Larne-Jones v Human Synergistics Australia Ltd
[2013] FCCA 1498
•30 September 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| LARNE-JONES v HUMAN SYNERGISTICS AUSTRALIA LTD | [2013] FCCA 1498 |
| Catchwords: PRACTICE AND PROCEDURE – Application to set aside notice to produce – whether abuse of process or vexatious – whether test of apparent relevance satisfied. |
| Legislation: Evidence Act 1995 (Cth), s.55 |
| Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Emergency Transport Technology Pty Ltd [2011] FCA 181 Bailey v Beagle Management Pty Ltd [2001] FCA 60 Board of Bendigo Regional Institute of Technical and Further Education v Barclay and Another (2012) 86 ALJR 1044; [2012] HCA 32 Cheung Kong Infrastructure Holdings Limited v BlueScope Steel Limited [2010] FCA 739 Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (No 3) [2012] FCA 61 Cosco Holdings Pty Ltd v Commissioner for Taxation (1997) 37 ATR 432; [1997] FCA 1504 Hamilton v Oades (1989) 166 CLR 486; [1989] HCA 21 ING Bank Australia Limited v Athanasakis [2010] FMCA 307 Khiani v Australian Bureau of Statistics [2011] FCAFC 109 Larne-Jones v Human Synergistics Australia Limited [2013] FMCA 206 Seven Network Ltd v News Ltd (No. 11) [2006] FCA 174 Trade Practices Commission v Arnotts Limited (No. 2) (1989) 88 ALR 90 Walker & Sherman & Anor v Andrew & Ors [2002] NSWCA 214 |
| Applicant: | MARGHERITA LARNE-JONES |
| First Respondent: | HUMAN SYNERGISTICS AUSTRALIA LIMITED ACN 093 428 098 |
| File Number: | SYG 2736 of 2011 |
| Judgment of: | Judge Barnes |
| Hearing date: | 13 June 2013 |
| Delivered at: | Sydney |
| Delivered on: | 30 September 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr S. Meehan |
| Solicitors for the Applicant: | Kemp Strang |
| Solicitors for the First Respondent: | FCB Workplace Law |
ORDERS
The following parts of the Notice to Produce filed on 14 May 2013 be set aside:
(a)Paragraph 1(a), (c) and (d);
(b)The sub-paragraphs in Paragraph 2 other than sub-paragraph (e);
(c)Paragraph 5; and
(d)Paragraph 10.
The parties bring in short minutes of orders within 7 days of today’s date containing a timetable for production of documents in all categories in the Notice to Produce not set aside.
If the parties are unable to agree on such a timetable each party is to file proposed orders and written submissions within 7 days of today’s date and orders will be made in chambers.
Liberty to either party to apply on 3 days’ notice.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 2736 of 2011
| MARGHERITA LARNE-JONES |
Applicant
| HUMAN SYNERGISTICS AUSTRALIA LIMITED ACN 093 428 098 |
First Respondent
REASONS FOR JUDGMENT
Human Synergistics Australia Limited (HSA), the First Respondent in substantive proceedings brought by Ms Larne-Jones under the Fair Work Act 2009 (Cth) (FWA) in relation to termination of her employment, seeks orders setting aside 9 paragraphs in a Notice to Produce. The Notice to Produce was served on the solicitors for HSA by the solicitors for Ms Larne-Jones by letter dated 8 May 2013. An amended copy of the Notice to Produce was filed in Court on 14 May 2013.
HSA asserts that the documents called for in 9 specified paragraphs in the Notice have no actual or apparent relevance to any fact in issue in the proceedings or, in the alternative, that the disputed categories are vexatious or an abuse of process.
The Notice to Produce sought production of documents prior to the hearing. Rule 15A.17 of the Federal Circuit Court Rules refers only to a notice to produce requiring production “at the hearing of the proceeding”. However the Court may, in the interests of justice, dispense with compliance or full compliance with any of the Rules or make a direction or order inconsistent with the Rules (see r.1.06). As both parties sought a hearing of the Application in a Case, I ordered that the time for production of documents pursuant to the Notice to Produce should be in accordance with directions to be made by the Court in relation to both those categories in respect of which there was no objection and any disputed category of documents in relation to which the Application in a Case was unsuccessful.
The Notice to Produce required production of the following documents:
(1) The deeds entered into between the First Respondent and the following past or present employees of the First Respondent:
(a) Emaan Zarour;
(b) Suzette Viljoen;
(c) Nick Dimou; and
(d) Tatiane Chu.
(2) Any written allegations of bullying and harassment made by any of the following persons in relation to the Applicant:
(a) Emaan Zarour;
(b) Suzette Viljoen;
(c) Nick Dimou;
(d) Tatiane Chu;
(e) Bridget Murray;
(f) Ian Crothers;
(g) Stephanie Kavali;
(h) Alisha Pena;
(i) Cynthi Wong;
(j) Marlien Brandjes;
(k) Audrey Martin;
(l) Camilla Frumar.
(3) The report (including any drafts thereof) created by Ms Jessica Fisher regarding the investigation of the Allegations;
(4) The report created by FCB regarding the investigation of allegations of bullying and harassing behaviour made against the applicant’s husband, Mr Quentin Jones (Mr Jones);
(5) Any document recording any communications between Ms Jessica Fisher and any employee (past or present) of the first respondent for the purpose of preparing her investigation report in relation to the Allegations;
(6) Documents recording or evidencing the findings of misconduct relied upon by the First Respondent in deciding that the Applicant breached her obligations under the:
(a) Occupational Health and Safety Act 2000 (NSW);
(b) Sex Discrimination Act 1984 (Cth);
(c) Anti-Discrimination Act 1977 (NSW);
(d) Fair Work Act 2009 (Cth);
(e) Workplace Surveillance Act 2005 (NSW).
(7) Any document evidencing or recording the decision of the First Respondent to terminate the employment of the Applicant;
(8) Any document evidencing or recording the decision of the First Respondent to terminate the employment of Mr Jones;
(9) Any document evidencing or recording the decision of the first respondent not to make the following payments to the Applicant upon termination of her employment:
(a) payment in lieu of notice;
(b) long service leave;
(c) bonus for the financial year ending 31 March 2011.
(10) Any document evidencing or recording the reason for the determination of the First Respondent to “meet the Applicant’s claim” as referred to in paragraph 26(a) of the Defence;
(11) Any document evidencing or recording the decision of the First Respondent to pay any employee(s) bonuses in respect of each of the 2004 to 2011 financial years, including any document referring to the criteria on which these decisions were based;
(12) Any document evidencing or recording the identity of employees of the First Respondent who received bonuses for the 2004 to 2011 financial years (inclusive), and the amount of the bonuses paid;
(13) Any document recording the profitability of the New Zealand business of Human Synergistics Australasia Limited for the financial year ended 31 March 2011.
Interpretation
In this notice:
“Allegations” means the allegations of bullying and/or harassing behaviour of the Applicant as referred to in paragraph 15 in the Defence.
“Defence” means the Defence filed by the First, Second and Third Respondents in these proceedings on 20 August 2012.
“document” means any record of information, and includes:
(a) anything on which there is writing; or
(b) anything on which there are marks, figures, symbols or perforations having a meaning for persons qualified to interpret them; or
(c) anything from which sounds, images or writings can be reproduced with or without the aid of anything else; or
(d) a map, plan, drawing or photograph,
including, but not limited to, any agreement, deed, other instrument, correspondence, letter, memoranda, written communication, diary note, report, audit report, file note, minute, board minute, memoranda of conversation, authorisation, share script, withdrawal slip, bank statement, balance sheet, ledger, journal, computer disk, computer tape or any other form of electronic storage of information.
