Ashby v Slipper

Case [2014] FCAFC 15


FEDERAL COURT OF AUSTRALIA

Ashby v Slipper [2014] FCAFC 15

Citation: Ashby v Slipper [2014] FCAFC 15
Appeal from: Ashby v Commonwealth of Australia (No 4) [2012] FCA 1411
Parties:

JAMES HUNTER ASHBY v PETER SLIPPER

MICHAEL DANIEL HARMER v PETER SLIPPER and JAMES HUNTER ASHBY

File number(s): NSD 22 of 2013
NSD 31 of 2013
Judges: MANSFIELD, SIOPIS & GILMOUR JJ
Date of judgment: 27 February 2014
Corrigenda: 24 March 2014
5 March 2014
Catchwords: PRACTICE AND PROCEDURE – application for leave to appeal from decision to dismiss proceedings as an abuse of process – leave to appeal required – principles relating to appellate review – challenge to factual bases upon which proceedings classified as an abuse of process – whether or not improper collateral purpose for bringing proceeding – adverse inferences drawn by primary judge - whether solicitor has standing to appeal in relation to adverse findings made as to the conduct of a proceeding - whether the Court has duty to act in relation to a perceived abuse of process - inferences to be drawn from a failure of a witness to depose to matters in issue - application of the Ferrcom principle.  
Legislation:

Fair Work Act 2009 (Cth) ss 340, 351, 372, 539, 540, 545, 550
Federal Court of Australia Act 1976 (Cth) s 24(1A), 37M(2)(e), Part VB
Federal Court Rules 2011 (Cth) rr 2.32, 6.02, 8.05(1)(a), 26.01, 34.05
Evidence Act 1995 (Cth) s 140
Civil Dispute Resolution Act 2011 (Cth) s 6
Legal Profession Act 1987 (NSW) s 57B
Revised Professional Conduct and Practice Rules 1995 (NSW) rr A.35, A.36, A.37
Members of Parliament (Staff) Act 1984 (Cth)
Australian Human Rights Commission Act 1986 (Cth) s 46PO(1)

Cases cited:

AJ v The Queen (2011) 32 VR 614
Ashby v Commonwealth of Australia [2012] FCA 640
Attorney-General for the Northern Territory v Maurice (1986) 161 CLR 475
Australian Competition and Consumer Commission v Metcash Trading Ltd (2011) 198 FCR 297
Axon v Axon (1937) 59 CLR 395
Bale v Mills (2011) 81 NSWLR 498
Ballerini v Shire of Berrigan [2004] VSC 321
Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256
Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 290 ALR 647
Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1
Briginshaw v Briginshaw (1938) 60 CLR 336
Browne v Dunn (1893) 6 R 67
Caboolture Park Shopping Centre Pty Ltd (In liquidation) v White Industries (Qld) Pty Ltd (1993) 45 FCR 224
Cirillo v Consolidated Press Property Ltd (formerly known as Citicorp Australia Limited) (No 2) [2007] FCA 179
Clyne v The New South Wales Bar Association (1960) 104 CLR 186
Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389
Commonwealth v Construction Forestry Mining and Energy Union (2000) 98 FCR 31
Commonwealth v Fernando (2012) 200 FCR 1
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Competition and Consumer Commission (2007)…

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Ashby v Slipper [2014] FCAFC 15
Case
[2014] FCAFC 15
Decision Date

CaseChat Overview and Summary

In Ashby v Slipper, the Full Court of the Federal Court of Australia considered an application for leave to appeal from a decision of Siopis J to dismiss proceedings as an abuse of process. The applicants, Ashby and his solicitor Harmer, sought to appeal against the primary judge’s decision. The legal issues before the Court included whether the appeal should be dismissed as an abuse of process, whether adverse findings made against the solicitor should stand, and whether the Court had a duty to act in relation to a perceived abuse of process.

The Court held that Harmer, despite not being a party to the proceeding, ought not be granted leave to appeal. However, the Court concluded that the adverse findings in relation to Harmer’s conduct, with their flow-on effect upon Ashby, ought not to have been made. The Court found that the primary judge had erred in rejecting Ashby’s unchallenged claim that he felt distressed and harassed by Slipper’s alleged sexual conduct. The Court emphasised that it may be wrong, unreasonable or perverse to reject unchallenged evidence and overturned the decision of the primary judge on the basis of an error of fact.

The Court set aside the orders made by Siopis J and in lieu thereof, ordered that the respondent's interlocutory application be refused and that the respondent pay the applicant's costs. The application for leave to appeal was refused, and the applicant was ordered to pay the first respondent's costs.

Orders

Orders of the court

1. Leave to appeal be granted.

2. The appeal be allowed.

3. The orders made on 12 December 2012 be set aside and in lieu thereof there be orders that:

3.1 the respondent’s interlocutory application dated 8 June 2012 be refused.

