Bethune v Strategic Lawyers Pty Ltd
[2021] FedCFamC2G 6
•2 September 2021
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
Bethune v Strategic Lawyers Pty Ltd [2021] FedCFamC2G 6
File number(s): BRG 265 of 2020 Judgment of: JUDGE TONKIN Date of judgment: 2 September 2021 Catchwords: PRACTICE AND PROCEDURE – Discovery – application for declaration that discovery be allowed – whether documents sought to be discovered amount to “fishing” – application for discovery granted. Legislation: Evidence Act 1995 (Cth) s 131(2)
Fair Work Act2009 (Cth) ss 340, 343, 351, 352, 419
Federal Circuit Court Act 1999 (Cth) s 45(1)
Federal Circuit Court Rules 2001 (Cth) rr 14.02(2)(b), 14.03
Legal Profession Act 2007 (Qld) s 419
Cases cited: Abrahams v Qantas Airways Limited (No 2) [2007] FMCA 639; (2007) 210 FLR 314
Apotex Pty Limited v Les Laboratoires Servier (No 5) [2011] FCA 1282
Banque Commerciale S.A., en Liquidation v Akhil Holdings Limited (1990) 169 CLR 279
Dataquest (Australia) v Dataquest Inc [1996] FCA 1685
Director of the Fair Work Building Industry Inspectorate v Construction Forestry, Mining and Energy Union [2015] FCA 353
Harkianakis v Skalkos (1997) 42 NSWLR 22
Harwood v The Trustee of the Property of John Mervyn Harwood [2015] FCCA 1058
Jensen v Legal Services Commissioner [2017] QCA 189
Martin v Norton Rose Fullbright Australia (No 2) [2019] FCA 96
Mulley v Manifold [1959] HCA 23; (1959) 103 CLR 341
O'Sullivan v Parkin [2008] FCAFC 134
State of Victoria v Construction Forestry, Mining and Energy Union [2013] FCFAC 160
Unilever Plc v The Procter & Gamble Co [2000] 1 WLR 2436
Vinden v Wrong Fuel Rescue Pty Ltd & Anor [2019] FCCA 1091
Y v Z v W [2007] 70 NSWLR 377
Division: Division 2 General Federal Law Number of paragraphs: 57 Date of hearing: 17 August 2021 Place: Brisbane Counsel for the Applicant: Mr Latham Solicitors for the Applicant: Anderson Gray Lawyers Counsel for the Respondents: Mr Collins Solicitors for the Respondents: Strategic Lawyers Pty Ltd ORDERS
BRG 265 of 2020 BETWEEN: LEA BETHUNE
Applicant
AND: STRATEGIC LAWYERS PTY LTD (ACN 150 602 716)
First Respondent
JUSTIN IRELAND
Second RespondentORDER MADE BY:
JUDGE TONKIN
DATE OF ORDER:
2 SEPTEMBER 2021
THE COURT ORDERS THAT:
1.Pursuant to subsection 45 (1) of the Federal Circuit Court Act 1999 the Court declares that it is appropriate in the interests of the administration of justice that the First Respondent give discovery in accordance with Order 2.
2.Pursuant to rule 14.02 (2) (b) of the Federal Circuit Court 2001 the First Respondent give disclosure within 14 days of any documents within the following categories:
(a)For the period 14 September 2020 to 17 September 2020 a copy of all electronic documents that were sent to, received from, or were between the following directors or employees of Strategic Lawyers Pty Limited:
(i)Justin Ireland;
(ii)Steven Hodgson;
(iii)Iain Roots; and
(iv)Jon Spelman
which
(b)concerned the letter sent from the First Respondent to the Applicant on 17 September 2020; and
(c)contains any reference or part reference to Lea Bethune or this proceeding.
3.Pursuant to rule 14.03 of the Federal Circuit Court Rules 2001 within 14 days of the date of this order the First Respondent file an affidavit of documents particularising all electronic documents in the possession and/or under the control of the First Respondent that were sent to, received from, or were between the following directors or employees of Strategic Lawyers Pty Limited being Justin Ireland, Iain Roots and Jon Spelman and/or Steven Hodgson which concerned the letter sent from the First Respondent to the Applicant on 17 September 2020 and contains any reference or part reference to Lea Bethune and/or this proceeding.