HSA seeks orders setting aside paragraphs 1, 2, 4, 5, 6, 8, 10, 11 and 12 of the Notice to Produce in their entirety. In support of this application, HSA relies on an affidavit affirmed by its solicitor, Benjamin Josef Gee, on 21 May 2013 and tendered correspondence.
Ms Larne-Jones opposed the application. She sought to read some paragraphs of the affidavit of Shaun Thomas McCarthy sworn on 22 May 2013 filed for HSA in the substantive proceedings as well as part of the Exhibit to that affidavit.
In order to consider the application to set aside parts of the Notice it is necessary to refer to the nature of the substantive proceedings as pleaded in Ms Larne-Jones’ Statement of Claim filed on 25 June 2012.
Relevantly, Ms Larne-Jones alleges that her employment as a senior consultant with HSA was suspended on 10 May 2011 and summarily terminated on 22 September 2011 following an investigation conducted into allegations against her of misconduct, including bullying and harassing behaviour. Such investigation was conducted by Ms Jessica Fisher, a solicitor and partner in the firm FCB. The report of the investigation (the Report) is exhibited to Mr McCarthy’s affidavit.
Ms Larne-Jones alleges that her dismissal amounted to adverse action in contravention of the general protection provisions of the FWA. Her assertion is that her employment was terminated by HSA for prohibited reasons, or reasons that included such reasons, and that by this conduct HSA contravened ss.340 and 351 of the FWA. In particular, she claims that her employment was terminated for the reason or reasons that included that she had a workplace right to make a claim under the Workers Compensation Act 1987 (NSW); that she exercised her workplace right by lodging a claim for workers compensation payments; that she had a mental disability due to HSA’s treatment of her in relation to the allegations against her of misconduct, including bullying and harassing behaviour, the investigation of the same and the suspension of her employment; and that she was married to Mr Quentin Jones (who at relevant times was the managing director of HSA against whom similar allegations of misconduct were made and who was also later dismissed by HSA).
In addition, Ms Larne-Jones alleges a contravention by HSA of ss.44 and 117 of the FWA by reason of its summary termination of her employment and failure at that time to give her five weeks written notice or payment in lieu thereof in accordance with s.117 of the FWA.
She asserts that the second and third respondents (directors of HSA) were involved in the alleged contraventions of the FWA. She seeks unparticularised compensation for loss suffered due to the alleged contraventions and the imposition of pecuniary penalties.
In addition, Ms Larne-Jones alleges that there were breaches of implied terms in her contract of employment with HSA as to her entitlement to a reasonable annual bonus and as to reasonable notice. She seeks damages (loss of salary bonuses and other employment entitlements) for the alleged breaches of contract.
She also claimed that HSA’s failure on termination of her employment to pay her any amount in respect of accrued long service leave amounted to a breach of the Long Service Leave Act 1955 (NSW).
In the Defence filed on 20 August 2012 HSA relevantly denies any contravention of ss.340 and 351 of the FWA. In response to the allegation of summary termination on 22 September 2011 it is pleaded that on 16 August 2012 “[HSA], without admission of liability and in order to avoid prolonged litigation, determined to meet the Applicant’s claim by treating the termination of the Employment Agreement as if done by payment in lieu of notice in accordance with clause 12(b),(c) and (d) of the Employment Agreement” and made payments to her in lieu of notice under the contract and s.117 of the FWA, accrued annual and long service leave together with interest thereon (calculated as a net amount of $56,521.25 said to take into account an amount overpaid in relation to salary).
HSA denies that Ms Larne-Jones was entitled to a bonus, says that any bonus payments were at its absolute discretion, denies there was an implied reasonable notice term in her contract of employment and says the termination provisions were expressly contained in cl.12 of the written Employment Agreement dated 1 February 2003. It denies any breach of contract as pleaded and relies on the payments made on 16 August 2012 in asserting that by reason of HSA treating Ms Larne-Jones’ termination in accordance with the express terms of the Employment Agreement she had no entitlement to any other termination payment.
Legal Principles
The Court has power to set aside a notice to produce, whether that power arises from the expression “unless the court otherwise orders” in r.15A.17(2) of the Federal Circuit Court Rules or is an incident of the power of the Court to regulate its own processes.
The applicable principles were summarised by Collier J in Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (No 3) [2012] FCA 61 (CFMEU). Relevantly, after expressing the view (at [5]) that the principles governing the exercise of the power to set aside a notice to produce (or to excuse production of documents in answer to a notice) were the same as those which govern the setting aside of a subpoena for production, her Honour stated (at [6]):
(1) The party which has issued a Notice to Produce bears the onus of establishing that the documents the subject of the Notice are sufficiently relevant to justify production (Seven Network Ltd v News Ltd (No. 11) [2006] FCA 174 at [6], Cheung at [55].
(2) Timing of the issue and service of a Notice to Produce is a relevant factor in respect of any application to set aside the Notice.
(3) A Notice to Produce cannot be used as an alternative to an application for discovery or for further and better discovery.
(4) It is necessary that the material sought has an apparent relevance to the issues in the principal proceedings. The test of apparent relevance in this context is whether the documents are reasonably likely to add, in the end, in some way or other, to the relevant evidence in the case. (Seven Network (No. 11) at [6], Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union at [14]).
(5) A Notice to Produce cannot be used for the purpose of “fishing” or for the purpose of determining a preliminary question as to whether a party has a supportable case.
(6) A Notice to Produce may be set aside on the basis that it is unduly burdensome if the width of the categories requested is too broad or the categories are not described with adequate specificity ...
Thus, Ms Larne-Jones, as the party who issued the Notice to Produce, has to establish that the documents in the disputed categories are of sufficient relevance to the issues in the principal proceedings to justify production (see Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Emergency Transport Technology Pty Ltd [2011] FCA 181 (AFMEPKIU), CFMEU at [6], Seven Network Ltd v News Ltd (No. 11) [2006] FCA 174 at [6] and Cheung Kong Infrastructure Holdings Limited v BlueScope Steel Limited [2010] FCA 739 at [55]). This involves establishing apparent relevance.
In considering whether documents sought have apparent relevance to the issues in the principal proceedings what is in issue is “adjectival, as distinct from substantive relevance”, (see Trade Practices Commission v Arnotts Limited (No. 2) (1989) 88 ALR 90 at 103 per Beaumont J). Paraphrasing what was said in Arnotts by Beaumont J at 103 in relation to the setting aside of a subpoena for production, there are two questions to be asked in this context:
(1) Does the material sought have an apparent relevance to the issues in the principal proceedings, ie, is adjectival, as distinct from substantive, relevance established? Does the [Notice] have a legitimate forensic purpose to this extent? This involves a consideration of the matter from the standpoint of [the issuer].
(2) Is the [Notice] seriously and unfairly burdensome or prejudicial? This is to look at the matter from the point of view of [the recipient].
In Arnotts Beaumont J stated (at 103) that documents sought would be of apparent relevance if they “could possibly throw some light on the issues in the main case” such that it could be said that a subpoena (or a notice to produce) had a “legitimate forensic purpose to this extent” (103).
As Spender J explained in Cosco Holdings Pty Ltd v Commissioner for Taxation (1997) 37 ATR 432 at 440; [1997] FCA 1504 it is not simply a question of “looking at the documents to see if the documents might permit a case to be made”. Regard is to be had to the issues in dispute in the substantive proceedings in order to consider whether the material sought in the disputed categories appears to have relevance in the sense of being such that it could reasonably be expected to “throw light on” some of the issues in the substantive proceedings (see Cosco at 439, citing Arnotts at 102 per Beaumont J).
Beaumont J’s test of “adjectival relevance” has been considered in many cases. Importantly, as Foster J discussed in Cheung at [36], in determining whether a notice to produce should be set aside, it is not necessary for the court to determine whether the document or material sought would be admissible in any final hearing of the substantive proceedings. Thus, it is not necessary in this context to determine whether, if accepted, such evidence could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceedings (see s.55 of the Evidence Act 1995 (Cth)). The test for apparent relevance does not require a party to demonstrate direct relevance to the substantive proceedings, but rather some potential relevance to the principal case as pleaded.
