Takai v Westpac Bank of Tonga [2009] TOLawRp 36; [2009] Tonga LR 296 (8 July 2009)

IN THE SUPREME COURT OF TONGA
Supreme Court, Nuku'alofa

CV 784/2007

Takai

v

Westpac Bank of Tonga

Shuster J
13-15 May 2009; 8 July 2009

Employment law – wrongful dismissal claim – found the plaintiff acted fraudulently – dismissal justified

The plaintiff worked for the Westpac Bank of Tonga, the defendant. In July 2007 the plaintiff applied to the defendant for a short term overdraft facility the amount of which was the subject of the dispute. The plaintiff claimed the overdraft was for $30,000, the bank claimed the overdraft was for $2,000. The bank received information there might have been an irregularity in the plaintiff's overdraft application from an employee. The 30,000 overdraft facility which had been applied to the plaintiff's account was cancelled and an internal investigation was commenced by the bank. After a full investigation the plaintiff was dismissed by the Bank on 11th July 2007. The plaintiff filed suit for wrongful dismissal and sought damages as follows: damages of $50,000, exemplary damages of $60,000, and costs.

Held:

1. Within the banking industry in particular it was a well-established principle that the public and the employer will insist upon utmost trust, honesty, loyalty, and confidence from each and every employee, given the nature of work performed within the banking industry where staff are dealing with large volumes of money, loans, confidential materials having access to many numerous customers' accounts on a daily basis. The defendant bank need only show an employee's conduct as to his or her breach or breaches of well-established banking practices and procedures, coupled with a proven allegation of fraudulently altering or defacing any bank document or documentation, would amount to a serious breach. This would entitle the bank to immediately and summarily dismiss an employee.

2. The Court concluded on the evidence the plaintiff filled out an application for a $2,000 overdraft which more likely than not would have been approved and the plaintiff submitted same. At some point in time the plaintiff retrieved her application form and replaced page two with the $30,000 sum and she reattached that page.

3. The bank was entitled to summarily dismiss the plaintiff.

Counsel for the plaintiff : Mr Edwards
Counsel for the defendant : Mr Waalkens

Judgment

This is a claim by the plaintiff Mrs Nita Takai for wrongful dismissal from her employment with the Westpac Bank of Tonga on the 11th July 2007. The case was not able to settle by way of mediation, so the matter proceeded to trial - from 13-15th May 2009. I am grateful to counsel, for their comprehensive written submissions, which I have taken into account in this my judgment.

Background

The plaintiff was 20 years of age when she commenced her initial employment with the Westpac Bank, of Tonga on 25th October 2000. The plaintiff is married; there are two children of the marriage, the plaintiff's husband works in New Zealand.

In June 2007 the plaintiff was employed as a personal banking manager in the Westpac Personal Business Unit she received a basic salary of $12,882.00 per annum.

In March 2007 the plaintiff secured a loan of $223,966.00 from the Westpac Bank to build a house on her husband's allotment — to purchase a motor vehicle, and service existing debt. The housing loan included, and was conditional on the plaintiff's parents and husband acting as guarantors; the family allotment secured the agreement with the bank.

In July 2007 the plaintiff - FURTHER - applied to the Westpac Bank for a short term overdraft facility - the amount of which is the subject of dispute, over which we heard evidence during the course of the trial. Whereas the plaintiff claims the overdraft was for $30,000.00, the bank claims the overdraft was for $2,000.00. The banks evidence is that they would not have approved any more than $2,000.00 as the plaintiff was at the very limit of her debt / loan serviceability ratio of [49.5%] of her salary.

Upon the bank receiving information there might have been an irregularity in the plaintiff's overdraft application, from an employee, Mrs. S Fifita - a $30.000.00 overdraft facility which had been applied to the plaintiffs account was cancelled and an internal investigation was commenced by the bank.

After a full investigation by the bank into the circumstances of the plaintiff completing and filing her overdraft application, the plaintiff was dismissed from employment with the Bank on 11th July 2007, by letter of that same date. The evidence revealed the dismissal had been approved by the Banks Head Office in Sydney.

As a result of her dismissal the plaintiff felt aggrieved, she sought the assistance of her lawyer Mr. Edwards, who wrote to the Bank on her behalf – seeking a review of the dismissal. However her written request for a review of the decision to dismiss the plaintiff was refused by the Bank — the plaintiff issued proceedings to seek redress via the Court process.