3.2 the respondent pay the applicant’s costs.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

1. The application for leave to appeal be refused.

2. The applicant pay the first respondent’s costs.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

There is a further application before the Court. Michael Harmer, of Harmers Workplace Lawyers (Harmers), Ashby’s solicitor, was not a party to the proceeding but is the subject of adverse findings made by the primary judge. These findings also attached to Ashby. Harmer personally seeks leave to appeal and to appeal the judgment. We agree with Siopis J, having had the benefit of considering his reasons in draft, that Harmer ought not be granted leave to appeal. Nonetheless, we have concluded that the adverse findings in relation to his conduct, with their flow on affect upon Ashby, ought not to have been made. Background The following background is largely as described in the reasons of the primary judge. Slipper was a member of the Commonwealth House of Representatives. Prior to 24 November 2011, Slipper had been a member of the Liberal National Party of Queensland (LNP). On 24 November 2011, Slipper was appointed Speaker of the House of Representatives in controversial circumstances. Those circumstances led Slipper to resign from the LNP. Ashby joined the staff of the Hon Peter Slipper, then the Speaker of the House of Representatives, in late December 2011. Ashby was a political advisor to Slipper. On 20 April 2012, Ashby’s solicitors, Harmers, electronically filed in the Court an originating application under the Fair Work Act 2009 (Cth) (the FW Act) which included an allegation that during Ashby’s employment Slipper had sexually harassed him and involved him in “questionable conduct in relation to travel”. The originating application named the Commonwealth as the first respondent and Slipper as the second respondent. As required, that application was accompanied by a genuine steps statement. The originating application sought damages for breach of contract. It should have claimed the relief that Ashby sought, and should have been accompanied by a statement of claim as required by r 8.05(1)(a) of the Federal Court Rules 2011 (Cth): Ashby v Commonwealth of Australia [2012] FCA 640 at [2]-[3]. On its final page the originating application contained a statement that the allegations it made were supported “by sworn/affirmed evidence”, that included a forensic report in respect of text messages that it set out verbatim. The originating application made a number of serious allegations concerning Slipper’s conduct including that:(1)Slipper had sexually harassed Ashby in the course of his employment by conduct between 4 January 2012 and 20 March 2012 (the sexual harassment allegations);(2)in 2003 Slipper had a relationship of a sexual nature with a younger male member of his staff and an encounter between them had been recorded on a video, a viewer of which had concluded that the relationship was consensual (the 2003 allegations); and(3)Ashby had been forced on three occasions to watch Slipper sign multiple Cabcharge vouchers during his employment and hand them to the driver of a vehicle in which they both travelled and that Ashby intended to report these matters to the Australian Federal Police (the Cabcharge allegations).As the primary judge observed, by filing the originating application in the Court, Ashby, and as lawyers acting for Ashby, Harmer and Harmers, made the allegations it contained under absolute privilege.

Evidence

Evidence Before The Court

That burden which Slipper carried in his interlocutory application required him to show on the whole of the evidence to the reasonable satisfaction of the Court the elements of his contention: Axon v Axon (1937) 59 CLR 395 per Dixon J at 403. Inferences, that is, affirmative conclusions from circumstances otherwise proved in evidence are part of the process by which the court determines whether it has been persuaded to the requisite standard of the existence of a fact in issue. As Dixon CJ explained in Jones v Dunkel (1959) 101 CLR 298 at 305, “[t]he facts proved must form a reasonable basis for a definite conclusion affirmatively drawn of the truth of which the tribunal of fact may reasonably be satisfied”. Section 140(2)(a) of the Evidence Act The standard of proof in a civil proceeding before this Court is prescribed by s 140 of the Evidence Act 1995 (Cth) (the Evidence Act): Qantas Airways Ltd v Gama(2008) 167 FCR 537 at [110] and [139]. Section 140 of the Evidence Act provides as follows: 140 Civil proceedings: standard of proof(1) In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities. (2) Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account:(a) the nature of the cause of action or defence; and(b) the nature of the subject-matter of the proceeding; and(c) the gravity of the matters alleged. As the Full Court observed in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Competition and Consumer Commission (2007) 162 FCR 466 (CEPU v ACCC) at [30]:[30]The mandatory considerations which s 140(2) specifies reflect a legislative intention that a court must be mindful of the forensic context in forming an opinion as to its satisfaction about matters in evidence. Ordinarily, the more serious the consequences of what is contested in litigation, the more a court will have regard to the strength and weakness of evidence before it in coming to a conclusion. These observations are an echo of what was said by the High Court in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449 at 449-450 which was decided before the Evidence Act was enacted:The ordinary standard of proof required of a party who bears the onus in civil litigation in this country is proof on the balance of probabilities. That remains so even where the matter to be proved involves criminal conduct or fraud. On the other hand, the strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove. Thus, authoritative statements have been made to the effect that clear or cogent or strict proof is necessary ‘where so serious a matter as fraud is to be found’. Statements to that effect should not, however, be understood as directed to the standard of proof. Rather, they should be understood as merely reflecting a conventional perception that members of our society do not ordinarily engage in fraudulent or criminal conduct and a judicial approach that a court should not lightly make a finding that, on the balance of probabilities, a party to civil litigation has been guilty of such conduct.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