Given that the principles governing the exercise of the power to set aside a notice to produce are the same as those which govern the setting aside of a subpoena for production (CFMEU at [5]), it is also relevant that subpoenas to parties have been treated somewhat more liberally than subpoenas to strangers. What must be borne in mind however is that as Sackville J pointed out in Seven Network Limited (No 11) (at [12]) “granting a party access to documents is one thing, admitting the documents into the proceedings is another”.
It is for HSA to establish that there is an abuse of process. However, beyond referring to the fact that a notice to produce may be set aside as “vexatious, oppressive or inappropriate for any other reason” (Bailey v Beagle Management Pty Ltd [2001] FCA 60 at [24] referred to in ING Bank Australia Limited v Athanasakis [2010] FMCA 307 at [31]), HSA cited no authority in support of the contention that the Notice to Produce, or at least categories 1, 11 and 12 of the Notice, were such that those parts of the Notice were an abuse of process.
It is however clear that the issue of a notice to produce would be an abuse of process if it was not used for a legitimate forensic purpose (see Cheung at [30], AFMEPKIU at [13] and CFMEU at [5] – [6] and cases cited therein). In Arnotts Beaumont J referred to a passage from the dissenting judgment of Deane and Gaudron JJ in Hamilton v Oades (1989) 166 CLR 486 at 502; [1989] HCA 21 in which their Honours relevantly remarked that the term “vexatious” was often used to convey the meaning that proceedings were “productive of serious and unjustified trouble and harassment”.
Ground Two: Whether the Notice is an Abuse of Process or Vexatious
It is convenient to consider first ground two in the Application in a Case, which is that the disputed categories in the Notice to Produce are vexatious or an abuse of process.
In essence, HSA’s main contention in this respect is in relation to categories 1, 11 and 12. It is that Ms Larne-Jones issued the notice to produce for a collateral purpose. Beyond this HSA relies on the generally asserted absence of apparent relevance to establish an abuse of process. This issue is discussed below in relation to ground 1.
HSA relies on the fact that the Applicant’s evidence-in-chief filed in the principal proceedings includes an affidavit of her husband Mr Jones (the former Managing Director of HSA) sworn on 19 March 2013. According to the affidavit evidence of Mr Gee, the solicitor for HSA, a number of documents that HSA regards as confidential information and company property are referred to in and exhibited to Mr Jones’ affidavit. Such documents are said to be the subject of Paragraphs 1, 11 and 12 of the Notice to Produce issued by Ms Larne-Jones.
However Mr Jones’ affidavit and the Exhibit thereto are not in evidence in these proceedings. Indeed the Exhibit has not yet been filed. Nor did HSA seek to tender the documents themselves for the purpose of these proceedings. Rather, it relied on correspondence between its solicitors and Ms Larne-Jones and Mr Jones and their solicitors in relation to such documents.
Mr Gee’s evidence is that from 8 April 2013, on instructions from HSA, his firm (FCB) had sought to recover documents from Mr Jones contained in the Exhibit to his affidavit that were regarded as the property of HSA and to seek agreement from Mr Jones and Ms Larne-Jones not to retain or use such information. Their attempts were unsuccessful. On instructions from HSA, FCB issued a summons in the Supreme Court of New South Wales on or about 20 May 2013 seeking declarations and injunctions against Mr Jones and Ms Larne-Jones to recover and restrain the use of information it asserts is confidential information and/or company property.
In submissions, reference was made to the fact that by letters of 8 April 2013 from FCB to Mr Jones and to Kemp Strang, his solicitors, who are also the solicitors for Ms Larne-Jones, FCB asserted that specified documents exhibited to Mr Jones’ affidavit filed in these proceedings (said to be included among the documents sought in the disputed categories in the Notice to Produce) were confidential documents belonging to HSA. The letter referred to a Deed of Release and Confidentiality said to have been entered into by Mr Jones after his termination and to contain a warranty that he had returned and had not retained any of HSAs property and a requirement of non-disclosure in the absence of prior written authority of HSA. It was said that HSA regarded the documents as confidential.
Kemp Strang responded on 11 April 2013, taking issue with these claims and seeking further information as to the basis on which it was said that certain of these documents were confidential. It was also claimed that copies of the documents now sought in Paragraph 1 of the Notice to Produce (deeds between HSA and four named past employees) had been provided to Kemp Strang’s office in response to a request made on behalf of Mr Jones and Ms Larne-Jones in June 2011.
HSA relied on this and subsequent correspondence between FCB and the solicitors for Ms Larne-Jones and Mr Jones in support of the proposition that it regarded such documents as confidential and company property which should have been returned by Mr Jones in light of the Deed of Release he had executed with HSA. It was pointed out that FCB had subsequently asserted in such correspondence that copies of the deeds referred to in Paragraph 1 of the Notice had been provided to Kemp Strang only to enable Mr Jones (who at that stage was an employee of HSA) to prepare his response to disciplinary allegations against him.
It was contended for HSA that the tendered correspondence demonstrated that it had attempted to recover the documents from Mr Jones that were its property and to seek his agreement not to retain or use that information and submitted that HSA had only filed the application to set aside parts of the Notice to Produce and the summons in the Supreme Court in circumstances where such attempt had been unsuccessful.
HSA submitted that what Ms Larne-Jones was seeking to do by way of the Notice to Produce (issued after the correspondence in question but before the Supreme Court proceedings were commenced) was to obtain by lawful means what she had neglected to do at the time Mr Jones’ affidavit was filed. It was also contended that the Notice sought to subvert the right of HSA to seek the recovery of its confidential information and property.
HSA submitted that categories 1, 11 and 12 in the Notice to Produce were vexatious and/or an abuse of process because Ms Larne-Jones had a collateral purpose in filing the Notice to Produce (at least in respect of these categories) to seek to obtain lawful access to documents her husband had exhibited to his affidavit.
HSA contended that the Court could infer that in causing the Notice to Produce to be created Ms Larne-Jones was acknowledging by her conduct that she, or she and her husband, had improperly retained such documents and that they were now seeking to regularise the situation. It was said to be relevant that the Applicant had issued the Notice to Produce after she had her evidence on and was aware of HSA’s concerns.
Ms Larne-Jones submitted that on the present state of the evidence the contentions made by HSA in relation to the Supreme Court proceedings should not be seen by the court as a barrier to production of the documents referred to in the Notice to Produce. It was contended that the Notice was an appropriate and legitimate interlocutory forensic process engaged in by her to obtain documents of apparent relevance to the issues in dispute in the principal proceedings.
Insofar as the timing of the Notice to Produce was raised by HSA as an issue, Counsel for Ms Larne-Jones pointed out that her affidavit evidence had all been filed prior to the Notice being issued so that it could not be said that this Notice was premature. As to any issues in relation to the time needed to comply with the Notice to Produce, it was suggested that there would be sufficient time prior to the hearing such that compliance could be addressed in a manner that was not a barrier to production pursuant to the Notice. There was said to be no warrant for any conclusion that the Notice to Produce was an abuse of process based on either of these matters.
Ms Larne-Jones acknowledged that in his affidavit Mr Jones had referred to certain documents including deeds referred to in Paragraph 1 of the Notice to Produce and had sought to annex them and that there had been a complaint about this by HSA. It was also acknowledged that the documents had not been delivered up to HSA. However it was pointed out that there was no evidence before this Court that the documents in question were confidential documents. The documents themselves had not been tendered. In addition, it was contended that it could not be suggested that Ms Larne-Jones had breached some obligation towards HSA in respect of delivering up documents in circumstances where there was no evidence or claim that she had entered into a Deed of Release with HSA of the nature suggested in relation to Mr Jones.
