"One visitor looked into the bathroom and said twice that there was someone in there behind the door," a statement from the receptionist read.
"I didn't know what to say or what was going on so just said it's probably a staff member and diverted them as they wanted to look at the deck."
Mrs Hoff denied that anything untoward had taken place and said the pair were "just talking". She said she did not know why she had hid behind the door.
The gardener said told the ERA that they had a good professional working relationship and were just gossiping.
Mrs Hoff had a husband of ten years, who would regularly join her, the gardener and other employees for a drink at the local tavern.
The ERA was told that Mrs Hoff had lost her mother to cancer in 2011 and three long-term residents had also died around this time, which was "like losing close family members".
After her dismissal, evidence was subsequently presented that Mrs Hoff had engaged in serious misconduct, kissing and cuddling the gardener and "acting as if they were in a relationship whilst at work".
The gardener had been called for a disciplinary meeting, where he denied he was a "lecherous person". During the meeting it was established that staff had seen him giggling and hugging Mrs Hoff and had also witnessed "a lot of flirting" between him and a female ambulance driver.
Mrs Hoff's case was initially heard by the ERA in March 2013 where her dismissal was found to be "procedurally flawed but not substantially justified". She was awarded compensation, but the amount sought was reduced due to the serious misconduct discovered after her employment was terminated.
She challenged the whole determination and requested a full rehearing.
Judge AD Ford determined that dismissal was unjustified because if management had investigated the allegations earlier, the incident in the studio would not have occurred.
He added that the gardener's past behaviour had been inappropriate and that Mrs Hoff was "particularly vulnerable" at the time. He accepted that the issues of serious misconduct had been known before her dismissal and should have been properly investigated at the time.
Mrs Hoff was awarded $8,257.04 for lost remuneration and $20,000 for humiliation compensation. The remedies awarded were reduced by 10 per cent on account of the plaintiff's contribution.