4.The matter is adjourned for mention to 9:30am on 19 October 2021 in the Federal Circuit Court of Australia at Brisbane.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE TONKIN:
INTRODUCTION
The applicant Lea Bethune applies for a declaration under subsection 45 (1) of the Federal Circuit Court Act 1999 that it is appropriate in the interests of the administration of justice to allow discovery. The application in a case for discovery was initially filed on 13 July 2021 and later amended on 6 August 2021 and is made in proceedings the applicant brought against the First and Second Respondents seeking relief under the Fair Work Act2009 (Cth) (“FW Act”). The applicant alleges that on 13 February 2020 the First Respondent took adverse action against the applicant by terminating her employment and this action was taken for prohibited reasons in contravention of sections 340, 351 and 352 of the FW Act. The applicant claims that the relevant decision maker with respect to her dismissal was Justin Ireland the Second Respondent.
Further the applicant claims that the First Respondent contravened section 343 of the FW Act by threatening the applicant with intent to coerce her to agree to dismiss or strike out the proceeding.[1] The applicant claims that the Second Respondent had actual knowledge of and was an intentional participant in threatening the applicant with intent to coerce her to agree to dismiss or strike out the proceeding.[2]
[1] Amended statement of claim filed 2 November 2020 at [25E]
[2] Amended statement of claim filed 2 November 2020 at [26] – [27]
The application for discovery relates solely to the claim with respect to coercion wherein the applicant contends that she received a letter from the First Respondent dated 17 September 2020 which threatened that if she did not withdraw from the proceeding she would be referred to the Legal Services Commission in particular to determine whether her conduct was fitting conduct for a legal practitioner.
BACKGROUND
The applicant is a single parent of two young children. She was employed by the First Respondent Strategic Lawyers Pty Limited (“SL”) as a solicitor between 6 December 2019 and 13 February 2020.
The Second Respondent Justin Ireland (“Ireland”) was at all material times the Director of SL.
SL employed and continues to employ Jon Spelman (“Spelman”) as Chief Operating Officer and employed Iain Roots (“Roots”) as Chief Information Officer.
The applicant made several protected complaints and enquiries during the course of her employment with SL in January and February 2020.
On 6, 7 and 10 February 2020 the applicant took leave. On 11 and 12 February 2020 the applicant took carer’s leave.
On 11 February 2020 the applicant alleges that she received a voice mail from the Second Respondent criticising the applicant for not making herself available to answer a phone call. On 11 February 2020 the applicant made a complaint to SL via text message.
On 13 February 2020 the applicant returned to work. She alleges that she spoke with Iain Roots and repeated earlier complaints and that information was conveyed to Justin Ireland. She was directed to attend a meeting.
A dismissal meeting was held on 13 February 2020 attended by the applicant, Justin Ireland, Jon Spelman and Iain Roots. The applicant alleges that Ireland and the applicant discussed the subject matter of the applicant’s complaints. The applicant alleges that her employment was terminated without notice.
On 28 April 2020 the applicant commenced proceedings against the First Respondent claiming adverse action against the applicant by terminating her employment for prohibited reasons in contravention of sections 340, 351 and 352 of the FW Act. The relevant decision maker with respect to her dismissal was Justin Ireland the Second Respondent.
On 17 September 2020 SL sent the applicant an email attaching a letter addressed to the applicant’s solicitor[3] headed “Without Prejudice Save as to Costs” the content of which included an offer to compromise the claim, attached CCTV footage inter alia and the following:
“Please note should this matter not settle in accordance with this letter that we intend to refer to the CCTV (and three formal complaints) to the Legal Services Commission concerning whether your client’s conduct … is fitting conduct for a legal services professional…”
[3] Affidavit of Lea Bethune filed 23 November 2020 Exhibit LFB1
The letter bears the names of Ireland and Spelman as signatories save that it appears to have been signed “per Roots” on behalf of Ireland.
COERCION CLAIM
The application for discovery concerns only the second matter pleaded by the applicant in the substantive proceedings being the allegation that the First Respondent sought to coerce the applicant to abandon her claim under the FW Act (the coercion claim) which is set out against the First Respondent at [25A] to [25E] and against the Second Respondent with respect to accessorial liability at [26] to [27] of the further amended statement of claim filed on 2 November 2020.
In Banque Commerciale S.A., en Liquidation v Akhil Holdings Limited (1990) 169 CLR 279 Mason CJ and Gaudron J said at 286:
“The function of pleadings is to state with sufficient clarity the case that must be met … In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision. The rule that, in general, relief is confined to that available on the pleadings secures a party’s right to this basic requirement of procedural fairness.”
The coercion claim is constituted by the First Respondent sending the letter dated 17 September 2020 to the applicant stating that “… should this matter not settle in accordance with this letter that we intend to refer to the CCTV (and three formal complaints) to the Legal Services Commission concerning whether your client’s conduct … .is fitting conduct for a legal services professional …”. That document includes the name of the Second Respondent though it is signed by another.