Absent any evidence that the documents were in fact confidential, it was submitted that it could not be said that by invoking the interlocutory processes of the Court to obtain the documents in question there was some abuse of process. Counsel for Ms Larne-Jones pointed out that no authority had been advanced by HSA in support of such proposition. Nor was there said to be any authority cited to demonstrate that any of Ms Larne-Jones’ conduct or the Notice to Produce was vexatious. In particular, there was said to be no basis for any inference that Ms Larne-Jones was acknowledging by her conduct that she had improperly obtained any of the documents sought. It was also submitted that such arguments could be agitated at the time of trial in the context of a determination as to whether particular documents should be admissible.
As discussed in relation to ground 1 in the Notice to Produce, it was also submitted that insofar as there seemed to be a submission by HSA that a collateral purpose could be inferred because documents could not possibly be relevant to the claims advanced in the principal proceedings, this should be rejected as the documents sought were of apparent relevance.
There is no evidence before the Court to establish the confidentiality of any of the documents in Paragraphs 1, 11 or 12 of the Notice of which production is sought. There is merely evidence that HSA asserts confidentiality in relation to certain documents not presently before the Court, in particular Deeds between HSA and named persons and a document described as a confidential spreadsheet of salary and bonus data of HSA’s employees and that it has sought the return of such documents. This is not the appropriate context in which to determine whether such documents are in fact confidential documents belonging to HSA. Rather, at the hearing of the principal proceedings the court may consider and, if necessary, make appropriate orders as to confidentiality in relation to any such documents sought to be admitted into evidence.
However it remains necessary to consider on the limited evidence now before the Court whether the disputed categories are otherwise such as to establish an abuse of process by Ms Larne-Jones. Paragraph 1 of the Notice refers to deeds entered into between HSA and four named persons, said to be past or present employees. While the Notice is broadly expressed to refer to unparticularised “deeds”, it appears from the correspondence in evidence before the Court that HSA’s concern relates to Deeds of Release and Confidentiality between each of the four named former employees and HSA that are said to have been executed by Mr Jones on behalf of HSA.
As indicated, while HSA asserts that the Deeds entered into with the four named employees are confidential, there is no evidence before the Court to establish the confidentiality of the documents of which production is sought in Paragraph 1. Insofar as this assertion is the basis for the contention that Ms Larne-Jones improperly obtained such documents or breached an obligation to deliver such documents to HSA, no basis has been established on the evidence before the Court for any inference that Ms Larne-Jones acknowledged by her conduct or that of her solicitors that she had improperly obtained the documents or that she breached some obligation towards HSA. The timing of the Notice to Produce does not suffice to give rise to any such inference. It has not been established that the Notice sought to subvert the right of HSA to seek recovery from Mr Jones of what it regards as its confidential information and property such as to amount to an abuse of process by Ms Larne-Jones. Insofar as there is a submission that Mr Jones improperly obtained or retained such documents, that is not a matter that can be determined in the context of considering the application to set aside part of the Notice to Produce issued by Ms Larne-Jones.
No authority was cited by HSA to suggest that a collateral purpose of itself gave rise to an abuse of process (albeit there is authority in relation to notices issued for an impermissible or illegitimate purpose). In any event, the assertion of such a purpose without sufficient evidentiary foundation to establish confidentiality does not establish an abuse of process. Insofar as HSA’s objection to production of the documents referred to in Paragraph 1 is based on the contention that Ms Larne-Jones had a collateral purpose, it has not been established that this part of the Notice should be set aside as an abuse of process.
While HSA raised some issues about the difficulty of complying with the Notice promptly, this can be addressed by appropriate directions. It was not contended in any meaningful sense that the Notice was seriously and unfairly burdensome or prejudicial. It has not been established that production of such documents would be productive of serious and unjustified trouble and harassment from HSA’s perspective such as to render this part of the Notice to Produce vexatious. There is no issue of timing of concern in this respect such as to warrant setting aside this part of the Notice.
Ground 2 in the Application in a Case is not made out in relation to Paragraph 1 of the Notice to Produce. That does not, however, address the issue of whether such part of the Notice should be set aside on the basis of an absence of apparent relevance (and in that sense as lacking a legitimate forensic purpose and hence an abuse of process). That issue is discussed below in relation to ground 1.
Paragraphs 11 and 12 in the Notice seek production of any documents evidencing or recording the decision of HSA to pay any employees bonuses in respect of each of the 2004 to 2011 financial years, the criteria on which these decisions were based, the identity of employees and amount of the bonuses paid.
HSA’s assertion of abuse of process and/or vexatious conduct in seeking production of these categories of documents is based on a contention that such documents are confidential documents sought for a collateral purpose. Insofar as copies of such documents are said to be annexed to Mr Jones’ affidavit, they are not in evidence. In fact, it appears from the correspondence tendered in evidence that the only document of this nature exhibited by Mr Jones in relation to which HSA asserts confidentiality is what its solicitors described as a “spreadsheet of salary and bonus data” in relation to HSA’s employees. It is said that this document contains the names of certain employees. According to the correspondence tendered, it can be described as payroll information. Such a document is described in more detail in the affidavit relied on in the Supreme Court proceedings as covering the period 1998 to 2010. It is asserted that the spreadsheet contains confidential information in relation to HSA’s finances and the salary and remuneration detail of former and current employees.
The spreadsheet is not in evidence. The question of whether it is in fact confidential information cannot be determined on the evidence before the Court for the purposes of the present Application in a Case. For the reasons given in relation to Paragraph 1 of the Notice it has not been established that there was a collateral purpose constituted by an attempt to obtain lawfully what Ms Larne-Jones was said to have obtained or retained unlawfully by virtue of the fact that her husband obtained such document or documents.
Insofar as necessary, any issue of confidentiality may be agitated at the time of trial in relation to whether any documents produced are admissible.
There has been no suggestion that the production of such documents would have an impact on HSA that would be productive of serious and unjustified trouble and harassment.
That leaves the issue of apparent relevance and whether the absence of a legitimate forensic purpose means that issuing the Notice in relation to such documents amounted to an abuse of process. However, ground two is not made out on the basis of a collateral purpose as contended for by HSA.
I am not satisfied that Paragraphs 1, 11 and/or 12 in the Notice should be set aside on the basis contended for in Ground 2 of the Application in a Case.
Ground One: Apparent Relevance
Ground one is that each of Paragraphs 1, 2, 4, 5, 6, 8, 10, 11 and 12 of the Notice to Produce should be set aside as lacking actual or apparent relevance to any fact in issue in these proceedings. Counsel for Ms Larne-Jones acknowledged that his client bore the onus of establishing apparent relevance.
Ms Larne-Jones submitted generally that the documents sought in the disputed categories were of apparent relevance on questions of liability in the substantive proceedings, having regard to the matters raised in the pleadings. It was submitted that a fundamental issue in dispute was whether Ms Larne-Jones had in fact engaged in serious or gross misconduct such as to justify her summary dismissal for serious breach of the contract.
It was pointed out that gross misconduct was the reason given in the termination letter of 22 September 2011 from HSA to Ms Larne-Jones. In her Statement of Claim one of the matters pleaded by Ms Larne-Jones was that by summarily terminating her employment HSA breached the reasonable notice term of her employment contract. It was pointed out that the affidavit evidence of Mr McCarthy (a Director and the Chairman of HSA) is that he relied on the Report, as well as the allegations detailed in letters to Ms Larne-Jones, Ms Larne-Jones’ responses and his own discussions with HSA employees in coming to the decision, together with another director of HSA, that Ms Larne-Jones should have her employment terminated for gross misconduct.
