WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATES COURT

PARTIES CHRISTOPHER SHARPE

CLAIMANT

-v-

David A Kelly

RESPONDENT

CORAM INDUSTRIAL MAGISTRATE G. CICCHINI

HEARD THURSDAY, 5 November 2009

DELIVERED Monday, 23 November 2009

FILE NO. M 48 OF 2009

CITATION NO. 2009 WAIRC 01221

Catchwords: Respondent’s alleged failure, contrary to s 74(2) of the Industrial Relations Act 1979 (IRA), to act honestly at all times whilst carrying out his duties as Secretary of the State School Teachers’ Union of W.A. (Incorporated) (SSTUWA);  Respondent’s alleged failure, contrary to s 74(3) of the IRA, to exercise a reasonable degree of care and diligence in carrying out his duties; Respondent’s alleged use of position to obtain or seek to obtain advantage in contravention of s 74(9) of the IRA; and the Respondent’s alleged failure to disclose his personal interest in a matter to the Committee of Management of the SSTUWA contrary to s 74(12) of the IRA.

Legislation: Industrial Relations Act 1979; ss74 and 77.

Industrial Magistrates (General Jurisdiction) Regulations 2005, regs 5(1), 5(2)(a), 5(2)(b), and 7(1).

Cases cited: Clay & Ors v Clay & Ors [1999] WASCA 8.

Naum Nikoloski v Mojak Plastics Pty Ltd [2005] WAIRC 2210.

 Richard John Powers & Ors v Austal Ships Pty Ltd [2003] WAIRC 7726.

Cases referred to

in Judgement: Imobilari Pty Ltd v Opes Prime Stockbroking Ltd (in liquidation) [2008] 252 ALR 41 at 43.

Temwood Holdings Pty Ltd and Ors v Oscar Neil Blackburne Oliver and Ors Supreme Court of Western Australia Library No.980459 at 27

Henderson v Templeton and Anor [2004] WASC 192 at paragraph 14

Oldfield Knott Architects Pty Ltd v Ortiz Investments Pty Ltd [2000] WASC 255

at paragraph 135

Result: Claim struck out 

Representation: Mr Christopher Sharpe appeared in person.

  Mr J Fiocco of Fiocco’s Lawyers appeared for the Respondent.

_______________________________________________________________________________________________

REASONS FOR DECISION

Background

1         In his originating claim made pursuant to sections 77 and 83 of the Industrial Relations Act 1979 (IRA) lodged 1 September 2009 the Claimant alleges that the Respondent has failed to comply with the SSTUWA Salary Sacrifice Arrangement Participation Agreement (the Agreement) and further has failed, in carrying out his duties as Secretary of the State School Teachers’ Union of W.A. (Incorporated) (SSTUWA), to comply with the requirements of subsections 74(2), 74(3), 74(6), 74(9), 74(11), and 74(12) of the IRA.

2         In short the Claimant alleges that the Respondent, a finance official within the meaning of s 74 of the IRA, has either misused his position or alternatively has acted carelessly and/or without due diligence and/or not in accordance with his duties and has thereby obtained benefits to which he was not entitled.  The originating claim does not specifically particularise the allegations but rather contains attachments.  The attachments comprise of two letters from the SSTUWA’s auditors, copies of correspondence passing between the Claimant and the President of the SSTUWA, and a blank copy of the Agreement to support the claim.

3         On 25 September 2009 the Respondent lodged his particularised response denying each allegation in the claim.  On 15 October 2009 the Respondent made an application pursuant to regs 5(2)(a), 5(2)(b) and 7(1)(r) of the Industrial Magistrates Court (General Jurisdiction) Regulations 2005 (IMC(GJ)R); seeking the following:

The claim be struck out; or alternatively

The claim be dismissed and judgement entered for the Respondent; and in any event

The Claimant pay the Respondent’s costs of the action including today’s appearance.

4         The Respondent’s application which was listed on 22 October 2009 was adjourned to 5 October 2009 in order to enable the Claimant to lodge an affidavit and written submissions in response.  On 3 November 2009 he lodged and served his affidavit and written submissions.

5         When the matter came on for hearing on 5 November 2009 the Claimant announced that he no longer wished to proceed with those parts of his claim relating to the Respondent’s alleged failure to comply with the Agreement and alleged failure to comply with subsections 74(6) and 74(11) of the IRA.  Those parts of the claim were accordingly struck out.  As a result the surviving claim is with respect to the Respondent’s alleged non-compliance with subsections 74(2), 74(3), 74(9) and 74(12) of the IRA. 

6         The Claimant asserts that between 1 January 1999 and 16 April 2003 the Respondent received payments totalling $85,868.00 from the SSTUWA with respect to his personal motor vehicle and further that an amount of $22,818.00 was paid by the SSTUWA as a penalty to the Australian Taxation Office with respect to the Respondent’s salary sacrifice arrangements for the 2000/01, 2001/02, 2002/03 financial years.  He contends that such payments were not authorised by the Executive of the SSTUWA and that consequently the Respondent has obtained a financial advantage to which he was not entitled.

