in interpersonal relationships and staff conflict together with undue pressure placed upon them by criticisms from parents and community members.

2. There has been and continues to be significant breakdown in interpersonal relations within the school. This has been caused by the active and passive actions of the assistant teacher, often supported by the senior school assistant and key members of the community.

3. These actions have led to considerable stress among staff resulting in past principals and staff seeking compassionate transfer, relinquishment of position and demotion, or alternative employment.

4. The breakdown in personal and professional relationships between the assistant teacher, the last four principals and at least two casual teachers has caused significant destabilisation of the school.

5. Criticism of principals by parents over the last ten years has made difficult the completion of duties.

6. There will continue to be little possibility of any principal being able to fulfil the role effectively while a significant section of the community continues to criticise principals in an attempt to support the assistant teacher.

7. Unless action is taken to address these issues the position of the current principal will rapidly become untenable.

8. There is substantial community support for the assistant teacher, both in his capacity as a classroom teacher and his perceived ability to be principal of the school.

9. Support for the assistant teacher is often fuelled (sic) by his own actions and often exhibits itself in adverse criticism of principals and other members of school staff.

10. Sections of the Penrose community have a negative view of the Department and its employees other than the assistant teacher.

11. The community is either unaware or unaccepting of many departmental policies and procedures.

12. The School Council does not always act in accordance with its constitution.

13. In less than one school term of the current principalship the relationships between the principal, assistant teacher and community have broken down and there is no evidence of a positive working relationship developing in school. The pattern of previous years continues to emerge.

14. Conflict with the principals will continue while the assistant teacher remains on the staff at Penrose. While the decision may be unpopular within sections of the community, the panel concludes that the only solution is his transfer to a larger staffed school.

17 The Recommendations of the Review Report stated:

RECOMMENDATIONS

1. That the assistant teacher be transferred to a large staffed school.

2. That the senior school assistant be transferred to another school.

3. That the school's fair discipline code be revised in co-operation with the school community to ensure that the discipline and welfare policy is consistently applied by all teachers

4. That community awareness be raised of the range of appropriate teaching strategies available to meet the needs of Penrose students.

5. That the respective roles of the principal and the school council in school governance be clearly delineated in order to be understood and that the school council be directed to act in accordance with its constitution.

6. That the Parents and Citizens association be reminded of Section 3 of their constitution which deals with School Staff.

7. That parents and community be made fully aware of appropriate channels of communication in school matters.

18 The edited Report read at the public meeting on 1 August 2000 was based on the more detailed Final Report, which was finalised in late June 2000. The trial judge noted that Mrs Cretney received a redacted version of the Final Report from Mr Sutton on 26 September 2000 and obtained a full and uncensored version (excluding some appendixes) on 20 July 2001. The trial judge also noted that the Final Review Report drew 14 ‘Conclusions’, only one of which referred directly to the applicant:

There has been and continues to be significant breakdown in interpersonal relations within the school. This has been caused by the active and passive actions of the assistant teacher often supported by the senior school assistant and key members of the community.

19 There were 10 Recommendations in the Final Report. Recommendations numbered 6-10 related to Mrs Cretney in her role as the school assistant. The Recommendations were prefaced by the following:

Given the nature of this management review a thorough investigation of certain matters was not possible. Section 3.2(j) of the School Development Policy states that ‘information gathered in school program reviews may be used in departmental investigations...’

It is therefore recommended that a formal investigation be held to ascertain more fully whether breaches have occurred of the Teaching Services Act 1980, Teaching Services (Education Teaching Services) Regulation 1994, the NSW DSE Code of Conduct 1994, 1995, 1997 and the Professional Responsibilities of Teachers (97/227, S.209).

More specifically, the panel recommends that the following matters be considered for further investigation.

...

20 The Report then listed the following matters that related to Ms Cretney:

6. The fact that the assistant teacher transcribed, distributed to parents and tabled at a P and C meeting the issues raised with him at interview on 31 May 2000 may be in breach of an act, code of conduct (section 5.2) or departmental policy or direction and therefore warrants further investigation. Similarly the action of the senior school assistant in attaching the list of issues to the school newsletter warrants investigation.

7. The reported disclosure to others of school and student information by the assistant teacher and the senior school assistant. This may be in breach of the Teaching Services (ETS) Regulation 1994 Sect. 9 which states:

9. (1) A member of staff must not, except in the discharge of official duties, use any information gained by or conveyed to the member in the course of those duties.

(2) A member of staff must not, without express direction or permission of the Minister or the Director General, disclose (whether directly or indirectly) any such information.

8. By copying a fax sent to the review team leader the senior school assistant may be in breach of the Code of Conduct 3.1.xvi (1997) which states that staff should "use information gained in the course of employment only for proper and appropriate purposes" and section 5.2 of the Code which states that "staff should maintain the security and integrity of all information and/or documents for which they are responsible or to which they have access.

9. The senior school assistant also may have breached the Code of Conduct 3.1.xvi and 5.2 by the transcription on 6 June 1999 and the publication to others of a private telephone conversation. Some review respondents believed that other confidentialities had been breached.

10. Two of the senior school assistant's daughters have been employed in a casual capacity at school. Some respondents to the review questioned the integrity of these appointments. It is considered that an investigation may clarify the circumstances.

21 Kavanagh J observed that much of the evidence led by Ms Cretney in the hearing went to challenge the truth of the ‘Recommendations’. The Final Report concluded by stating:

Regardless of whether this investigation takes place or of its possible outcomes, the following recommendations are made.

1. That the assistant teacher be transferred to a large staffed school.

2. That the senior school assistant be transferred to another school.

3. That the school's fair discipline code be revised in co-operation with the school community to ensure that the discipline and welfare policy is consistently applied by all teachers.

4. That community awareness be raised of the range of appropriate teaching strategies available to meet the needs of Penrose students.

5. That the respective roles of the principal and the school council in school governance be clearly delineated in order to be understood and that the school council be directed to act in accordance with its constitution.

6. That the Parent and Citizens association be reminded of Section 3 of their constitution which deals with School Staff.

7. That parents and community be made fully aware of appropriate channels of communication in school matters.

22 Under the heading ‘Ramifications of the Management Review Report’ ([50]-[61]) the trial judge noted, inter alia:

· that on 3 August 2000, Ms Cretney complained by letter to her Union about the content and publication of the edited Report and its Recommendations. She wrote outlining her expressed concerns about the edited Report. She complained of the public disclosure of her situation through the Recommendations of the Review being revealed at the meeting on 1 August 2000;

· that Ms Cretney complained in the following terms:

The inclusion of these unsubstantiated allegations against me in this public document discredits my integrity and my professionalism of which I am very proud and I believe effectively destroys my employment opportunities. The inclusion of those unsubstantiated allegations against me in this public document has caused great distress to my family including my elderly mother, my community and myself;

· that the environment in which the Management Review was conducted aroused a great deal of community interest. The edited Report became the subject of more widespread discussion than that isolated within the community: it was debated in the New South Wales Primary Principals' Association; four former Principals of Penrose wrote to the Minister urging action on the recommendations of the edited Report; the issues were canvassed on radio talkback by interested community members; the recommendations and issues were reported in the Daily Telegraph;

· that after the Review Report was finalised, Mr Phil Irvine was sent as ‘caretaker’ Principal of the school. That Ms Cretney alleged Mr Irvine immediately called her and Mr Randazzo to a meeting on 7 August 2000 and said words to the following effect:

You two are under investigation, I've heard about you on the grapevine and I will come down on you if I need to. The information in the report was sufficient for your dismissal;

· that on 25 August 2000, an audit of the final Management Review Report and its conclusions and recommendations was conducted. It produced a report titled: ‘Evaluation of information arising from the Management Review of Penrose PS - June 2000’. The audit recommended that the applicant not be transferred to another school but her supervision be strengthened. The evaluation concluded:

The Management Review identified five potential breaches of legislation or policy involving Mrs Pat Cretney. The Audit/IR review concluded that disciplinary action against Ms Cretney was not warranted on any of these matters;

· that the Assistant Director General, Mr Sutton, then determined not to accept the Recommendation of the Review that: ‘regardless of the further investigation or outcome’ of the matters/issues referred for formal investigation, the senior school assistant be transferred;

· that on 8 September 2000 Mr Sutton communicated with Ms Cretney she was not to be transferred. Ms Cretney was reminded of her obligation as the school assistant under the Department's Code of Conduct. In particular, her obligation to the Principal and her obligations regarding information obtained in the performance of her duties; and

· that Ms Cretney continued in employment as the school assistant from 1987 until her retirement on 18 July 2003. She then applied to be re-employed on 27 April 2004 and has worked at Penrose as the senior school assistant for a further four years. Today she is still in that employment.