In the amended application in a case filed on 6 August 2021 the applicant is seeking the following class of documents:
For the period 14 September 2020 to 17 September 2020 a copy of all electronic documents sent to or received from or between the following directors or employees of Strategic Lawyers Pty Ltd:
Justin Ireland;
Steven Hodgson;
Iain Roots; and
Jon Spelman
that make reference or part reference to Lea Bethune or this proceeding.
The Respondents claim that the letter containing the alleged coercive threat is privileged. The applicant submits that the admissibility of the letter of 17 September 2020 is not relevant to the application for discovery as the Court’s task is to consider whether there is sufficient clarity in the pleadings for the Respondents to meet the applicant’s case. It is therefore sufficient that the applicant pleads that she was coerced by the letter.
DISCOVERY
The inquiry in this application is whether the documents sought by discovery tend to prove or disprove the coercion allegations and accessory allegations against the Respondents. In Vinden v Wrong Fuel Rescue Pty Ltd & Anor [2019] FCCA 1091 at [8] to [15] Kendall J said:
[8] Section 45 (1) of the Federal Circuit Court of Australia Act 1999(Cth) (the “FCC Act”) provides:
Interrogatories and discovery
(1) Interrogatories and discovery are not allowed in relation to proceedings in the Federal Circuit Court of Australia unless the Federal Circuit Court of Australia or a Judge declares that it is appropriate, in the interests of the administration of justice, to allow the interrogatories or discovery.
[9] Rule 14.02 of the Federal Circuit Court Rules 2001(Cth) (the “FCC Rules”) states that if a declaration is made pursuant to s.45 of the FCCA Act, the Court may make an order for discovery.
[10] Overall, there is a reluctance in this Court to grant orders for discovery and interrogatories. Indeed, in Vanden Driesden v Edith Cowan University [2012] FMCA 735; (2012) 226 IR 452, the Court referred to the power as one that is “rarely used”.
[11] Section 45(1) of the FCCA Act is a general statutory prohibition on discovery.
[12] Before granting a declaration under s.45 of the FCCA Act, the Court will specifically consider s.45 (2). That section provides:
(2) In deciding whether to make a declaration under subsection (1), the Federal Circuit Court of Australia or a Judge must have regard to:
(a)whether allowing the interrogatories or discovery would be likely to contribute to the fair and expeditious conduct of the proceedings; and
(b)such other matters (if any) as the Federal Circuit Court of Australia or the Judge considers relevant.
[13] In this Court, there appears to be a presumption that the “fair and expeditious conduct of the proceeding” does not require discovery: Devine Marine Group Pty ltd v Fair Work Ombudsman [2013] FCA 442 at [54]. That does not mean, however, that it will not ever be given.
[14] To determine whether discovery will contribute to the “fair and expeditious conduct of the proceedings”, the Court will first consider the Court’s objects. These can be summarised as follows:
(a)the Court should act as informally as possible in the exercise of judicial power;
(b) proceedings should not be protracted;
(c)the resolution of the proceedings should be achieved justly, efficiently and economically;
(d) streamlined procedures should be used; and
(e) the Court should seek to avoid undue delay, expense and technicality.
[15] In relation to s.45(2)(b) of the FCCA Act, the Court notes that in Abrahams v Qantas Airways Limited (No 2)[2007] FMCA 639; (2007) 210 FLR 314 at [25] (“Abrahams”) Federal Magistrate Lucev (as he then was) identified a non-exhaustive list of matters that may be considered “relevant” for the purposes of s.45(2)(b). His Honour highlighted the following matters:
(a)the relevance of any documents sought to be discovered;
(b)the volume of documents sought to be discovered;
(c)whether there is a court book containing relevant documents, and the extent to which relevant documents are included in the court book;
(d)whether discovery would narrow the issues;
(e)whether both parties seek discovery;
(f)whether there is consent to discovery;
(g)whether discovery is “of benefit” to the litigation; and
(h)the effect of discovery on litigants; especially vulnerable litigants.”
I respectfully adopt the approach taken by Kendall J in Vinden (supra) in approaching this application.
