Dowling v Kirk & 16 Ors

[2007] FMCA 2106

FEDERAL MAGISTRATES COURT OF AUSTRALIA

DOWLING v KIRK & 16 ORS [2007] FMCA 2106

INDUSTRIAL LAW – Accessorial liability – applicable test.

PRACTICE AND PROCEDURE – No reasonable prospects of success – summary dismissal application.

Workplace Relations Act 1996, ss.4, 659, 728, 779, 792, 793, 809
Federal Magistrates Act 1999, s.17A
Trade Practices Act 1974, s.75B
Federal Magistrates Court Rules 2001, r.13.10

Dowling v John Fairfax Publications Pty Limited [2007] FMCA 2014
Yorke v Lucas (1985) 158 CLR 661
Australian Competition & Consumer Commission v Giraffe World AustraliaPty Ltd (1999) 95 FCR 302
Rural Press Ltd v Australian Competition & Consumer Commission (2002) 118 FCR 236
Heydon v NRMA Ltd (2000) 51 NSWLR 1
Australian Competition & Consumer Commission v IMB Group Pty Ltd [2003] FCAFC 17

Applicant: SHANE DOWLING

First Respondent: DAVID KIRK

Second Respondent: RON WALKER

Third Respondent: JULIA MARION KING

Fourth Respondent: ROGER CORBETT

Fifth Respondent: MARK BURROWS

Sixth Respondent: DAVID EVANS

Seventh Respondent: PETER YOUNG

Eighth Respondent: JOHN FAIRFAX

Ninth Respondent: NICHOLAS FAIRFAX

Tenth Respondent: GAIL HAMBLY

Eleventh Respondent: LINDA PRICE

Twelfth Respondent: CAROLYN BRADLEY

Thirteenth Respondent: KELLY DALY

Fourteenth Respondent: NATALIE CARRINGTON

Fifteenth Respondent: YEMEE FERNANDES

Sixteenth Respondent: KEVIN STOKES

Seventeenth Respondent: ROBERT WHITEHEAD

File Number: SYG 2704 of 2007

Judgment of: Cameron FM

Hearing date: 25 October 2007

Date of Last Submission: 25 October 2007

Delivered at: Sydney

Delivered on: 20 December 2007

REPRESENTATION

The Applicant appeared in person.

Counsel for the Respondent: Ms. K. Eastman

Solicitors for the Respondent: Freehills

ORDERS

1. Pursuant to r.13.10(a) of the Rules of Court, the proceedings be dismissed to the extent that they allege that the respondents are liable pursuant to s.728 of the Workplace Relations Act 1996 for breaches of s.792 of that Act which are alleged to arise out of conduct described in ss.793(1)(k) and 793(1)(l) of that Act.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 2704 of 2007

SHANE DOWLING

Applicant

And

DAVID KIRK

First Respondent

RON WALKER

Second Respondent

JULIA MARION KING

Third Respondent

ROGER CORBETT

Fourth Respondent

MARK BURROWS

Fifth Respondent

DAVID EVANS

Sixth Respondent

PETER YOUNG

Seventh Respondent

JOHN FAIRFAX

Eighth Respondent

NICHOLAS FAIRFAX

Ninth Respondent

GAIL HAMBLY

Tenth Respondent

LINDA PRICE

Eleventh Respondent

CAROLYN BRADLEY

Twelfth Respondent

KELLY DALY

Thirteenth Respondent

NATALIE CARRINGTON

Fourteenth Respondent

YEMEE FERNANDES

Fifteenth Respondent

KEVIN STOKES

Sixteenth Respondent

ROBERT WHITEHEAD

Seventeenth Respondent

REASONS FOR JUDGMENT

Introduction

1. Shane Dowling, the applicant in these proceedings, has brought three sets of proceedings arising out of the termination of his employment with John Fairfax Publications Pty Limited (“Fairfax”). In proceedings SYG 2671 of 2007 (“principal proceedings”) Mr Dowling seeks reinstatement with Fairfax based on his allegation that he was unlawfully dismissed in breach of s.659(2)(e) of the Workplace Relations Act 1996 (“Act”). In those proceedings Mr Dowling has also filed a Notice of Motion seeking orders that his application be amended to plead breach by Fairfax of s.792 of the Act arising out of conduct described in s.793(1)(j) and (k). Mr Dowling originally sought also to add seventeen additional parties, apparently directors or officers of Fairfax, as respondents in those proceedings, however, he no longer seeks to do so.