First instance decision

23 Before addressing the merit of the appellant's claim, the trial judge dealt with a number of preliminary matters including the relevant principles applicable, procedural fairness and three ‘jurisdictional’ issues raised by the respondent, namely that:

· the claim is one in defamation and at the time of publication of the Report in 2000, was governed by the Defamation Act 1974 (NSW); or alternatively,

· the claim is one for personal injury arising during the course of employment and therefore governed by the Workers Compensation Act 1987 (NSW) and the Workplace Injury Management and Workers Compensation Act 1998 (NSW) and common law principles; alternatively

· a claim which under the principles of ‘legal coherence’ (given the existence of the Defamation and Workers Compensation legislative schemes and common law) would be outside jurisdiction as directly inconsistent given the scope and purpose of those other schemes.

24 In relation to the defamation issue, Kavanagh J found that a ‘loss of reputation’ may, in very particular circumstances, give rise to relief granted under s 106 in an employment contract where it is found unfair conduct makes the employment contract unfair: Bowker & Anor v Software Engineers Australia Pty Ltd & Ors [2004] NSWIRComm 104.

25 In relation to the workers' compensation and common law rights issue her Honour found:

[81] Notwithstanding the existence in NSW of a Workers' Compensation legislative scheme and the ongoing rights of an individual under the common law for personal injury, I accept that if an employee establishes an unfairness or unconscionably in their employment contract, a statutory remedy is available under s106. An applicant is then entitled to pursue ‘just compensation’ for that unfairness which can be measured through proven pain and stress associated with the unfairness.

26 As to the legal coherence issue Kavanagh J stated:

[89] A partial overlap of consequential remedies available under s106 with common law or statutory forms of action (being the making of orders for the payment of money) does not raise the application of the principle of legal coherence. It is a fundamentally different matter to read down one statutory scheme relating to unfair contracts under the Industrial Relations Act 1996 solely by reference to the fact that other statutory or common law remedies may be available. There is no inconsistency between relief which could be available to Mrs Cretney for unfairness in her employment contract under s106 and relief which could be available through independent remedies under other common law or statutory regimes. There is no cause of action, statutory or otherwise available under which can consider the fairness of a contract of employment between the parties and the associated granting of relief in the form of variations to the contract and ‘just compensation’ other than through s106 of the Act. Therefore, the principle of legal coherence is not applicable in this case and does not prevent the applicant from validly pursuing her case for unfair contract. The court has therefore jurisdiction to hear and consider the claim....

27 The trial judge then proceeded to consider each of the five Recommendations in the Final Review Report to which Ms Cretney had taken objection. In relation to Recommendation 6 (‘...the action of the senior school assistant in attaching the list of issues to the School newsletter warrants investigation’), her Honour found as follows:

[108] I find at Stage 5 of the Management Review, Mrs Cretney was accorded procedural fairness regarding the newsletter incident. I find, therefore, there was no unfairness in the conduct of the Management Review that could be connected to the newsletter incident.

[109] Further, even if (at Stage 5 of the Policy) Mrs Cretney's replies were not given consideration by the Department (and I accept, by inference, they were), I would not accept the publication of the newsletter issue in the edited Report before she had an opportunity to reply, would establish such unfair conduct by the respondent sufficient, on its own, to make the contract unfair (see Antonakopoulos v State Bank of NSW (1999) 91 IR 385 (at 389-392)). It remains to be considered whether, given her submission, there was any other such alleged unfair conduct.

28 In relation to Recommendation 7 (‘The reported disclosure to others of School and student information by the assistant teacher and the senior school assistant. This may be in breach of the Teaching Services (ETS) Regulation 1994 Sect. 9...’) her Honour found (at [111]):

Mrs Cretney's recording of conversations, opinions of third parties and her own views warranted the recommendation for further investigation to determine if disclosure of such information was in breach of the Department's Code of Conduct for staff. On the evidence, both before me and what was before the Review Team, further investigation appears a reasonable conclusion of the Review Team and a fair one.

29 In relation to Recommendation 8 (‘By copying a fax sent to the Review Team leader the senior school assistant may be in breach of the Code of Conduct 3.1.xvi (1997)’), the trial judge found (at [112]):

[I]t was a reasonable and fair recommendation for the Review Team to determine the circumstances be further investigated as it ‘may’ reveal a breach of the Code of Conduct.

30 In relation to Recommendation 9 (‘The senior school assistant also may have breached the Code of Conduct 3.1.xvi and 5.2 by the transcription on 6 June 1999 and the publication to others of a private telephone conversation. Some Review respondents believed that other confidentialities had been breached’) Kavanagh J found (at [113]):

[I]t was a fair recommendation from the Review Team that a formal investigation be conducted as to the use of such records.

31 In relation to Recommendation 10 (‘Two of the senior school assistant's daughters have been employed in a casual capacity at the School. Some respondents to the Review questioned the integrity of this appointment. It is considered that an investigation may clarify the circumstances’), her Honour found (at [114]):

The Recommendation was fair in the circumstances but not necessarily one for which Mrs Cretney carried a great burden.

32 Kavanagh J dealt with other allegations of unfairness. In that respect, her Honour stated:

[117] I accept Mrs Cretney may have been genuinely motivated to serve the interests of the students of Penrose Public School and the school community. However well intentioned, in providing such clear support actively and/or passively to the Assistant Teacher, whether he was the acting principal or not, her actions were inappropriate. While the Review Team noted the difficulty in pinpointing the ‘passive’ actions that made life so difficult for the various Principals, I accept there has been a demonstrated pattern of unco-operative behaviour from the applicant. When considered alongside those actions of the assistant teacher, it is evidence Mrs Cretney contributed to conduct which was at the heart of some of the difficulties faced by the various Principals at Penrose Public School causing them to ask for transfer, often on compassionate grounds.

33 At [118]-[124] the trial judge dealt with issues regarding denial of natural justice. At [120] her Honour was satisfied that:

[T]he conduct of the Review, the treatment of the applicant was consistent with the [School Development] Policy. The Policy, in its stages and steps, incorporated the principles of natural justice (recognised as procedural fairness in administrative law). There was no breach of natural justice as Mrs Cretney was given an opportunity to respond to all issues raised regarding her conduct except that of the newsletter. I accept, before publication, Mrs Cretney was not given an opportunity to respond to the issues regarding the distribution of the newsletter. However above at [99-108], I have found that prior to the finalisation of the Review, Mrs Cretney's replies to the issues raised in the second interview and the newspaper incident were submitted to the Department by the Union and given consideration. The Department determined not to adopt the Report's recommendation to transfer Mrs Cretney nor to send the matters for a formal investigation under disciplinary procedures. She was in the circumstances accorded procedural fairness.

Her Honour also rejected claims of ‘purported findings’ of the Review that were false, inaccurate and defamatory (see [122]).

34 At [125]-[133] the trial judge dealt with the appellant's claim that:

[From] the moment the issues raised by the Review Team were put to the Assistant Director General Mr Sutton, the Department embarked upon a ‘disciplinary procedure’. She asserted such disciplinary proceedings were not conducted in accordance with the provisions of the relevant Act and Regulations.

Her Honour interpolated this to mean that:

[T]he five ‘Recommendations’ relating to her as recited in the final Review Report were in fact ‘disciplinary matters’ which should have been examined under the Department's Disciplinary Procedures. She asserts the complaints should have been formalised in accordance with the Department's disciplinary procedures and been given the ‘allegations’ (as she referred to them) in ‘writing’.

35 In this respect, her Honour found:

[133] I do not accept, and it was denied in writing by the Department, that the investigation ever became the first step in a disciplinary proceeding. But even if it did, an authorised person, the Assistant Director General, considered the matters, the investigation, the applicant's denial and determined not to initiate a disciplinary investigation. So while I do not accept there was a s14 investigation, if the full Report is seen as the investigation under s14, the denials of the applicant were by inference, weighed up at Audit and by the Assistant Director General and no charge laid. It would be a curious result if, arising from this litigation, an unfairness is found and the matters were referred back for disciplinary action notwithstanding the determination of the Audit and the Assistant Director General that there were no disciplinary issues. The applicant inferred the matter could not go to a disciplinary hearing because of the time constraints (the passing of eight years) yet she seeks the court to rehear all issues and reconsider all recommendations and conclusions of the Management Review by a consideration of evidence placed before it which she asserts, somehow could not be placed before a disciplinary tribunal.

36 At [134] Kavanagh J stated that having found no unfairness in the conduct of the Review it was unnecessary to consider the orders sought for relief. Nevertheless, because the appellant pressed a number of claims for relief she asserted were reflective of the unfairness of the contract and had left her reputation damaged and herself in ill health, the trial judge decided to ‘briefly address those issues’. It is not necessary on appeal to canvass what her Honour said about those issues.