The plaintiff filed suit for wrongful dismissal – by way of damages as follows:-

a) Damages of $50,000.00

b) Exemplary damages of $60,000.00

c) Costs

Common Ground

It is common ground: - in a wrongful dismissal case, awards in Tonga vary - awards do not follow similar awards in New Zealand Australia or the United Kingdom, because these countries have industrial laws and Employment Courts dealing with these types of cases. In Tonga the Courts historically apply the common law principles, and the law of contract with slight adaptations to local conditions.

The plaintiff also argued — in the United Kingdom, Australia, New Zealand and other developed countries, if you lose your employment it is not too difficult to obtain re-employment elsewhere this is not the case in Tonga because the prospect of obtaining further employment is and will be always be remote because Tonga is a small island with very limited employment opportunities.

The plaintiff argues if someone is dismissed from a position in Tonga, then everyone gets to know about the circumstances of dismissal. Consequently the plaintiff says dismissal from employment carries with it a stigma of dishonesty or: - suspected wrong doing. The defendant bank argues however this point is irrelevant in this type of case, and it should not have been advanced in the plaintiff's closing submissions, when no evidence on the point was called.

The Contract of Employment

Under the plaintiff's employment contract with the Westpac Bank, the plaintiff is regulated by the terms of the contract — subject to the implied terms of reasonableness. It was accepted by the plaintiff that the defendant has the right to dismiss, if it wishes, by giving the requisite notice, or payment of salary in lieu of notice.

Additionally the plaintiff accepts the defendant has the right to dismiss - for misconduct or dishonesty. The plaintiff says however, if the defendant wrongly exercises its right to summarily dismiss the plaintiff and, the dismissal is not justified - the employment contract is thereby repudiated - it is then, not open to the defendant to try to rely on a month's notice - as provided for in the agreement.

The plaintiff says in the present case, the defendant chose to dismiss the plaintiff summarily. If that is wrong then the defendant, cannot shelter under the umbrella of one months notice provided for under the employment contract. The plaintiff argues the implied term of the employment contract to act reasonably - is relevant and important when the defendant exercised its right to dismiss the plaintiff. They say the circumstances surrounding the alleged misconduct and dishonesty and the manner in which the defendant arrived at its decision to dismiss was wrong in fact and in law - whereas the defendant bank strongly disagrees.

The defendant bank, says this case raises - two issues for determination by the Court.

[1] Whether the plaintiff has established the allegation of wrongful dismissal.

[2] If so, then what is the appropriate relief given the plaintiff's claim for general and exemplary damages.

The Evidence

The plaintiff testified in July 2007 she was desirous of obtaining a temporary overdraft of $30,000.00 — to purchase materials for a women's Katoanga a display of Tongan handicrafts and artifacts mats, tapper, baskets at a venue for sale- a Katoanga is an important ceremony in the village life and community. One of the Katoanga's was to be held in Tonga, and the other in Niua. The plaintiff claims her mother and sister who reside in the U.S.A were involved in the Katoangas.

The plaintiff says these goods have a high value and her participation was an opportunity for the sale and export of Tongan artifacts, In essence the plaintiff said the $30,000 overdraft was to purchase goods for the Katoanga and sell them, the whole family was involved and it was anticipated the $30,000 overdraft would be repaid in full by the end of September 2007.

The plaintiff fully accepts and fully recognized she had a problem with a $30,000 overdraft [the amount required] because of her relatively low salary and her existing mortgage debt - which she agreed approached 49.5% of her monthly salary. The plaintiff told the court she sought the advice of her relationship manager -Taniela Ponefasio. She claimed she discussed the amount of the overdraft, the purpose, security and repayment with him. The plaintiff said she was advised to see Malakai Sika the Bank's Manager Credit and Risk.

On 11 June 2007 the plaintiff saw Malakai Sika and discussed the amount of the overdraft, the purpose of the overdraft, security, and repayment details she told him of the involvement of her mother and her sister who lived in the USA in the venture. The plaintiffs told the court she told both managers her sister had money in the USA which would cover the $30.000.00 required, but that money was earmarked for her sisters application for permanent residency the sister needed funds to show she had sufficient money to support herself in the USA. The plaintiff explained to Malakai Sika the overdraft was really for her sister and mother; but the overdraft would be taken out in the plaintiff's name.