2. In these proceedings (“directors and officers proceedings”) Mr Dowling has commenced proceedings against the individuals he had previously sought to join in the principal proceedings. Mr Dowling seeks financial compensation and a published apology on the basis of alleged accessorial liability under s.728 of the Act. This is related to Fairfax’s alleged breach of s.792 of the Act and is said to arise out of conduct described in s.793(1)(j), (k) and (l).

3. In matter SYG 2703 of 2007 (“contempt proceedings”) Mr Dowling seeks orders in respect of three employees of Fairfax and one of its solicitors to the effect that certain aspects of their conduct associated with, or subsequent to, the termination of his employment with Fairfax be referred to the Director of Public Prosecutions for the laying of criminal charges. 

4. The respondents have sought dismissal of their respective proceedings pursuant to s.17A of the Federal Magistrates Act 1999 and r.13.10 of the Rules of Court on the basis that Mr Dowling has no reasonable prospects of success in any of them.

5. On 28 September 2007 it was ordered that each of the matters be listed for hearing on 25 October 2007 for hearing of the respondents’ applications. 

6. For the reasons which follow, these proceedings will be dismissed to the extent that they allege accessorial liability for breaches of s.792 arising out of conduct described in s.793(1)(k) and (l) of the Act. I am satisfied that those parts of the proceedings have no reasonable prospects of success.

Background

1. The relevant background facts are set out in my reasons for judgment in the principal proceedings: Dowling v John Fairfax Publications Pty Limited [2007] FMCA 2014.

2. The principal proceedings had been commenced in the Federal Court.  On 20 August 2007, after hearing some argument on the parties’ motions in those proceedings (to amend and add parties and to dismiss summarily), Gyles J transferred the principal proceedings to this Court.

3. These proceedings were commenced on 3 September 2007.

No reasonable prospects of success

1. To succeed on their current application, the respondents must demonstrate that these proceedings have no reasonable prospects of success. As to the proper principles to apply, I refer to paragraphs [14] to [24] of my reasons for judgment in the principal proceedings.

Mr Dowling’s claims

1. The application which Mr Dowling has filed to commence these proceedings is almost identical to his notice of motion filed in the principal proceedings when they were in the Federal Court. One point of difference between this application and the notice of motion in the principal proceedings is that in this application Mr Dowling additionally alleges breach of s.792 by reason of conduct described in s.793(1)(l) which provides:

   Conduct referred to in subsection 792(1) or (5) is for a prohibited reason if it is carried out because the employee, independent contractor or other person concerned:

   …

   (l) has given or proposes to give evidence in a proceeding under an industrial law; …

2. Another point of difference is that Mr Dowling seeks in these proceedings to demonstrate liability on the part of seventeen individuals rather than just on the part of Fairfax.

3. Mr Dowling says that he was dismissed because he made a complaint about bullying, intimidation and bastardisation and had proposed to take the complaint outside Fairfax.  In support of his claim of bullying, intimidation and bastardisation:

   a)

   Mr Dowling points to the second last paragraph of his email to Mr Kirk (whom he describes as “CEO – Fairfax Media”) dated

   
   16 April 2007

   where he says:

   This is my last attempt to have these issues resolved by the company.  If they are not dealt with summarily I will have no choice but to look at other options in dealing with them.  (para.1, affidavit filed 3 September 2007);

   b)Mr Dowling says that on 7 May 2007 he walked out of a meeting with Natalie Carrington, Yemee Fernandes and Luke Osborn saying that he would “be getting WorkCover involved” (para.2, affidavit filed 3 September 2007);

   c)Mr Dowling also says that the following day, after receiving a warning letter, he spoke to Linda Price and said words to the following effect:

   They are threatening to sack me and believe [sic] I can take out a court order stopping them from sacking me.  I also told Natalie Carrington yesterday that I would be making a complaint to WorkCover but have decided to at least wait until after the meeting with you and Carolyn Bradley tomorrow.  (para.3, affidavit filed 3 September 2007);

   d)Mr Dowling says he was dismissed in the way that he was because “they did not want to give me time to make a complaint outside the company” (para.4, affidavit filed 3 September 2007);

   e)Mr Dowling says:

   When I made the complaint to David Kirk, as a director, he would have informed the Board of Directors. This leads me to believe they are the ones who ultimately directed my termination. (para.5, affidavit filed 3 September 2007);

   f)Mr Dowling also says:

   The Directors obviously had a huge incentive to have me terminated in an attempt to hide their breach of duties from a OH&S viewpoint. (para.6, affidavit filed 3 September 2007).

4. Mr Dowling has also filed an affidavit sworn 24 September 2007 to which is annexed a marked up document in the form of a Fairfax internal report on Mr Dowling’s dismissal which he describes as a fraudulent document.

