DAZA-PACHECO -v- WESTPAC BANKING CORPORATION [1997] IRCA 211

DECISION NO:211/97 CATCHWORDS

INDUSTRIAL LAW - unlawful termination - employee engaged as a bank teller - employer advanced loan moneys to employee - employee accessed her own loan account - whether termination for a valid reason

Workplace Relations Act 1996 (Cth) s 170 DE (1)

Gerard Westen v Union Des Assurances de Paris, NI 2819 of 1995, Madgwick J, IRCA, (Unreported), 17 December 1996; Nettlefold v Kim Smoker Pty Ltd, TI95/1334. Lee J, IRCA, (Unreported), 4 October 1996; Thomas v Ralph Lynch t/as Bellingen Grocery, Wilcox CJ, IRCA, (Unreported), 20 December 1996; Byrne v Australian Airlines Pty Ltd (1995) 131 ALR 422; Laws v London Chronicle (Indicator Newspapers) Ltd (1959) 2 All ER 285; Gooley v Westpac Banking Corporation (1995) 129 ALR 628; Nicolson v Heaven & Earth Gallery Pty Ltd (1994) 126 ALR 233;

DAZA-PACHECO -v- WESTPAC BANKING CORPORATION NI 2248 of 1996

Before: TOMLINSON JR Place: SYDNEY Date: 2 JULY 1997

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY

NI 2248 of 1996

BETWEEN: Sophia DAZA-PACHECO Applicant

AND WESTPAC BANKING CORPORATION Respondent

BEFORE: TOMLINSON JR PLACE: SYDNEY DATE: 2 JULY 1997 MINUTES OF ORDERS

THE COURT ORDERS THAT: 1. The Application of Sophia Daza-Pacheco be dismissed.

