COYLE v Doctors of Northcote (Trustee) - [2016] FCCA 555

FEDERAL CIRCUIT COURT OF AUSTRALIA

COYLE v DOCTORS OF NORTHCOTE (TRUSTEE) & ORS

[2016] FCCA 555

Catchwords:
INDUSTRIAL LAW – Application seeking imposition of civil penalties – whether first respondent should be subject of order for discovery – whether first respondent entitled to penalty privilege unclear – whether privilege waived in any event – defence filed asserting various facts – privilege waived to extent delineated in the defence – consideration of discretionary issues – limited orders made.

Legislation:

Fair Work Act 2009, ss.546, 570

Federal Circuit Court of Australia Act 1999, s.45

Construction, Forestry, Mining and Energy Union (CFMEU) v Boral Resources (Vic) Pty Ltd [2015] HCA 21
Devine Marine Group Pty Ltd v Fair Work Ombudsman [2013] FCA 442
Australian Securities and Investments Commission (ASIC) v Mining Projects Group Ltd [2007] FCA 1620

Applicant:

DOROTHY COYLE

First Respondent:

THE TRUSTEE OF THE LYNFAM FAMILY TRUST TRADING AS DOCTORS OF NORTHCOTE (ABN 73 997 715 710)

Second Respondent:

SANDRA LYNCH

Third Respondent:

BRONWYN HENMAN

File Number:

MLG 1906 of 2015

Judgment of:

Judge Burchardt

Hearing date:

22 December 2015

Date of Last Submission:

22 January 2016

Delivered at:

Melbourne

Delivered on:

21 March 2016

REPRESENTATION

Counsel for the Applicant:

Ms Tobin

Solicitors for the Applicant:

Lander & Rogers

Counsel for the Respondent:

Ms Landwehr

Solicitors for the Respondent:

Tress Cox Lawyers

ORDERS

The Respondents provide to the Applicant, upon request, any documents expressly referred to in the Statement of Claim.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 1906 of 2015

DOROTHY COYLE

Applicant

And

THE TRUSTEE OF THE LYNFAM FAMILY TRUST TRADING AS DOCTORS OF NORTHCOTE (ABN 73 997 715 710)

First Respondent

SANDRA LYNCH

Second Respondent

BRONWYN HENMAN

Third Respondent

REASONS FOR JUDGMENT

This is an interlocutory dispute about an Application for discovery pressed by the Applicant. The Application is resisted on the grounds of penalty privilege by the Respondents, who additionally point to discretionary matters tending against the Application being acceded to.
In order to understand the arguments put by the parties, it is necessary to examine the nature of the proceeding.
The Applicant’s originating Application, filed 18 August 2015,

is supported by a Form 4 claim in which the relief specified includes pecuniary penalty.
In the Applicant’s Statement of Claim it is asserted that the Respondents contravened a number of penalty provisions in the

Fair Work Act 2009
(“the FW Act”), and as a result, inter alia, one of the remedies sought is “the maximum penalties pursuant to s.546 of the FW Act”.
From the Statement of Claim it appears that the Applicant was employed by the First Respondent from 10 March 2011 onwards in the permanent part-time position of receptionist, working four days per week on a rostered basis. Paragraph 4 of the Statement of Claim is admitted by the Defence that has been filed.
The gravamen of the complaint appears to arise from ill health alleged on the part of the Applicant and the Respondents’ allegedly unlawful response thereto. I note that paragraph 71 of the Statement of Claim pleads that “the Applicant has been on personal leave since
20 February 2015 under cover of medical certificates from her treating practitioner”. That paragraph is admitted by the Defence.
The Defence was filed on 1 October 2015, following orders made by the Court, requiring a Defence, on 14 September 2015.
The Defence consists in part of admissions and denials, as would be expected. A number of pleading objections are also taken. More importantly for these purposes, the Defence does not plead penalty privilege, and in part consists of positive assertions as to asserted facts.
The Applicant has pressed for an order against the First Respondent and the categories of documents sought to be discovered, which are annexed to the Applicant’s proposed Minute of Consent orders placed on the Court file, seem to me to be substantial.
The Applicant submits that the First Respondent as a corporation does not attract penalty privilege. The Applicant further submits that there are at least two directors of the medical practice with which the proceeding is concerned, and since only one of them is a Respondent, presumably the other could reasonably be required to swear any affidavit of discovery on behalf of the First Respondent, thus not exposing themselves to penalty privilege.
The Applicant further submits that the First Respondent, being a Trustee, could not be exposed to any penalty and/or would be indemnified in the event that any order was made against it.
The Respondents submit that the corporate status of the First Respondent is not established. A slightly vague submission was advanced by counsel for the Respondents to the effect that the First Respondent “is not understood to be a corporation”.
Furthermore, the respondents submit that this is not an appropriate case for discovery since many of the documents sought to be discovered would be in the possession of the Applicant by their nature, and because it would be oppressive.
The parties have referred me to copious authority.
In my view, perhaps the appropriate starting point is Construction, Forestry, Mining and Energy Union (CFMEU) v Boral Resources (Vic) Pty Ltd [2015] HCA 21, in which the High Court reviewed the law in relation to penalty privilege, and in particular as it applied

