Farac v Pendal Group Limited

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FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Farac v Pendal Group Limited [2021] FedCFamC2G 25

File number(s): SYG 2443 of 2020
Judgment of: JUDGE CAMERON
Date of judgment: 9 September 2021
Catchwords:

INDUSTRIAL LAW – Inaction causing adverse action.

INDUSTRIAL LAW – Settlement negotiation privilege attaching to Fair Work Commission mediation or conciliation conference.

PRACTICE & PROCEDURE – Pleadings – application to strike out – application for leave to amend.

WORDS & PHRASES – Adverse action.

Legislation:

Fair Work Act 2009 (Cth), ss.340, 342, 591, 592

Evidence Act 1995 (Cth), s.131

Patents Act 1977 (UK)

Workplace Relations Act 1996 (Cth), s.298K

Federal Court Rules 2011 (Cth), r.16.21

Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth), sch.1

Cases cited:

Unilever PLC v The Procter & Gamble Co [2000] 1 WLR 2436

YXW Pty Ltd v Sushi Sushi Franchising Pty Ltd (2016) 52 VR 182

BHP Iron Ore Pty Ltd v Australian Workers’ Union (2000) 102 FCR 97

Unsworth v Tristar Steering and Suspension Australia Ltd (2008) 216 FCR 122

Rowland v Alfred Health [2014] FCA 2
Division Division 2 General Federal Law
Number of paragraphs: 31
Date of hearing: 31 August 2021
Place: Sydney
Counsel for the Applicant: Mr T. Brennan
Solicitor for the Applicant: Kennedys
Counsel for the Respondents: Mr D. Mahendra
Solicitor for the Respondents: MinterEllison

ORDERS

SYG 2443 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

BETWEEN:

PETER ADAM FARAC

Applicant
AND:

PENDAL GROUP LIMITED (ACN 126 385 822)

First Respondent

RICHARD BRANDWEINER

Second Respondent

ORDER MADE BY:

JUDGE CAMERON

DATE OF ORDER:

9 SEPTEMBER 2021

THE COURT ORDERS THAT:

1.Paragraphs 60, 61 and 78 of the statement of claim be struck out.

2.The respondents have leave to file an amended defence.

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 CAMERON

INTRODUCTION

  1. In this proceeding, the applicant has alleged that his employer, the first respondent (“Pendal”), and its chief executive officer, the second respondent, took adverse action against him because he had exercised certain of his workplace rights and so contravened s.340 of the Fair Work Act 2009 (Cth) (“FW Act”). On 9 July 2021, the respondents filed an interlocutory application in which, relying on r.16.21 of the Federal Court Rules 2011 (Cth) (“FCA Rules”), they sought orders striking out certain paragraphs of the applicant’s statement of claim filed 1 March 2021, namely:

    a.Paragraphs 60 and 61 on the grounds that it is likely to cause prejudice, embarrassment or delay in the proceedings because the conference…

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Details
Case
[2021] FedCFamC2G 25
Decision Date

CaseChat Overview and Summary

In the case of Farac v Pendal Group Limited, the Federal Circuit and Family Court of Australia was called upon to adjudicate a dispute pertaining to alleged adverse action and the admissibility of evidence in settlement negotiations. The applicant, Farac, accused the respondents, Pendal Group Limited, of taking adverse action by withholding certain information during a conference intended to mediate the dispute. The respondents argued that the conduct during this conference was privileged and could not be relied upon due to the settlement negotiation privilege outlined in section 131(1) of the Evidence Act 1995 (Cth).

The court was required to decide whether the settlement negotiation privilege applied to the conference held in the Fair Work Commission (FWC) proceeding, which would render the evidence inadmissible in the current proceedings. Additionally, the court needed to determine whether the respondents should be granted leave to amend their defence due to the lack of particulars provided by the applicant regarding a specific text message.

The court found that the conference indeed had the purpose of mediating or conciliating the dispute, which was sufficient to engage the settlement negotiation privilege under section 131(1) of the Evidence Act. This privilege, when applicable, prevents the admissibility of evidence related to the communications and documents created during settlement negotiations. The court acknowledged the lack of evidence suggesting the Deputy President made a recommendation or expressed an opinion, and despite the applicant's submission that there was no evidence of the conference's purpose, the court accepted that the primary aim was to explore the possibility of a settlement. As a result, the court concluded that the privilege applied, and the respondents' application to strike out certain paragraphs of the statement of claim was granted. Additionally, the respondents were permitted to amend their defence due to the inadequate particularisation provided by the applicant.

In conclusion, the court ordered that paragraphs 60, 61, and 78 of the statement of claim be struck out, and the respondents were granted leave to file an amended defence. The form of the order is subject to the Court’s records, and any minor errors may be reviewed or corrected.

Orders

Orders of the court

THE COURT ORDERS THAT:

1. Paragraphs 60, 61 and 78 of the statement of claim be struck out.

2. The respondents have leave to file an amended defence.

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).

