Chambers v DFP Recruitment and Esso Australia Pty Ltd

[2020] VMC 1

IN THE MAGISTRATES’ COURT OF VICTORIA
AT LATROBE VALLEY
WORKCOVER DIVISION OF COURT

Case No. K11894649  

WENDY CHAMBERS	Plaintiff
v
DFP RECRUITMENT SERVICES PTY LTD ATF DFP BUSINESS TRUST	Defendant

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MAGISTRATE:	S GARNETT
WHERE HELD:	LATROBE VALLEY
DATE OF HEARING:	24 FEBRUARY 2020
DATE OF DECISION:	27 FEBRUARY 2020
CASE MAY BE CITED AS:	CHAMBERS V DFP RECRUITMENT & ESSO AUSTRALIA PTY LTD
MEDIUM NEUTRAL CITATION:	[2020] VMC001

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Catchwords: Workplace Injury Rehabilitation and Compensation Act 2013 – Claim for weekly payments and reasonable medical and the like expenses – Adjustment disorder, anxiety and depression arising out of or in the course of employment – S 40 defence – Subpoena issued on non-party – Rule 42A.03 Magistrates’ Court General Civil Procedure Rules 2010 – Claim for costs and expenses of complying with subpoena – Rule 42.11.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr Chen	Holding Redlich/Adviceline
Injury Lawyers
For the Defendant For Esso Australia Pty Ltd	Mr Schram Mr Healer	Minter Ellison Piper Alderman

HIS HONOUR:

1. Ms Chambers issued WorkCover proceedings (filed by Holding Redlich) against DFP Recruitment on 22 July 2019 in the Magistrates Court claiming weekly payments of compensation from 25 February 2019 together with reasonable medical and like expenses and costs.

1. Ms Chambers alleges that she was employed by the defendant (a recruitment company) as an Underwater Operations Co-ordinator on assignment to Exxon Mobil, operating as Esso Australia Pty Ltd.

1. Ms Chambers alleges that she suffers from an adjustment disorder with depressed and anxious mood, anxiety and depression which arose out of or in the course of her employment due to;

a.    Being regularly required to work long hours;

b.    Being assigned excessive responsibilities;

c.    Being spoken to inappropriately and unprofessionally by managers;

d.    co-workers making sexually inappropriate comments to her;

e.    Management not dealing with her complaints in a reasonable manner about the sexually inappropriate comments;

f.     Management not dealing with her concerns in a reasonable manner about safety issues;

g.    the unreasonable allegation against her of having a conflict of interest and the unreasonable manner in which the subsequent investigation was conducted.

1. Ms Chambers lodged a claim for compensation on 27 February 2019 which was rejected by the Authorised Agent on 10 May 2019 on the grounds that her injury was of a type which did not create an entitlement to compensation under the Act as it was wholly or predominantly caused by management action taken on reasonable grounds and in a reasonable manner by the host employer (s 40).

1. On 4 October 2019, Adviceline Injury Lawyers on behalf of Ms Chambers, filed a Subpoena for Production with the Registry dated 2 October 2019 addressed to The Manager Esso Australia Pty Ltd (not a party to the proceedings) in accordance with Rule 42A.03 of the Magistrates’ Court General Civil Procedure Rules 2010. The subpoena requested the production of:

-      the personnel file of Wendy Chambers;

-      any documents relevant to sexual harassment complaints/investigations concerning Wendy Chambers;

-      any documents relevant to safety complaints/concerns made by Wendy Chambers and subsequent investigations;

-      any requests for leave made by Wendy Chambers;

-      any complaints regarding pay or position description made by Wendy Chambers;

-      all documents relevant to the handling of the “conflict of interest” allegation made against Wendy Chambers and the subsequent investigation, including all diary entries.

1. By way of Order dated 25 November 2019, Esso Australia Pty Ltd was granted leave to file and serve an Affidavit of Documents listing any documents which it objected to producing on the grounds of legal professional privilege.

1. In an Affidavit of Documents dated 10 December 2019, sworn by Christopher Hartigan of Piper Alderman, lawyers instructed by Esso Australia Pty Ltd, a request for an extension of time was sort in order for an assessment of whether several hundred documents were privileged or not. In his Affidavit, Mr Hartigan also made reference to background factors relevant to the documents that fall within the scope of the subpoena as follows:

(a)  during the period December 2012 to 3 May 2019, the plaintiff was engaged by DFP Recruitment Services Pty Ltd (the Defendant) to provide services to Esso as a contract manager in its offshore operations in Bass Strait.

