ClubsNSW mounts defence in potentially lengthy legal battle against whistleblower
18 Jun 2020

ClubsNSW has filed its defence against former employee turned whistleblower Troy Stolz, further signalling a potentially lengthy and expensive legal fight.

Mr Stolz, who worked as an anti-money laundering compliance auditor for ClubsNSW, revealed the “alarming” scale of money laundering in pokies rooms at local clubs and pubs earlier this year.

In March, he took legal action against his former employer in the Federal Circuit Court alleging defamation, bullying, sham contracting, underpayment and other breaches of the Fair Work Act.

Now the peak industry body for registered clubs in NSW has filed a response to his statement of claim, arguing Mr Stolz worked as an independent contractor rather than an employee for most of the relevant period and his defamation claim should be thrown out.

In its defence, ClubsNSW says that from the period September 2011 to October 2017 Mr Stolz traded under the business name C2C Solutions.

It argues he is not owed superannuation, long service leave and annual leave for this period as claimed because he was an independent contractor, not an employee.

Its defence says he was “directed and supervised by ClubsNSW in only a limited way” and “was not required to work exclusively for ClubsNSW”.

In a directions hearing conducted via videoconference on Tuesday, lawyers for both sides appeared remotely, with only the judge’s associate and the ABC present in court.

Lawyers for Mr Stolz told the court their client was a “large fellow” who was “belittled because of his weight” and “yelled at” over a period of a year prior to his resignation.

Part of Mr Stolz’s job involved advising and training staff from member clubs on what the law required them to do to prevent money laundering, particularly around poker machines.

He says that long-time ClubsNSW CEO Anthony Ball and ClubSAFE manager Jim Terrie ruined his reputation in the industry by making out he was of “bad character” and his performance was “substandard”.

ClubsNSW said in its defence that Mr Terrie had raised concerns during a conversation with Mr Stolz’s next employer about the “quality and professionalism of Mr Stolz’s written work, and had advised … some degree of supervision would be necessary”.

ClubsNSW also disputes many of the conversations outlined in Mr Stolz’s statement of claim actually took place, arguing the alleged defamatory imputations were not made.

ClubsNSW said it also intended to rely on defences of justification, contextual truth and qualified privilege.

In his statement of claim, Mr Stolz says former ClubsNSW chief executive Mr Ball defamed him when a memo was sent to member clubs in November 2019 alleging Mr Stolz had infringed trademark law by registering a number of business names that included ClubsNSW brands.

According to its defence, ClubsNSW says: “Mr Stolz has not been injured in his business and professional reputation, as Member Clubs would not have engaged Mr Stolz to undertake compliance audits or provide advice and training on compliance with AML regulatory and legislative obligations even if the Circular had not been published.”

Most of the senior managers named in the documents before the court no longer work for ClubsNSW.

This month, former CEO Mr Ball took up a new role with pokies giant Aristocrat Leisure, as general manager of government and industry relations, according to his LinkedIn profile.

ClubsNSW represents more than 1,000 RSL, sporting and other clubs in the state, which has about half of Australia’s poker machines.

A tale of two courts

The legal contest is made even more complicated as it is just one of two disputes currently underway.

ClubsNSW is also taking action against Mr Stolz in the Federal Court, where it has accused him of breaching a confidentiality agreement by giving a ClubsNSW board paper to independent MP Andrew Wilkie.

In February, Mr Wilkie attempted to table the confidential board paper, written in May 2019, which outlined ClubsNSW’s own concerns about poor levels of compliance within its member clubs.

The document stated: “Current levels of AML/CTF (anti-money laundering/counter-terrorism financing) compliance are at best at 5-10 per cent for the approximately 770 clubs in NSW that are full reporting entities.”

Mr Wilkie told Parliament this board paper was evidence that up to 95 per cent of clubs in NSW were “operating illegally”.

When he requested leave to table the document in Parliament, Mr Wilkie was refused, leading him to call out in the chamber: “They’re running a protection racket for the gambling industry!”

ClubsNSW’s action could test the centuries-old tradition of parliamentary privilege, which has allowed MPs to disclose information from whistleblowers in Parliament.

By Kyle Taylor, ABC News, 17 June 2020

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