The plaintiff testified she told the managers sufficient money would be available by the end of September 2007 - because by then the handicrafts would be sold and the proceeds would be more than adequate to repay the Bank's $30,000 overdraft - in full. The plaintiff testified; - Malakai Sika approved the overdraft in principle, and instructed the plaintiff to submit her application. The plaintiff reported the outcome of her meeting with Malakai Sika to Taniela Ponefasio she testified Taniela was busy BUT he told her to prepare the submission - and let him check and sign the forms later.

The plaintiff prepared her submission and took the application to Malakai Lomu Sika — BUT—the application was sent without Taniela Ponefasio's signature. The plaintiff said her submission was placed with a bundle of applications she took from Taniela Ponefasio's table to Malakai Sika for approval. The plaintiff agreed that Taniela had not signed the submissions. The plaintiff readily acknowledged this fact throughout her interviews, and whilst giving evidence in court. According to her evidence; and throughout her interviews with the Bank officials, the plaintiff maintained Malakai Sika approved a $30,000 overdraft - not one for $2,000.00.

The plaintiff also testified she herself prepared document 8 of the defendant's production

• "THE OFFER AND ACCEPTANCE LETTER FOR THE $30.000 OVERDRAFT

The plaintiff testified both she - and her husband signed the documentation but she admits the two signatures were not witnessed by a Bank Officer - as required by Bank policy. The plaintiff said it was policy that loan submissions and the Offer and Acceptance Documents were submitted to the bank's legal department to check, which would be on or about the 14 or 15 June 2007 - the plaintiff told the court she left on the 15 June 07 - for a week's vacation to New Zealand.

Whilst the plaintiff was in New Zealand the court heard the witness Ms Simaima Fifita claimed she saw a copy of the first page of the plaintiff's submission lying beside the photocopier - and Ms Fifita reported her finding to Mrs. Melaia Tu'ipulotu. Shortly after the finding of the first page of the submission — both Simaima Fifita and Mrs. Melaia Tu'ipulotu met with Malakai Sika — and as a consequence of the meeting, the plaintiffs overdraft facility for 30,000 PA was cancelled and removed from the Banks computer system.

It is common ground between 25th June and 5th July 2007 the plaintiff was interviewed by bank officials and she was subsequently suspended from employment on full pay.

On 11th July 2007 the plaintiff was dismissed by letter of the same date. The letter of dismissal stated the reason for the plaintiff's dismissal - as follows:

"... The Bank regards your misconduct in not following Bank's procedures as serious. This is clearly a breach of the Westpac Bank of Tonga code of conduct and the Bank will not tolerate any type of fraudulent behaviour that leads to a loss of confidence and trust in your services".

The plaintiff was aggrieved by the Bank's decision and as a result, the court heard the plaintiff through her lawyer formally requested the Bank to review its dismissal decision of 11th July 2007. The plaintiff said, the crucial grounds for a review of the decision was stated in the plaintiff's lawyers letter - dated 20 August 2007 to the defendant as follows:

5th Para. Page 4 - "The loan documents were incomplete in several respects and it is the normal function of the legal section to check and defer and/or decline any application that is incomplete or has errors in it".

1st Para. Page 5 - "As regards to not following the Bank's procedures it should be noted that the head of loans namely Malakai L. Sika should have corrected this matter at the very outset. The plaintiff was presenting her own application and the application or submissions were not signed by Taniela Ponefasio. Further Ponefasio should not have directed Nita to complete the form and give it to him for his signature."

The plaintiff argued there was no loss to the Defendant Bank or any gain to herself (the plaintiff) by this action. However the request for a review of the plaintiff's dismissal by Counsel for the plaintiff - was declined by the Defendant bank - and the matter went to trial.

The dismissal letter stated that the Bank regarded the misconduct in not following the Bank's procedures as serious. Because the procedures that she failed to follow, were not stated in dismissal letter, the plaintiff asked for a copy of the report which recommended dismissal. This was never supplied to her, and the request by the plaintiff for a copy of the report - was admitted by Mr. Rob Buick - in his evidence before the court.

It is common ground the plaintiff was accused of not having her submission signed by Mr. Taniela Ponefasio and, her signature and that of her husband - were not witnessed by an authorized Bank Officer. The plaintiff readily admitted the two accusations against her. The plaintiff explained that she was directed by Taniela Ponefasio to prepare her submission and give it to him later to sign. The preparation of the submission should have been completed by Taniela but because he was too busy, he directed the plaintiff to complete it. That direction was against policy and the code of conduct. It was an act of non-compliance with procedures and the plaintiff says it is significant to note that no punitive or any other action was taken against the Relationship Manager.