37 In her conclusion, the trial judge stated:

[145] The circumstances surrounding the resignation of four Principals from Penrose Public School over a 10 year period entitled the Department to activate its School Development Policy and conduct a Management Review. When conduct of a potentially disciplinary nature was raised under that Review, the procedures of the Policy required an Assistant Director General's consideration as to whether the Review could achieve its aim if continued. I accept the Assistant Director General considered all issues and determined the Review proceed but, as a matter of natural justice and procedural fairness, the matters raised be put to those concerned. I accept the conclusions reached by the Review were open to it, fair and related to the Review's objective regarding the ‘management’ of Penrose Public School. Mrs Cretney's refusal to answer some issues raised during her second interview contributed to the Recommendation for a ‘formal investigation’. This was a procedure open to the Review Team under the School Development Policy. I further accept the Review Report was distributed to those with a stake in its conclusions - parents and the community members. The Review was not completed until after the Audit determined no disciplinary action was warranted and the Assistant Director General determined not to action the recommendation to transfer Mrs Cretney. The decision not to transfer Mrs Cretney was made by taking into account her submissions as to the issues identified (through the Union) as well as the possible effect of the recommendations on her personal circumstances. However, the other four Recommendations from the Review Report were to be implemented. I find Mrs Cretney was accorded procedural fairness and there was a compliance with the rules of natural justice.

[146] The Department of Education and Training has obligations under statute and a duty to the public of NSW to ensure the efficient functioning of public schools within its administration. In the conduct of a justified inquiry into the management of Penrose Public School, I find there was no unfairness. I therefore reject Mrs Cretney's claim the Department's conduct of the Review led to an unfairness in her employment contract. I reject the claim that ‘findings’ made in the conduct of the Review were unfair. I reject the claim that any distress she suffered/suffers is reflective of any unfairness in her employment contract. I do not accept she suffered damage to her reputation because of the conduct of the Departmental investigation into the management of Penrose Public School. Even if there is a public interest test to be applied to this litigation I find the Department has given the applicable members of staff and Mrs Cretney procedural fairness: assurances about professional integrity were complied with; the procedures were fairly defined and followed.

38 The orders her Honour made were that:

1. I declare the contract of employment between the parties was not an unfair contract within the meaning of s 105 of the Act.

2. The application brought under s 106 of the Act is dismissed.

3. Leave to relist as to costs.

GROUNDS OF APPEAL

39 The grounds of appeal were as follows:

1. Her Honour erred in failing to find that the contract of employment between the appellant was unfair, harsh and unconscionable and contrary to the public interest because it permitted the respondent without recourse to its disciplinary procedures to make wrong and adverse findings against the appellant and to publish those findings widely throughout the Southern Highlands community of Penrose.

2. Her Honour erred in finding (par. 108) that at Stage 5 of the Management Review Ms Cretney was accorded procedural fairness regarding the ‘newsletter incident’.

3. Her Honour erred in finding (par. 108) that there was no unfairness in the conduct of the Management Review that could be connected to the ‘newsletter incident’.

4. Her Honour erred in failing to find that the respondent took into account as if proved, for the purpose of making findings and recommendations in the Management Review, matters which it had referred for further investigation and possible disciplinary action.

5. Her Honour erred in failing to find that the conduct of the respondent in taking into account as if proved, for the purpose of making findings and recommendations in the Management Review, matters which it had referred for further investigation and possible disciplinary action, rendered the contract unfair.

6. Her Honour erred in failing to find that the respondent failed to apply the School Development Policy in the course of the Management Review process in that it failed to protect the professional integrity of staff.

7. Her Honour erred in finding (par. 116) that Ms Cretney failed to provide full professional support to all Principals appointed to Penrose Public School.

8. Her Honour erred in finding (par. 117) that Ms Cretney’s actions in respect of the Assistant Teacher were ‘inappropriate’.

9. Her Honour erred in finding (par. 117) that Ms Cretney ‘contributed to conduct which was at the heart of some difficulties faced by the various Principals at Penrose Public School’.

10. Her Honour erred in finding (par. 122) that the Review Team did not make findings or purported findings.

11. Her Honour erred in finding that the conclusion of the Review Team set out in paragraph 122 of her decision was ‘a reasonable conclusion and open on the evidence before the Review Team and therefore fair’.

12. Her Honour erred in failing to find (par. 123) that the respondent, during the Review process, took no steps to check the veracity of its purported findings.

13. Her Honour erred in finding (par. 123) that ‘Mr Chalmers and Mr Armstrong only reported on matters which were raised by at least two persons in the conduct of the investigation’.

14. Her Honour erred in finding (par. 131) that the conclusion drawn affecting Ms Cretney in the Management Review was not unfair because it related in its terms only to the effect of her conduct had on the management of the school.

15. Her Honour erred in failing to find that the contract was unfair in that it did not require the respondent to take any steps to correct or qualify findings and recommendations concerning Ms Cretney made in the management review and read out to the Public Meeting on 1 August 2000.

16. Her Honour erred in failing to apply the correct, or any indeed any, test in determining whether the contract of employment was relevantly unfair, harsh and unconscionable and contrary to the public interest.

17. Her Honour erred in failing to find that irrespective of the respondent’s purported, claimed or asserted adherence to ‘policy’ the contract of employment operated so as to permit the respondent to make wrong findings, publish adverse findings and to deny the appellant procedural fairness which conduct was, irrespective of any policy, such as to render the contract of employment relevantly unfair, harsh and unconscionable and contrary to the public interest.

18. Her Honour erred in finding, in particular, that the contract of employment was fair even though it permitted:

a. the respondent to apply a procedure other than its disciplinary procedure in making adverse (and disciplinary) findings against the appellant;

b. the respondent to make adverse findings against the appellant without affording the appellant (contrary to Her Honour’s findings) a fair opportunity to be heard in her own defence in respect of those matters;

c. the respondent to publish widely without any justification at all to the school community and further matters that were adverse to the appellant and which affected her good name and character.

19. Her Honour erred in finding that it was fair and open to the review team to determine whether there were disciplinary matters to be addressed in circumstances where it had not afforded the appellant procedural fairness and conducted no fair investigation into the allegations and in fact published its ‘conclusions’ widely.

20. Her Honour erred in failing to find that the damage done to the appellant’s good name and character was by reason of the failure of the contract of employment to contain appropriate protective or security provisions so as to ensure that the respondent:

a. dealt with matters of discipline under it disciplinary policy;

b. dealt with matters of management review under its Management Review Process; and

c. maintained confidentiality of all process so as to protect the applicant’s good name and character.

21. Her Honour erred in failing to find that the Management Review Policy was both in its terms and in its operation unfair, harsh and unconscionable and contrary to the public interest.

22. Her Honour erred in that she misunderstood and misapplied the principles of natural justice or procedural fairness.

23. Her Honour erred in refusing to grant the appellant the relief sought and in failing to make an order for the payment of money that was just in the circumstances.

24. Upon such other grounds and for such other reasons as this Honourable Court considers just.

40 The manner in which the appeal grounds were formulated did not assist in an understanding of the appellant's case: some grounds overlapped to a confusing degree and others were not easy to make sense of. Nevertheless, we will accept the appellant's contention that the grounds may be divided into three main categories, they being:

(1) errors in findings concerning procedural fairness issues raised by Ms Cretney (grounds 2 - 6);

(2) errors associated with findings of fact concerning supposed inappropriate conduct by Ms Cretney (grounds 7 - 13); and

(3) errors in respect of failure to find unfairness in the contract consequential upon the errors in the first two categories (grounds 1, 14, 17, 18, 19, 20, 21, 22 and 23).

41 In addition, the appellant addressed grounds 15 and 16 separately.

LEAVE TO APPEAL

42 It will be seen that we have concluded the trial judge erred in making findings on the facts that were not open to her Honour. Such were the errors, it is in the public interest that leave be granted in order that her Honour's decision to dismiss the appellant's summons for relief may be reversed. The errors concerned the application of principles of procedural fairness which, in the present case had a public aspect, as they permitted the publication of inappropriate communications (having regard to the unfairness attaching to parts of the Review Report).

NOTICE OF CONTENTION

43 The respondent filed a notice of contention in the appeal. The notice was in the following terms:

1. The learned trial Judge erred in not finding that the principles of legal coherence were not applicable in this matter and, further, was in error in making the following findings:

(a) that there was only a partial overlap of consequential remedies available under s.106 with the stated common law or statutory forms of action;

(b) that there was only simple discomfort between the remedies sought by the Appellant in this matter and the law of defamation in the legislative scheme for workers compensation of NSW;

(c) that the relevant test for legal coherence was restricted to situations where the relief for an unfair contract under s. 106 would be in conflict with defamation or workers compensation legislation as well as common law rights for personal injury; and

(d) that, in any event, the Appellant’s claim did not directly conflict, inhibit or undermine defamation law and the statutory scheme of workers compensation.