Determination

7         The originating claim in this matter is lacking in particulars, a fact recognised by the Claimant in submissions lodged 3 November 2009.  Consequently he has sought to augment his allegations made in the originating claim by providing further details in his affidavit sworn and lodged 3 November 2009. 

8         The primary issue to be determined in this application is whether as a whole the materials lodged by the Claimant discloses a reasonable cause of action  assuming the truth of his allegations and drawing all the inferences in his favour (see Imobilari Pty Ltd v Opes Prime Stockbroking Ltd [2008] 252 ALR 41 at 43).

Allegation that the Respondent failed to act honestly

9         The most damming allegation against the Respondent is that which alleges he did not act honestly and thereby contravened subsection 74(2) of the IRA.  It is a serious matter to allege dishonesty.  His Honour Steytler J observed in Temwood Holdings Pty Ltd and Ors v Oscar Neil Blackburne Oliver and Ors Supreme Court of Western Australia Library No.980459 at paragraph 27, that it is well established that pleas of this kind must be distinctly alleged and proved.  There needs to be specificity with respect to the act or acts alleged with respect to time, place and circumstances founding the alleged dishonesty.  Unless sufficient particularity and evidence exists to support it, the pleadings should not be allowed to stand.

10      There is nothing in the materials lodged by the Claimant which specifically indicates how it is that the Respondent is said to have acted dishonestly.  Allegations of dishonesty must be clearly and succinctly particularised (see Henderson v Templeton and Anor [2004] WASC 192 at paragraph 14).   Justice requires the definition of the accusation brought which is different to setting out the evidence by which it is intended to establish it (see Oldfield Knott Architects Pty Ltd v Oritz Investments Pty Ltd [2000] WASC 255 at paragraph 135).  There is nothing in the affidavit of the Claimant nor other materials that he has lodged that specifically addresses the particulars required.  It is apparent from what the Claimant says in paragraph 85 of his affidavit that to a large extent the allegation relating to dishonesty flows from the Respondent’s alleged failure to comply with subsections 74(9) and 74(12) of the IRA.  In my view that is incapable of supporting an allegation of dishonesty.

11      The materials before the Court do not sufficiently particularise the allegation of dishonesty and accordingly that allegation should not be allowed to stand.

Alleged use of position to obtain or seek to obtain financial advantage

12      In order to support his contention that the Respondent has contravened subsection 74(9) of the IRA the Claimant is required to demonstrate with particularity when and how in each instance the Respondent has made use of his position in order to obtain advantage.

13      In paragraphs 33 and 34 of his affidavit the Claimant alleges that the Respondent has obtained a pecuniary advantage by writing a letter to the leasing company instructing it to withdraw $15,015.00 from the SSTUWA’s bank account in order to pay the residual value of Respondent’s leased car and further by having the ownership of that car transferred to him.  In paragraph 75 of his affidavit the Claimant alleges that the SSTUWA’s payment of the Respondent’s personal salary sacrifice penalty for three consecutive years  also constitutes the attainment of a pecuniary advantage.  To support his contention, the Claimant in paragraph 84 of his affidavit, points out that the minutes of the SSTUWA’s Executive Committee do not authorise the payment of the personal salary sacrifice penalty.

14      Subsection 74(9) of the IRA provides:

“A finance official of an organisation is not to make use of the finance official’s position as a finance official to obtain or seek to obtain, directly or indirectly, a pecuniary advantage for the official or for any other person or to cause or seek to cause detriment, loss or damage to the organisation.”

15      Subsection 74(9) is concerned with the use of position by a financial official to obtain a pecuniary advantage. In this matter the Claimant is required to particularise how the Respondent has made use of his position in order to gain an advantage.  Put another way the Claimant must specify how the Respondent has misused his position to obtain advantage.

16      The term “used” is defined in the Collins’ Dictionary of English Language to mean:

“..to behave towards … in a particular way for one’s own ends.”

17      It is incumbent for the Claimant to detail how the Respondent has manipulated or misused his position to gain advantage.  It is not sufficient to state that money has been paid to the Respondent or that the SSTUWA has made payments to the Respondent or any other body including the Australian Taxation Office.  Those matters are not in dispute in any event.  What is required is a set of facts or particulars that isolate and demonstrate why it can be said that the Respondent used his position to obtain a financial advantage. That however is not demonstrated by the materials lodged by the Claimant.  The mere fact that the SSTUWA has paid out the residual on respondent’s vehicle, and has paid FBT liabilities, of themselves do not automatically result in a contravention of subsection 74(9) of the IRA.  Similarly the transfer in ownership of the Respondent’s vehicle does not of itself amount to a contravention of that subsection.

18      In so far that the Claimant asserts that the minutes of meetings of the Executive Committee of the SSTUWA do not appear to record authorisation of the various payments made to or on behalf of the Respondent, it has not been demonstrated by reference to any rule of the SSTUWA why such is necessary.  Again there is a lack of particularity indicating how subsection 74(9) has been contravened in that regard.