Note: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY

NI 2248 of 1996

BETWEEN: Sophia DAZA-PACHECO Applicant

AND WESTPAC BANKING CORPORATION Respondent

BEFORE: TOMLINSON JR PLACE: SYDNEY DATE: 2 JULY 1997 REASONS FOR DECISION

This is an application for reinstatement made under the Industrial Relations Act 1988 (now the Workplace Relations Act 1996) allegedly arising out of an unfair dismissal. The applicant at all times was employed by Westpac as a bank teller and commenced work in 1994. At the time of termination she was attached to the Royal Exchange Branch and in the course of her duties dealt with customer enquiries and on occasion dealt with treasury matters for the respondent. In early 1996 the applicant sought to buy a house and to complete the purchase she needed to borrow money to bridge the purchase pending the sale of her existing home at Lakemba. The applicant discussed the matter with her manager, being the manager of the Royal Exchange Branch, Mr Bruce King. Mr King determined the applicant would need to borrow the sum of $121,000 and he assisted the applicant to complete a Personal Finance Enquiry Form. Mr King allegedly crossed out certain parts of the form as not being relevant. That form was marked exhibit G. In cross examination the applicant denied that at this time Mr King said words to the effect that she would require interest capitalisation and that she did not recall him saying that the facility was not capable of re-draw. The applicant agreed at the time she had the interview with Mr King that she failed to supply details of a personal loan of $1,000. The applicant said Mr King would have knowledge of the loan as he has her banking record in front of him. Approval for the loan was subsequently given by the bank. It was common ground that approval for the loan was supplied to the applicant in the form of a 15 paged document headed "Loan Offer - Bridging Option Home Loan". That document was not produced to the Court, and the applicant stated that on the front page, placed relatively near to the words "Amount of Credit - $121,000" appeared the sum "$6,000" which she understood to be for interest capitalisation. Upon instruction from Mr King the applicant took the form to her solicitor for his approval and advice. The solicitor was not called to give evidence in the proceedings. There was no evidence presented to the Court that the respondent's practices in relation to staff loans were in any way different from other customers. The applicant said she did not give the bank a copy of the contract of the purchase of the house. There was no mention of it in a schedule of documents provided to the applicant by either the bank or her solicitor listing the legal documents that would be put into place to record the loan. It is noted the loan was for a term of 6 months and was stated as being "the predominant purpose of this loan is purchase of established dwelling." Further down in "Additional Terms and Conditions" it is stated that "the bank will not pay you interest on any credit balance in the loan account." At the point headed "Repayment" appearing under "Additional Terms and Conditions" the document provides "You must make payments which are required on Payment Due Dates by direct debit from an account in your name..." The purchase of the property did not proceed. The applicant then sought to buy a second property. Again the matter was discussed with Mr King, and again the amount of $121,000 was selected as the amount she would need to borrow. There was no evidence that before the loan was processed that the bank inspected the premises. A second application was made for finance, again with the assistance of the applicant's manager Mr King, that application being marked exhibit B. The expected sale price of Lakemba was discussed. The sale of the Lakemba property had not taken place at the date of the hearing, and the applicant gave the loss of her job as the reasons. It was put to the applicant that at the time of discussing the loan she indicated to Mr King that the sale of the Lakemba property was imminent, and that Mr King had said that she was going to have to "meet the market." There was no documentation provided to the court that it was a requirement of the bank that the applicant sell her Lakemba property. The applicant only met with Mr King on one occasion in relation to the second loan. Again the applicant received from the respondent a document entitled "Loan Offer - Bridging Option Home Loan" (exhibit I) which again she took to her solicitor at the request of the respondent, in order that she could obtain advice. In exhibit I, again there was reference to the duty of the borrower to keep the property insured, and to produce proof of that insurance, but from the evidence presented to the court there was nothing linking the loan document to the particular property. The matter was completed to the point of settlement on 26 July 1996. One week later the applicant received notification from the bank that she had been granted a home loan, but that notification was not produced to the court. The previous lender to the applicant in relation to the Lakemba property was paid out the sum of $107,000. The applicant said the balance was in the vicinity of $14,000.00 and that she regarded these as monies available to her. However, in light of the previous matter, the applicant was mindful that $6,000 might