(b)  On or about 22 February 2019 Esso became aware of serious allegations against the plaintiff concerning an alleged conflict of interest by her in the performance of her duties for Esso in that she was involved in the engagement of her husband’s company to provide services to Esso without declaring her conflict of interest to Esso. Esso then commenced an internal investigation into those allegations (the Investigation).

(c)  Esso’s Audit Team conducted the investigation. The Audit Team relevantly comprises:

(1)      Nasaruddin Meor Abu Bakar (based in Kuala Lumpur); and

(2)      Naheed Jo (based in Melbourne).

(d)  From time to time Esso’s Audit Team contacted Esso’s internal lawyers in Australia to obtain legal advice in relation to the investigation. Esso’s internal counsel relevantly comprise the following people (Internal Counsel):

(1)      Monica Edgar, General Counsel

(2)      Simon Vanderaa, Executive Legal Counsel

(3)      Amy Pate, Senior Legal Counsel

(4)      Claire Winton Burn, Legal Counsel

(e) At all material times each of the above lawyers was an employee of Esso and an Australian lawyer within the meaning of the Legal Profession Uniform Law Application Act 2014.

(f)   Operational personnel (including managers in the relevant business unit at Esso and human resources staff based in Australia) were also involved in the investigation, including with providing instructions to internal counsel, and assisting with the enquiries of the Audit Team. This included:

(1)      Andrew Cooke (Integrity Group Supervisor)

(2)      Kirsteen Butler (Human Resources Manager, Australia)

(3)      David Rodee, and;

(4)      Wade Telley (Global Security Advisor)

(g)  On 27 February 2019, Esso contacted the defendant to request that it arrange for the plaintiff to attend an interview as part of the investigation into the allegations which it had received concerning the plaintiff. On the same day, the defendant advised Esso that the plaintiff was unfit for work, and Esso confirmed that it would not require her to participate in an interview until she was fit to return to work.

(h) On 28 March 2019, the plaintiff still had not returned to work, and Esso therefore forwarded a list of questions to the plaintiff’s legal representatives, Holding Redlich, for her response in lieu of requiring her to attend an interview.

(i)   By letter dated 8 April 2019, Holding Redlich sent Esso the plaintiff’s response to its questions as provided on 28 March 2019.

(j)   By letter dated 10 April 2019, Holding Redlich contacted Esso and alleged that Ms Chambers:

(1)      was an employee of Esso;

(2)      had been subject to sexual harassment whilst engaged by Esso;

(3)      had exercised a workplace right to make complaints in relation to alleged safety incidents; and

(4)      had been victimised because of her exercise of workplace rights and because her sexual harassment claim had not been resolved.

(k)  In the letter dated 10 April 2019, Holding Redlich, also stated, “unless action is taken in respect of the above matters, or there is agreement by the company to meet with Ms Chambers and her legal representatives, within 14 days, Ms Chambers will take legal action to vindicate her position”.

(l)   Esso’s investigation into the plaintiff’s alleged conduct continued, and as a result of the threatened legal action against the company, Esso’s Audit Team received legal advice from Esso’s internal Australian counsel in relation to the conduct of the investigation. Esso also engaged external counsel (Piper Alderman) to provide advice in relation to the foreshadowed litigation.

1. The court was  informed that;

-      on 22 November 2019, Esso produced eight folders of documents to the registry in response to the subpoena;

-      on 29 November 2019, Esso produced a further two folders of documents to the registry;

-      on 11 December 2019, Esso produced a further 81 documents;

-      objection was taken to the production of 180 documents said to be subject to legal professional privilege;

-      on 16 December 2019, the plaintiff’s lawyers indicated that the plaintiff did not object to the claim of legal professional privilege over those documents.

1. On 24 February 2020, Esso Australia Pty Ltd sought an order that the plaintiff pay its ‘actual costs reasonably incurred’ in complying with the subpoena dated 2 October 2019 in accordance with Rule 42.11. In correspondence annexed to the Affidavit, Esso Australia Pty Ltd had initially sought recovery of its costs associated with complying with the subpoena on an indemnity basis

1. The court was provided by way of Affidavit a copy of numerous correspondence exchanged between the parties. In a letter dated 21 February 2020, Piper Alderman indicated;

To date, the legal costs alone incurred by our client in complying with your client’s subpoena are in excess of $60,000 exclusive of GST. That figure does not include our client’s internal costs in conducting extensive searches and copying of documents which on current estimates are in excess of $25,000.

1. During submissions, both parties referred to and relied on the decision in Victoria International Container Terminal t/as VICT v CFMEU [1] and the cases referred to therein. Rule 42.11 of the Magistrates’ Court General Civil Procedure Rules 2010 provides that:

   [1] [2018] VSC 467 (Ruling No.2)

(1) The court may order the issuing party to pay the amount of any reasonable loss or expense incurred in complying with the subpoena.