It was acknowledged that, as it pleaded, HSA subsequently had (without admission of liability) made payments to Ms Larne-Jones. In the Defence this was said to be to “meet the Applicant’s claim by treating the termination of the employment agreement as if done by a payment in lieu of notice” in accordance with clause 12 of the Employment Agreement and that HSA also denied that there was a reasonable notice term as pleaded in the Statement of Claim and contended that the termination provisions of the contract were expressly contained in clause 12 of the Employment Agreement. However Ms Larne-Jones submitted that as the pleadings stood there was a live contest in the context of the claimed breach of contract as to whether there was a breach of her employment contract by reason of her summary dismissal on the basis that she engaged in gross misconduct as described in the findings of the 21 June 2011 Report prepared by Ms Fisher.
Counsel for Ms Larne-Jones also submitted that the “true” reason for Ms Larne-Jones’ dismissal was in issue in the part of the substantive proceedings based on the general protection provisions of the FWA in circumstances where the asserted adverse action was said to be her dismissal from employment. It was pointed out that, as French CJ and Crennan J stated in Board of Bendigo Regional Institute of Technical and Further Education v Barclay and Another (2012) 86 ALJR 1044; [2012] HCA 32 at [41]:
The question of why an employer took adverse action against an employee is a question of fact arising from the operation of interdependent provisions of the Fair Work Act.
Their Honours expressed the view (at [44]) that:
“direct evidence of a decision-maker as to [his or her] state of mind, intent or purpose [would] bear on the question of why adverse action was taken although “the central question remains ‘why was the adverse action taken?’”
and continued at [45]:
This question is one of fact, which must be answered in the light of the facts established in the proceeding. Generally, it will be extremely difficult to displace the statutory presumption in s361 if no direct testimony is given by the decision-maker acting on behalf of the employer. Direct evidence of the reason why a decision-maker took adverse action, which may include positive evidence that the action was not taken for a prohibited reason, may be unreliable because of other contradictory evidence given by the decision-maker or because other objective facts are proven which contradict the decision-maker’s evidence.
Ms Larne-Jones submitted that the documents sought in the disputed categories in the Notice to Produce could be said to go to an issue of apparent relevance in relation to her FWA claim.
In relation to Paragraphs 11 and 12 in the Notice, reliance was placed on the fact that in the Statement of Claim Ms Larne-Jones pleaded that she was entitled under an implied term in her contract to an annual bonus. Such term was said to be implied on the basis that it was well known throughout HSA’s Australian business that all consultants employed in its Sydney office received annual bonuses subject to meeting performance targets and that there was an established professional practice and past course of dealings between the parties whereby Ms Larne-Jones would be paid a bonus for achieving performance targets.
Again, it was acknowledged that the Respondents’ case was that there was no entitlement to any bonus, as a bonus was completely at large and discretionary. Nonetheless there was said to be a live issue as to whether Ms Larne-Jones, by reason of such an implied term based on notoriety and past course of dealings between the parties, was entitled to an annual bonus. In addition, it was pleaded that the amount of the annual bonus payable would be a sum that was reasonable in the circumstances. It was submitted that if the Court was ultimately satisfied that there was such a contractual term, there had to be a frame of reference to determine the amount of such a reasonable bonus.
HSA submitted that having regard to the pleadings none of the documents called for in the disputed categories of the Notice had any apparent relevance to any fact in issue in the proceedings. It was pointed out that at issue in the adverse action claim was whether or not Ms Larne-Jones was dismissed for a reason or reasons that included her compensation claim, her alleged mental disability and/or her marital status and submitted that no part of this claim involved determining the fairness or otherwise of the reasons for the decision, but only whether any of the reasons were prohibited reasons. It was submitted that the onus on HSA under s.361 of the FWA would not involve a forensic examination of whether there was otherwise a proper basis for the dismissal (see Khiani v Australian Bureau of Statistics [2011] FCAFC 109).
HSA also contended that none of the disputed categories of documents had any apparent relevance to Ms Larne-Jones’ asserted contractual entitlement to a bonus or the amount of any such bonus. HSA submitted that the only substantive issue in the matter was whether the contract of employment contained a reasonable notice term or only an express notice term and that, given the way the case had been pleaded, this was now simply a question of whether there had been a contravention of the contract by payment in accordance with the express notice term, to which it was said that the documents called for in the disputed categories could have no apparent relevance.
Before considering the disputed categories, there are a number of matters to note in relation to these submissions.
First, for the Court to be satisfied that the disputed categories of documents should be produced it must be reasonably likely that they have an apparent relevance to the facts in issue in the principal proceedings. As discussed in Larne-Jones v Human Synergistics Australia Limited [2013] FMCA 206, an adverse action claim based on termination of employment such as pleaded in this case does not create an opportunity for the applicant whose employment has been terminated to challenge the validity of the steps taken prior to the termination (such as the investigative procedure and Report). Further, under s.361 of the FWA the obligation on a respondent such as HSA would be to prove on the balance of probabilities that its reasons for dismissing the Applicant did not include any of the particular prohibited reasons pleaded. Ms Larne-Jones pleads that she was dismissed for the reason or reasons that included that she had exercised a workplace right by lodging a workers compensation claim, had a mental disability and was married to Mr Jones.
It is the case that, as French CJ and Crennan J pointed out in Barclay (at [45]), “[d]irect evidence of the reason why a decision-maker took adverse action … may be unreliable because of other contradictory evidence given by the decision-maker or because other objective facts are proven which contradict the decision-maker’s evidence” (emphasis added). Thus the Court may have to consider evidence of events that preceded and culminated in Ms Larne-Jones’ dismissal (see AFMEPKIU at [23]. However the issue of why adverse action was taken (Barclay at [44]) arises in the context of determining whether it was for any of the asserted prohibited reasons. The circumstances leading up to Ms Larne-Jones’ termination may be of relevance to the adverse action claim if evidence in that respect could give rise to an inference that her worker’s compensation claim, her alleged mental disability or her marital status played a part in HSA’s decision to dismiss her summarily such that HSA may not meet the onus placed on it under s.361 of the FWA. However these proceedings are not the occasion for a broad-ranging enquiry as to whether Ms Larne-Jones in fact engaged in serious misconduct. Rather, what would be in issue under s.361 (if applicable) would be whether on the evidence, including any direct evidence from the HSA decision-makers as to the reason or reasons they acted to dismiss Ms Larne-Jones, HSA established that it did not dismiss Ms Larne-Jones because of her worker’s compensation right or claim, mental disability or marital status. The solicitor for HSA indicated in submissions that HSA does not seek to establish in this context that Ms Larne-Jones in fact engaged in misconduct such as to warrant her dismissal.
Apart from the adverse action claim, Ms Larne-Jones has relevantly pleaded a contravention of s.44 of the FWA and that by summarily terminating her employment for gross misconduct HSA breached her employment contract. However the bases for these claims and the issues in dispute on the pleadings require further consideration.
Ms Larne-Jones claimed an entitlement to 5 weeks written notice or payment in lieu thereof under s.117 of the FWA and that the failure to make such payment was a contravention of s.44 of the FWA. HSA does not seek to rely on any claim of misconduct by Ms Larne-Jones in relation to this issue.
As pleaded, Ms Larne-Jones’ contractual claims are, relevantly, to an entitlement to a reasonable bonus under an implied term (paragraphs 8(b) and (c), 12 and 13 and 14 of the Statement of Claim) and to reasonable notice of termination under an implied term which is said to apply save and except in the circumstance where there was a right to summary dismissal for serious and wilful misconduct (paragraphs 8(e), 26 and 29 of the Statement of Claim).
In the Defence HSA claimed that there were no implied terms in the contract under which Ms Larne-Jones was entitled to a bonus or to reasonable notice. It was asserted that the termination provisions of the contract were the express terms in cl.12 of the Employment Agreement (Paragraph 8 of the Defence).