5. Section 792(1) of the Act provides:

   An employer must not, for a prohibited reason, or for reasons that include a prohibited reason, do or threaten to do any of the following:

   (a) dismiss an employee; …

6. Section 793(1)(j), (k) and (l) provide:

   Conduct referred to in subsection 792(1) or (5) is for a prohibited reason if it is carried out because the employee, independent contractor or other person concerned:

   …

   (j)    has made or proposes to make any inquiry or complaint to a person or body having the capacity under an industrial law to seek:

   (i)    compliance with that law; or

   (ii)   the observance of a person's rights under an industrial instrument; or

   (k)   has participated in, proposes to participate in or has at any time proposed to participate in a proceeding under an industrial law; or

   (l) has given or proposes to give evidence in a proceeding under an industrial law;…

7. “Industrial law” is defined in s.779 as follows:

   this Act, the Registration and Accountability of Organisations Schedule or a law, however designated, of the Commonwealth or of a State or Territory that regulates the relationships between employers and employees or provides for the prevention or settlement of disputes between employers and employees.

   “Industrial instrument” is defined in s.779 of the Act as follows:

   an award or agreement, however designated, that:

   (a)   is made under or recognised by an industrial law; and

   (b)concerns the relationship between an employer and the employer's employees, or provides for the prevention or settlement of a dispute between an employer and the employer's employees.

   “Proceeding” is defined in s.4 of the Act as follows:

   “proceeding” includes a proceeding relating to the following:

   (a)an award rationalisation process;

   (b)an award simplification process.

The respondents’ application

Issue 1 – claim of breach based on conduct described in s.793(1)(j)

1. For the reasons set out in paragraphs [47] to [65] and [71] of my reasons for judgment in the principal proceedings, I cannot conclude at this point and based on the arguments which have so far been made, that this claim has no reasonable prospects of success.

Issue 2 – claim of breach based on conduct described in s.793(1)(k)

1. For the reasons set out at paragraphs [66] to [69] of my reasons for judgment in the principal proceedings, I am of the view that the claim based on the alleged breach of s.792 said to arise out of conduct described in s.793(1)(k) has no reasonable prospects of success. Significantly, these proceedings were commenced after Fairfax filed its notice of motion in the principal proceedings seeking the dismissal of those proceedings on the basis that they had no reasonable prospects of success. Nowhere in the principal proceedings nor, more relevantly, in these proceedings, has Mr Dowling put on evidence that at any time prior to his dismissal he had participated in or proposed to participate in proceedings under an “industrial law”. For the reasons given at paragraph [72] of my reasons for judgment in the principal proceedings, the reverse onus of proof found in s.809 does not alter the situation that this element of Mr Dowling’s claim has no reasonable prospects of success.

Issue 3 – claim of breach based on conduct described in s.793(1)(l)

1. This paragraph, which prohibits the dismissal of employees in circumstances where a person has given or proposes to give evidence in a proceeding under an industrial law, presupposes the existence of such proceedings. Unless such proceedings are on foot, any proposal to give evidence can be no more than hypothetical. Moreover, the evidence filed by Mr Dowling does not support a conclusion that any industrial proceedings were in prospect at or around the time he was dismissed or that he proposed to give evidence in any such proceedings. Additionally, there is no evidence that he had earlier given evidence in any such proceedings.

2. As is the case in relation to Mr Dowling’s evidence concerning an alleged breach related to conduct described in s.793(1)(k), the history of this matter leads to the conclusion that Mr Dowling has put before the Court the affidavits which he considers to be accurate and sufficiently complete for current purposes.

3. Consequently, no arguable case had been demonstrated in respect of this asserted breach and, as a result, this aspect of his claim has no reasonable prospects of success.

Issue 4 – accessorial liability

1. Section 728 of the Act provides:

   (1)A person who is involved in a contravention of a civil remedy provision is treated as having contravened that provision.

   (2)For this purpose, a person is involved in a contravention of a civil remedy provision if, and only if, the person:

   (a)has aided, abetted, counselled or procured the contravention; or

   (b)has induced the contravention, whether by threats or promises or otherwise; or

   (c)has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or

   (d)     has conspired with others to effect the contravention.

2. Section 728 is drawn in terms very similar to those of s.75B of the Trade Practices Act 1974. The latter section has been considered in a number of decisions which provide guidance as to the meaning of the same terms where they are found in s.728(2). Those Trade Practices Act authorities show that in order that a person may be “involved in” a contravention of a civil remedy provision it is necessary to demonstrate that the person in question was a knowing participant in the contravention: Yorke v Lucas (1985) 158 CLR 661 at 668-670.