The applicant contends that the documents sought are relevant to the issue whether the First Respondent threatened the applicant with intent to coerce her to agree to dismiss or strike out the proceeding contravened section 343 of the FW Act[4] and whether the Second Respondent had actual knowledge of and was an intentional participant in threatening the applicant with intent to coerce her to agree to dismiss or strike out the proceeding.[5]
[4] Amended statement of claim filed on 2 November 2020 at [25A] to [25E]
[5] Amended statement of claim filed 2 November 2020 at [26] – [27]
The First Respondent admits in the Defence that the letter dated 17 September 2020 was sent to the applicant but otherwise claims privilege with respect to the content of the letter.[6] The Second Respondent admits in the Defence that he had actual knowledge of and was an intentional participant in the matters which comprise the purported contraventions with respect to sections 340 of the FW Act or alternately section 351 of the FW Act (the adverse action claim) but denies actual knowledge and/or being an intentional participant with respect to the matters raised in the coercion claim.[7]
[6] Further amended Defence filed 10 November 2020 at [25B]
[7] Further amended Defence filed 10 November 2020 at [26] and [27]
There are two elements that demonstrate an intent to coerce. Firstly that the respondent must have intended to exert pressure to negate choice and negating choice requires something more than influence or persuasion and implies a high degree of compulsion. Secondly the coercive act must involve conduct that is unlawful, illegitimate and unconscionable. The applicant relied on the decision in Director of the Fair Work Building Industry Inspectorate v Construction Forestry, Mining and Energy Union [2015] FCA 353 at [50] – [52]. In that matter Tracey J said as follows:
[50] An intention to “coerce” forms an element of the statutory proscription in three of the sections appearing in Part 3-1 of the Act. These sections are 343, 348 and 355. Some of these provisions are the successors of earlier provisions such as ss 170NC and 789 of the Workplace Relations Act 1996(Cth). In State of Victoria v Construction, Forestry, Mining and Energy Union [2013] FCAFC 160; (2013) 218 FCR 172 the Full Court considered that the meaning to be accorded to the phrase “intent to coerce” had become settled (see at 187). The Court referred, with approval, to Merkel J’s statement in Seven Network (Operations) Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia[2001] FCA 456; (2001) 109 FCR 378 at 388 that:
“... there must be two elements to prove ‘intent to coerce’ under s 170NC(1). First, it needs to be shown that it was intended that pressure be exerted which, in a practical sense, will negate choice. Secondly, the exertion of the pressure must involve conduct that is unlawful, illegitimate or unconscionable.”
[51] The first of these elements was explained in greater detail by Weinberg J in National Tertiary Education Industry Union v Commonwealth[2002] FCA 441; (2002) 117 FCR 114. Speaking of this element his Honour said (at 143) that:
“The approach to the expression ‘intent to coerce’ taken in each of the authorities set out above makes it clear that what is required is an intent to negate choice, and not merely an intent to influence or to persuade or induce. Coercion implies a high degree of compulsion, at least in a practical sense and not some lesser form of pressure by which a person is left with a realistic choice as to whether or not to comply.”
[52] The second element was considered by Buchanan J in Fair Work Ombudsman v National Jet Systems Pty Ltd[2012] FCA 243; (2012) 218 IR 436. His Honour pointed to the common law origins of this element in the torts of coercion and duress. In doing so he referred (at 443) to the judgment of McHugh J in Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40 at 46 where McHugh J had equated the three categories saying (at 46) that:
“Pressure will be illegitimate if it consists of unlawful threats or amounts to unconscionable conduct. But the categories are not closed ...”
It was submitted on behalf of the applicant that the reverse onus applies to coercion such that it is presumed that a respondent acted with intent to coerce. He referred to the decision in State of Victoria v Construction Forestry, Mining and Energy Union [2013] FCFAC 160 at [54] where Tracey J made reference to subsection 361 (1) of the FW Act.
The applicant argued that the letter dated 17 September 2020 contained an explicit threat to make three complaints to the Legal Services Commission about the applicant unless she agreed to withdraw the proceedings and in doing so threatened to damage the applicant’s professional reputation and standing and to subject her to the risk of losing her right to engage in legal practice. The applicant contends that the nature of the threat spoke to the high degree of compulsion exerted upon the applicant.
Further the applicant contends that the threat was unlawful in that section 17 of the Federal Circuit Court Act 2001 confers upon the Court the power to punish a person for contempt where their action interferes with the course of justice. In reliance on the decision in Harkianakis v Skalkos (1997) 42 NSWLR 22 at [28] and [29] the applicant contends that contempt includes actions that have a tendency to improperly pressure a party to withdraw from court proceedings and a contempt will still have occurred notwithstanding that the party elects to continue with their claim. He referred to the comment by President Mason in Harkianakis (supra) at [30] that a threat to report a legal practitioner to a professional disciplinary body may constitute a contempt. Further he argued in reliance on the decision in Y v Z v W [2007] 70 NSWLR 377 per Ipp JA that an improper threat intended to induce settlement may constitute contempt.
The applicant argued that an issue for the Court with respect to the coercion claim was whether the Second Respondent’s conduct amounted to professional misconduct. In Jensen v Legal Services Commissioner [2017] QCA 189 the making of a similar threat to induce settlement was found to be professional misconduct within the meaning of section 419 of the Legal Profession Act 2007 (Qld).