(2) If an order is made under paragraph (1), the Court must fix the amount or direct that it be fixed in accordance with the Court’s usual procedure in relation to costs.

(3) An amount fixed under this Rule is separate from and in addition to-

(a)    any conduct money paid to the addressee;

(b)    any witness expenses payable to the addressee.

1. The court in VICT v CFMEU referred to a decision by Forrest J in Charan v Nationwide News Pty Ltd (No 6)[2] who in turn referred to the matter of Pyramid Building Society v Farrow Finance Corporation and ASADA v 34 Players and One Support Person (No 2). Forrest J noted that the decision in Pyramid stands for the proposition that once the requirements of the rule are satisfied then the court has a wide discretion as to the award of costs, extending to an award on an indemnity basis. In Asada, Croft J said; Rather, the proper question is, how are the provisions of r 42.11 to be applied having regard to the authorities to which reference has been made; authorities which indicate that where a person seeks to invoke the coercive powers of the Court with respect to subpoenas, a person who seeks to resist that process or to comply with the process is entitled to have costs and expenses reimbursed so that they are not out of pocket as a result. As the authorities indicate, this is particularly so in circumstances where they have no interest in the relevant proceedings and, in any event, seek to assist the Court with respect to the issue of or compliance with the subpoena.

   [2] [2017] VSC 331

1. After referring to this passage, Forrest J said; In my view, the submissions of Mr Charan miss the point. The determination of whether an award of costs should be made under r 42.11 does not turn upon the result of the claim for privilege and the events preceding it. Rather, as the observations of Croft J regarding the purpose of the rule make clear, it is intended to provide a means for properly compensating a party which has gone to the trouble and expense of complying with a subpoena and where it would not adequately be covered by the provision of conduct money or witness expenses.

1. The court in VICT also referred to a decision of Riordan J in Hera Project Pty Ltd v Bisognin (No 4) [3] where it was stated:

   [3] [2017] VSC 270

For an expense to be recoverable under r 42.11 it is necessary that it be incurred in complying with the subpoena and is reasonable. Expenses incurred in complying with a subpoena have been held to include expenses incurred in the following:

(a)  advice as to the validity of the subpoena and whether the addressee should comply with it at all or in part.

(b)  Correspondence and attendances on the issuing party regarding its terms particularly with a view to narrowing or clarifying the scope of documents to be produced.

(c)  Advice as to whether documents are subject to claims for privilege.

(d)  Advice as to whether inspection of documents may be restricted on the basis of confidentiality including correspondence, attendances and negotiations with the issuing party as to the terms for inspection.

(e)  Attendances in court on the return of the subpoena including attendances to assert that the subpoenaed documents should be protected from unrestricted access due to their confidential character and ensuring confidentiality undertakings have been properly given.

1. It was also held that whether an expense is incurred in compliance with the subpoena and whether the expense is reasonable are questions of fact with the addressee as the party applying for an order under r 42.11 bearing the onus of proving each of the elements.

Conclusion

1. There is no dispute that the subpoenaed non-party to the proceeding has expended considerable time, effort and expense in complying with its obligations under the subpoena. The scope of the documents sought is ‘wide’ and covers the plaintiff’s ‘engagement with Esso’ between December 2012 and May 2019. The sheer volume of the documents produced speaks for itself. The nature of the allegations made against the plaintiff (conflict of interest) together with the nature of the alleged injuries said to have arisen in the course of her employment has contributed to the volume of the material produced. I also accept that considerable time and effort was undertaken by Esso to ascertain whether any of the documents sought may have been subject to legal professional privilege. In my opinion, it is also of some importance that Esso, whilst not being a party to the Workcover proceedings, is not a completely disinterested party, it being the ‘host’ employer and the alleged injuries are said to have occurred whilst the plaintiff was ‘engaged’ with it, albeit employed by the defendant. Nonetheless, it should be compensated for its compliance with the subpoena and for costs that were reasonably incurred by it relevant to the Workcover proceeding and not the ‘threatened legal action’ referred to in the letter from Holding Redlich dated 10 April 2019.

1. In accordance with Rule 42.11, Esso Australia Pty Ltd is entitled to its ‘reasonable costs and expenses’ in complying with the subpoena. The costs will not be ordered on the basis of ‘actual costs reasonably incurred’, but rather on a ‘reasonable basis’ as outlined in Rule 42.11 and to be assessed by the Costs Court pursuant to s 131A of the Magistrates’ Court Act 1989.