CFMEU v Newlands Coal Pty Ltd
[2014] FCCA 1166
•25 March 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| CFMEU v NEWLANDS COAL PTY LTD | [2014] FCCA 1166 |
| Catchwords: PRACTICE & PROCEDURE – Discovery – ambit of disclosure – interests of the administration of justice to permit disclosure – reference to pleadings – r.20.14 Federal Court Rules 2011 (Cth) – ongoing obligation to disclose. PRACTICE & PROCEDURE – Discovery – security of disclosed material – potential misuse of disclosed material – potential for disclosure of material to lead to industrial unrest – history of legal non-compliance by the applicant –undertakings not to disclose material – disclosure of material to limited persons. |
| Legislation: Fair Work Act 2009 (Cth) |
| Abrahams v Qantas Airways Ltd (No.2) [2007] FMCA 639 Cairns, Bernard, The Law of Discovery in Australia: Documents, interrogatories and property (Law Book Co, 1st ed, 1984) |
| Applicant: | CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION |
| Respondent: | NEWLANDS COAL PTY LIMITED |
| File Number: | BRG 922 of 2013 |
| Judgment of: | Judge Burnett |
| Hearing date: | 24 March 2014 |
| Date of Last Submission: | 24 March 2014 |
| Delivered at: | Brisbane |
| Delivered on: | 25 March 2014 |
REPRESENTATION
| Solicitors for the Applicant: | Maurice Blackburn Lawyers |
| Counsel for the Respondent: | Mr C. Murdoch |
| Solicitors for the Respondent: | Ashurst Australia |
ORDERS
Discovery occur in accordance with Rule 20.14 of the Federal Court Rules 2011 (Cth).
The ranking spreadsheet documentation be disclosed by the Respondent in un-redacted form to:
(a)lawyers employed by Maurice Blackburn who are acting for the Applicant;
(b)Counsel for the Applicant; and
(c)Mr Sommerfeld.
The ranking spreadsheet documentation not be disclosed to the Applicant.
Prior to the disclosure of the ranking spreadsheet documentation by the Respondent, Mr Sommerfeld provide a written undertaking to the Court that the ranking spreadsheet documentation and its contents will not be disclosed to any person or entity other than lawyers employed by Maurice Blackburn who are acting for the Applicant and Counsel acting for the Applicant.
Each party file an affidavit of documents by no later than 4.00pm on 22 April 2014.
The parties have liberty to apply upon three days' notice to the Court.
Costs, if any, be reserved.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRG 922 of 2013
| CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION |
Applicant
And
| NEWLANDS COAL PTY LIMITED |
Respondent
REASONS FOR JUDGMENT
(Ex tempore)
On 13 November 2013, I ordered:
“The parties exchange lists of any proposed classes of documents for discovery by 4.00pm on 21 February 2014 and, failing agreement between the parties as to the classes on or before 28 February 2014, either party has liberty to apply in respect of discovery on or before 7 March 2014, with any application to be returned on a date to be advised by the Court.”
The parties are in dispute concerning discovery, and so I am now formally required to address this issue.
In matters such as this, the Court is required to consider whether a declaration ought be made that it is in the interests of the administration of justice to permit discovery.[1] A helpful catalogue of the relevant principles is provided in Abrahams v Qantas Airways Ltd (No.2) [2007] FMCA 639.
[1] Section 45(1) Federal Circuit Court of Australia Act 1999 (Cth). That decision is to be informed by the matters required by s.45(2).
In this application, both parties agree that discovery is appropriate. The argument is directed to the ambit of discovery and control of certain discovered documents. There is no question that the documents sought to be disclosed are relevant.
The substantive application is a general protections claim under the Fair Work Act 2009 (Cth) (“FW Act”) related to the redundancy of an employee of the respondent (Mr Sommerfeld). The redundancy ostensibly occurred as part of a corporate restructure. Mr Sommerfeld, represented by the applicant, seeks reinstatement. A bona fide case is alleged, and the onus is clearly upon the respondent to address the case, which it seeks to do in its Defence. In order to address its Defence, it will need to turn out documents to answer the applicant’s case. It will also have to turn out documents relevant to the circumstances in which the redundancy occurred.