As Samuels JA observed in Ellis v Wallsend District Hospital (1989) 17 NSWLR 553 at 587-588, it may be "wrong, unreasonable or perverse to reject unchallenged evidence" and if an appellate court concludes that it were so, in the particular circumstances of a given case, it may overturn the decision of the primary judge on the basis of an error of fact, rather than an error of law. However, as his Honour observed at 588, there is no rule of law in this country that a Court must accept unchallenged evidence. Consideration of the factual challenges The core challenge Central to the disposition of the application before him was the finding by the primary judge in which he rejected Ashby’s unchallenged claim in the commentary that he felt distressed and harassed by Slipper’s alleged sexual conduct: at [37]-[38]. That Ashby did not complain to his friends of feeling sexually harassed in his text messages was prominent in the reasoning of the primary judge in reaching this conclusion at [35], [37], [38], [52] and [134], together with the fact that by contrast, Ashby had felt readily able to complain about political matters to Slipper (at [42]-[44]). This was tantamount to a finding that Ashby was lying about this matter which was an essential fact in his case. It was this finding, it seems, which was prominent in leading the primary judge to conclude that Ashby’s predominant purpose in initiating the proceeding was to pursue a political attack against Slipper and not to vindicate any legal claim: at [196]. His Honour rejected Ashby’s claim that he had contemporaneously complained of being distressed to both McArdle (then a senior shadow minister in the Queensland LNP State opposition) and his friend Hubbard (at [37]). The primary judge considered that an overwhelmingly negative inference was available from Ashby’s text messages sent on 4 February 2012, which discussed mainly the political implications of what Ashby was contemplating but which failed to state expressly that he felt distressed. The primary judge considered Ashby’s claims to have been distressed and the 4 February text messages as follows:[32]On one view, Mr Slipper’s messages of 1 February 2012, suggesting a closer relationship, could be read as a proposal that he and Mr Ashby have a sexual relationship. Mr Ashby rebuffed the suggestion to be met by Mr Slipper’s withdrawal of his invitation to the harbour cruise and the instruction that Mr Ashby, directly in the future, should not contact Mr Slipper directly but communicate through another male adviser, Mr Knapp. Mr Slipper corrected that situation early the next day. His conduct might have been attributable to the stress Mr Slipper said, in his text message, that he felt. Not every attempt to develop a relationship into a sexual one, that is unsuccessful, necessarily has the character of sexual harassment: see Kraus v Menzie [2012] FCAFC 144 at [68] per Rares, McKerracher and Murphy JJ. Nonetheless, Mr Slipper’s conduct in some of those text messages is capable of being characterised as sexual harassment. Thus, it was open to Mr Ashby to make such an allegation in both the originating application and statement of claim, whatever Mr Slipper may have intended to convey. What is significant from the text message exchanges on 1 February 2012 is that Mr Ashby was able to draw a firm line against having the proposed “closer” relationship and that appeared to have a relatively lasting effect.[33]Following the exchanges of text messages on 1 and 2 February 2012 between Mr Slipper and Mr Ashby, Mr Ashby texted Mr McArdle saying that what he wanted to discuss was 100% confidential, with which Mr McArdle agreed. In his affidavit of 31 August 2012, Mr Harmer recorded comments by Mr Ashby on selected text messages in the approximately 270 pages of them in evidence. I will refer to these as Mr Ashby’s commentary. According to Mr Ashby’s commentary he spoke to Mr McArdle on 2 February 2012, complaining of feeling distressed and uncomfortable about the text messages he had received from Mr Slipper (summarised in [19(4)] above) and that, in response, Mr McArdle told Mr Ashby that it was probably best to ignore the messages and go on having a normal professional relationship. Mr McArdle said that he would think the matter over and would give Mr Ashby any further advice if he changed his mind.[34]Later, on the night of 2 February 2012, Mr Slipper invited Mr Ashby on a second Sydney Harbour cruise, which Mr Ashby accepted enthusiastically. On 3 February 2012, Mr Ashby had dinner with a friend of his, whose first name was “Martin”. After thanking Martin for dinner in a text message sent at about 12.30 am on 4 February 2012, Mr Ashby extended his thanks for him being “so supportive in a moment when a fella needs real mates to make life changing decisions. National decisions actually”. Soon after that text Mr Ashby sent a text to another friend Paul Nagle, at 12.44 am saying: “I’m serious when I ask this, would u put a bullet in my head to save the nation?”