The plaintiff is accused of not getting Taniela Ponefasio to sign the application. The plaintiff's application was not signed by Taniela but was submitted to Malakai Loinu Sika for approval. It was not rejected. Further it was claimed by Mr. Buick in his report that Taniela said to Nita to give him the completed application for checking and signing before it was submitting to the credit department. The relationship Manager did not submit the plaintiff's application and the Credit Manager received it and approved it. He saw Nita and not Taniela. Both Managers were at fault but no disciplinary action was taken against either (or both) of them for not following or ensuring that the procedures of the Bank were followed.

The other misconduct alleged against the plaintiff related to her and her husband - signing the acceptance of the terms and conditions of the overdraft without their signatures being witnessed by an authorized Bank Officer.

The application was submitted to the legal section to check before it could be finalized. The legal section would have picked up that the application was not signed by Taniela Ponefasio, and it would without doubt have noted that the signatures of the plaintiff and her husband were not witnessed. The plaintiff says there was no intention to act fraudulently nor can such an intention be implied from the evidence on that point. The explanation given by Taniela Ponefasi, and the plaintiff was to the effect that it was a busy week for both of them and they were short staffed because of absences and leave on account of the Free Wesleyan Church Annual Conference that week. The plaintiff was also leaving on vacation leave for one week that Fridy 15 June 2007.

These explanations were referred to in Mr. Rob Buick report. The plaintiff asserts it would appear that Ms. Buick did not consider this when he recommended the plaintiffs dismissal. The evidence reveals the application for the $30,000.00 overdraft was cancelled and taken out of the system. The plaintiff says this was not due to any report from the legal section of the Bank (where no evidence was called) but because of the action of Simaima Fifita and Melaia Tu'ipulotu - already referred to.

The plaintiff says there was also the defendant's suggestion that the pages of the plaintiff's loan application were changed after approval which is a theory -as there was no clear evidence to support it. There was a conflict of evidence between Nita and Malakai Lomu Sika. The decision to dismiss the plaintiff - because of serious misconduct in not following Bank's procedure and for fraudulent behaviour was not justified the plaintiff says it was harsh and extreme and was a conclusion which was not supported by the facts.

The Report and the Recommendation - by Mr Buick
The plaintiff claims the report and the recommendation of Mr Buick (Defendants Documents — D10) was significant for its omission in the following regards:

i) Reference to the role of the legal section of the Bank to check and defer and/or decline any application that is incomplete and/or has errors in it. Before this could be done, Simaima Fifita and Melaia Tu'ipulotu had intervened.

ii) That the overdraft application was cancelled and the $30,000.00 overdraft facility was taken out of the computer system.

iii) That there was no loss to the Bank or any gain to the plaintiff.

The report was misleading and wrong as the Westpac Head Office at Sydney was misinformed - when it was stated –

"Nita is aware of what the Banks recommendation to Sydney: - will be in relation to her continued employment with Westpac Bank of Tonga"

The plaintiff argues this is an incorrect statement of fact for consideration by the Westpac Bank's Head Office. The evidence on this point is clear. The plaintiff was suspended and she was informed that further investigations were being carried out.

On 11 July 2007 a letter of dismissal was handed to her. The plaintiff asked for a copy of the report made to Head Office, in relation to her dismissal. This assertion was admitted by Mr. Buick in his evidence in chief and in cross examination and Mr. Buick confirmed that no copy of a report was given to the plaintiff. The plaintiff asserts she was never told or made aware whilst she was on suspension - that she would be dismissed for fraudulent behaviour. The recommendation in the last paragraph of the report is as follows:

"It is the Bank's recommendation given the incidence as detailed above that Nita Finan Takai employment is terminated due to numerous breaches in the Banks policies and procedures".

The recommendation for the plaintiff's termination expressly stated "numerous breaches in the Banks policies and procedures" whereas the dismissal letter went further and accused her of fraudulent behaviour.

The recommendation notice used the phrase — "that Nita Finaze Ta/cal employment is terminated" It is not clear that it be terminated by notice under clause 11(b) or dismissal under 11(c) of the employment contract.