In relation to Ms Larne-Jones’ claims under s.117 of the FWA that her employment was summarily terminated and that she was entitled to reasonable notice (and damages for breach of contract), the Respondents pleaded that on 16 August 2012 HSA “without admission of liability and in order to avoid prolonged litigation, determined to meet the Applicant’s claim by treating the termination of the Employment Agreement as if done by payment in lieu of notice in accordance with clause 12(b), (c) and (d) of the Employment Agreement” (Paragraph 26 of the Defence). The Defence recites payments in lieu of notice said to have been made in accordance with cl.12 of the Employment Agreement and in satisfaction of HSA’s obligations under the FWA and the Long Service Leave Act 1955 (NSW). It is also pleaded that by reason of HSA treating the termination in accordance with the express terms in the Employment Agreement “the Applicant has no entitlement to any other termination payment as pleaded or otherwise” (Paragraph 28 of the Defence).
What was perhaps not entirely clear on the pleadings was whether, if the pleaded implied term as to reasonable notice was made out, it would have to be determined whether the exception of summary dismissal for serious and wilful misconduct was applicable.
Were this so, then whether the Applicant engaged in such misconduct would be in issue. However in oral submissions the solicitor for HSA conceded that there is now no contest that the Respondent is to meet the Applicant’s claim for notice, “only what that notice term is”. The issue in dispute was explained as merely being whether the claim for notice was met by honouring the express term in the Employment Agreement or was to be met by honouring some reasonable notice term to be determined by the Court.
I take HSA’s concession to indicate that while in the context of meeting any onus under s.361 of the FWA it may rely on evidence that, having regard to the findings in the Report, those who made the termination decision were of the opinion that Ms Larne-Jones should be dismissed for gross misconduct, it does not otherwise put it in issue or seek to establish that Ms Larne-Jones in fact engaged in misconduct for the purpose of the principal proceedings. In particular, HSA does not seek to rely on any claim of misconduct by Ms Larne-Jones to defeat her claim to reasonable notice (and/or damages for breach of contract) if such a term is implied in Ms Larne-Jones’ contract. I have considered the disputed paragraphs in the Notice to Produce on this basis.
Paragraph 1
The first category of documents in Paragraph 1 of the Notice to Produce refers to unspecified “deeds” entered into between HSA and four named former employees. In support of the contention that such documents are of apparent relevance Counsel for Ms Larne-Jones referred to Appendix 2 to the Report in which allegations against Ms Larne-Jones relating to employees (including the four former employees referred to in this paragraph) and the findings of the Report are described.
Subparagraph (a) refers to Emaan Zarour. It was submitted that a Deed of Release entered into between HSA and Emaan Zarour would be of at least apparent relevance to the question of whether the misconduct alleged against Ms Larne-Jones was undermined by the basis upon which Ms Zarour’s employment came to an end. This was said to be relevant to the question of whether there was any basis for summary dismissal of Ms Larne-Jones based on gross misconduct. However, as indicated, whether Ms Larne-Jones in fact engaged in gross misconduct is not in issue in these proceedings.
Appendix 2 to the Report records that Ms Zarour (referred to as Zahour) was dismissed from her employment as a result of the bullying and harassment she was subjected to by Mr Jones, Ms Larne-Jones and others at the direction of Mr Jones and Ms Larne-Jones on her return to active duties after a period of maternity leave. It also records that Ms Larne-Jones was, with Mr Jones, involved in implementation of a fabricated performance management process, manufactured allegations and termination of Ms Zarour’s employment in circumstances said to amount to unlawful discrimination.
Appendix 2 to the Report contains certain adverse findings against Ms Larne-Jones (and also Mr Jones) in relation to these allegations, including a finding that while Ms Zarour’s employment was terminated for purported reasons of her non-compliance with company protocols, work attitude and behaviour, the reasons had not been substantiated as the basis and justification for her termination. Rather, it was found to be proven that the reasons for Ms Zarour’s termination were manufactured.
In this context, the contention in support of the Notice to Produce that production of the deed between HSA and Ms Zarour was sought because it was anticipated that it recorded the reason for the termination of Ms Zarour’s employment is not such as to establish apparent relevance to any fact in issue in these proceedings. Ms Larne-Jones was not a party to the Deed of Release between HSA and Ms Zarour. It has no apparent relevance to the bonus issue. Nor is it now of any apparent relevance to the notice issue having regard to the concession made for HSA.
I have borne in mind that in the context of the adverse action provisions of the FWA the Court may have to consider evidence of the events that preceded and may have been associated with or culminated in the dismissal. However given the nature of the claim under the FWA (see Larne-Jones v Human Synergistics Australia Limited [2013] FMCA 206) it is difficult to see that the Deed of Release Ms Zarour signed on her termination by HSA is reasonably likely to add in some way or the other to the relevant evidence in this case or that it could reasonably be expected to throw some light on any of the issues in these proceedings.
I am not satisfied that such Deed has any apparent relevance to the facts in issue in these proceedings. There is no suggestion of other Deeds in existence between Ms Zarour and HSA that are of any relevance whatsoever to the principal proceedings. Paragraph 1(a) of the Notice to Produce should be set aside.
Similarly, the Deed of Release between HSA and Tatiane Chu (said to be the subject of Paragraph 1(d) of the Notice) has not been shown to have apparent relevance to any matter in issue in these proceedings. Appendix 2 to the Investigation Report refers to findings against Ms Larne-Jones in relation to a warning given to Ms Chu as a result of her use of language discovered by apparent surveillance of her private Skype conversation with another HSA employee in which she referred to details about an employee leaving HSA.
The relevant findings in the Report and as explained in the Termination Letter in relation to Tatiane Chu were that Ms Larne-Jones breached HSA’s IT Policy and the Workplace Surveillance Act 2005 (NSW) by unlawfully surveilling her internet use without authority and proper purpose and for the purpose of bullying and harassment, that she pressured other named employees to unreasonably pressure, micromanage and otherwise bully Ms Chu (and other employees), that she had some involvement in the process of “termination” of Ms Chu’s employment by Mr Jones and that the characterisation of Ms Chu’s termination by Ms Larne-Jones and Mr Jones was false.
As in relation to the Deed of Release between HSA and Ms Zarour, I am not satisfied that it has been established that the Deed of Release between HSA and Ms Chu is of any apparent relevance to any matter in issue in these proceedings. There is no suggestion of any other deeds of relevance. Paragraph 1(d) of the Notice to Produce should be set aside.
Counsel for the Applicant did not refer to what was said in the Appendix to the Report in relation to the relevance of the Deed of Release entered into by HSA with Nick Dimou. According to the Appendix, insofar as any such allegations related to Ms Larne-Jones, they were not proved. There is no other basis on which it is asserted that this Deed can be reasonably expected to throw some light on any issues in these proceedings. I am not satisfied that this or any other deed entered into between HSA and Mr Dimou is of any apparent relevance to the issues raised in these proceedings. Paragraph 1(c) of the Notice should be set aside.
Similarly, no reference was made by Counsel for the Applicant to Appendix 2 to the Report in relation to the Deed of Release entered into between HSA and Ms Suzette Viljoen said to be the subject of paragraph 1(b) of the Notice. This is unsurprising, as the Report records that there were no specific allegations against Ms Larne-Jones in relation to Ms Viljoen (although certain allegations were found to be proven against Mr Jones). Rather, reliance was placed on the fact that in his affidavit sworn on 22 May 2013 Mr McCarthy put in issue the circumstances in which Ms Viljoen’s employment with HSA came to an end and whether that was by reason of dismissal or resignation.
In these circumstances Ms Larne-Jones submitted, and I accept, that what the Deed executed by Ms Viljoen at the time of her termination said about the circumstances would be of apparent relevance, given that the Applicant is entitled to test the evidence of Mr McCarthy. That is so notwithstanding that Mr McCarthy’s affidavit had not been filed at the time the Notice of Produce was issued. I am satisfied that this Deed is of apparent relevance. As was conceded by Counsel for the Applicant, that does not mean that the Court might not at the trial of the matter come to the view that such document was not of substantive relevance or for some other reason was not admissible into evidence. Paragraph 1(b) of the Notice to Produce should not be set aside.