With respect to the threat contained in the letter of 17 September 2020 the applicant contends this was arguably an act of contempt or professional misconduct. Counsel submitted in reliance on affidavits filed in the substantive proceedings that the Second Respondent in his affidavit filed on 8 December 2020 deposed at paragraphs [14] and [15] that he was “aware that on 17 September 2020, a without prejudice offer to compromise the proceedings was sent by Mr Jon Spelman, Chief Operating Officer, to the lawyers for the applicant. I was not in the office this day as I was at home with my daughter. I am unable to otherwise speak as to the contents of the correspondence as the correspondence was issued on a without prejudice basis”. The Second Respondent did not indicate whether he was involved in the drafting of the letter, why the letter bore his name and who signed it on his behalf and why the letter was signed on his behalf and whether he was responsible for making the decision to send the letter to the applicant though it may be inferred from the Defence filed wherein the Second Respondent admits that he was at all material times the Director and Principal of Strategic Lawyers Pty Limited, that he was admitted to practice law as a senior lawyer and was responsible for decision making in relation to the employment of the applicant.
In his affidavit filed on 9 December 2020 Jon Spelman deposed at paragraphs [2] to [5] that he caused the letter of 17 September 2020 to be sent to the applicant’s lawyers containing a “without prejudice offer of compromise.” He deposed that at the time of issuing the offer of compromise as Chief Operating Officer he was aware that the firm had incurred legal costs in briefing Counsel to assist in defending the firm and Mr Ireland. He asked Iain Roots Chief Information Officer with the First Respondent to co-sign the letter as Justin Ireland was not in the office on 17 September 2020. He deposed that he was otherwise unable to speak to the contents of the letter as it was issued on a without prejudice basis.
The applicant contends that the evidence will show that the letter sent on 17 September 2020 [8] was sent with the intention of coercing the applicant to withdraw her claim under the FW Act in these proceedings.
[8] Affidavit of Lea Bethune filed 23 November 2020 Exhibit LFB1
I observe that the court in Abrahams[9] said at [50] that “it is not properly possible to finally ascertain what the relevant issues are and therefore to finally determine to what extent if any a declaration of discovery might be in the interests of the administration of justice until such time as all affidavits are filed. Once that is done it may be that the applicant can formulate a request for discovery which warrants a declaration.” Affidavits have now been filed in these proceedings.
[9] Abrahams v Qantas Airways Limited (No 2)[2007] FMCA 639; (2007) 210 FLR 314.
In Mulley v Manifold [1959] HCA 23; (1959) 103 CLR 341 (5 May 1959) the Court said at [7] in relation to an application for discovery:
[7] … (turning) to the pleadings to determine what are the matters at issue between the parties, discovery is a procedure directed towards obtaining a proper examination and determination of these issues - not towards assisting a party upon a fishing expedition. Only a document which relates in some way to a matter in issue is discoverable, but it is sufficient if it would, or would lead to a train of enquiry which would, either advance a party's own case or damage that of his adversary. (at p.345)
The applicant contends that the documents sought on discovery are likely to show or lead to an enquiry regarding who was involved in drafting and/or sending the letter dated 17 September 2020. The applicant contends the request is not onerous, the volume of documents sought in the application minimal, the period of time covered is limited and the issues in dispute clear from the affidavits filed in the proceedings.
The Respondents oppose the application for discovery and seek orders for the application to be dismissed with costs on an indemnity basis. The Respondents claim that the content of the letter of 17 September 2020 is privileged by virtue of the words “Without Prejudice Save as to Costs”. The Respondents contend that the First Respondent was entitled to make a without prejudice attempt to compromise the dispute and that protection cannot be abrogated by a simple assertion on an interlocutory basis that the offer of compromise somehow contravenes legislation or is conduct giving rise to an offence.
In submissions filed on 27 July 2021 the Respondents argued that the application for discovery was “nothing more than a fishing expedition dressed up as discovery” and there was not “one iota” of evidence to justify the application. The respondents complained of the “extraordinary breadth” of the discovery application and contend that the applicant was seeking “entirely irrelevant and most probably privileged documents”. Further the Respondents argued that the request was oppressive and questioned the issue in the pleadings the documents were said to be relevant to.
The Respondents contend that the applicant made a “bare but extremely serious assertion that the letter contained a threat and the letter ‘is prepared in furtherance of an offence or the commission of an act that renders a person liable to a civil penalty being an allegation of contravening the FW Act.’” It was argued that the applicant’s affidavits do not justify the request for discovery nor explain how the documents are relevant.