2. The learned trial Judge misapprehended legal coherence principles in that:

(a) learned trial Judge ought to have taken into account that legal coherence would apply if the cause of action under s.106 was rendered otherwise inappropriate by reason of the scope and purpose of the workers compensation legislation and/or the defamation legislation and common law regime;

(b) learned trial Judge ought to have taken into account issues of consistency and compatibility; and

(c) if the learned trial judge had properly applied the principles enunciated in sub-paragraphs (a) and (b), then a finding ought to have been made that the legal coherence principles applied to exclude the Appellant’s claim under s. 106 of the Act. The learned trial Judge erred in failing to exercise the Court’s discretion pursuant to rule 82(1) of the Industrial Relations Commission Rules by:

(a) finding that the application of Rule 82(1)(h) was restricted to certain types of applications; and/or

(b) failing to find that this Court was an inappropriate forum for the litigation of the Appellant’s cause of action in the circumstances.

CONSIDERATION

Grounds 2 and 3

44 In relation to grounds 2 and 3, it was submitted for the appellant that her Honour erred in finding that Ms Cretney was accorded procedural fairness in respect of the Newsletter Incident allegation after that allegation had been published and relied upon by the respondent in its general conclusions and Recommendations.

45 The allegation concerned what was contained in the edited version of the Management Review Report that was read out to the meeting on 1 August 2000 and which was in the following terms:

On Friday 16 June the principal approved the school newsletter for distribution to parents. The principal found that without her knowledge the transcription of the issues raised with the assistant teacher was subsequently attached by the senior school assistant to the newsletter with the P & C minutes and distributed to students and parents.

46 The allegation concerned the attachment by Ms Cretney of certain notes about Mr Randazzo to the School newsletter. Mr Chalmers concluded that Ms Cretney, by attaching the material to the newsletter acted ‘without authority’ and in a ‘deceitful’ manner. It was submitted these were serious allegations and clearly of a disciplinary nature. The allegation was referred by the Review Team for further disciplinary inquiry.

47 The appellant submitted the allegation that Ms Cretney had deceitfully and without authority attached notes about Mr Randazzo to the School newsletter was not put to Ms Cretney in any form whatsoever by the Review Team. The Review Team, nevertheless, concluded that Ms Cretney had acted without authority and in a deceitful way. Indeed, it was submitted, Mr Chalmers was ‘sure’ that Ms Cretney had behaved or acted without authority and in a deceitful way. The appellant contended that the respondent relied upon this conduct in arriving at Conclusion 2 to the Report and the Recommendation for the transfer of Ms Cretney.

48 Counsel for the appellant submitted that Ms Cretney’s immediate response, having read the Report, was that she had merely followed her usual practice of attaching the P & C minutes, as provided to her by the P & C secretary, to the newsletter. The notes about Mr Randazzo had been tendered at the P & C meeting and were referred to in the minutes as ‘attached’. This was conveyed to the respondent by the PSA in its letter of 10 August 2000.

49 It was submitted that Kavanagh J appeared to accept Ms Cretney’s explanation that her conduct was innocent, but nonetheless found that procedural fairness had been accorded to Ms Cretney after the publication of the Report in that, she inferred, the Department would have had regard to the letter written on her behalf on 10 August 2000 by the PSA in considering whether disciplinary action should be taken.

50 Counsel for Ms Cretney submitted that given the Review Team published its findings on this issue, and given its general conclusion and Recommendation which relied upon this issue on 1 August 2000, it was irrelevant whether and the extent to which the respondent subsequently considered the issue in the course of considering formal disciplinary action against Ms Cretney. Such consideration did not remove the fundamental unfairness of the respondent’s conduct.

51 It was further submitted that to the extent that her Honour found (by inference) that the respondent had considered the issue and granted Ms Cretney procedural fairness subsequent to the publication of the Report, the findings were not available on the evidence. The respondent elected not to call any evidence as to the deliberations on possible disciplinary action subsequent to the publication of the Management Review. In those circumstances it was not open to the Court to infer what may or may not have occurred. Accordingly, it was submitted that Ms Cretney was denied procedural fairness in respect of the Newsletter Incident and grounds 2 and 3 were made out.

52 There was clearly an inference in the edited Report that was published that Ms Cretney acted in a deceptive manner and without authority in relation to the newsletter. Indeed, Mr Chalmers confirmed in his evidence in the proceedings at first instance that he was ‘sure’ that Ms Cretney had behaved or acted without authority and in a deceitful way. There was also evidence that, in recommending Ms Cretney be transferred to another School, the Review Team did so having regard to its view of Ms Cretney's conduct in connection with the Newsletter Incident.

53 The trial judge accepted there was no evidence to suggest Mrs Cretney knew the transcription of the questions put to Mr Randazzo by the Review Team were attached to the P&C Minutes and found there was no basis for the inference cast in both the edited and Final Report, that the school assistant was deceptive in attaching the transcription of the Review questions to the newsletter. Further, as her Honour found, the Review Team did not raise the Newsletter Incident with Ms Cretney in the second interview because it occurred at a later time, but up to the point of publication of the edited Report, Ms Cretney was not given an opportunity to respond.

54 The trial judge found, in effect, that if there was any procedural unfairness it was 'cured' in Stage 5 of the Review when the appellant, through her Union, the PSA, did give a response (see first instance judgment at [103]-[109]).

55 We do not accept that finding was open to her Honour. To the extent Ms Cretney was not given an opportunity to respond to the allegation prior to publication, she was not accorded procedural fairness. The effect of not providing that opportunity created a real risk that it might be inferred, by those who read the edited Report, that the appellant acted without authority and in a deceitful way. Given there was no basis for the inference cast in both the edited and Final Report - something the respondent may have discovered if Ms Cretney had been given an opportunity to respond to the allegations - the respondent was not entitled to create that risk in the way it did and in doing so treated the appellant unfairly.

56 That the respondent ultimately decided that there was no basis to institute disciplinary proceedings against Ms Cretney in relation to the Newsletter Incident (or any of the other four matters recommended for disciplinary investigation), cannot be said to have cured completely the failure to accord procedural fairness. The decision not to proceed with a disciplinary investigation was not based on the conclusion that the appellant had not been guilty of any wrongdoing, which is perhaps the reason why no public apology was given to Ms Cretney and why there was no statement by the respondent that no basis existed for the inference cast in both the edited and Final Report. Nor was it clear how the communication by her Union was treated in the process. That left the appellant in the position of being concerned and stressed that an adverse impression of her had been created in the minds of those who read the edited Report in so far as it referred to the Newsletter Incident. That concern was one reasonably held by her, especially when it had been recommended the appellant be transferred to another School. Whilst transfers may be effected from time to time not as a result of a disciplinary process, the overwhelming inference in this case is that the transfer was proposed to be undertaken for disciplinary reasons or at least in that context. The respondent was not entitled to place the appellant in a position whereby her integrity might become a matter of speculation without at least having provided her with an opportunity to vindicate herself.

57 Grounds 2 and 3 have been made out.

Grounds 4 and 5

58 Grounds 4 and 5 of the appeal were to the effect that the trial judge erred in failing to find that the respondent took into account as if proved, for the purpose of making findings and Recommendations in the Management Review, matters which it had referred for further investigation and possible disciplinary action.

59 The matters relating to Ms Cretney that were referred for further investigation were: the Newsletter Incident (Recommendation 6); the reported disclosure to others of School and student information (Recommendation 7); copying a fax sent to the Review Team leader (Recommendation 8); transcribing the telephone conversation with Ms Baker on 6 June 1999 (Recommendation 9); and the employment of Ms Cretney's daughters in a casual capacity at the School (Recommendation 10).

60 There is no doubt that in relation to the Newsletter Incident, the respondent, in the course of the Management Review, applied a procedure which denied Ms Cretney procedural fairness in that it failed to offer her an opportunity to respond to the allegations against her, but it, nonetheless, relied upon the allegations as if they were proved for the purpose of drawing adverse conclusions and making Recommendations in the Management Review and then referred the Newsletter Incident for further investigation and possible disciplinary action.

61 In relation to the disclosure of School and student information, it was put to Ms Cretney at her second interview that it had been reported to the Review panel that Ms Cretney was privy to many confidential School matters and that she reported these to the assistant teacher knowing that they were supposed to be confidential. Ms Cretney was asked whether she wished to respond. She said she did not and sought further particulars.

62 The trial judge found that the applicant recorded School information and such information was disclosed to various persons, including the Union, the P&C members, Mr Randazzo and others. Her Honour found that the recording of conversations, opinions of third parties and Ms Cretney's own views warranted the Review panel's Recommendation for further investigation to determine if disclosure of such information was in breach of the Department's Code of Conduct for staff.