The situation was not made any clearer when the decisions of Peter Capell and Ben Rex are considered. [Defendants documents 11.] One person says, that he support termination and other person says he supports dismissal. The report contained an unproven theory and allegation that the first page of the submission was changed. The plaintiff said there are two points to be noted —

[1] That the file was taken out of the system by Simaima Fififta and Melaia Tu'ipulotu and they saw both saw Malakai Lomu sika whilst the plaintiff was on vacation.

[2] When Mr. Buick raised the staple holes on the application form with the plaintiff, she said they were not there before. The plaintiff also strongly denied that the overdraft was for $2,000.00. There was a difference between her evidence, and that of Matakai Lomu Sika on the overdraft amount.

The plaintiff says following factors should have been taken into account-

i) Malakai Sika admitted in cross examination that if the amount was for $2,000.00 only — then it would not have been necessary for Nita to see him it would have been approved.

ii) The plaintiff had seen and sought advice from Taniela Ponefasio.

iii) According to her evidence the plaintiff discussed the same facts discussed earlier with Taniela Ponefasio and Malakai Lomu Sika.

iv) The only difference between Taniela Ponefasio and Malakai Lomu Sika is that Taniela said the amount was $30,000 whereas Malakai said no amount was mentioned. The evidence from Malakai is less than credible. The plaintiff discussed repayment and who was involved and how it was to be repaid and for Malakai Lomu Sika to say that the amount was not mentioned is - very odd and strange. The plaintiff says the central purpose of the meeting concerned the amount required, the required security and how it was to be repaid.

v) In Malakai Sika's evidence he said the amounts of $4,000.00 or $5,000.00 were mentioned in his meeting with the plaintiff.

In a conflict of evidence situation between Malakai and the plaintiff, the plaintiff says it was wrong for Mr. Buick to conclude that fraud was being committed. In the amended statement of defence, paragraphs 15 thereof - refers to dishonesty. Under cross examination the plaintiff was accused of dishonesty in trying to obtain the overdraft and to have run away. The plaintiff says there was no evidence of dishonesty, and she has not run away from her mortgage commitments. The family has gone to New Zealand her husband is earning more money in New Zealand to assist with the mortgage repayments. The plaintiff argues she is entitled to the benefit of the doubt, rather than for Mr. Buick to conclude, that she was fraudulent.

The Defendant Bank's Version

The defence as advanced can be summarized as follows:

i) The defence denied the plaintiffs claim.

ii) The plaintiff did not follow the Banks procedures - and the failure to do so — constitutes serious misconduct / or dishonesty.

iii) The misconduct or dishonesty consisted of— and by

a. Submitting her own application to the Credit and Risk Manager - without Taniela Ponefasio's signature.

b. Preparing and signing the formal Offer and Acceptance of the terms and conditions of the overdraft - without the same being witnessed by an authorized Bank Officer.

iv) Under paragraph 11(c) of the employment contract dated 25/10/2000 – the bank was and is - authorized to dismiss - for misconduct.

v) The defendant Bank says the dismissal was justified.

vi) If the dismissal was not justified, then the defendant says damages should be limited to one month's pay of $1,073.00.

The defendant says the crucial issues in this case will ultimately turn on the analysis and the view taken on the nature of the alleged misconduct, and the circumstances under which the misconduct occurred. The defendant says there are basically two omissions or misconduct. The misconduct occurred because the officers concerned were performing under work pressure at the time and, the plaintiff was preparing to go on vacation.

This fact is mentioned in part in Mr. Buick's report (Defendants production — Document 10)

"Nita asked Taniela to complete the application and submit it to the Credit Dept for approval Taniela advised Nita he was unable to process immediately due to workflow, (other RM away on leave and numerous requests in front of Nita's)."

The defendant says errors started from the advice to the plaintiff to complete her own loan application. Taniela admitted in cross-examination that this trouble would not have occurred if he had completed the application in the first place, rather than delegating it to the plaintiff applicant. The witness Malakai Sika knew the procedure to be followed and allowed the plaintiff to submit her own application. These safeguards were not observed by the various Bank Managers involved and that is and was admitted by the Defendant Bank.

The plaintiff - says the plaintiff explained to Mr. Buick — and said in evidence that she was under pressure and she made a mistake. The plaintiff said throughout the course of her evidence she was very frank and she freely admitted her failure to follow procedures. The plaintiff said she was aware of the procedure and the fact that the Bank's legal section would check, and would also vet the application, to confirm whether — the application was in order or not. However the evidence revealed that function was not completed because it was prematurely terminated by Simaima Fifita and Melaia Tu'ipulotu - and the 30,000 overdraft facility was detected and, it was taken out of the computer system.