Paragraph 2
Paragraph 2 of the Notice to Produce seeks production of any written allegations of bullying and harassment made in relation to Ms Larne-Jones by any of 12 listed persons. Counsel for the Applicant pointed out that the Report recorded descriptions of allegations based on handwritten notes made at the time of interviews and tape-recorded interviews. It was submitted that the written complaints were of apparent relevance to whether such complaints found proper reflection and articulation in the Report or what flowed from it.
However, as discussed above, neither whether Ms Larne-Jones in fact engaged in bullying or harassment nor the veracity of the investigative process is in issue in the principal proceedings. Ms Larne-Jones does not assert that the investigation into allegations against her or the manner in which it was conducted amounted to adverse action for the purposes of the FWA. Her case is not pleaded in a manner that raises issues as to the bona fides of the investigation or its result. While Ms Larne-Jones pleads that she was dismissed for reasons that included a mental disability (said to be attributable to HSA’s treatment of her in relation to the allegations, investigation and the suspension of her employment), what is in issue under the adverse action provisions of the FWA is the reason for adverse action, not the reason for any such mental disability.
With the exception of Bridget Murray, it appears that no person listed in paragraph 2 has sworn an affidavit in the substantive proceedings. In these circumstances having regard to the matters in issue in the substantive proceedings it has not been established that the written allegations by the listed persons other than Bridget Murray are of any apparent relevance. However Bridget Murray has sworn an affidavit that has been filed for the Respondents and she is the subject of part of Mr McCarthy’s affidavit. On balance, as in relation to the Deed of Release between HSA and Ms Viljoen, I am of the view that Paragraph 2(e) should not be set aside. However all the subparagraphs in Paragraph 2 of the Notice to Produce other than subparagraph (e) should be set aside.
Paragraph 3
No issue is taken with Paragraph 3 in the Notice to Produce.
Paragraph 4
Paragraph 4 of the Notice to Produce seeks production of the report created by the solicitors for HSA regarding the investigation of allegations of bullying and harassing behaviour made against the applicant’s husband, Mr Quentin Jones.
HSA submitted that documents in relation to the dismissal of Ms Larne-Jones’ husband had no apparent relevance to any consideration of the facts in issue in the substantive proceedings about the decision to dismiss the applicant because, even if marital status was a live issue, the issue before the Court was the reason for termination of employment of Ms Larne-Jones, not the reason for the termination of Mr Jones’ employment. It was submitted that it could not be relevant to examine a report that went to the reasons in relation to dismissal of another person when the decision under consideration was the decision to terminate the Applicant.
Ms Larne-Jones pointed out that in the adverse action claim one of the asserted reasons for the dismissal relied on by her was her status as Mr Jones’ wife. It was submitted that it was apparent from the Report in relation to Ms Larne-Jones and the Appendices thereto that there was a convergence between the allegations against Mr Jones and the allegations against Ms Larne-Jones. Further, in HSA’s termination letter to Ms Larne-Jones it was said to have been found that Ms Larne-Jones:
... took advantage of [her] personal relationship with Mr Jones to assume and exercise authority and responsibilities at HSA that were outside the scope of [her] position with the company.
It was submitted that on its face this evidence raised the question of whether Ms Larne-Jones’ marital status as Mr Jones’ wife was “caught up” in the investigation process. Hence it was said that the findings against Mr Jones were of apparent relevance because they may record that his personal relationship with Ms Larne-Jones was one of the factors that led to his dismissal or consideration of her dismissal. It was submitted that any such evidence would directly undermine Mr McCarthy’s affidavit evidence that the decision was taken without regard to that status.
One of the bases for Ms Larne-Jones’ claim under s.351 of the FWA is that she was married to Mr Jones. Given this claim and the content of the Annexure to the Report in relation to Ms Larne-Jones, I am satisfied the report referred to in Paragraph 4 is of sufficient apparent relevance that this Paragraph should not be set aside. Of course this leaves for resolution at the hearing the issue of whether such relationship is within s.351 as well as issues of substantive relevance and admissibility of any separate Report.
Interestingly, I note that the document annexed to Mr McCarthy’s affidavit described as the Investigation Report relates to both Mr Jones and Ms Larne-Jones. It is not clear why HSA is opposed to production of the document referred to in Paragraph 4 if this is in fact such Report. In any event Paragraph 4 of the Notice to Produce should not be set aside.
Paragraph 5
Paragraph 5 of the Notice to Produce seeks any document recording any communications between Ms Fisher, who prepared the investigation report, and any employee (past or present) of HSA for the purposes of Ms Fisher preparing her investigation report in relation to the allegations (referred to in Paragraph 15 of the Defence) of bullying and/or harassing behaviour of Ms Larne-Jones.
Paragraph 15 of the Defence responds to part of the recitation of events in the Statement of Claim that preceded the allegations that due to HSA’s treatment of her in relation to the allegations, investigation and suspension Ms Larne-Jones became unwell and suffered from a psychological injury and a mental disability for the purposes of s.351 of the FWA and the claim that she had an exercised a workplace right by claiming workers compensation. It is admitted that on 10 May 2011 the applicant’s employment with HSA was suspended, effective immediately, but pleaded that the Applicant was suspended on full pay “pending the outcome of the investigation into allegations of bullying and harassment” of several current and former employees of HSA.
The Applicant submitted that this category of documents was related to category 2 in that production was sought of all communications (such as records of interviews) between the author of the Report and HSA employees, past and present, for the purpose of preparing the Report. These matters were said to be of apparent relevance on the basis that such documents might serve to undermine the correctness or accuracy of what was set out in the Report. It was contended that these were not matters that went to the process, but rather the factual correctness of the evidence as described and recorded and the conclusions in the Report because that Report was relied on to justify HSA’s conclusion of gross misconduct on the part of Ms Larne-Jones.
However, as discussed above, these proceedings are not an occasion for an inquiry into the veracity or bona fides of the Report. Given the assurance by the solicitor for HSA as to the matters in issue under the FWA and in dispute in relation to the reasonable notice issue there is no basis on the pleadings and the evidence before the Court for a determination by the Court in the principal proceedings as to whether Ms Larne-Jones in fact engaged in misconduct. I note that she has not put this matter in issue by seeking to rely on affidavit evidence from any of the current and former employees of HSA described in the Report as complainants.
Ms Larne-Jones does not assert that the investigation or her suspension themselves amounted to adverse action. The veracity of the investigative process is not in issue in these proceedings and these are not unfair or wrongful dismissal proceedings. It has not been established that the documents sought in Paragraph 5 are of apparent relevance. This part of the Notice to Produce should be set aside.
Paragraph 6
Paragraph 6 in the Notice to Produce seeks production of documents recording or evidencing the findings of misconduct relied upon by HSA in deciding that Ms Larne-Jones breached her obligations under five listed statutes. In the termination letter of 22 September 2011 it was stated that:
Through your performance and conduct, we consider you have breached the following statutes:
(a) the Occupational Health and Safety Act 2000 (NSW);
(b) the Sex Discrimination Act 1984 (Cth);
(c) the Anti-Discrimination Act 1977 (NSW);
(d) the Fair Work Act 2009 (Cth); and
(e) the Workplace Surveillance Act 2005 (NSW).
The Applicant seeks production of documents that record or evidence the findings of misconduct relied upon as justifying the conclusion that she breached those statutes on the basis that such matters went to the heart of whether there was gross misconduct.