63 We understand the appellant to be submitting that it was procedurally unfair for the respondent to find as proven the allegations regarding the disclosure of information and then drawing adverse conclusions and making adverse Recommendations when Ms Cretney had not responded to the allegations. Underlying the appellant's complaint was that no conclusions or Recommendations adverse to Ms Cretney should have been determined prior to the allegations having been dealt with through the respondent's formal disciplinary procedure.

64 The respondent was entitled to seek responses from Ms Cretney in the course of its Management Review as to whether she had disclosed School and student information that she was not entitled to disclose. But upon Ms Cretney refusing to respond unless she received particulars of the allegations - allegations which had implications of a disciplinary nature - the respondent was left with essentially two choices: either refrain from reaching any conclusions regarding the allegations and refer the allegations to be dealt with under its formal disciplinary procedure; or provide Ms Cretney with the necessary particulars so that she could answer the allegations.

65 The appellant's request for particulars was a reasonable one. She was entitled to know who made the allegations, what where the ‘many’ matters that were supposed to be confidential, and when it was alleged she reported them to Mr Randazzo, not some sweeping allegation that could not be adequately answered without particularisation.

66 It may have been that given the information provided to the Review Team from various sources, the question raised in Recommendation 7 was a reasonable question raised by the Review Team, as the trial judge found. But it was not reasonable to use that information to draw conclusions adverse to the appellant in the absence of adopting a fair procedure in relation to Ms Cretney. That fair procedure required the respondent to provide reasonable particulars to Ms Cretney regarding the allegations in Recommendation 7 so that she might be in a position to provide a considered response. Ms Cretney was not accorded procedural fairness in relation to Recommendation 7.

67 Recommendation 8 concerned a fax sent to the Review Team leader that Ms Cretney had photocopied. This issue was raised with Mrs Cretney in her second interview. She refused to answer. The trial judge found it was a reasonable and fair Recommendation for the Review Team to determine that the circumstances of the copied fax be further investigated as it ‘may’ reveal a breach of the Code of Conduct. The Code provided that staff should ‘use information gained in the course of employment only for proper and appropriate purposes’. The background to Recommendation 8 was discussed by Kavanagh J at [112]:

The applicant agreed she handed to the Review Team leader a photocopy of a facsimile sent to him in the conduct of the business of the Review. She asserts the instruction booklet for the operation of the particular facsimile machine concerned advised that the print could fade on the thermal paper used. The operator of the facsimile machine was advised that copies should be made of all facsimiles. Mrs Cretney asserts this was her practice. However, the details related to this particular facsimile are of concern. The facsimile was signed by Sharon Fujie. It was directed to the Review Team in support of Mr Randazzo, the assistant teacher, and it attacked a prior Principal's conduct. When handed to the Review leader, Mr Chalmers, Mrs Cretney did not reveal the author was Mrs Cretney's daughter, who had been employed at the school as a casual teacher. Mrs Cretney further asserts that her daughter had requested her to keep a copy of the facsimile. Both explanations from Mrs Cretney for copying the facsimile may have some validity. However, in the environment in which this Review was being conducted, I understand the concern expressed by the Review Team as to the procedures adopted by Mrs Cretney in handing to the team leader a copy of a confidential facsimile communication and not revealing it had been written by her daughter....

68 The Review Team was required to investigate why the administration of the School was dysfunctional. It was evident that Ms Cretney was a central figure in the investigation because of her support for Mr Randazzo and because of the criticisms that had been levelled against her. It was inevitable and entirely proper that Ms Cretney's conduct would be examined. Moreover, we agree with the trial judge that it was understandable that the Review Team had a concern ‘as to the procedures adopted by Mrs Cretney in handing to the team leader a copy of a confidential facsimile communication and not revealing it had been written by her daughter...’.

69 The questions put to Ms Cretney in the second interview regarding the copied fax, it will be recalled, were in the following terms:

5. During the review a fax was received at the school addressed to the review team leader, Bob Chalmers. You photocopied the fax, gave it to Mr Chalmers in an envelope and did not provide him with the original. This could be seen as a breach of normal and appropriate confidentiality procedures. The question arises as to whether other copies of the fax were made and, if so, who has them. Do you wish to respond to this?

6. The above fax was sent from Queensland by your daughter yet you failed to mention your family relationship in the matter. Your daughter also failed to mention the family relationship when the fax was discussed with her. Do you wish to respond to this?

70 The questions were quite specific. There could have been no misunderstanding about them on Ms Cretney's part and they needed no elaboration in order that they might be adequately answered. There was no reason why Ms Cretney could not have provided answers except, it appears, because of the ill-considered advice of her Union not to answer. The fact is that Ms Cretney photocopied the fax and failed to inform the Review Team the fax was from her daughter. In the circumstances, given the legitimate concerns held by the Review Team and the unreasonable refusal of Ms Cretney to provide answers, we do not consider there was a lack of procedural fairness in the Review Team making Recommendation 8 and referring the issue for further investigation and possible disciplinary action.

71 Recommendation 9 was that:

The senior school assistant also may have breached the Code of Conduct 3.1.xvi and 5.2 by the transcription on 6 June 1999 and the publication to others of a private telephone conversation. Some review respondents believed that other confidentialities had been breached.

72 The Code of Conduct at 3.1.xvi states that staff should ‘use information gained in the course of employment only for proper and appropriate purposes’ and section 5.2 of the Code states that ‘staff should maintain the security and integrity of all information and/or documents for which they are responsible or to which they have access’.

73 The relevant question put to the appellant in the second interview was that:

During the review you gave to the panel a record of a private telephone conversation you had transcribed from shorthand longhand (sic) notes. Some would see this as a breach of confidentiality. Do you wish to respond to this?’

74 Ms Cretney had been invited to provide to the Review Team any material she thought might be relevant to the Management Review. In response, she provided some notes of the call made by Ms Baker to Ms Cretney. There was no dispute that the call was a business call, made in Ms Baker’s capacity as the President of the P & C. Ms Baker made a number of comments about the situation at the School. Ms Cretney provided the notes of the conversation to the Review Team. There was no suggestion that she had provided them to any other party.

75 The trial judge dealt with this issue at [113]:

[Ms Cretney] gave the notes to the Review Team as she thought they were relevant to the Review Team's inquiry. Mrs Cretney revealed to the Review Team she did not know if Ms Baker knew she was recording the conversation. The opportunity for her to reply to the assertion that ‘some would see this as a breach of confidentiality’ was put to Mrs Cretney in the second interview. She refused to answer the inquiry. The applicant asserts it is unclear what part of her action could be seen as a breach of confidentiality and asked for further particulars such as: ‘by whom and why’. Without her reply, the Review Team recommended that this ‘may’ have been a breach of the Code of Conduct and recommended a formal investigation. In giving the notes to the Review Team, I cannot accept there was any inappropriate behaviour on the part of the applicant. Given the content of the notes referring to the view of others and the significant number of other records related to school activities kept by the applicant, the question of their promulgation does arise. I can, therefore, accept it was a fair recommendation from the Review Team that a formal investigation be conducted as to the use of such records.

76 We agree with the trial judge that there was no inappropriate conduct on the part of the appellant in giving the notes to the Review Team. It appears that the Review Team was concerned that the notes may have been given to other persons. This could have been the only concern of the Review Team in relation to adherence to the Code of Conduct, although, as we have said, there is no evidence that the appellant had provided the notes to any other person.

77 The issue of the notes suffers from the same flaws as those we identified in relation to the disclosure of information issue. Ms Cretney was entitled to ask what was the breach of confidentiality and, if it was the provision of the notes to other persons, who were those other persons other than the Review Team. The Review Team should have provided Ms Cretney with the particulars she asked for or referred the matter to a formal disciplinary process without reaching any adverse conclusions.

78 The Review Team was not entitled to come to the view in its Recommendation that Ms Cretney published the transcription of the telephone call to Ms Baker to others and as a consequence might be in breach of the Code of Conduct. In doing so, the respondent failed to accord Ms Cretney procedural fairness.

79 Recommendation 10 was that two of Ms Cretney's daughters had been employed in a casual capacity at School and that ‘Some respondents to the Review questioned the integrity of these appointments. It is considered that an investigation may clarify the circumstances.’

80 The relevant question put to Ms Cretney was:

It was reported that one of your daughters was employed to set up the OASIS library system, but that she was untrained in the OASIS library program. It was reported that trained personnel were available to do this but were not employed. Do you wish to respond to this?

81 At [114], the trial judge observed:

Generally a school assistant, such as Mrs Cretney, has no power within a school to hire staff. If there is any basis to question the integrity of either appointment, I cannot see how it reflects on Mrs Cretney. However, Mrs Cretney in an affidavit (tendered in the respondent's case) revealed the hiring of each of her daughters was sometimes the action of Mr Randazzo (when he was acting Principal) and at other times actions of other Principals who had served at the school. The recommendation for an investigation can therefore not be perceived as one necessarily against the interests of the school assistant. If there was any inference that she exercised influence in these appointments, it would rightly warrant further investigation to determine if there was any breach of the Code. The Recommendation was fair in the circumstances but not necessarily one for which Mrs Cretney carried a great burden.