Included in Mr. Buick's report recommending termination of the plaintiffs employment was the alleged changing of pages in the application which together with the omissions referred to in paragraph 6.1 hereof constituted —

a) A factor which should not have been taken into account in the decision making process.

b) Relevant factors which were omitted and should have been taken into account in the decision making process.

Under the meaning of the word reasonable as defined in the Wednesbury case (Supra), the inclusion of (a) and exclusive of (b) above in the decision making process would render the decision bad on the grounds of unreasonableness.

In paragraph 22 of the amended statement of defence it states that if the summary dismissal was wrong the defendants liability "by virtue of the provisions set out in paragraph 14(c)" would be limited to one month pay of $1073.50. There is no paragraph 14(c) in the amended statement of defence or the employment contract. There is a paragraph 15(c) in the amended statement of defence which combines the provisions of paragraphs 11(b) and (c) of the employment contract as to giving of one months notice for termination and the right to dismiss summarily.

My Conclusions

Because I have heard and I have fully recorded all the evidence and I chose also to rely upon the very helpful written submissions of both Mr. Edwards for the plaintiff and Mr. Waalkens for the defendant, I do not intend to rehearse the defendants evidence in full in this particular case. At common law, every employer is entitled to expect from each and every one of his or her employees; complete loyalty, honesty and integrity, whilst at work. In essence every employee must faithfully discharge his or her duty to their employer and be honest in all dealings between the respective parties.

Within the banking industry in particular - it is a well established principle, that the public and the employer will, insist upon utmost trust, honesty, loyalty and confidence from each and every employee, given the nature of work performed within the banking industry; where staff are dealing with large volumes of money, loans, confidential materials — having access to many numerous customers' accounts on a daily basis.

In the Banking Industry these obligations, and dare I say near perfect qualities, are expected in each and every employee, from the General Manager to the Office Cleaner, in fact from anyone who is engaged to work in the banking industry. These principles are accepted and now enforced worldwide - these qualities in staff members are considered vital for the very survival of a vibrant, honest, trustworthy, and increasingly International Banking Industry.

I agree with the Defendant's argument that the defendant bank need only show an employee's conduct, as to his or her breach or breaches of well established banking practices and procedures, coupled with a proven allegation of fraudulently altering or defacing any bank document or documentation, would amount to a serious breach - and would entitle the bank to immediately and summarily dismiss - an employee.

I also accept because: - every complaint or every allegation of impropriety (or dishonesty) in the banking industry must of necessity be thoroughly investigated - it must follow that whenever a complaint is made to a member of management; that a thorough investigation into each and every complaint must take place, and at the earliest opportunity.

In this case the facts reveal - that at a point in time in June 2007 whilst the plaintiff was away in New Zealand on leave, a member of the Banks staff - Mrs. Fifita found what she considered to be a questionable page of a document, at the side of a photocopy machine at the Westpac Bank office which concerned her. The document Mrs. Fifita found was a single page of an application for an overdraft submitted by the plaintiff to the bank. The witness Mrs. Fifita testified the document raised her concerns about the amount of overdraft claimed. Mrs., Fifita reported her findings to her supervisors. After which two bank officials met and reported their suspicions to senior management, and an investigation into the plaintiffs conduct commenced.

As a result of the complaint received from Mrs. Fifita - an overdraft facility of $30,000.00 which had been applied to the plaintiffs account was immediately cancelled, and the authority to allow her to overdraw to the amount of $30000.00 was removed from the bank's computer system.

The evidence also revealed that at a point in time the plaintiff telephoned the Westpac Bank from New Zealand whilst she was on leave, she queried a cheque on her account which had not been paid by the bank- the cheque was made out to a builder. When the plaintiff returned to work from leave in New Zealand she was questioned by management about her application for the overdraft, the investigation focused on the amount of $30,000.00 viz a viz $2,000.00.

The investigation by banks senior management took place over a period of time, and at its conclusion the plaintiff was asked to comment on her version of events -by the witness Mr. Buick. The investigation focused on page two of the loan submission and an unusual number of staples on page two i.e. 2 sets - viz and viz an expected 1 set of staple marks.

At the conclusion of Mr. Buick's investigation the plaintiff was suspended from work on full pay and she was sent home on the 5th July 2007. After the banks local management had obtained clarification from Head Office in Sydney the plaintiff was subsequently dismissed from the Bank's employment on the 11th July 2007 by letter.