be needed for interest capitalisation, although no notification of that fact appeared on any of the documents relative to the second property she had settled upon. The property purchased was in disrepair. The applicant engaged contractors to do the repair work. On 13 September the applicant accessed her loan account on the computer at work and she saw a heading entitled "available funds." Via another teller she withdrew $2000 from her loan account to pay tradespeople to do repairs. On 16 September 1996 the applicant withdrew further money from the loan account. She transferred the withdrawn money to another savings account in her name at Bankstown Square. On Wednesday 18 September 1996 the applicant withdrew $3,460.00 from her Bankstown Square account to pay for new carpet. The applicant said the use of the word "Options" in her loan entitled her to withdraw the balance of the loan as she did - in her words, that she had a "re-draw facility". Further, it was the evidence of the applicant that during the course of her employment generally the applicant had effected transactions where customers (being members of the public) had accessed their loan accounts in the manner in which she did. The applicant said she received a call from a supervisor Paula Mullins who told her the $3,460.00 withdrawal had been rejected and that maybe the loan did not have a re-draw facility. The applicant said that she had already withdrawn the sum of $2,000 and that that transaction had gone through. The applicant told Paula Mullins that fact. The applicant said that Ms Mullins told her she should speak to Mr Max Stephenson. The applicant then spoke to Mr Stephenson who said that he had no paperwork in relation to her bridging loan and that he could not authorise the withdrawal. The applicant said that she did not think there was problem with her actions in withdrawing the money, and that she had seen no internal paperwork which might have been indicative of a problem. It seems that it was after the telephone conversation with Paula Mullins the applicant then accessed her personal Bankstown account and withdrew the sum of $3,460.00. It was her evidence that she gave the cash to her fiance who had come to meet her to get the money to pay carpet contractors. The applicant denied that in withdrawing the money as she had it was a deliberate attempt to frustrate the intentions of her employer to reverse the deposit of the money in her Bankstown Square account. The applicant said that after she had then done that there was another conversation with Mr King but that she could not recall if he had said to her words to the effect that the money was not hers to take. The applicant denied that at the time she had told Mr King that she had deposited the money in another bank to the credit of a tradesman doing repairs on her house. On Monday 23 September 1996 the applicant had a meeting with Mr Alfano, the bank's investigative officer. The statement of Mr Alfano was admitted into evidence. The applicant said after an initial discussion she realised the matter was serious and so she availed herself of union assistance. The interview was recorded and a record of interview was given to the applicant. The applicant was suspended. Then for the next week she was required to telephone Mr Alfano daily, to report in, as it were. On 30 September 1996 the applicant together with her union representative had a meeting with Mr Capell when she was provided with a document marked as exhibit 2 wherein the allegations against the applicant were set out. Those allegations formed the basis of the dismissal of the applicant. That allegation stated; "that on 18 September 1996, you did, having caused the transaction to occur as outlined in allegation two, did then, without proper authority or entitlement cause to be processed a withdrawal in the sum of $3,460.00 from your account after having been prior to the conduct of that withdrawal...made aware that your bridging options home loan facility had no re-draw condition, (b) made aware that you had no authority or entitlement to conduct the initial withdrawal of $3,500 on your bridging options home loan account, and (c) made aware that the funds which were still in your account, were to be reversed." In submission Mr Moses on behalf of the respondent stated that what is being alleged as being a valid reason for termination was dishonesty by the applicant not fraud. By letter dated 4 October 1996 the applicant was asked to provide relevant receipts and any other documentation which may confirm the renovations that were done. The applicant could not provide receipts of the work she had had done on her house, and so she provided "before and after" photographs. Those photographs were admitted into evidence. It should be borne in mind there was no evidence presented to the Court the bank had inspected the premises, and could satisfy itself as to the state or condition of the property, either before or after the renovations. Accordingly scant weight can be accorded to any evidence as to what the applicant might have done with the money with regard to her house. The validity of the reasons for termination in my view is to be determined by establishing what happened between the parties when the loan was explained to the applicant. Mr Moses emphasised that Ms Howell on behalf of the applicant stated in opening that the written document contained