82 It was not unreasonable to expect Ms Cretney to respond to the question as put even if it were to the effect that she was not responsible for employing casual teachers and to direct the questioners to the principal who, presumably, had responsibility for hiring staff. However, the implication in the Recommendation was that Ms Cretney may have somehow been influential in having her two daughters employed at the School and that the appointments raised questions about the integrity of such appointments. How an unanswered question about one daughter employed to set up a library system developed into a Recommendation to investigate the employment at the School of two of the appellant's daughters and how the appellant may have been involved, is not apparent. Even if Ms Cretney had answered the question regarding one of her daughters it appears the reviewers were still concerned about the employment of the other daughter, a concern that apparently was not put to Ms Cretney. There was nothing before the reviewers that would have, on any proper basis, allowed them to refer the matter for investigation in a disciplinary context and in that respect was quite wrong.

83 It is undoubtedly the case that where an employee is asked a series of questions that may have disciplinary implications for the employee and the employee makes a reasonable request for further particulars about the matters raised in the question and the particulars are not forthcoming, it is difficult to see how it would be open to the questioner to then draw adverse conclusions about the employee where the employee has declined to answer the questions. Normally, the particulars should be provided before any conclusions are drawn adverse to the employee. The employee in such circumstances is unlikely to have been accorded procedural fairness.

84 If the employee unreasonably refuses to answer a question about their conduct and the questioner, nevertheless, has cogent evidence upon which to draw an adverse conclusion and does so, the procedure could not usually be regarded as unfair.

85 In the present case, the appellant was entitled to more information about the issues raised in a number of the questions put to her in the second interview. They were not provided. Nevertheless, the Review Team formulated a number of Recommendations related to the questions that were adverse to the appellant or which contained adverse inferences. It was conceded by both Mr Chalmers and Mr Ashford in cross-examination that the matters constituting the Recommendations were part of a matrix of considerations to which the Review Team had paid regard in arriving at its conclusion that the ‘significant breakdown in interpersonal relations within the School’ was caused by ‘the active and passive actions of the assistant teacher, often supported by the senior school assistant and key members of the community’ and led to the Recommendation by the Review Team that Ms Cretney be transferred to another School.

86 The Recommendations relating to Ms Cretney were Recommendations for a formal investigation to be carried out. That the Recommendations were couched in terms of conduct that ‘may’ be in breach of various codes or regulations and, therefore, no final determination had been made by the Review Team about the issues, does not overcome the fact that the Review Team relied upon conclusions about what it regarded as disciplinary matters for the purpose of making a Recommendation for transfer. We note in this respect that in relation to the disciplinary allegations against the appellant, in recommending an investigation the Review Team ‘recommended that a formal investigation be held to ascertain more fully whether breaches have occurred...’.

87 We find that grounds 4 and 5 have been made out. The respondent's conduct in failing to accord the appellant procedural fairness rendered the contract unfair to the extent we have identified in this part of our judgment.

Ground 6

88 It follows from our consideration of grounds 2 to 5 inclusive that the making and publication of conclusions adverse to Ms Cretney in the circumstances described did not protect Ms Cretney’s professional integrity as required by clause 3.2(p) of the School Development Policy. That Policy placed obligations on the Review Team to ensure the professional integrity of staff. The protection of Ms Cretney’s professional integrity would require that allegations of a disciplinary nature be fully and thoroughly investigated before any reliance on those matters, or any publication of conclusions based upon those matters, is permitted. Accordingly ground 6 is made out so far as considered within our aforementioned conclusions.

Grounds 7 - 9

89 The appellant submitted that the findings made by the trial judge about the behaviour of the appellant toward former School principals were ‘not open on the evidence’. Essentially the same issue arises in relation to grounds 10 - 13 and so we have dealt with the issue under the next heading.

Grounds 10 - 13

90 It was submitted her Honour erred in finding that: the Review Team did not make findings or purported findings; the conclusion of the Review Team set out in [122] of the decision was ‘a reasonable conclusion and open on the evidence before the Review Team and therefore fair’; the respondent, during the Review process, took steps to check the veracity of its purported findings; and that ‘Mr Chalmers and Mr Armstrong only reported on matters which were raised by at least two persons in the conduct of the investigation’.

91 At [122]-[123] the trial judge stated:

[122] The applicant further claims the ‘purported findings’ of the Review were false, inaccurate and defamatory. I do not accept there were any ‘purported findings’. There were matters identified in ‘Recommendations’ for further investigation not ‘findings’. The only finding related to Mrs Cretney as stated in the edited Report and in the final Report was in Conclusion 2 of 14 conclusions. It reads:

There has been and continues to be a significant breakdown in interpersonal relations within the school. This has been caused by the active and passive actions of the assistant teacher, often supported by the senior school assistant and key members of the community.

This conclusion was the second of 14 conclusions published. That part of the conclusion relating to Mrs Cretney is couched in the context that her actions were seen ‘in support of the assistant teacher’ along with that of others who supported him. In the context of the finding there was a ‘systematic breakdown in interpersonal relations within the school’. (sic) A recommendation was made that both the assistant teacher and the applicant be transferred and the school community be further educated as to its role within the context of an efficient school. I accept these were reasonable conclusions and open on the evidence before the Review Team and therefore fair.

[123] I reject the proposition that during the Review the respondent took no steps to check the veracity of the ‘purported findings’. All matters except the newsletter incident were put to the applicant (and addressed at a later stage of the Review). Mr Chalmers and Mr Armstrong only reported on matters which were raised by at least two persons in the conduct of the investigation.

92 The Review Team certainly made a ‘finding’, as her Honour acknowledged at [122], that the appellant supported the assistant teacher in his actions in causing ‘a significant breakdown in interpersonal relations within the School’. However, the trial judge held this finding was reasonably open on the evidence, a matter we will deal with shortly.

93 As to ‘findings or purported findings’, we understand the appellant was also addressing the five Recommendations referring matters involving Ms Cretney to a formal disciplinary investigation. Her Honour held that the matters identified in the Recommendations were matters for further investigation, not ‘findings’. What the Review Team found was that in relation to certain matters Ms Cretney conducted herself, or may have conducted herself, in a certain way such that the Review Team believed warranted further investigation. As we have found, the flaw in the process followed by the Review Team was that it formulated a number of Recommendations related to the questions put to the appellant that were adverse to the appellant, or which contained adverse inferences, in circumstances where Ms Cretney was not accorded procedural fairness. The matters referred to in the Recommendations then constituted part of the rationale for the finding that Ms Cretney was involved in causing a significant breakdown in interpersonal relations within the School.

94 Whether or not the Review Team made findings or purported findings, seems to us to matter little and we do not propose to deal with ground 10 any further, other than to say that the matters referred for further investigation were partly in the nature of allegations and partly findings.

95 Ground 11 raises the more significant question of whether her Honour erred in finding it was a reasonable conclusion and open on the evidence before the Review Team and, therefore, fair, that the appellant was involved in causing a significant breakdown in interpersonal relations within the School. Grounds 12 and 13 raise the associated issues of whether the Review Team took steps to check the veracity of the allegations that constituted those matters referred for further investigation and whether her Honour erred in finding that ‘Mr Chalmers and Mr Armstrong only reported on matters which were raised by at least two persons in the conduct of the investigation’.

96 The trial judge's finding that it was reasonable and fair for the Review Team to find that the appellant was involved in causing a significant breakdown in interpersonal relations within the School and, therefore, a transfer of the appellant was warranted, appears to be based - at least in large part - on what her Honour found at [115]-[117]:

[115] The applicant made a number of other assertions as to the unfairness she suffered. She asserted Ms Murphy was the sole source of any complaint made against her interest to the Review. From documentation, there were recorded a myriad of complaints as to the role Mrs Cretney played in supporting the machinations and ambitions of the Assistant Teacher. Her correspondence, records of meetings and her expressed views persuades the court she played an active role in supporting Mr Randazzo. I accept there was evidence of Mrs Cretney's passive acts of unco-operation as detailed by Ms Murphy. This includes, for example, in not assisting Ms Murphy as to the place where school equipment was stored; refusing to give her information as to why older children or children with special needs, not enrolled at Penrose Public School, were attending classes; and offering no explanation as to why a telephone line was connected to the assistant teacher's classroom. While these were Ms Murphy's complaints, other Principals joined in evidencing a failure by Mrs Cretney to support them in their role. Mr Irving also gave evidence of her unco-operative attitude. In one of the interviews with the Review Team, a parent reported, and it was recited in the Final Management Review Report that:

‘if she could fly a (assistant teacher's name) banner, she would’.