Until that date the plaintiff had been suspended on full pay.

I Accept and Find as a Fact - or Facts

1. The plaintiff was at all material times employed by the Westpac Bank of Tonga, via a contract of employment; the terms of which were regulated by Conditions of Service to the Bank, and the Terms and Conditions of Service - as such it is implied that the plaintiff of necessity owed a duty of care to her employer.

2. I also accept the plaintiff was bound by the Westpac banks rules and regulations these rules and regulations were contained in the various policy manuals, which were made available to all staff members - including the plaintiff.

3. I accept that a level of an authorized overdraft of 490 $30.000.00 for this particular plaintiff— who was a junior bank employees, would be unprecedented — based on the plaintiff's stated means, her ability to pay, or to repay the full debt upon demand, and by listening to the evidence adduced by the various bank staff members.

4. I do find as a fact that any application for an authorized overdraft of $30.000.00 would be declined by any responsible bank lending officer, knowing all the facts of tins case - as they would have pertained to this particular plaintiff - at that time in June 2007.

5. I also find as a fact that at the time the plaintiff made her overdraft application in June 2007, the Westpac Bank was facing tight liquidity. I accept the evidence the bank had placed tight restrictions on lending but small loans were still being made by the defendant bank to good customers.

6. I find as a fact that a more normal overdraft facility of- $1,000 to $5,000 would more likely than not, be the norm for a junior banking officer based upon the evidence of the Westpac lending officers and the Acting GM Mr. Buick- which evidence I fully accept as truthful.

7. It is clear the plaintiff had absorbed 49.05% of her outgoings to income - in servicing her authorized housing loan; a loan which she had just obtained in March 2007 in the sum of $223,966.00 - for a house a car and to consolidate debt— I saw and I heard evidence to that effect and that evidence I accept.

8. The courts notes item 6 of the bundle — which is the plaintiffs credit history for her housing loan, the responsible bank officer had placed in writing - a caveat on the plaintiffs credit file —to say that there were to be, "No further increase or suspension, until this debt is substantially reduced." this evidence is crucial to this case - and it is evidenced by – tab 6 and is evidence - which I fully accept.

9. Following a complaint of possible irregularities by an internal staff member Mrs. Fifita, I find as a fact a thorough and a proper investigation took place into the circumstances of the allegations of misconduct and or fraud, [dishonesty] against the plaintiff, and that investigation was carried out by responsible senior bank officials.

10. The investigation into the alleged irregularity was conducted by more than one senior member of the banks staff that fact came out quite clearly in the evidence given in court the officers talked to the various staff members involved in the plaintiff's loan application and its processing.

11. I find as a fact the various investigating bank officers pooled their findings and from the evidence I heard - I conclude a proper determination of the evidence took place- with the plaintiff being kept informed, as the investigation went on— as is required by the bank's policies, procedures and natural justice.

12. I find as a fact the plaintiff was given every opportunity to comment on the allegations made against her and, that the banks investigation was appropriately witnessed throughout, by at least two bank officers at all times, and I find as a fact that the plaintiff was never alone with Mr. Buick at any time.

13. I confirm I cannot not believe the plaintiff- when she told the court she did not know of the existence of, or, of polices contained in the Westpac Banks Staff Policy handbook. The assertion beggars' belief, when the plaintiff had worked for the bank for so long, working in a responsible lending position such as hers.

14. There is no doubt in my mind on hearing the evidence I find as a fact the second sheet of the plaintiffs overdraft- loan application had in fact been changed or replaced. That assertion -is clearly evidenced by an extra set of staple holes on page 2 of the application, also because I heard, and because I accept the evidence of the computer expert when he explained that the second page of the plaintiff's application; must have been inserted later within the bundle. In other words the whole document had been charged in form or had been altered.

15. I fully accept the evidence of the computer expert, that the serial numbers inserted at the bottom of the pages on the application- on pages 1, 3 and 4 differ - completely -from page 2, that in mind I also accept the explanation for the difference in the serial numbers on the pages of the loan application given by the computer expert. He testified the serial numbers came from different sources - and were printed at different times.

16. In my respectful view the expert's evidence conclusively proved- the plaintiff's four page loan document had the original page 2 removed, when page 2 of the original application was removed, it was then replaced with a fresh page number 2 indicating a request for a $30,000.00 overdraft - the expert concluded that is why the serial numbers differ.