the agreement between the parties and that accordingly parol evidence could not be adduced. It is my view that the applicant is not bound by that proposition and it is clear that in order to determine the validity of the termination other facts have to be considered. Indeed, the evidence of Mr King the applicant's then branch manager was that he orally advised the applicant Ms Daza-Pacheco of the terms and conditions on two specific occasions and confirmed that those oral terms and conditions relating to the very heart of the matter - whether the applicant had the belief that she could access her loan account - were not in fact reduced to writing. During the course of the hearing Mr Moses indicated that condition 3 was the only reason the respondent relied upon for the termination, and that other evidence should be limited so that only the actions of the applicant after she allegedly was advised the monies were not hers to access, and that she then apparently defied that advice and withdrew funds from her Bankstown account thereby defeating a reversal by the bank that allegedly she knew was going to happen. Exhibit 3 was dated 1 October 1996 and was the applicant's reply to the respondent's allegations. The applicant re-stated her position that "at the time there was no mention that the home loan had no re-draw facility" and in relation to the third allegation that "at the time of the transaction I still thought that there was not going to be a problem." The applicant was dismissed by letter dated 21 October 1996. The applicant now has part time work. On behalf of the respondent the Court heard from Mr Alfano - whose statement was admitted into evidence as exhibit A. That statement set out the role played by Mr Alfano in investigating the matter. Various statements given to Mr Alfano by the people involved in the matter were attached to his statement. Mr Alfano was contacted by Mr King on 18 September 1996 alerting him to the situation. Shortly after Mr Alfano met Mr Stephenson. Mr Alfano commenced to interview the applicant on 23 September 1996 during which time telephoned Mr Peter Capell, and recommended that the applicant be suspended. According to Mr Alfano, Mr Capell agreed. Mr Alfano returned to the interview room and suspended the applicant. The court heard from Mr King, whose statement was attached to the statement of Mr Alfano. In his evidence Mr King stated he was the Branch Manager of the Royal Exchange Branch of the respondent and the supervisor of the applicant. In March 1996 Mr King said the applicant approached him seeking a bridging loan for the purchase of a house. In his signed statement, attachment "E" to the statement of Mr Alfano, Mr King stated: "I recall that she was seeking a loan in the amount of $121,000 to purchase a house at Tregear for the purchase price of $85,000. This loan was also for the purpose of refinancing a $27,000 loan with the St George Bank. The differential of $9,000 was for interest capitalisation in the amount of $6,000 and $3,000 for legal and stamp duty fees. This extra amount was for legal and stamp duty fees. This extra amount was included as Ms Daza-Pacheco did not have the resources to meet loan repayments over the term of the bridging, nor did she have a deposit to put towards the purchase. At the time Ms Daza-Pacheco was living at Lakemba and the sale of this property was to be used to clear the bridging loan in total within a six month period." Mr King identified the Personal Finance Enquiry form used in March 1996 when the applicant was seeking her loan and stated that the amount of the loan then sought was $112, 000 and that the extra amount of $9,000 was not included as at the time of completing the Enquiry form. "Interest will be debited to the loan account on a monthly basis and you will not be required to make any repayments for the term of the loan. I recall that I also said, words to the effect of, 'The limit will be marked up to the extent of the loan and the interest being charged each month will progressively work the debt towards the limit.'...(the applicant) appeared to understand what interest capitalisation meant." Mr King said he recalled the applicant saying words to the effect that she intended to sell the Lakemba property quickly and "meet the market" in that regard. Further, Mr King stated that ; "During the course of this conversation I recollect that I said to Ms Daza- Pacheco, "The bridging finance is purely just that and there is no redraw facility." To this, Ms Daza-Pacheco acknowledged same, by saying words to the effect of, "I understand." Mr King told the court it was his view the applicant did not have the resources to make re-payments, and therefore she needed an interest capitalisation account. To that end the applicant needed a loan of $121,000, and that she had to sell Lakemba as soon as possible. Given the applicant's financial affairs, it was impossible for her to re-pay the loan without the sale of Lakemba. In his oral evidence Mr King said that the applicant did not reveal that she had a personal loan. Mr King told the court that a bridging loan does not have a re-draw facility and that the term "re-draw facility" is a term applicable to a number of loans. Mr King was shown exhibits L1 and L2, and said that these brochures were kept in the manager's area. Exhibit L2 was the brochure stated as being the one provided to a customer by the