[116] On Mrs Cretney's behalf Ms Howell, of counsel, asserted she had provided full professional support to all Principals appointed to Penrose Public School. The applicant's notes, memorandums and affidavit evidence revealed otherwise. In Mrs Cretney's affidavit of 27 October 2003 (tendered in the respondent's case) by its tone and content I accept she expressed contempt for four of the previous Principals, namely, Mr Peaks, Mr Cameron, Ms Wallace and Ms Murphy and in doing so she gave covert and overt support to Mr Randazzo.

[117] I accept Mrs Cretney may have been genuinely motivated to serve the interests of the students of Penrose Public School and the school community. However well intentioned, in providing such clear support actively and/or passively to the Assistant Teacher, whether he was the acting Principal or not, her actions were inappropriate. While the Review Team noted the difficulty in pinpointing the ‘passive’ actions that made life so difficult for the various Principals, I accept there has been a demonstrated pattern of unco-operative behaviour from the applicant. When considered alongside those actions of the assistant teacher, it is evidence Mrs Cretney contributed to conduct which was at the heart of some of the difficulties faced by the various Principals at Penrose Public School causing them to ask for transfer, often on compassionate grounds.

97 In relation to these findings, the respondent submitted that an appellate court should not interfere with the trial judge's conclusions on facts unless it is of the opinion that they were not reasonably open (or were clearly wrong) on the evidence. It was further submitted that as such, the Full Bench would be hesitant in intervening in the trial judge’s finding that the contract was not unfair because it was an overall finding taking into account all of the relevant matters. The appellant could only succeed in the appeal, it was submitted, if the appellant had properly demonstrated that there was a factual error which, if not made, would have been likely to result in the trial judge making a different decision.

98 The respondent submitted that the findings made by the trial judge about the contempt and unco-operative behaviour of the appellant toward the previous principals were open on the evidence, that being:

(a) the Appellant’s affidavit filed 24 December 2003;

(b) the evidence of Ms Kate Murphy;

(c) the report of the Review Team that one of the parents had said that if Ms Cretney could fly a Randazzo banner, she would;

(d) a number of reports to the Review Team that the Appellant kept extensive diaries on principal’s actions and reported all matters to the Assistant Teacher;

(e) the written statement of Brian Reakes;

(f) the written statement of Stewart Cameron;

(g) the notes of the Appellant’s meeting with the District Superintendent and the PSA in May 1997;

(h) the transcription of the critical comments made by Beverley Baker in the telephone call;

(i) the Tina Day (parent) letter to John Sutton dated 7 August 2000;

(j) the evidence of Mr Irvine, the interim Principal, which confirmatory of the difficult behaviour of the Appellant:

Look I would regard any person who is continually difficult in a school environment to be not acting properly. It is a team. Schools are a team operation. If people aren’t prepared to work together as a team they quickly break down.

(k) the evidence of Mr Irvine that he did not accept that the appellant had performed all her duties in a professional manner. Mr Irvine went on to describe the very first meeting with Mr Randazzo and the appellant:

At the beginning of that, this particular meeting there was like a passive/aggressive stance taken by Ms Cretney and Mr Randazzo. I had not asked for notes to be taken and I was the only person there and I felt a little intimidated by the situation and I believe it was a stance to put me on the back foot. ... I felt ill at ease and I thought that it was on purpose.

99 We have considered each of these submissions and undertaken a careful Review of the evidence. Our conclusion is that it is very finely balanced as to whether the trial judge was entitled on the evidence to make the findings that her Honour did about the contempt and unco-operative behaviour of the appellant toward the previous principals. For instance, in relation to the evidence said to support her Honour's findings:

(i) as to the appellant's affidavit of 22 December 2003, the respondent did not cross examine the appellant on any aspect of it. Moreover, it is not easy to discern on the face of the affidavit how the trial judge arrived at the conclusion that Ms Cretney's December 2003 affidavit ‘by its tone and content’ expressed contempt for Mr Reakes, Ms Wallace or Mr Cameron or that by doing so that the appellant gave covert and overt support to Mr Randazzo;

(ii) of the four former principals referred to by the trial judge, only one was called to give evidence in the proceedings (Ms Murphy). The respondent, having filed and served affidavits of three former principals, decided not to call them as witnesses as to the truth and accuracy of the statements and conclusions in the Reports;

(iii) it is difficult to see what probative value there was in the accusation by an unknown parent about the appellant flying Mr Randazzo's banner;

(iv) that a number of respondents reported to the Review Team that they believed that the appellant reported all matters to the assistant teacher and kept extensive personal diaries on principal's actions, would appear to fall short of a proper foundation upon which to base a finding that the conclusions and recommendations of the Review Team that were adverse to Ms Cretney were reasonable and fair;

(v) there was no direct evidence from Messrs Reakes, Cameron or Wallace of any conduct that Ms Cretney failed to provide full support for or otherwise undermined the three former principals; and

(vi) Mr Irvine did not identify any inappropriate conduct on Ms Cretney’s part. His strongest criticism was that he perceived Ms Cretney had a ‘passive aggressive stance’ and took notes at a meeting he convened to discuss the Review findings. Moreover, Mr Irvine had no direct knowledge of the appellant's conduct prior to him arriving at the School in August 2000. What he had heard about the appellant was via the ‘grapevine’.

100 We interpret the respondent's submission in support of her Honour's findings as being that it is not appropriate to consider one or two matters in isolation, but rather, as the trial judge did, that the Full Bench should take into account all of the material that the Review Team had before it and make a realistic assessment.

101 We agree with that submission. However, whilst the evidence considered overall suggests uncooperative conduct on Ms Cretney's part (eg vis a vis Ms Murphy), and does indicate that the appellant was undoubtedly supportive of Mr Randazzo, we have reservations about whether the evidence was of sufficient probative value to prove that Ms Cretney made such a contribution to 'a significant breakdown in interpersonal relations' that it justified a Recommendation to have the appellant transferred.

102 Nevertheless, the trial judge had the distinct advantage in this matter of assessing the evidence given in the witness box. Whether Ms Cretney was contemptible towards the former principals and did exhibit a pattern of uncooperative behaviour that contributed to 'a significant breakdown in interpersonal relations' are essentially matters of fact and degree about which views might legitimately differ. It is not enough that an appellate court might have come to a different conclusion. Before an appellate court will intervene the appellant must show error on the part of the primary judge: Australian Air Express Pty Ltd v Langford [2005] NSWCA 96; 147 IR 240 at [15] and the cases referred to therein; Abboud v The State of New South Wales (Department of School Education) (1999) 92 IR 32 at 43; Commissioner of Police v Dobbie [2006] NSWIRComm 285; (2006) 157 IR 44 at [68]. We are not satisfied to the requisite degree that error has been demonstrated as asserted in appeal ground 11.

Grounds 12 and 13

103 In respect of at least a number of the allegations constituting the Review Team's Recommendations for further investigation of the appellant's conduct, no steps were taken to check the veracity of the allegations. The Newsletter Incident is a prime example of the Team not having done so. Indeed, in relation to that incident the allegation was not even put to Ms Cretney. In other cases, the sole source of the complaints was the Review Team itself. Examples of this were the adverse findings concerning the conversation with Ms Baker, and the issues surrounding the copying of the facsimile from Ms Cretney’s daughter to the Review Team.

104 Ground 12 is made out.

105 As to ground 13, we consider the appellant was correct in submitting that the trial judge erred in finding ‘Mr Chalmers and Mr Armstrong only reported on matters which were raised by at least two persons in the conduct of the investigation’. That was clearly not so. The evidence of the two reviewers disclosed that some matters were not raised by any persons, other than the Review Team itself. Mr Chalmers conceded in cross-examination that the Team relied on matters not raised by two persons.

106 Ground 13 is made out.

Ground 15

107 It was submitted for the appellant that the trial judge erred in failing to find that the contract was unfair in that it did not require the respondent to take any steps to correct or qualify findings and Recommendations concerning Ms Cretney made in the Management Review and read out to the Public Meeting on 1 August 2000. The respondent, on the other hand, submitted that the short version of the Report was the only one published and that the conclusion reached in it about the appellant’s support of Mr Randazzo was found by the trial judge to be open and reasonable. Further, that the Recommendation for transfer was never implemented and that must have been apparent to each parent and community member who retained any interest in the Review and its outcome. It was submitted that having found that the publication of the short Report was fair and reasonable, there was no basis on which the trial judge ought find that there was any need to qualify or correct it.