Alleged failure to disclose a personal interest

19      Subsection 79(12) provides:

“A finance official of an organisation who has a material personal interest in a matter involving the organisation is to disclose the nature of the interest to the committee of management of the organisation as soon as is practicable after the relevant facts come to the finance official’s knowledge.”

20      The Claimant makes reference to subsection 74(12) in paragraphs 81 and 83 of his affidavit, however I cannot discern anything in those paragraphs or indeed in the paragraphs to which they relate which would indicate that the Respondent has specifically failed to disclose a personal interest.  There is nothing before me to indicate what that interest might be.  If anything the materials before me indicate that the SSTUWA was well aware of the difficulties caused by the novation of the lease with respect to the Respondent’s motor vehicle and the penalties incurred in that regard.  There is simply nothing else which on its face would tend to identify what interests the Respondent failed to disclose.

21      It is incumbent for the Claimant to indicate how the Respondent has failed to disclose his interests and the particular nature of the interests that he failed to disclose.  Clearly that has not been done.

Alleged failure to exercise reasonable degree of care and diligence

22      In paragraph 72 of his affidavit the Claimant alleges that the Respondent has failed to follow up executive initiated instructions concerning the SSTUWA’s salary sacrifice policy.  However it is not indicated how any such failure contravenes subsections 74(3) and 74(4) of the IRA.

23      Subsections 74(3) and 74(4) of the IRA provide:

“(3) A finance official is to exercise a reasonable degree of care and diligence at all times in the performance of the functions of the finance official’s office or employment.

(4)    The degree of care and diligence required by subsection (3) is the degree of care and diligence that a reasonable person in the finance official’s position would reasonably be expected to exercise.”

24      It is not indicated why the degree of care and diligence allegedly absent was capable of offending the reasonable person test set out in the aforementioned provision.

25      In paragraph 77 of his affidavit the Claimant alleges that the Respondent’s failure to have the auditors advice recorded and actioned contravenes subsection 74(3) of the IRA, however it is not indicated why the Respondent was obligated to do that.  In that regard there is no reference to the SSTUWA’s rules.  It is not indicated with the particularity required how the Respondent’s actions fall outside what was expected of him.  Reference to subsection 74(3) is also made in paragraph 78 of the Claimant’s affidavit in which it is alleged that by failing to place the salary sacrifice penalty issue on the SSTUWA Executive Committee’s agenda the Respondent failed to carry out his duties with the care and diligence required thereby contravening subsection 74(3).  That allegation is unsupported.  No detail has been given as to how that formed part of the Respondent’s duties under the SSTUWA rules.  There is no specificity as to which SSTUWA rule was not complied with.  Indeed the same applies to the allegations made in paragraph 63 of the Claimant’s affidavit.

Conclusion

26      It is self evident from the materials lodged by the Claimant that his allegations are broadly based.  They lack specificity as to how each of subsections 74(2), 74(3), 74(9) and 74(12) of the IRA have been contravened.  It is incumbent upon him to demonstrate precisely which facts support each aspect of his claim.  The Respondent is entitled to know the detail of the allegations against him.  To require the Respondent to defend a claim expressed in broad generalisations is unfair and should not be permitted.

27      It is obvious that the Claimant has a notion that the Respondent has done wrong, has acted improperly, has been dishonest and thereby obtained a financial advantage.  However the difficulty is that he is unable to say with any degree of preciseness how that has occurred. 

28      It is quite apparent from the materials before me that the Claimant has initiated this claim without the necessary details required.  He hopes that a general inspection of the SSTUWA’s records to be accessed through this Court’s processes may possibly reveal evidence to support his claim.  The Claimant’s view as to what the records will reveal is entirely speculative.  What he proposes is both improper and impermissible.  This Court cannot allow its processes to be used in order to facilitate or assist in a speculative investigation.  Such constitutes an abuse of process.  If the Claimant wants access to documents as part of an investigative process he should achieve that by other means.  This is not the proper forum to achieve that end. 

29      This claim against the Respondent is clearly deficient in that it lacks the specificity required to enable the Respondent to know what the case against him is.   Regulation 5 of the IMC(GJ)R requires this Court to ensure that cases are dealt with justly, efficiently, economically, expeditiously, that the parties are on an equal footing and that the court’s judicial and administrative resources are used as efficiently as possible.  To enable this matter to proceed further would not only result in injustice to the Respondent but would also waste time and resources for all concerned.

30      Regulation 7(1)(r) of the IMC(GJ)R enables this Court to strike out a claim which does not disclose a reasonable cause of action.  The Claimant has been given the opportunity to indicate with preciseness the particulars which give rise to his allegations but he has failed to do so.  Any further opportunity afforded to him so as to enable him to provide the necessary detail is unlikely to resolve his problem.  It is apparent that the totality of what is relied upon by him is presently before the Court but that such is insufficient.  In those circumstances the matter should not be permitted to proceed further.  The claim will be struck out.

31      The Clerk of Court is instructed to re-list the application and notify the parties of the hearing date when formal orders will be made.

G Cicchini

Industrial Magistrate