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Section 131(1) of the Evidence Act 1995 (Cth) provides, subject to the exceptions found in s.131(2), that evidence is not to be adduced of communications between parties to a dispute made in connection with an attempt to negotiate a settlement of the dispute or of documents prepared in connection with such an attempt. For present purposes, the common law relevantly provides similarly. EVIDENCE Mr Williams, the solicitor for the respondents, relevantly deposed the following in his affidavit affirmed 9 July 2021:(a)on 19 March 2021 the respondents’ solicitors, MinterEllison, wrote to the applicant’s solicitors, Kennedys, requesting further and better particulars and a copy of a text message referred to in para.22 of the statement of claim; (b)Kennedys replied on 26 March 2021 but did not provide the text message sought;(c)the respondents filed their defence on 30 March 2021, which indicated their intention to seek the striking out of paras.60, 61, 67 and 78 of the statement of claim; (d)on 14 April 2021, Kennedys provided MinterEllison with a copy of the text message referred to in para.22 of the statement of claim; (e)on 15 April 2021 and 26 April 2021, MinterEllison wrote to Kennedys indicating that subject to the outcome at mediation, orders might be sought in relation to pleadings and particulars; and(f)on 25 June 2021, MinterEllison wrote to Kennedys setting out their arguments as to why paras.60, 61 67 and 78 of the statement of claim were liable to be struck out to which Kennedys responded on 2 July 2021.CONSIDERATIONParagraphs 60 and 61 Paragraphs 60 and 61 of the statement of claim concern a conference in the FWC proceeding that was conducted by Deputy President Bull and, specifically, a refusal by the respondents “[a]s part of that process” to provide the applicant with certain information. It is alleged that that refusal was adverse action that was taken for a prohibited reason. In support of their application for an order striking out those paragraphs, the respondents submitted that the parties’ conduct during the conference could not be relied on in this proceeding because it was subject to the settlement negotiation privilege provided by s.131(1) of the Evidence Act. In that regard the respondents submitted that the purpose of the conference had been to mediate or conciliate the dispute and that this had been sufficient to engage s.131. I note that there is no evidence of, or suggestion that, the Deputy President made a recommendation or expressed an opinion under s.592(4)(b). The applicant did not dispute the proposition that the conference had been for settlement purposes, although he did submit that there was no evidence that it had been. On balance I accept that the purpose of the conference was to essay the possibility of settlement. That being so, subject to the applicability of any of the statutory exceptions to the privilege found in s.131(2), settlement negotiation privilege attaches to what was said at, and to documents created in connection with, the conference.

Decision

Reasons for decision

The respondents sought leave to amend their defence because they had had to file their pleading before they had received adequate particularisation of para.22 of the statement of claim. No argument was put in opposition to this aspect of the application and, in any event, I am satisfied that the leave sought should be granted for the reasons advanced.CONCLUSION For the reasons given, paras.60, 61 and 78 of the statement of claim will be struck out and the respondents will have leave to file an amended defence.

Ratio Decidendi

Legal Principle Established

Mr Williams, the solicitor for the respondents, relevantly deposed the following in his affidavit affirmed 9 July 2021:(a)on 19 March 2021 the respondents’ solicitors, MinterEllison, wrote to the applicant’s solicitors, Kennedys, requesting further and better particulars and a copy of a text message referred to in para.22 of the statement of claim; (b)Kennedys replied on 26 March 2021 but did not provide the text message sought;(c)the respondents filed their defence on 30 March 2021, which indicated their intention to seek the striking out of paras.60, 61, 67 and 78 of the statement of claim; (d)on 14 April 2021, Kennedys provided MinterEllison with a copy of the text message referred to in para.22 of the statement of claim; (e)on 15 April 2021 and 26 April 2021, MinterEllison wrote to Kennedys indicating that subject to the outcome at mediation, orders might be sought in relation to pleadings and particulars; and(f)on 25 June 2021, MinterEllison wrote to Kennedys setting out their arguments as to why paras.60, 61 67 and 78 of the statement of claim were liable to be struck out to which Kennedys responded on 2 July 2021.CONSIDERATIONParagraphs 60 and 61 Paragraphs 60 and 61 of the statement of claim concern a conference in the FWC proceeding that was conducted by Deputy President Bull and, specifically, a refusal by the respondents “[a]s part of that process” to provide the applicant with certain information. It is alleged that that refusal was adverse action that was taken for a prohibited reason. In support of their application for an order striking out those paragraphs, the respondents submitted that the parties’ conduct during the conference could not be relied on in this proceeding because it was subject to the settlement negotiation privilege provided by s.131(1) of the Evidence Act. In that regard the respondents submitted that the purpose of the conference had been to mediate or conciliate the dispute and that this had been sufficient to engage s.131. I note that there is no evidence of, or suggestion that, the Deputy President made a recommendation or expressed an opinion under s.592(4)(b). The applicant did not dispute the proposition that the conference had been for settlement purposes, although he did submit that there was no evidence that it had been. On balance I accept that the purpose of the conference was to essay the possibility of settlement. That being so, subject to the applicability of any of the statutory exceptions to the privilege found in s.131(2), settlement negotiation privilege attaches to what was said at, and to documents created in connection with, the conference. It was also noted that the conference had, pursuant to s.592(3) of the FW Act, been a private one although it was not argued that this fact had any separate significance. A situation similar to the present one was considered in Unilever PLC v The Procter & Gamble Co [2000] 1 WLR 2436, a patent case where the appellant’s action was based on the respondent’s threat made in the course of pre-litigation settlement negotiations to bring infringement proceedings. In ordinary circumstances, that threat would have been actionable under the Patents Act 1977 (UK). However, the action was struck out on the basis that it would have been an abuse of process for the appellant plaintiff to be allowed to plead anything said at the meeting either as a threat or a claim of right. The same reasoning applies in this case.