It is obvious that disclosure, at least to a limited extent, will be to the benefit of both parties. It will deal with the question of assisting the respondent to address the original conduct complained of, and it will permit the applicant to address the issue of whether or not there was an even-handed process which resulted in the selection of those employees made redundant.
That is a matter which is very much alive on the pleadings. The applicant contends that Mr Sommerfeld has been discriminated against on the basis of health and because of his membership of the applicant. The respondent contends that following a detailed four-step process which sought to objectively evaluate the quality of competing employees, it settled upon Mr Sommerfeld as one of those who was to be subject to redundancy.
In those circumstances, it seems to me that discovery will clearly narrow the issues, if only by putting to rest the suspicion which presently appears to inform the applicant’s concerns about the respondent’s Defence. The ambit of disclosure being requested will be addressed and confined by the pleadings. Generally I consider it appropriate that there be disclosure and that a declaration to that effect be made.
The real issue in this case concerns discovery in respect of two matters:
a)ambit; and
b)control of certain discovered documents.
Ambit of disclosure
In respect of the ambit, the application for discovery details a lengthy list of classes of documents which the applicant requires disclosure of. There has been some agreement between the parties, which is detailed in correspondence. That agreement preceded the current discovery dispute. However, I do acknowledge the respondent’s concern that the applicant’s demands, as expressed, appear to be far-reaching.
Despite the broadly expressed classes, the ultimate determinative factor of the ambit of disclosure is resolved by reference to the pleadings. In respect of standard disclosure, this is provided for by r.20.14 Federal Court Rules 2011 (Cth), a rule which I consider appropriate to be adopted in this Court.
I understand the applicant to seek very broad disclosure, including disclosure of documents consistent with principles expressed in the Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Company (1882) 11 QBD 55 test. I note the comments at paragraph 27 of the applicant’s submissions:
“Documents in the categories sought will assist in the conduct of the litigation and they will identify communications and other documents relevant to the matters in issue.”
In the decision of Redline Contracting Pty Ltd v MCC Mining (Western Australia) Pty Ltd [2012] FCA 1157, Siopis J was considering the issue of disclosure and its ambit. In relation to the general obligation to disclose, he noted at [18]:
“… For the Court to make an order [pursuant to r. 20.14] permitting, or requiring, any party to provide discovery under the [Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Company] test, would be a highly unusual order for this Court to make. The Court would need to be persuaded by way of a fully argued application to make such a radical order for discovery.”
At [13] he identified the relevant test in Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Company as this:
“[The] test provides for a very wide scope of discovery so that parties are required to discover even documents which may lead to a train of inquiry that may damage the case of the party giving discovery or advance the opponent’s case.”
Once discovery is made by affidavit, it is open to each party to challenge the other on any alleged failings or shortcomings. There is no reason for the Court to expect that each party’s lawyers will otherwise but ensure that disclosure is conducted appropriately and that the affidavits will, in the ordinary course, be conclusive. The extensive correspondence to date has served to put each party on notice as to the expectations in respect of disclosure and, indeed, has already limited its ambit. An established process exists for resolving disputes about matters of ambit should they arise. However, it commences from the existence of an affidavit of disclosure in the first place.
Considering that process, I refer generally to the commentary in The Law of Discovery in Australia at page 40.[2] It should not be forgotten that the obligation to disclose is a continuing one. I make that observation in anticipation that other documents become relevant when considered against the background of documents that fall into the classes that ought be initially disclosed.
[2] Bernard Cairns, The Law of Discovery in Australia: Documents, interrogatories and property (Law Book Co, 1st ed, 1984) 40. Although this is an ancient text by contemporary standards, its observations carry equal force in the present day.
It follows that an order ought be made directing each party to make disclosure in terms of r. 20.14.
Confidentiality of information
The next significant issue is the confidentiality of disclosed information. It has been addressed by the parties under various other headings, such as redaction and masking, but in essence the problem is confidentiality. The respondent’s real concern is the use to which information gleaned from disclosure might be put.