It is not clear whether there are such documents other than the Report created by Ms Fisher. The First Respondent is not opposed to production of that Report. The documents sought in Paragraph 6 are of a similar nature and if there are other such documents they may be of relevance to the issue of why the pleaded adverse action (the termination of Ms Larne-Jones’ employment) was taken in the sense considered by French CJ and Crennan J in Barclay at [44]. Paragraph 6 should not be set aside.
Paragraph 7
No issue is taken in relation to Paragraph 7.
Paragraph 8
Paragraph 8 of the Notice to Produce seeks production of any document evidencing or recording the decision of HSA to terminate the employment of Mr Jones. It was submitted that such documents are of apparent relevance because of the closeness of the two investigations and the allegation that the personal relationship between Ms Larne-Jones and Mr Jones was a reason for Ms Larne-Jones’ termination.
On the basis discussed in relation to Paragraph 4 above, noting that HSA has acknowledged that Mr Jones has exhibited to his affidavit a copy of the termination letter he received on 24 June 2011 and bearing in mind the distinction between apparent and substantive relevance, I am not satisfied that Paragraph 8 of the Notice to Produce should be set aside. There is no suggestion that production of any such documents would be unduly onerous. Their admissibility and substantive relevance would be a matter to be determined at the hearing.
Paragraph 9
HSA does not seek an order that Paragraph 9 of the Notice to Produce be set aside.
Paragraph 10
Paragraph 10 of the Notice to Produce seeks production of any document evidencing or recording the reason for the determination of HSA to “meet the applicant’s claim” as referred to in Paragraph 26(a) of the Defence. In the Defence it is pleaded that HSA’s determination to meet Ms Larne-Jones’ claim by treating her termination as if done by payment in lieu of notice in accordance with cl.12 of the Employment Agreement was made “without admission of liability and in order to avoid prolonged litigation”.
Ms Larne-Jones submitted that such an approach did not enable the Court to take the view that there was no longer an issue as to whether the termination occurred without notice and that it could not be said that the only question that arose in the context of this part of the breach of contract claim was whether she was entitled to reasonable notice or the month’s notice provided for in Clause 12 of the Employment Agreement. Rather, it was said that the question remained as to whether Ms Larne-Jones did engage in serious misconduct justifying summary dismissal. It was suggested that the documents showing why HSA had reached this view in circumstances where it had previously terminated her employment without notice, might be replete with admissions.
It was acknowledged that there may be issues of privilege in relation to this category, but pointed out that the issue of privilege was not raised as a basis to oppose production. It was also submitted that there may be documents, such as communications between directors or employees, that were not privileged, and that these would be of apparent relevance to the liability question.
HSA submitted that the Defence spoke for itself and that by this pleading the Respondent had met what it said was the Applicant’s claim for notice and that what remained for the Court to determine was whether the claim for notice was met by honouring the express notice term in the 2003 Employment Agreement or by some reasonable notice term to be determined by the Court. Importantly it was stated in submissions that there was now no contest that HSA was to meet Ms Larne-Jones’ claim for notice, but only as to the term of notice.
HSA also submitted that the reason why it chose to meet that part of the claim was not of apparent relevance to the facts in issue in these proceedings and that the Applicant was not entitled to go behind the decision to meet part of her claim. The reason given in paragraph 26 of the Defence (to avoid prolonged litigation) was said to be self-evident so that there could be no apparent relevance in seeking the documents in Paragraph 10 of the Notice to Produce.
While Mr Gee’s affidavit evidence is that he was instructed that HSA claimed privilege over any and all documents in its possession, custody or control that would fall within this category, such submission was not pursued in oral submissions. Whether or not it would be appropriate to rule on privilege at this stage, I am not in a position to do so and do not regard the general assertion of privilege as a basis on which this part of the Notice to Produce should be set aside.
However, given that on the concession of the solicitor for HSA whether Ms Larne-Jones in fact engaged in gross misconduct is not in issue in these proceedings, HSA’s reasoning as to why it determined in August 2012 to meet Ms Larne-Jones’ claim that her employment was summarily terminated by treating the termination as if done by payment in lieu of notice is not a fact in issue or reasonably likely to add in some way to or possibly throw some light on issues in dispute in these proceedings. Paragraph 10 of the Notice to Produce should be set aside.
Paragraphs 11 and 12
Paragraph 11 of the Notice to Produce seeks any document evidencing or recording the decision of HSA to pay any employee(s) bonuses in respect of each of the 2004 to 2011 financial years, including any document referring to the criteria on which these decisions were based. Paragraph 12 seeks production of any document evidencing or recording the identity of employees of HSA who received bonuses for the 2004 to 2011 financial years (inclusive) and the amount of the bonuses paid.
Ms Larne-Jones contended that such documents would assist in proving what was said to be the notorious practice whereby employees of HSA received bonuses each year and the established practice and custom and the course of dealing between the parties referred to in the particulars to clause 8(b) of the Statement of Claim.
She submitted generally that the documents in Paragraphs 11 and 12 were of apparent relevance to enable her to address the facts and circumstances upon which the Court could determine whether there was an implied term as contended for and, if there was, the quantum of the reasonable bonus to which she was entitled in the years for which she was claiming it by reference to the factors taken into account in allocating bonuses that were said to be described in Mr Jones’ affidavit.
It was contended that such documents would put Ms Larne-Jones in a position to advance by way of evidence a claim that her position was, for example, comparable in her final year of employment, at least in a relative sense, to some other employee who had received a bonus by reference to the amount of bonus paid to such employee. Thus she could make a submission as to what was reasonable in her case having regard to matters including evidence of the profitability of the New Zealand business of HSA sought in Paragraph 13 (which is not objected to by HSA).
It was submitted that figures showing that unidentified people received bonuses would not suffice, as the Applicant would not be in a position to know what position such people occupied and whether they were reflective of the level of seniority she had. Hence she would have difficulty in demonstrating the amount of the reasonable bonus said to be implied in her contract of employment.
Insofar as HSA (through Mr Gee) submitted that Paragraphs 11 and 12 were oppressively wide, there was said to be no evidence upon which the Court could come to that conclusion. It was submitted that in the absence of evidence in that respect the Court could not come to the conclusion that these paragraphs of the Notice to Produce were oppressive.
HSA submitted that documents relating to the payment of bonuses by HSA to persons other than the Applicant had no actual or apparent relevance to any fact in issue in the proceedings. It was submitted that on the pleadings and evidence to date the only facts in dispute in the substantive proceedings in relation to the payment of bonuses were whether or not the Applicant had a contractual right to be paid a bonus and, if so, the quantum of the bonus that was required to be paid to her by HSA.
However, as pointed out by Counsel for the Applicant, the New South Wales Court of Appeal made the point in Walker & Sherman & Anor v Andrew & Ors [2002] NSWCA 214 at [33]ff that where the amount of a bonus was not fixed at the time of execution of a deed the law imposed an obligation to pay a sum that was reasonable in the circumstances to be assessed having regard to the evidence showing what values the parties themselves put on the relevant person’s services.
In this case, if there is such an implied term, the criteria by which recommendations for bonuses were made (which Mr Jones attests included the profitability of the New Zealand business and other factors) and the amounts of bonuses paid to others would be likely to throw some light on what was a “reasonable” bonus. Documents showing the amounts paid by HSA to particular other people may provide reference points for the Court’s determination of what bonus (if any) would be reasonable in the factual matrix that existed at the time. I am satisfied that such documents are of apparent relevance. Paragraphs 11 and 12 of the Notice should not be set aside.
Paragraph 13
There is no challenge to paragraph 13 of the Notice.
Conclusion
The parties should bring in short minutes of orders within 7 days specifying the time for production of those categories of documents not set aside. In the absence of agreement, the parties may make submissions as to an appropriate timetable for production.
I certify that the preceding one-hundred-and-thirty (130) paragraphs are a true copy of the reasons for judgment of Judge Barnes
Associate:
Date: 30 September 2013
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