CONSIDERATION
In Harwood v The Trustee of the Property of John Mervyn Harwood [2015] FCCA 1058 (28 April 2015) Manousaridis J in relation to the purpose of discovery said at [29]:
[29] … The principal purpose of discovery is to require each party to disclose documents in his or her possession or control that are relevant to the proceedings. That, in turn, increases the probability that a court will have before it all relevant evidence and thus make a decision that is based on the truth of the matter; and, by requiring disclosure of documents before trial, discovery affords the parties a better opportunity to assess the truth of the matter for themselves, and, therefore, be in a position to make a more reasoned decision about the issues that should be tendered to the court for its determination and, indeed, whether the proceeding should be resolved without the expense, delay, stress, and aggravation of a hearing.
The starting point for this application is subsection 45 (1) of the FCC Act which provides that discovery is “not allowed in relation to proceedings in the Federal Circuit Court of Australia unless the Federal Circuit Court of Australia or a Judge declares that it is appropriate, in the interests of the administration of justice, to allow the interrogatories or discovery”.
It is common ground that the First Respondent sent the letter dated 17 September 2020 to the applicant in circumstances where the applicant had commenced proceedings for relief under the FW Act. The letter contains the signature of Jon Spelman Chief Information Officer for SL. Spelman is not a legal practitioner nor the Principal nor Director of SL. The documents leading up to and including the 17 September 2020 are relevant as to who was involved in drafting the letter and/or sending the letter and are likely to prove or disprove whether the First Respondent threatened to refer the applicant to the Legal Services Commission regarding her professional conduct should she not “settle the matter in accordance with this letter.”
Similarly with respect to the Second Respondent who at the time was not legally represented in the proceedings the documents leading up to and including the 17 September 2020 are likely to prove or disprove whether the Second Respondent was involved in drafting and/or sending the letter, who signed the letter of behalf of the Second Respondent, the Second Respondent’s knowledge of the content of the letter and why the letter was signed on his behalf by another presumably Iain Roots. The Second Respondent was at all material times the Principal and Director for SL and the decision maker with respect to the applicant and her employment.
The documents relating to Iain Roots and Steven Hodgson are likely to lead to further enquiry or prove or disprove that person’s involvement drafting and/or sending the letter or signing the letter (relevant to Iain Roots).
The applicant’s claim is particularised with clarity in that the applicant contends that the letter sent to her by SL on 17 September 2020 contains an alleged threat with intent to coerce the applicant to agree to dismiss or strike out the proceeding in contravention of section 343 of the FW Act[10] and an allegation that the Second Respondent had actual knowledge of and was an intentional participant in threatening the applicant with intent to coerce her to agree to dismiss or strike out the proceeding.[11] Discovery of the documents sought are relevant to the applicant’s coercion claim.
[10] Amended statement of claim filed on 2 November 2020 at [25A] to [25E]
[11] Amended statement of claim filed 2 November 2020 at [26] – [27]
The number of documents sought on discovery are limited to documents in existence over a closed period of four days (including the subject letter). The request involves documents that relate to persons identified in the letter of 17 September 2020. Spelman and Roots have signed the letter. Ireland’s name appears on the letter and has been signed by Roots on Ireland’s behalf. Both Spelman and Ireland admit to knowledge of the existence of the letter but have failed to particularise the precise nature of their involvement in drafting and/or sending the letter.
Discovery is likely to narrow the issue in that the documents will either tend to prove or disprove whether the First and/or Second Respondent threatened to report the applicant (a legal practitioner) to a professional disciplinary body (the Legal Services Commission) and/or whether the First and/or Second Respondent made an improper threat intended to induce settlement and whether that conduct constituted a contempt. The benefit to the impending litigation is that the discovery of documents may result in one or other party compromising the claim.
WITHOUT PREJUDICE
The Respondents contend that the applicant is seeking the court make findings about the content of the privileged document by asserting that the Respondents exerted illegitimate pressure on the applicant. Those are matters for trial. The Respondents challenge the applicant’s contention that the documents are both relevant and significant to the coercion claim and assert that the applicant is engaged in a fishing expedition in order to establish some liability on behalf of the Second Respondent or Steven Hodgson or Iain Roots. The Respondents contend that this is not the purpose of disclosure, the purpose of discovery being to provide relevant documents directly relating to the issues in the proceedings. The applicant contends that the focus of discovery is on the pleadings and the without prejudice claim is irrelevant to the inquiry.
The principles that apply to legal professional privilege are well established. In Martin v Norton Rose Fullbright Australia (No 2) [2019] FCA 96 Charlesworth J said as follows:
[79] In a pre-trial context, it is the common law test for legal professional privilege that applies: Esso Australia Resources Ltd v Federal Commissioner of Taxation [1999] HCA 67; (1999) 201 CLR 49 at [17] – [28] (Gleeson CJ, Gaudron and Gummow JJ), [64] (McHugh J). At common law, privilege attaches to confidential communications between a lawyer and client made for the dominant purpose of obtaining or giving legal advice or assistance, or to aid in the conduct of actual or anticipated litigation: Esso at [61]. Litigation will be anticipated when there is a real prospect of legal proceedings being commenced. It is not enough to show that proceedings are possible: State of New South Wales v Jackson[2007] NSWCA 279.