108 In light of our findings regarding ground 11 we do not find it necessary to deal further with ground 15.

Ground 16

109 The appellant submitted that her Honour’s decision did not disclose what test if any the Court applied in considering whether the contract was unfair in the relevant sense. It was submitted that, had her Honour applied the test as set out in the relevant authorities relied upon by the appellant at first instance, her Honour would have found the contract to be unfair in the respects urged by the appellant. The authorities referred to were: Baker v National Distribution Services (1993) 50 IR 254; Westfield v Helprin (1997) 82 IR 411; Port Macquarie Golf Club v Stead (1996) 64 IR 53; Beahan v Bush Boake Allen Ltd (1999) 47 NSWLR 648, 93 IR 1; Walker v Hussmann (1991) 24 NSWLR 451, 38 IR 180; and Rothmans Distribution Services Ltd v Full Court of the Industrial Court of New South Wales (1994) 53 IR 157.

110 The trial judge was not obliged to set out the test of unfairness. This ground is not made out.

Grounds 1, 14, 17, 18, 19, 20, 21, 22 and 23

111 The errors asserted in these grounds were in respect of an alleged failure by the trial judge to find unfairness in the contract consequential upon the errors in the first two categories of grounds that we have dealt with. That is to say, her Honour made errors of a more general nature in failing to draw appropriate conclusions concerning the unfairness of the contract.

112 Much of what is contained in grounds 1, 14, 17, 18 and 19 may be regarded as somewhat repetitive or duplicitous. However, it is our finding that the trial judge erred in failing to find that the contract of employment operated so as to deny the appellant procedural fairness, which conduct was such as to render the contract of employment relevantly unfair. We also consider her Honour erred in failing to find that the contract of employment operated so as to permit the respondent to avoid its obligation to protect the appellant's professional integrity, thereby rendering the contract unfair.

Damage to reputation

113 Ms Cretney asserted that her reputation had been damaged as a result of the unfairness of the contract between the parties and the conduct of the respondent thereby permitted. It was submitted that adverse consequences for Ms Cretney’s reputation, particularly the adverse views of her past and present professional colleagues, and members of the School community generally, flowed directly from the manner of conduct of the Review, the content of the Review and the manner of publication of the Review. The appellant is seeking $50,000 for damage to her reputation.

114 We acknowledge there was evidence that the appellant was subjected to disparaging comment. Perhaps the most hurtful was that she had engaged in deceptive conduct. However, even if we were inclined to entertain an application that we regard as tantamount to a claim in defamation, there was no evidence called from any person involved with the Review or present at the meetings, other than the appellant herself, to found a proper basis for assessing damage to reputation. It is necessary to know the reputation said to have been injured: Amalgamated Television Services Pty Ltd v Marsden [2002] NSWCA 419 at [1370].

115 The other difficulties associated with the claim for damages to reputation include those referred to by the trial judge at [137]. Further, the incident giving rise to the claim occurred nine years ago and for most of that time Ms Cretney has continued in employment at the School. There was no evidence that throughout that period the appellant's reputation has continued to suffer. Finally, on this aspect, the unfairness we have found in relation to the contract of employment would necessarily provide a large degree of comfort to Ms Cretney that she should not have been subjected to the treatment she received in 2000.

116 We have decided that there is no proper basis for awarding monetary compensation for damage to reputation in this case.

Pain and suffering, hurt, humiliation and distress

117 Ms Cretney sought an order for payment of an amount in respect of pain, suffering, hurt, humiliation and distress which arose from the unfairness of the contract. The amount claimed was $51,500, $1500 of that being for the cost of medical treatment and medication.

118 At [143]-[144] the trial judge found as follows:

[143] I accept Mrs Cretney has a vulnerable personality. In June 2003, she has complained of another incident at work which has affected her and, by inference, seems to have brought about her first resignation. From the beginning of the announcement of the Review Team's investigation she objected to its conduct. I accept she attended at the doctors during the conduct of the Review in April 2000. While this was prior to the publication of the Report or mention of any of the specific events relied upon in the pleading as causing her distress, I accept Mrs Cretney clearly suffered stress in the conduct of the Review. I accept she continues to be distressed by the thought of the recommendations contained in the Review Report notwithstanding they were reviewed and not implemented. She clearly has a perception those recommendations were ‘findings’ and further they were unfair ‘findings’.

[144] However, I have accepted that four of the Recommendations in the Reports arising from the information received in the conduct of the Management Review were not unfair. I have found that related to the newsletter issued, notwithstanding publication before she had opportunity to respond, Mrs Cretney's reply was given consideration before the Department acted on the Report Recommendations. I do not accept her obvious distress, be it as particularised in the medical evidence or symptomised through her behaviour over the last eight years, is reflective of any unfairness in the conduct of, or publication of, the Management Review Report. I reject the diagnosis of her general practitioner that she suffers ‘chronic post traumatic stress disorder with major depression’ an identifiable psychiatric disorder not supported by qualified specialist diagnosis. However, I accept she had stress and still has distress. Unfortunately, I cannot accept her ongoing distress can be related to any unfairness in her employment contract. Therefore there should be no re-imbursement of her claim for medical expenses.

119 We agree with her Honour's findings that the appellant ‘had stress and still has distress’. However, we do not agree that the appellant's distress was unrelated to any unfairness in her employment contract. The appellant's distress was directly related to the fact that the appellant was not accorded procedural fairness.

120 That compensation may be awarded for medical expenses incurred because of illness or injury or ‘distress’ or ‘stress and suffering’ arising from the unfairness of a contract appears to have been settled (see King v State Bank of New South Wales (No 2) [2002] NSWRIComm 353, 126 IR 407; State of New South Wales v Banas [2004] NSWIRComm 255; 137 IR 63), we note what the Full Bench said in Banas at [105]:

[105] Finally, on this issue we wish to emphasise that claims for stress and suffering or claims under a similar rubric must be carefully scrutinised. As it was cautioned in King v State Bank of New South Wales (No 2) there needs to be ‘a very careful approach’ taken to the assessment of compensation for unfairness arising under such labels as ‘stress and suffering’ and the precise basis for the award must be specified.

121 The medical evidence adduced by the appellant as to her pain and suffering was not strong. There was evidence from the appellant's general practitioner that Ms Cretney presented on 3 April 2000 with insomnia, panic attacks and palpitations and that ‘she had been stressed regarding her employment’. It was said that the appellant continued to suffer ‘chronic post traumatic stress disorder with major depression’ and that ‘all these symptoms are directly related to her employment’. Ms Cretney visited her general practitioner on 1 June 2000, 22 June 2000, 31 July 2000, 7 July 2000, 30 October 2000 and frequently thereafter.

122 Dr Mouroukas, the appellant's general practitioner, described the onset of psychological symptoms in April 2000. That was before any of the acts of unfairness pleaded in the appellant's Second Further Amended Summons and before both the second interview and the publication of any adverse comments about the appellant. Dr Mouroukas did not identify which specific aspects of the appellant's employment caused her symptomatology. He simply said that the appellant was ‘stressed regarding her employment’.

123 The appellant gave evidence in cross-examination that she had and/or was being treated by a psychiatrist for her condition. However, no evidence was led from that psychiatrist.

124 Notwithstanding the deficiencies in the medical evidence, it cannot be doubted that Ms Cretney suffered distress or ‘stress and suffering’ that may well have been avoided if the appellant had been treated in a procedurally fair manner. She had to suffer the indignity of being accused of deceitful conduct and acting without authority and Mr Irvine and Ms Murphy, two of the principals she had to work with, taking the view that she was untrustworthy, disloyal or deceitful as a result of the publication of the Reports. What is more, the respondent did not take steps to publicly explain why the disciplinary process was not proceeded with, leaving it a matter for speculation about what the respondent believed in relation to the matters referred for disciplinary investigation.

125 We have decided that it is appropriate to award compensation of $2500 to the appellant in connection with the unfairness found on appeal for the stress and suffering she experienced.

NOTICE OF CONTENTION

126 The respondent's notice of contention raised the principles of legal coherence. We have declined the claim for damage to reputation and no need arises to consider legal coherence. In relation to the claim for stress and suffering, we rely on the reasoning expressed by the Full Bench in Banas.

ORDERS

127 The Full Bench makes the following orders:

(1) Leave to appeal is granted.

(2) The appeal is upheld.

(3) The decision and orders of Kavanagh J in Matter No IRC 7430 of 2003 are set aside.

(4) The Full Bench declares that the contract as pleaded in the appellant's second further amended summons was unfair in that it denied the appellant procedural fairness and in doing so operated so as to permit:

(i) the respondent to make Recommendations and findings adverse to the appellant and publish adverse findings without a proper foundation for doing so,

(ii) the respondent to avoid its obligation to protect the appellant's professional integrity.

(5) The contract is varied, ab initio, to provide that the appellant shall be accorded procedural fairness in any management Review or disciplinary process to which she is subjected and that the respondent shall protect the appellant's professional integrity in accordance with the School Development Policy.

(6) In connection with the varied contract, the respondent shall pay to the appellant the sum of $2500.

(7) The respondent shall pay the appellant's costs of both the proceedings at first instance and on appeal as agreed or assessed.

______________________________

LAST UPDATED:
15 July 2009