respondent should the respondent be approached for information concerning bridging loans. L1 is the brochure then completed to allow the transaction to proceed. Mr King told the Court a terms and conditions letter of that loan was issued on 14 March 1996 and that subsequently the applicant advised the purchase had fallen through. Mr King said again in June 1996 the applicant approached him after finding a second property, the conditions of purchase being similar to that of the first. Again Mr King assisted the applicant in completing a Personal Finance Enquiry form. In his sworn statement Mr King said; "During this particular interview, I again informed Ms Daza-Pacheco about interest capitalisation and that again there was no re-draw facility on the loan. Again, Ms Daza-Pacheco acknowledged what I told her and appeared to understand what it meant." It was the evidence of Mr King that a borrower would however be able to withdraw funds from his or her account if the account was styled as a "premium options account." Mr King said all loans of the nature of the applicant's loan were classed as "options loans." MFI 1 was a business record of the respondent being a guide to the loans that Westpac employed - and that all information concerning loans is readily accessible to staff and to customers. Mr King told the court the loan was processed - the terms and conditions of which were subsequently issued from the Mortgage Processing Centre. In the sworn statement of Mr King; "I understand that Ms Daza-Pacheco sought advice concerning the purchase of this second property from her solicitor and that as a result the loan was subsequently drawn down." There was no evidence produced to the court as to the documents taken by the applicant to her solicitor in order that he may give her that advice. On the afternoon of 18 September 1996 as a result of being contacted by Mr Max Stephenson, the Staff Lending Manager at the Royal Exchange Branch, Mr King became aware the applicant had withdrawn funds from her loan account; further, that the applicant had drawn out some additional funds which had been in her savings account after being told that her loan account had no redraw facility. As a result Mr King telephoned the applicant and said words to the effect that she had no authority to debit her loan account and that she had placed herself in a very bad position. Paragraph 17 of the statement of Mr King provides; "I believe I went to more than adequate lengths to explain her (sic) about interest capitalisation. I did this because I believed that when I first spoke with her she may not have had the financial acumen to understand the transaction involved." In cross examination it was put to Mr King that at the second meeting he had in June with the applicant he did not raise the re-draw matters or the interest capitalisation. Mr King said that he did. The court saw no supporting documentary evidence in that regard. In his oral evidence Mr King said that the legal obligations of the applicant arose through his conversations with her during the time she was taking out her loans. Mr King agreed with the suggestion that owner-occupied bridging loans allow for progressive drawn downs by the borrower. Mr King said a re-draw occurred when a client had the ability to access their funds placed in a loan account to their credit, and that exhibit "C" had neither of those facilities. Mr King agreed that if another person, a customer being a member of the public, had attempted to draw down a loan such as the applicant did, the procedure would have been different. The customer would have been requested to come into the bank and to put the account in order. Further, that the matter would have been reported to the loans area of the bank. It was put to Mr King that that was appropriate in the case of the applicant and the answer was "it could be". It was put to Mr King that he had a dual relationship with the applicant - one as an employee and another as a customer. The suggestion was not denied. On behalf of the respondent evidence was admitted from Ms Paula Mullens who stated she was employed as part-time Customer Service Officer by the respondent. On the morning of 18 September 1996 Ms Mullins noticed that a debit in the amount of $3,500 had been rejected. Ms Mullins ascertained the debit related to a Mortgage Processing Centre loan processed on Monday 16 September 1996. Soon after, Ms Mullins learned that the funds of $3,500 had rejected because there was no re-draw facility on that loan. Shortly after Ms Mullins spoke to the applicant and allegedly advised her that the account she had drawn against did not have a redraw facility, and that reversal entry would have to be done on the funds. The evidence provided by Ms Mullins was that she requested the applicant to telephone Mr Stephenson. It was made clear to the applicant that unless she obtained authority for the existing transaction, she would have to reverse the funds out from the Bankstown Square account of the applicant. At approximately 4 pm Ms Mullins learned that the funds in the applicant's name had been withdrawn from the Bankstown Square account, sometime after her second telephone conversation with the applicant. The scenario as outlined was put to the applicant by Mr Alfano during the interview held on 23 September 1996. There was no evidence on behalf of the applicant that she refuted the matters attributed