3. In Yorke v Lucas, speaking of s.75B(1)(a), the High Court observed at 667 that that paragraph uses criminal law terms, namely the words “aided, abetted, counselled or procured” which, in that branch of the law, are used to designate participation in a crime either as a principal in the second degree or as an accessory before the fact. Such conduct requires intent in order that the offence can be proved. The High Court noted that a person will be guilty of the offences of aiding and abetting or counselling and procuring the commission of an offence only if the person intentionally participates in it, in the sense that he or she has knowledge of the essential matters going to make up the offence, whether or not he or she knows they amount to a crime.

4. As to the proper construction of s.75B(1)(a), the High Court said:

   Notwithstanding that s.75B operates as an adjunct to the imposition of civil liability, its derivation is to be found in the criminal law and there is nothing to support the view that the concepts which it introduces should be given a new or special meaning. (at 669)

5. The High Court described persons falling within the reach of s.75B(1)(a) of the Trade Practices Act – s.728(2)(a) in the Workplace Relations Act – as “accessories”, with the consequent requirement implied by that term of knowing participation in a contravention. 

6. As to the Trade Practices Act equivalent of s.728(2)(c), the High Court said:

   In our view, the proper construction of par (c) requires a party to a contravention to be an intentional participant, the necessary intent being based upon knowledge of the essential elements of the contravention. (at 670)

7. Lindgren J summarised the relevant passage in Yorke v Lucas in Australian Competition & Consumer Commission v Giraffe World AustraliaPty Ltd (1999) 95 FCR 302 at 346 [184] in the following terms:

   In Yorke v Lucas (1985) 158 CLR 661, in which the managing director of a vendor’s corporate agent was held not liable by reason of s.75B(1) for the vendor’s misrepresentation, Mason ACJ, Wilson Deane and Dawson JJ held in a joint judgment (at 670) that:

   ·    for a person to be “knowingly concerned in” a contravention, he or she must have “knowledge of the essential facts constituting the contravention”;

   ·    The word “knowingly” in para (c) qualifies the expression “concerned in” and not “a party to”; and

   ·    “the proper construction of par (c) requires a party to a contravention to be an intentional participant, the necessary intent being based upon knowledge of the essential elements of the contravention.”

   In the same case, Brennan J said that under s.75B, civil liability is imposed only on “those who engage in the conduct prescribed in s.75B with the state of mind ... call[ed] mens rea” (at 673).

8. Although Lindgren J said at [186] that it was not necessary that the accessory should have appreciated that the conduct was unlawful, his Honour stressed at [187] that the state of mind of a supposed accessory in relation to a particular pleaded contravention was a critical issue. His Honour said that simple reference to evidence of the positions and conduct of the respective alleged accessories, without attempting to show that the evidence established intention and knowledge as well as “involvement”, would be to fail to address that critical issue.

9. His Honour’s reasoning was approved by the Full Court of the Federal Court in Rural Press Ltd v Australian Competition & Consumer Commission (2002) 118 FCR 236 at 283 [160]. Their Honours also approved the following comments of Malcolm AJA in Heydon v NRMA Ltd (2000) 51 NSWLR 1 at 109 in relation to a party being knowingly concerned in, or party to, a contravention:

   In Yorke v Lucas, it was held that for liability to be attracted the person concerned must be an intentional participant and possessed of knowledge of the matters or things constituting the contravention, even if he did not know that they did constitute a contravention. It is enough to know the essential facts.

10. In Australian Competition & Consumer Commission v IMB Group Pty Ltd [2003] FCAFC 17, the Full Court of the Federal Court said:

    For a person to be involved in a contravention within the meaning of s.75B(1)(c) of the Act, a person must be an intentional participant in the contravention, the necessary intent being based upon knowledge of the essential elements of the contravention: see Yorke v Lucas (1985) 158 CLR 661 at 670. Thus, while it is not necessary to establish that the individual Respondents had knowledge that there was a contravention of a provision of Pt V of the Act, it is necessary to demonstrate that each individual Respondent had knowledge of each of the essential elements of the contravention.

    In order to establish whether any of the individual Respondents was involved in a contravention, it is necessary to examine the state of mind of each of them separately in relation to each alleged contravention. Here the Commission's pleading did not permit of such a course. It did not ever identify the contravention that the particular Respondent was said to be involved in. We do not understand any of the Respondents to have addressed any case specific to them. Rather, his Honour appears to have assumed that merely being a director of IMB and being involved in promoting its activities was sufficient to attract the operation of s.75B(1)(c) in relation to any contravention on the part of IMB that occurred during the time that the individual was involved in promoting IMB's activities. However, his Honour made no finding concerning the state of mind of any of the individual Respondents. Further, the Full Court was not invited by the Commission to make findings in that regard. Rather, the Commission sought to support the conclusions reached by the primary judge.