to corporations. Having dealt with the privilege against self-incrimination at [54], Nettle J said at [55]-[56]:
“[55]
The privilege against self-exposure to penalty affords similar protection to the privilege against self-incrimination,

but it developed in Chancery from the equitable precept that

it would be “monstrous” for a common informer to be able

to bring a civil action for penalty without evidence to support

it and then require the defendant to supply the evidence out of his own mouth.
[56]
In Caltex the majority held that the privilege against self-incrimination is not available to a corporation as a basis for resisting a statutory requirement for the production

of documents.43 Subsequently, in Abbco, the majority of the Full Court of the Federal Court held that, as the result of denying the privilege against self-incrimination to corporations, it should

be accepted that corporations are also denied the benefit of the privilege against self-exposure to penalty.44 More recently,

in Daniels, Gleeson CJ, Gaudron, Gummow and Hayne JJ stated that, consistently with what was said in Abbco, it should now be recognised that neither the privilege against self-incrimination nor the privilege against self-exposure to penalty any longer applies to corporations.”
In the case of Devine Marine Group Pty Ltd v Fair Work Ombudsman [2013] FCA 442 (“Devine Marine Group”), Lander J made a number of observations which, in my respectful view, are of assistance.

At [63]-[67] his Honour said:
“[63]
However, a corporation does not enjoy the same privilege: Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477; Trade Practices Commission v Abbco Iceworks Pty Ltd (1994) 52 FCR 96. Following these decisions, s 187 of the Evidence Act 1995 (Cth) was enacted, which provides that a body corporate is not entitled to refuse or fail

to comply with the obligations to produce a document even if that obligation might intend to incriminate the body or make the body liable to a penalty: s 187(2).
[64]
A corporate respondent cannot refuse to make discovery

on the ground that making discovery might tend to incriminate

a natural person such as a director: Microsoft Corporation
v CX Computer Pty Ltd (2002) 116 FCR 372 (“Microsoft v CX”) at [32]; Australian Securities and Investments Commission
v Mining Projects Group Ltd (No 2) [2008] FCA 951 (“ASIC
v Mining Projects”) at [7].
[65] Conversely, a natural person cannot complain about a corporate respondent giving discovery on the ground that the natural person might lose the privilege against self-incrimination or exposure to penalty: Microsoft v CX at [32]; ASIC v Mining Projects at [7].
[66]
However, a court should not make an order requiring

a corporate respondent to make discovery if, by complying with that order, a natural person would be denied the privilege otherwise entitled to that person: Microsoft Corporation v CX Computer Pty Ltd at [32]–[33].
[67]
It follows, therefore, that if a corporate respondent can give discovery without thereby requiring a natural person to lose that person’s own entitlement to privilege, an order can be made.

If, however, the corporate respondent can only give discovery by requiring a natural person to forego that person’s right

to privilege, an order should not be made.”
The pleadings filed by the parties admit that the First Respondent was the employer of the Applicant. The nature of the employer is not, however, clearly delineated. It has an ABN number, but no ACN number is given. One is left to wonder whether the Trustee is a person, a Corporation, or a Partnership. This is not a satisfactory state of affairs.
For present purposes I cannot be satisfied that the First Respondent is a corporation, and it therefore follows that the Court has no power to make an order, prima facie, against the First Respondent. That is the case whether the First Respondent would be able to have an affidavit of documents sworn by someone who is not one of the Second or Third Respondents in any event.
This brings the Court to the question of waiver. It is clear that penalty privilege may be waived. I note that in Australian Securities and Investments Commission (ASIC) v Mining Projects Group Ltd [2007] FCA 1620 (“ASIC v Mining Projects”) at [13] Finkelstein J, expressed the view that there can be no requirement for a Defence to be filed in