to Ms Mullins. On behalf of the respondent the court heard from Mr Max Stephenson who stated he was employed as the Staff Lending Manager at the Royal Exchange branch of the respondent. On 18 September 1996 he spoke to Ms Mullins who advised that a debit in the amount of $3,500 had been processed on the applicant's loan account which had rejected from the loan account to the AMP suspense account. Mr Stephenson stated that he became aware that most of the credit funds of the debit had been transferred to an account in the name of the applicant at the Bankstown Square Branch and were still in that account. Shortly thereafter Mr Stephenson stated that he spoke to the applicant who confirmed she had spoken to Ms Mullins and secondly that she had withdrawn some money from the bridging options loan as it had "available funds" showing to her credit on the computer monitor at the bank. Mr Stephenson said he the applicant told him that she had "put others through the other day" and that he had suggested she contact Ms Mullins as to how the entry was going to be reversed. From the words used the fact that the entry was going to be reversed was not equivocal, it was clear and unambiguous. In the words of Mr Stephenson; "I made it quite clear to her that these funds would have to be reversed as no re-draw facility was connected to her loan account." Mr Stephenson said that at this time he was not aware that there had been a debit in the sum of $2,000 on the applicant's loan account processed the previous Friday. Subsequently Mr Stephenson learned that the funds had been withdrawn from the Bankstown Square account conducted by the applicant. On behalf of the respondent the court heard from Mr David Frigo who at the time of the incident held the position of Personal Banking Manager. Mr Frigo stated in March of 1996 he was present when Mr King interviewed the applicant about a bridging loan she was seeking. Paragraph 4 of the statement (annexure "F" to the statement of Mr Alfano) provides; "At the stage where her income and outgo details were disclosed, it appeared that she did not have sufficient income, nor a deposit to put towards a loan. Mr King then discussed with her that she would need interest capitalisation if she was to proceed with the loan and it would have to be approved by credit." It was the evidence of Mr Frigo that the applicant understood that the funds from the loan would be used to buy the new house, the extra funds being to refinance the other bank loan. Mr Frigo stated that it was his belief that Mr King provided a comprehensive description of what the facility entailed. I am unable to accord the evidence of Mr Frigo much weight as he was not present at the critical interview with Mr Stephenson, the one that occurred in June of 1996. However, his views are relevant as to the overall knowledge of the applicant, bearing in mind in submission the applicant contended she did not touch the sum of $6,000 in light of the explanations given to her by the bank when the initial loan was being explained. On behalf of the respondent the court heard from Mr Alfano, the manager of the Fraud Control Unit of the respondent who stated that on Wednesday afternoon, 18 September 1996 he received a telephone call from Mr King advising that a member of staff had drawn some funds against her bridging options home loan, such loan not having that facility. Mr Alfano then discussed the matter with Mr Stephenson. The next day he spoke with Ms Paula Mullins and then he subsequently advised Mr Peter Capell, the Regional Customer Service Manager of the situation. Mr Alfano interviewed the applicant the following Monday morning, 23 September 1996 who advised him that she thought she did have the option to draw the money from her loan account. Subsequently Ms Michelle Higgins, a representative from the Finance Sector Union attended and discussed matters with the applicant. A further interview then took place which was electronically recorded, the applicant was given a copy, and a copy was admitted as an exhibit. No allegation was made that the applicant answered the questions put by Mr Alfano under duress. Ms Daza-Pacheco was then advised enquiries were to be carried out which could result in termination, and she was suspended while the respondent carried out those investigations. Mr Alfano obtained statements from Mr Stephenson and Ms Mullins. On 26 September 1996 Mr Alfano completed a report to Mr Peter Capell outlining the facts and in his statement he said: "...Ms Daza-Pacheco had acted dishonestly by drawing funds from the loan account when she had been told that the loan had no re-draw facility, and then drawing funds from her savings account after she was told she was not entitled to these monies. I considered that such actions were as such a wilful and serious nature that the recommendation for termination was fair and just censure... I also gave consideration to inviting Police action concerning Ms Daza-Pacheco's actions...there was sufficient evidence to establish that (the applicant) had committed the offence 'Obtain Benefit by Deception' under...the New South Wales Crimes Act. I believed that this offence had been committed by the act of presenting a withdrawal of $3,460 to a teller at the 60 Martin Place Branch to draw out the credit funds from her savings accounts when the evidence indicates that she was aware she had no entitlement to