17. The only reasonable conclusion I come to, is that the changing of page 2, benefited ONLY the plaintiff and NO ONE ELSE - and the changing of page number 2 in the plaintiffs overdraft application in my view does amount to a fraudulent act.

18. Further the evidence from the computer expert was clear, that the plaintiff's application for an overdraft—was not initiated on the plaintiff's computer, and the transaction was not recorded on the plaintiff's computer's hard drive.

19. The computer expert told the court the plaintiff's overdraft transaction was initiated or created via a temporary file folder - and as a result no substantive record remains on the banks computer files.

20. On the other hand and to her credit, the plaintiff accepts she made mistakes and she blames others for these mistakes - the various supervisors who gave evidence, and the management for her non compliance with the banks procedures in this application. The plaintiff testified she was told by her management colleagues to fill in her own application forms which I accept. That's fair enough, but the plaintiff was NEVER told to create or fill out the necessary Formal Offer and Acceptance Letter I heard no evidence to that effect and she did.

21. The Offer and Acceptance Letter clearly formalizes the loan and by filling that form in herself - the plaintiff compounded her offence.

22. It is clear to me, that at the time when the loan application was made - money must have been extremely tight for the plaintiff [and her family] she had by all accounts a large loan in existence, the plaintiff had travelled to New Zealand, and whilst there she received information a cheque to her builder, had been returned by the bank unpaid, as a result the plaintiff telephoned the bank from New Zealand and queried the nonpayment of her cheque.

23. The evidence revealed the $30,000.00 overdraft the plaintiff had asked for had been loaded onto the bank computer system when the plaintiff left for New Zealand (or shortly afterwards) but - before the plaintiffs loan's application had been fully checked by the Bank's legal department.

24. The overdraft facility of $30,000.00 was apparently frustrated when the front page of the application document was found at side of the photocopier by Ms Fifita, it was then the overdraft facility was detected and was removed immediately from the banks system by senior management. Was that the reason the cheque to the builder bounced?

With all these points in mine, I have come to the following conclusions - based upon the evidence. The plaintiff made out a loan application for a temporary overdraft in the sum of $30,000.00.The plaintiff knew full well, that based upon her then current salary and her existing debt - the facility of a $30,000.00 overdraft would be declined by any responsible bank officer.

I conclude on the evidence the plaintiff filled out an application for a $2,000.00 overdraft which was more likely than not [with her work history] would have been approved and the plaintiff submitted same. I conclude on the evidence at a point in time the plaintiff retrieved her application form and replaced page two with the $30,000.00 sum, she reattached same - and that is why there were two staple marks on that page 2, as found and described by Mr. Buick, and only one single set of staple marks on pages 1, 3, and 4.

This theory also explains the difference in the computer generated serial numbers at the bottom of page two of the application. I conclude the 4 pages were not from the same computer run — and the evidence from the computer expert indicated page one, two three and four were certainly generated from a temporary file and not a hard drive and that evidence I fully accept. There is only one person who could have benefited from this course of action, and that would be the plaintiff.

It is my view the substitution of page two on the loan application constituted a fraudulent act, which coupled with the plaintiffs misconduct in submitting her own overdraft application and submitting her own letter of offer and acceptance -was contrary to the banks written policies and procedures - based upon all the evidence I have to conclude the bank were entitled to summarily dismiss the plaintiff as of the 11th July 2007 or even before.

Accordingly

Because I agree with the Defendant's argument that the defendant bank need only show an employee's conduct, as to his or her breach or breaches of well established banking practices and procedures, coupled with a proven allegation of fraudulently altering or defacing a bank document or documentation, would amount to a serious breach, then that would then entitle the bank to immediately and summarily dismiss an employee.

My Ruling

• I find for the DEFENDANT BANK in this case,

• In my view the defendant was fully justified in summarily dismissing the plaintiff on the 11th July 2007 based upon the evidence the bank had in its possession at the material time.

• In my view the defendant bank carried out a full and fair investigation in accordance with bank policy, and it came to a just conclusion based on the evidence.

• I have one criticism to make - when Mr. Buick was asked for a copy of the report by the plaintiff the report should have been supplied to the plaintiff [or her counsel] by the defendant bank as being in the interest of Justice.

• Costs are awarded against the plaintiff, to be taxed by the Chief Registrar - if they are not agreed.