The applicant is a trade union representing Mr Sommerfeld. It ought be noted that he was not the only employee rendered redundant, but it appears from the material that he was the only one rendered redundant who was also a member of the applicant. I also note that he is not a party to the proceedings. In an affidavit sworn by Mr Bernie O’Neill, General Manager of the respondent, he details his concerns about the potential damage that may follow from the uncontrolled disclosure of some of the information, in particular, documentation that refers to other employees. At paragraphs 15 to 21 of his affidavit filed 24 March 2014 he outlines those concerns.
I refer particularly to his important observations at paragraph 19, where he talks about his real concern being that the release of a “ranking spreadsheet” document will lead to industrial disputation and unrest at the respondent’s mine because of the highly sensitive personnel management information contained in that material.
The respondent’s concerns have not been allayed by the applicant’s solicitor’s submissions made in open court. When queried on whether an individual officer or employee of the applicant could be identified to be responsible for the control of this information so as to ensure that it was not used inappropriately, the Court was informed that there was no such person available. The conduct of the applicant’s litigation appears to be undertaken and managed by an advisory team process, and the applicant’s solicitor was unable to explain who precisely might be in a position to provide a personal undertaking to the Court on behalf of her client.
I raised the applicant’s historically insouciant approach to compliance with the FW Act generally as a relevant factor in considering why an undertaking from it as a corporate body alone may be insufficient. While this was not accepted by the applicant, the fact remains that it has been the manifest experience of this Court and many others that its attitude to compliance with the law appears to largely depend upon its immediate industrial objective(s). For instance, it regularly consents to penalties for contraventions of the FW Act, presumably adopting the principle that the end justifies the means, thereby evincing a quasi-commercial approach to its consideration of its duty to comply with the law. Its adherence to the law seems to be influenced by a consideration of whether the benefits outweigh the likely penalty or cost.
Mr O’Neill is no stranger to the ways and means of the applicant. He is literally at the coalface in an industry where the applicant is a significant and active industrial organisation. In my view, he has reasonable and well-informed grounds for his concern. It follows that the real issue here is how disclosure may be effected to permit each party to properly comprehend the material, but also ensure that sensitive material is protected, that is, material which contains highly sensitive personnel information, such as that detailed by Mr O’Neill at paragraphs 15 and 17 of his affidavit. A process must be put in place so that the material can be made available to the applicant without being used for a collateral and/or improper purpose.
One proposed solution to the issue of confidentiality was redaction. The approach of the Court to redaction is reasonably well settled, and it is fair to say that each case falls to be determined on its individual facts. However, in Gray v Associated Book Publishers (Aust) Pty Ltd [2002] FCA 1045, Branson J, at [15], was considering this very same issue. She made this observation:
“In my view, where in this Court categories of documents are required to be discovered and thereafter made available for inspection, the true obligation on the party giving discovery is the same as that identified by McLelland CJ in Eq in Telstra Corp v Australis Media Holdings by reference to Pt23 of the New South Wales Supreme Court Rules. The Chief Judge there said:
“Under the new discovery rules, Pt23 of the Supreme Court Rules, ... classes of documents required to be discovered may be, and were in the present case, specified not by reference to relevance to a fact or facts in issue, but by description of the nature of the documents, rendering it unnecessary to consider questions of relevance to an issue, as such. If in such cases the party giving discovery desires to withhold, by making or otherwise, production of part of a discoverable document on the ground that that part does not contribute to the satisfaction of any of the criteria by reference to which the class of documents is described, then it may be that a case can be made for giving effect to that desire, but in my view, unless there is some relevant qualification in the order for discovery, the order requires that the whole document be produced unless there is an agreement to the contrary by the party to which discovery is being made, or unless relief from the requirement, for example by making certain portions is obtained from the Court.”