obtain funds." Admitted into evidence as exhibit F was the conduct booklet being the Code of Conduct constituting part of the applicant's personnel agreement. It is there stated; "As a fundamental policy, we at Westpac conduct ourselves with absolute honesty and integrity. We do no tolerate dishonest behaviour in other employees or customers. If we suspect dishonest behaviour, we bring it to the attention of someone who will take action. Dishonestly and lack of integrity harm our business...Staff who breach our Code face disciplinary action. Potentially including dismissal. In some instances there may be legal action as well....Every one of us can always, in confidence, seek advice from a responsible person, such as a manager or supervisor, if we are unsure whether our actions or decisions,...breach the Code of Conduct." In cross examination the applicant acknowledged that when she signed the Personnel agreement (Exhibit E) she was provided with a copy of exhibit F. On behalf of the applicant it was submitted the respondent did not have a valid reason for termination based on the applicant's conduct in that it was as a customer she had approached the bank for finance. Further, it was alleged that there was no discussion with Mr King as to the terms and conditions of the loan. It is a finding that although there may have been discussion, there is no direct proof the applicant completely understood those terms and conditions. That finding is supported by paragraph 17 of the statement of Mr King, and the lack of documentation clearly explaining the position to the applicant. On the evidence of Mr Stephenson, it can be concluded the respondent assumed staff members would probably have a greater understanding of the workings of the loan, and secondly it was clear during the proceedings that staff members enjoyed a greater flexibility with regard to access to their accounts than other customers. This was so in that it appeared to be accepted practice that staff members would process transactions for each other on the basis of a certain amount of trust, whereas greater checks and balances would be performed for other customers. Mr Moses on behalf of the respondent stated that the proceedings were not brought under any review of contracts legislation. However it is the task of this tribunal to determine if the employer had a valid reason for the termination of the employment. I agree with the submission of Ms Howell that Ms Daza-Pacheco did not have experience in the bank in aspects of processing loans and her work in the bank was confined to working as a teller. On the basis that there could be a genuine mistake in the mind of the applicant as to her entitlement to the amount of $13,902 noted as being "available funds" in her name revealed on the screen of the bank's computer, it can be concluded that until the time of the first telephone call from Ms Paula Mullins the respondent did not have a valid reason for her termination. In Gerard Westen v Union Des Assurances de Paris (NI 2819 of 1995, Madgwick J, unreported, 17 December 1996 discussed the meaning of "valid reason" as it appears in s 170 DE(1) of the Act and recent authorities. It is clear that having regard to Nettlefold v Kim Smoker Pty Ltd (TI95/1334. Lee J, unreported, 4 October 1996) and Thomas v Ralph Lynch t/as Bellingen Grocery Wilcox CJ 20 December 1996, unreported) the central question is the fairness, in all the circumstances, of the dismissal. The evidence as to when the sale of the Lakemba property should occur is unclear, and the applicant has not refuted the suggestion that her borrowing's from her employer were very much bound up with the sale of Lakemba. It can be argued that the bank, the respondent lender, failed to impress upon the applicant that until Lakemba was sold her loan was in a state of flux. There was no evidence the bank satisfied itself the legal advice the applicant allegedly sought clarified that position for her. It is clear the applicant was aware that she had to sell her Lakemba property and that she could not support borrowings on both, and to that end the actions of the applicant on 18 September 1996 after she received the first telephone call from Ms Paula Mullins have to be considered. The respondent argued that the applicant was employed in a position of responsibility and trust dealing with money of members of the public. Accordingly, Westpac was entitled to expect that a person in her position be trustworthy. As a valid reason for the termination the respondent argued the applicant caused to be processed a withdrawal in the sum of $3,460 from her savings account approximately 20 minutes after she was informed by two Westpac officials that: - her loan account did not have a redraw facility; - she had no authority or entitlement to conduct the draw down of $3,460 on the loan account; - the funds which were still in her savings account were to be reversed out of it. It can be argued that the applicant may have misunderstood the position overall concerning the redraw facility, and in submission Mr Moses stated on behalf of the respondent that Westpac has given the applicant the benefit of the doubt. But having been an employee of the bank for some two years it is unlikely that she was unaware of the concern of her employer about her actions when she received the first telephone call from Ms Mullins and it can be concluded the applicant ought