. Later on 4 February 2012, another friend of Mr Ashby’s, Tania Hubbard sent him a text saying that she had sat up all night about their chat and continued:“Are you decision making from ego? Are you feeling a rush from the power of this moment – are you clear this is not the case? I could not tell completely last night. Am concerned that you will not be protected. I understand you trust Mark – is his and your intention clear – measure up all the costs and consequences – remember this is not a heart decision – this requires logic, reasons, analysis. No meetings for you with any other Min was what we discussed last night – pass the text forward in hard copy only to Mark – let him move it forward. Backup phone, delete messages, put in safe and let it be. A smoking gun usually means someone has already been shot! Don’t let it be you – please.”Mr Ashby responded:“… I really enjoyed our chat last night and I must admit there is an understanding of what power can do to people, but this doesn’t empower me once the information is passed on. I don’t want to use it for my personal power. It will empower someone else definitely. Will I be rewarded or condemned? Who knows. You are right though. The smoking gun is after the shot has been fired. We haven’t yet seen the gun go off. I need protection, you’re right. I always welcome your wisdom, so please feel free to text me anytime with thoughts. I will talk to Mark again tomorrow and See what his ideas are.” (emphasis added)[35]The text messages on the evening of 1 February 2012 were, of course, because of the features that I have just mentioned, capable of being used to damage Mr Slipper if they were put into the public or political arena. On one view Mr Ashby could have seen Mr Slipper’s approaches on that occasion as harassing. Hence, the way in which Mr Ashby reacted is significant. He saw Mr McArdle and discussed some plan with him, as appears from a text Mr Ashby sent later on 26 March 2012 (see [55] below). His text messages with Martin, Mr Nagle and Ms Hubbard are redolent of Mr Ashby having a purely political intention to use his text exchanges with Mr Slipper to damage him and assist his political opponents, rather than of Mr Ashby being in any way emotionally traumatised or even upset. [36]Mr Ashby’s commentary asserted that he had confided in Ms Hubbard his feelings of distress and harassment he had felt concerning Mr Slipper’s actions. His commentary also asserted that he had informed Ms Hubbard that he had spoken to Mr McArdle who had told him not to take steps to raise issues concerning Mr Slipper’s behaviour and to see whether he could ignore the problem. Mr Ashby’s commentary added that, by this time, Mr Ashby felt resentful towards Mr Slipper.[37]I do not accept Mr Ashby’s commentary that he had feelings of distress and harassment concerning Mr Slipper’s actions. Ms Hubbard’s message quoted in [34] above suggests that at 4 February 2012 Mr Ashby was contemplating that Mr McArdle would use the text messages. The passages I have emphasised from the exchanges of text messages show that Mr Ashby’s discussion with Mr McArdle concerning his text message exchanges with Mr Slipper, particularly those of 1 and 2 February 2012, was to do with empowering Mr McArdle or someone else with the ability to use those messages against Mr Slipper. Mr Ashby’s references to “empowering others”, and “national decisions”, were concerned solely with the political consequences of what Mr Ashby was contemplating. Those consequences could affect the balance of power in the House of Representatives, depending on whether Mr Slipper could remain as Speaker if Mr Ashby used his “power” and what effect that use would have. That was because the Government did not have a majority in the House and was reliant on cross bench support, assisted by Mr Slipper having ceased to be a member of the Opposition and not being able to vote while Speaker, by reason of s 40 of the Constitution, unless the votes in the House were tied.[38]What is singular about all of the text message exchanges that Mr Ashby had with his friends and others in the period prior to the commencement of these proceedings is the lack of any complaint by him of feeling sexually harassed. And his friends’ texts had no words of comfort for Mr Ashby as a victim of some traumatic experience of that kind. The exchanges between Martin, Mr Nagle, Ms Hubbard and Mr Ashby on 3 and 4 February 2012 do not read like those concerning a man claiming to feel sexually harassed or emotionally distressed by such conduct. Rather they read as if the participants were discussing the political ramifications of Mr Ashby revealing material that was sexually and politically embarrassing and that would compromise Mr Slipper and his position as Speaker if it appeared in the public domain. At least initially, Mr Ashby was contemplating that Mr McArdle, an LNP politician, would use the text messages against Mr Slipper’s political interests – hence his text that this did not “empower me once the information is passed on ... Will I be rewarded or condemned?”. Read in its context with all his texts, I am satisfied that if Mr Ashby were the victim of sexual harassment he would not have speculated with his friend in this way about whether he would be rewarded by revealing it.