a civil penalty proceeding. In this case, however, orders were made for a Defence without demur and have been complied with voluntarily

by the Respondents. As Finkelstein J pointed out in ASIC v Mining Projects at [18]:
“[18]
The second issue in the pleading dispute is waiver. As

to penalty privilege, Bray on Discovery (1885), 337–338 and Phipson on Evidence (14th ed, 1990), para 20–53 both state that penalty privilege may be waived expressly by contract and impliedly by conduct (see also Green v Weaver (1827) 1 Sim 404 at 427–432 [57 ER 630, 639–640]). That is entirely consistent with principle and accords with the nature of the privilege: see eg Daniels Corporation 213 CLR 543, 559; Rich 220 CLR 129, 179.”
Here the Applicant says that the Respondents have waived privilege because they did not plead it in their Defence, and says further that the Defence waives privilege by making a number of positive assertions as to facts.
In my view, the Respondents have not waived privilege simply because they have not expressly pleaded it in their Defence. They have asserted it in Court at the first available opportunity and, in my view, something more positive would be required to establish waiver in these circumstances.
Nonetheless, by pleading a number of positive assertions as to facts, the Respondents have, in my view, waived privilege to that extent.
In ASIC v Mining Projects at [24], Finkelstein J said:
“[24]
On the question of waiver, ASIC contends that the directors have waived each privilege by providing information in their respective defences which they were not obliged to provide.

It may be accepted, indeed it was not disputed, that the directors have waived each privilege as regards the admitted and asserted “facts”. But, in my opinion, the waiver is confined to what appears in the defences. First of all, what is conceded in each defence is not that the “facts” asserted or admitted are true “facts”. The defences do no more than relieve ASIC of the need to prove those “facts”. Second, there was no intention to waive privilege beyond what appears in each defence.”
In my view, the scope and scale of the discovery sought by the Applicant is, in any event, burdensome. As Lander J pointed out in Devine Marine Group at [55], about a case slightly different in form to that with which the Court is concerned here, but not in my view materially so:
“[55] Proceedings of the kind with which the Federal Magistrate was concerned should be dealt with inexpensively and expeditiously. Too often, proceedings of this kind can cause the respondents to pay more in legal costs than they become obliged to pay in pecuniary penalties. That itself is a penalty.”
In my view, discovery on the scale sought by the Applicant would be overly burdensome in circumstances where the nature of the pleadings filed strongly suggests that most of the documents the Applicant would require would already be in her possession.
Nonetheless, the Respondents have chosen to plead a Defence in which they refer to a number of documents. They should be required to provide copies of any of those documents referred to in the Defence to the Applicant should any request be made. This approach is more akin to a Notice to Produce than an order for discovery (an approach in fact suggested by the Respondents’ submissions). The Court can of course only make an order for discovery if the Court forms the view pursuant to s.45 of the Federal Circuit Court of Australia Act 1999 that it is appropriate in the interests of the administration of justice to order discovery.
What I am minded to do is simply to order that the Respondents provide to the Applicant, upon request, any documents expressly referred to in the Statement of Claim. This will not require an affidavit of documents. The documents are clearly referred to in the Defence itself.
I will give the parties an opportunity to peruse these reasons for judgment, in case the order I propose to make to resolve this matter is the subject of any concern.
Consistently with s.570 of the FW Act, I do not propose to make any orders for costs. In any event, each of the parties might be thought to have had some measure of success in the Application, such that costs would be inappropriate even if the Court had power to make such an order.
The other matter I wish to deal with is the identity of the First Respondent. It is manifestly unsatisfactory that the Court should be required to determine an issue potentially including civil penalties in circumstances where the civil penalties for individuals and corporations are radically different. The Court also needs to know the true identity of the party against whom any orders it may make actually is. The Respondents’ written submissions object to identifying the corporate or non-corporate identity of the First Respondent, on penalty privilege grounds. I am not presently convinced they are correct in that assertion. The First Respondent has admitted being the employer of the Applicant and it seems to me more probable than otherwise that only the First Respondent will be able to clarify this issue. I will hear further submissions on this matter.

I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of Judge Burchardt.

Date: 21 March 2016