to have known the funds in her Bankstown Square account were not hers to deal with as she wished as the re-payment position was not yet finalised and particularly as the Lakemba property was not yet sold. The question as to whether the applicant had that knowledge is to be measured from the actions of the employee, and not the belief of the employer. It is true the applicant did not access the further amount of $6,000 in her account which she believed should remain in the account because of what she had been told about her earlier loan application but it is erroneous to contend the respondent cannot overcome the fundamental fact that once the money had been placed in her account by employees of the respondent, following a normal withdrawal transaction, the applicant was entitled to do as she chose with the money. First the money was incorrectly placed in her account, and secondly the applicant was not entitled to do as she chose with it. The conclusion that the applicant was acting contrary to the policy of her employer and knowingly dealing with property that was not hers is further supported by the evidence that prior to the date of the applicant's termination and during the proceedings, Ms Daza-Pacheco gave various inconsistent explanations as to how she disposed of the funds on 18 September 1996. Further, it is a finding those inconsistencies establish the fact that the applicant lacks credibility and the respondent can have no confidence in her being a person of honesty and integrity. The inconsistent explanations were matters not known to the respondent at the time of termination and in accordance with the principles referred to by the High Court in Byrne v Australian Airlines Pty Ltd (1995) 131 ALR 422; McHugh and Gummow JJ at 463 state; " In Lane v Arrowcrest pty Ltd von Doussa J considered the example of the dismissal of an accountant who held a position of trust where it was discovered after the dismissal that the accountant had been systematically embezzling money from the employer. His Honour said it would be astonishing if the employer could not resist an allegation that the dismissal was harsh unjust or unreasonable, within the meaning of the relevant award, by pointing to those facts discovered after the dismissal. so long as they concerned circumstances in existence when the decision was made. His Honour concluded: 'Whether the decision can be so justified will depend on all the circumstances. A circumstance, likely to favour the decision to dismiss, would be that fraud or dishonesty of the employee had caused or contributed to the employer's state of ignorance. A circumstance likely to weigh against the decision would be that the employer had failed to make reasonable inquiries which would have brought existing facts to its knowledge before the dismissal occurred." It is a finding of this court that the actions of the applicant fall into the category of serious and wilful misconduct. Secondly it is a finding of this court that the request by Ms Mullins made to the applicant during the first telephone conversation to contact Mr Stephenson with regard to obtaining authority concerning her redraws was a lawful and reasonable direction on the part of the employer. In that regard I am unable to agree with the submission of the applicant that the respondent cannot point to any "direction" given to the applicant on 18 September 1996. This the applicant failed to do, such failure falling into the category of misconduct - the applicant thereby repudiated one of the essential conditions of her contract of employment: Laws v London Chronicle (Indicator Newspapers) Ltd (1959) 2 All ER 285; which was applied by Wilcox CJ in Gooley v Westpac Banking Corporation (1995) 129. In conclusion it can be said the respondent had a valid reason for the termination of the applicant. It is a finding the applicant was accorded procedural fairness. The requirement as set out in s 170DC of the 1996 Act provides that an employee must be given an opportunity to defend the allegations. That requirement does no require any particular formality: Nicolson v Heaven & Earth Gallery Pty Ltd (1994) 1 IRCA 199 at 209. Ms Higgins, the Finance Sector Union representative, was present when the allegations were put to the applicant. On or about 30 September 1996, the applicant attended a further meeting in the office of Mr Capell, the then Regional Customer Service Manager attended by Ms Gatfield an organiser from the Finance Sector Union. The applicant was provided with a letter setting out the allegations against her. A response was sought by 2 October 1996. Again a meeting took place in the office of Mr Capell with Ms Gatfield in attendance. Mr Capell told her the respondent had considered the matter and in view of the allegations and the response of the applicant decided to terminate the applicant. The applicant was asked if she had any questions concerning the decision and she said no. I agree with the submission that in this case it would have been impossible to give the applicant the opportunity to deal with the allegation that she had made inconsistent statements as some of those alleged inconsistent statements occurred during these proceedings. On the basis of the above finding the application of Ms Daza-Pacheco is dismissed. I certify that the preceding twenty (20) pages are a true copy of the reasons for decision of Judicial Registrar Tomlinson.