[80] In Grant v Downs[1976] HCA 63; (1976) 135 CLR 674 at 685, Steven, Mason and Murphy JJ described the rationale for the privilege attaching to legal advice as follows:
“The rationale of this head of privilege, according to traditional doctrine, is that it promotes the public interest because it assists and enhances the administration of justice by facilitating the representation of clients by legal advisers, the law being a complex and complicated discipline. This it does by keeping secret their communications, thereby inducing the client to retain the solicitor and seek his advice, and encouraging the client to make a full and frank disclosure of the relevant circumstances to the solicitor. The existence of the privilege reflects, to the extent to which it is accorded, the paramountcy of this public interest over a more general public interest, that which requires that in the interests of a fair trial litigation should be conducted on the footing that all relevant documentary evidence is available.”
[81] The “dominant purpose” of a communication is “the ruling, prevailing, or most influential purpose” for the communication being made: Federal Commissioner of Taxation v Spotless Services Ltd[1996] HCA 34; (1996) 186 CLR 404 at 416 (Brennan CJ, Dawson, Toohey, Gaudron, Gummow and Kirby JJ). The purpose for which a communication is brought into existence is a question of fact to be determined objectively, although evidence of the subjective motivations of a party to the communication will be relevant, if not decisive: Esso at [172].
[84] It is for the party claiming the privilege to prove the facts necessary to support the claim: Grant v Downs at 689 (Steven, Mason and Murphy JJ). Privilege is not “necessarily or conclusively established by resort to any verbal formula or ritual”: Grant v Downs at 689; National Crime Authority v S[1991] FCA 234; (1991) 29 FCR 203 at 212 (Lockhart J).
[87] Privilege will not attach to communications coming into existence for purposes that are anathema to the rationale for its existence. Wilson J in Kearney expressed the principle as follows (at 524):
‘... generally speaking, the public interest in the protection of alleged confidential professional communications will not be outweighed by the public interest in ensuring that all relevant evidence is admissible save when the professional relation is abused in a manner involving dishonesty that goes to the heart of the relationship. The presence of such dishonesty is enough to cause the privilege to ‘take flight’, to use the words of Cardozo J in Clark v United States, because it precludes a true professional relationship from arising: see the remarks of Steven J in Cox and Railton. A passage from the judgment of Isaacs J in Varawa v Howard Smith & Co. Ltd. is in point. His Honour said:
‘The words ‘or the perfect administration of justice’ are all important, because, as was pointed out by Turner V-C in Russell v Jackson, the privilege which protects any confidential disclosure between solicitor and client is not intended simply to protect that confidence, but it rests upon the necessity of carrying it out. Otherwise justice could not be administered, as the Courts would not have the proper opportunity and means of administering the law between the litigants. That being the foundation of the rule, says the learned Vice-Chancellor, the Court must, of course, have regard to the foundation on which it rests, and not extend it to cases which do not fall within the mischief which it is designed to protect.’
[88] This exception is not confined to cases of crime and fraud “even in the wide sense in which ‘fraud’ has been used in this context, unless the meaning of that word is extended to include anything that might be described as a fraud on justice”: Kearney at 514 (Gibbs CJ).
[89] Information given to a solicitor in circumstances where the client seeks advice to frustrate or disobey a court order or to otherwise frustrate the course of justice: see, for example, Bell; Ex parte Lees.
[90] The standard of evidence required to displace the privilege is not entirely clear on the authorities. The question is considered by Dr Ronald J Desiatnik in his text Legal Professional Privilege in Australia (3rd ed, LexisNexis Butterworths Australia, 2017) at pp 163 – 165. I gratefully extract the author’s summary of authorities (sans footnotes) as a correct expression of the state of the law:
How far must an applicant go to establish that privilege has been lost through the crime/fraud exception? The standard of proof required is certainly higher than ‘merely an allegation ... of a fraud’,for it ‘is a serious thing to override legal professional privilege where it would otherwise be applicable’.On the other hand, ‘something less than the full proof of illegality must suffice’, otherwise the consideration of this issue could turn ‘into a full-scale trial of the suggested illegality’,a situation which could only be described in terms of ‘complete unacceptability’.