…
[17] As Kiefel J observed in Index Group of Companies Pty Ltd v Nolan [2002] FCA 608 at [6], in this Court a party has only a qualified right to access another party's documents through the procedures of discovery and inspection. The Court has a discretion to order, or not to order, discovery or inspection of discovered documents and it will endeavour to avoid unnecessary discovery or inspection. The Court will be guided by what is necessary to ensure justice between the parties (Index Group of Companies Pty Ltd v Nolan at [7]). So far as discovery is concerned O15 r2(5) is a guide to factors that the Court may take into account in determining in a particular case the appropriate extent of discovery. However, it is not an exhaustive guide.
[18] In Index Group of Companies Pty Ltd v Nolan at [8] Kiefel J said:
“A private right of confidentiality in documents may be taken into account in considering whether to order discovery and inspection, although it is right to say that the fact that documents have that character is not usually itself a sufficient reason to deny discovery ... When a document is shown to be confidential the Courts must balance the effect of its disclosure and of it being withheld from a party to litigation. In that latter respect much may turn upon what it is necessary for that party to prove ...””
This case, in my view, is no different.
The most pressing concern of the respondent is that some documents, such as the “ranking spreadsheet” document, have the potential to cause difficulties and possibly incite industrial unrest, particularly if Mr Sommerfeld is successful in seeking reinstatement.
No doubt there will always be disappointment by those who are rendered redundant in any redundancy process. However, provided that the process was appropriate and properly conducted, nothing is to be achieved by simply trawling through other documents and identifying matters that of themselves would not lead to any different outcome, but by their airing have the potential to give rise to industrial unrest.
The matter has also been the subject of commentary by his Honour Justice Logan in Construction Forestry Mining and Energy Union v North Goonyella Coal Mine Pty Ltd [2013] FCA 1444. At [83] he stated:
“... for reasons which strike me as sound, the company chose not to mask out from the various manifestations of the assessment process in documents references to employees other than the three workers the subject of these proceedings. The reason why that strikes me as sound is that to measure the discrimination which occurred in relation to these particular workers, it was at least possible, if not probable, that it would be necessary to compare and contrast their fate with that of others in the assessment exercise undertaken. The documents concerned chart, therefore, a process relevant not just to Messrs Ludlow, Elliot and Woods but also to a wider class of employees. They were not documents created expressly for these proceedings but they were expressly created for a redundancy program which has in part been exposed in these proceedings and which same program is the subject of proceedings in the commission.”
The point made by Logan J is one with which I agree. However, two matters are relevant.
Firstly, in that case the respondent accepted that there had been contraventions involving discrimination. The principal application before his Honour on that occasion, in which context his comments were made, was one for the making of declarations and the imposition of penalties following a concession by the respondent that there had indeed been contraventions of the FW Act. In those circumstances, nothing was to be gained by maintaining confidentiality given the concession by the respondent that it had breached the FW Act; accordingly, there was no advantage to be achieved by the applicant.
Secondly, the point made by his Honour went to the need for comparison. Relatively speaking, the nature of the individuals in this instance can be seen as irrelevant. If the respondent makes its case, and the applicant can analyse the decision. To do that it does not need to know the names of the other individuals considered because on the respondent’s case its decision was based upon a review of competing characteristics.
Equally, I can see the force in an argument that it is appropriate for Mr Sommerfeld to know the identity of those who were preferred over him in the redundancy process. In that respect there may be personnel matters which became material, particularly if one looks to consider the points of distinction at the margins in the circumstances of equally weighted candidates for redundancy.
However, in this instance I do not think it will be necessary to proceed down that path. In this case, I think it is appropriate to require disclosure and inspection of the documents referred to in paragraph 15 and 17, but only on the basis that the disclosure be limited to the applicant’s solicitors and to Mr Sommerfeld personally upon his undertaking not to disclose any of the information contained therein to anyone other than his solicitors and counsel. I observe that they will be bound by their professional obligations and duty to the Court to ensure that the material is not disclosed to the applicant or otherwise used for an inappropriate purpose.
I certify that the preceding thirty-two (32) paragraphs are a true copy of the reasons for judgment of Judge Burnett.
Date: 5 June 2014
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