    It is not necessary to establish any subjective element in relation to a contravention of Pt V of the Act. A contravention may be committed unintentionally. That is to say, a person may contravene a provision of Pt V even though that person does not have knowledge of all of the essential elements that constitute the contravention. However, before any accessorial liability will arise, it is necessary to establish the subjective element of knowledge of each of the essential elements of the contravention. That knowledge may be constructive in the sense that it may be possible to show wilful blindness in relation to the elements of a contravention. However, absent a finding of wilful blindness, it is necessary to establish actual knowledge on the part of a person to whom it is sought to sheet home accessorial liability in respect of a contravention of Pt V. (at [133] – [135])

1. What these authorities show is that in order for a person to have accessorial liability under s.728(2) of the Act he or she

   ·must have knowledge of the essential facts constituting the contravention;

   ·must be knowingly concerned in the contravention;

   ·must be an intentional participant in the contravention based on actual not constructive knowledge of the essential facts constituting the contravention – although constructive knowledge may be sufficient under paragraph (c) in cases of wilful blindness; and

   ·need not know that the matters in question constituted a contravention.

2. As the respondents have submitted, Mr Dowling has not identified how each of them had “actual knowledge” of the elements of prohibited conduct described by s.793(1)(j) and that apart from Mr Kirk, Ms Price, Ms Carrington and Ms Fernandes, Mr Dowling has adduced no evidence going beyond assertion that any of the other respondents had any knowledge of him, his complaints or his intended plans prior to 9 May 2007. Indeed, in relation to the directors of Fairfax, all Mr Dowling has done is make an allegation that Mr Kirk “would have informed the Board of Directors” when Mr Dowling made his complaint to Mr Kirk. Given the role of a board of directors in a large company such as Fairfax, this allegation appears improbable and yet, given the way the respondents have approached this application, no evidence is before the Court to contradict Mr Dowling’s assertion. Notwithstanding its apparent improbability, at this interlocutory stage and given the possibility that further evidence might be adduced by Mr Dowling, it cannot be disregarded.

3. As far as the allegations made by Mr Dowling against Mr Kirk, Ms Price, Ms Bradley, Ms Carrington, Ms Fernandes and Mr Whitehead pursuant to s.728 of the Act are concerned, it cannot be concluded at this stage that Mr Dowling has no reasonable prospects of success. This is because it cannot be determined that Mr Dowling’s claim against Fairfax in the principal proceedings alleging a breach of s.792, based on his allegations regarding the potential involvement of WorkCover in his complaint, has no reasonable prospects of success. If a breach of s.792 was committed, then one or other or perhaps all of these respondents arguably had something to do with it. For this reason, it cannot be concluded at this point that Mr Dowling has no reasonable prospects of success in proving accessorial liability of these respondents in respect of a possible breach by Fairfax of s.792 of the Act.

4. The situation of the remaining respondents, who are not identified by name other than in the title to the proceedings, is more problematic. Instinctively, it must be suspected that the likelihood of their involvement in the decision-making associated with Mr Dowling’s dismissal from Fairfax would have been slight to non-existent. However, there is no evidence before the Court upon which it can conclude that such instincts have any solid foundation in fact. This is not a matter where Mr Dowling was a participant in and can depose to relevant conversations and events, such as is seen in respect of other aspects of his claims, and it has to be assumed that he has some knowledge of the practices and procedures of his former employer. The allegation which Mr Dowling makes in relation to the remaining respondents is one which may only be proved, if at all, following his utilisation of interlocutory procedures. Until Mr Dowling has an opportunity to avail himself of the various procedures available to litigants to assist them to make their cases, it should not be concluded that he has no reasonable prospects of success against these remaining respondents, in respect of a possible breach by Fairfax of s.792.

Conclusion

1. For these reasons, I am satisfied that the applicant has no reasonable prospects of successfully prosecuting the proceedings to the extent that he alleges accessorial liability related to a breach of s.792 of the Act allegedly arising out of conduct described in s.793(1)(k) and (l). Those parts of the proceedings will be dismissed.

2. In so far as the applicant alleges accessorial liability related to a breach of s.792 of the Act by reason of conduct described in s.793(1)(j), for the reasons set out above I am not satisfied that this part of the proceedings has no reasonable prospects of being successfully prosecuted against the respondents. In this respect, the respondent’s application in a case dated 2 October 2007 has been unsuccessful.

I certify that the preceding thirty-eight (38) paragraphs are a true copy of the reasons for judgment of Cameron FM

Associate: 

Date:  20 December 2007