Judicial opinion on what this middle road should be has ranged from proof of ‘a strong probability that there was fraud’,to a requirement of ‘strong evidence [to] do away with the privilege’,to simply ‘something to give colour to the charge’.In Australia, however, the law has settled on requiring that the ground for alleging that legal professional privilege has been lost must be clearly stated, as ‘vague or generalised contentions of crimes or improper purposes will not suffice’.Then, ‘there must be some evidence that gives substance to the allegation of crime or fraud’— some ‘material raising an arguable case that the relevant communications were made for the purpose of furthering or assisting a crime or fraud’.In short, the party resisting the claim for privilege must make out a ‘prima facie case’that reasonable grounds exist ‘for believing that the communication ... was made for some illegal or improper purpose’ (emphasis added).As can be seen, ‘the threshold for finding a prima facie case is not necessarily a stringent one’,although more is required to displace a claim to legal professional privilege than ‘merely by making an allegation’………..”
The applicant argued that in Apotex Pty Limited v Les Laboratoires Servier (No 5) [2011] FCA 1282 at [25] the Court observed that “it may be readily accepted that the mere insertion of the words ‘without prejudice’ does not of itself necessarily clothe correspondence with the character asserted any more than the absence of those words would deny a privilege attaching to correspondence which is truly engaged in for the purpose of effecting a settlement or compromise.”
A without prejudice privilege does not apply to cloak improper conduct. In Unilever Plc v The Procter & Gamble Co [2000] 1 WLR 2436 at 2444 Walker LJ said “one party may be allowed to give evidence of what the other said or wrote in without prejudice negotiations if the exclusion of the evidence would act as a cloak for perjury, blackmail or other unambiguous impropriety.”
In Dataquest (Australia) v Dataquest Inc [1996] FCA 1685 Tamberlin J considered that privilege did not apply where one party exerted unfair pressure upon the other during negotiations and said “… where the issue is whether a party to negotiations has exerted unfair pressure on the other party to accept an offer, the Court will admit evidence of such pressure and the privilege ordinarily attaching to ‘settlement’ negotiations in these circumstances cannot be relied on. Where statements are made in the nature of admissions not with a view to seeking compromise but rather in the nature of an ultimatum to the other side privilege will not attach”.
The applicant contends that the letter is not privileged as the letter contains an express example of illegitimate pressure being placed on the applicant to withdraw proceedings under the threat of referring her to the Legal Services Commission.
Further the applicant contends that the letter is admissible under subsection 131 (2) of the Evidence Act 1995 (Cth) which provides that “a communication is made in furtherance of the commission of an act that renders a person liable to a civil penalty (such as coercion) or where the communication affects a right of an applicant.” The applicant contends the “right” in issue is the applicant’s right to prosecute her claim under the FW Act.
With respect to the fact that the First Respondent was liable for sending the letter to the applicant (though he did not admit to be the author) the Second Respondent is liable as an accessory to the First Respondent’s contraventions either by way of being knowingly concerned or a party to the contravention.[12] The applicant argued that the accessory need not know that the conduct involved constituted a contravention.[13]
[12] See subsection 550 (2) of the FW Act
[13] See Fair Work Ombudsman v Jenni International Pty Ltd & Anor [2019] FCCA 2971 at [59] – [61]
The applicant argued that the Second Respondent was the decision maker who effected the dismissal of the applicant and that he did so for a prohibited reason. Further that he authored and directed Spelman to send the letter and he did so with intent to coerce the applicant to agree to withdraw the proceedings.
CONCLUSION
I am satisfied that the applicant has established that reasonable grounds exist for believingthat the communication contained within the letter dated 17 September 2020[14] demonstrates that the First and/or Second Respondent exerted unfair or illegitimate pressure upon the applicant within the context of settlement negotiations to accept an offer and the “without privilege” claim by the Respondents cannot be relied on in that regard.
[14] “Please note should this matter not settle in accordance with this letter that we intend to refer to the CCTV (and three formal complaints) to the Legal Services Commission concerning whether your client’s conduct ….is fitting conduct for a legal services professional……”
It is arguable that the letter of 17 September 2020 contains a communication that was made in furtherance of the commission of an act rendering a person liable to a civil penalty (such as coercion) or a communication affecting a right of the applicant however I find the latter unnecessary to decide.
I am satisfied that it is appropriate in the interests of the administration of justice that the Court exercise its discretion and make a declaratory order for discovery in the terms sought by the applicant. The First Respondent is required to file an affidavit of documents particularising all electronic documents in the possession and/or under the control of the First Respondent that were sent to, received from, or were between the directors or employees of Strategic Lawyers Pty Limited and Steven Hodgson which concerned the letter sent from the First Respondent to the Applicant on 17 September 2020 containing any reference or part reference to Lea Bethune or this proceeding.
I certify that the preceding fifty-seven (57) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Tonkin. Dated: 2 September 2021
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