Loata Petrunic v Q Catering Limited T/A Q Catering

[2019] FWC 1034

[2019] FWC 1034

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Loata Petrunic
v
Q Catering Limited T/A Q Catering
(U2018/10437)

SENIOR DEPUTY PRESIDENT HAMBERGER SYDNEY, 4 MARCH 2019

Application for an unfair dismissal remedy – call for material – order for the production of documents – claim of legal professional privilege – waiver of privilege.

[1] Loata Petrunic (the applicant) has applied for an unfair dismissal remedy under Part 3-2 of the Fair Work Act 2009 (Cth) (the FW Act) in relation to the termination of her employment by Q Catering Limited (the respondent) on 19 September 2018.

[2] This decision relates to an interlocutory question:

‘Is the respondent entitled to the benefit of legal professional privilege in relation to the provision of material,

•  the production of which was called for during the substantive hearing of the applicant’s case on 11 January 2019 (documents with the date range from 15 to 22 June 2018, henceforth described as Category 1 documents); and

•  documents which are subject to an order for production issued by the Commission on 2 January 2019 (henceforth described as Category 2 documents)?’

[3] I dealt with this question at a hearing on 20 February 2019. The applicant was represented by Tony Vernier, of counsel, and the respondent by Richard Kenzie QC, with Ralph Warren, of counsel. A statement was provided by Kathy Srdanovic, 1 a partner with Ashurst. Ms Srdanovic attached to her statement a list of 188 documents over which legal professional privilege is claimed.2 Ms Srdanovic was cross-examined on her evidence.

The facts

[4] Based on the evidence presented in the proceedings so far (including at the hearing on 20 February 2019) and the parties’ submissions, I am satisfied of the following facts.

[5] The applicant worked as an Airline Services Co-ordinator at the respondent’s Sydney Catering Centre at Mascot.

[6] On 15 June 2018, a number of the respondent’s employees, including the applicant, engaged in an unauthorised stoppage of work. The participants also blocked catering delivery trucks from exiting the catering centre. This disrupted the travel plans of a large number of Qantas’ passengers.

[7] In the morning of 15 June 2018, the respondent’s Head of Industrial Relations, Peter Smith, contacted Ms Srdanovic and told her about the work stoppage. He said that he would need Ashurst’s help and advice about how to deal with the situation.

[8] By the afternoon of 15 June 2018, Mr Smith had instructed Ms Srdanovic on a number of matters, including the following:

a) All employees of the respondent who had participated or been involved in the stoppage had been stood down with pay.

b) The respondent was considering the process by which it would conduct an investigation into allegations of misconduct flowing from the events of that day.

c) The respondent was considering disciplinary action up to and including termination of employment in respect of the employees involved.

[9] Ms Srdanovic understood from her discussions with Mr Smith that the respondent anticipated that legal proceedings would result from the events of 15 June 2018. This would include potential unfair dismissal proceedings if a decision was made to terminate the employment of one or more of the employees involved.

[10] Against this background, Ashurst was engaged, on and from the morning of 15 June 2018, to provide legal advice to the respondent in relation to the events of that day, including advice in relation to:

•  the conduct of enquiries for the purpose of preparing a letter (or letters) of allegations;

•  the nature of the investigation process to be undertaken; and

•  any consequential disciplinary action.

[11] Edward Carroll, a solicitor employed by Ashurst, and Ms Srdanovic met with management representatives who had witnessed the events on 15 June 2018 over the next few days to gather information from them so that Ashurst could provide legal advice.

[12] Following these enquiries, a number of different draft potential letters of allegation and other letters (for example, warning letters) were prepared in the lead up to 22 June 2018. Ashurst continued to provide legal advice in relation to the proposed investigation and any disciplinary action, etc.

[13] The respondent engaged Anne Bryce, a Qantas employee (who has since left Qantas), to investigate the allegations contained in letters to the applicant and four other employees. These were the only employees who were sent letters of allegation.

[14] I issued an order requiring production of documents on 2 January 2019. The order required the respondent to produce certain documents by 4:00 pm on 9 January 2019. Item 1 of the schedule to the order referred to:

‘All documents relating to the investigation into the unprotected industrial action which occurred at the Sydney Catering Centre in Mascot on 15 June 2018 including but not limited to:

a) statements or notes from witnesses;

b) internal emails or other written internal communications;

c) notes made by the investigator(s);

d) responses received from all employees;

e) responses received from managers;

f) any investigation report including drafts of such report;

g) any documents used to formulate the allegations made against the applicant noted in the letter from the respondent dated 22 June 2018, being attachment "A” to the statement of Loata Petrunic dated 10 November 2018.’

[15] The response to the order had a covering letter which included the following statement:

‘We have not produced documents which are subject to a claim of legal professional privilege, where the documents were prepared for the purpose of obtaining or receiving legal advice and/or in anticipation of litigation.’

[16] During the course of the proceedings on 11 January 2019, the applicant requested the production of documents. In particular, Mr Vernier called for a statement that Mr Donaghey (one of the managers employed by the respondent) said that he had given to Mr Carroll on 16 June 2018.

[17] Mr Donaghey was asked by Mr Vernier during his cross-examination whether he made any notes of the events of 15 June 2018. He said that he had not done so but had met with Ashurst lawyers on the next day to give a statement. The dialogue between Mr Donaghey and Mr Vernier included the following:

‘Okay. So you gave a statement to Ashurst lawyers? --- Yes.

Do you have a copy of that statement with you --- No.

I call for that statement.

MR WARREN: Privilege.

MR VERNIER: On what basis?

MR WARREN: Communication between client and solicitor.

MR VERNIER: Well, he is a witness and parts of that statement would have been used to formulate the letter of allegations, so that has been waived.’ 3

[18] Mr Vernier drew Mr Donaghey’s attention to certain words that he had included in a statement he gave to Ms Bryce on 3 July 2018, and noted that the same words were used in the letter of allegations given to the applicant on 22 June 2018. Mr Vernier asked him to explain how ‘… those words which are exactly in your statement of 3 July came to be put in a letter dated 22 June 2018, which is before you met with Ann Bryce?’ 4

[19] After some clarification of the question, Mr Donaghey replied:

‘I would have said those words when I gave my statement.’ 5

[20] Mr Donaghey said that the statement he was referring to was given to Mr Carroll on 16 June 2018 to Ed Carroll. 6 When asked what he said in that statement, he replied:

‘--- It will pretty much be the same as the statement that I said with Ann Bryce; in conjunction with that. I can’t recall every single detail, but I’m pretty confident it will be very, very similar to the statement I gave on 3 July.’ 7

[21] Mr Vernier said that privilege had been waived because parts of the statement Mr Donaghey had given to Ashurst would have been used to formulate the letter of allegations. 8 He also said that it was covered by the order requiring production of documents, as it was part of the investigation.

[22] Mr Vernier then indicated that he wanted access to all information or statements gathered and/or provided by Ashurst in relation to the stoppage of work that occurred on 15 June 2018.

[23] It is clear from Ms Srdanovic’s evidence that Mr Donaghey did not strictly provide a statement to Mr Carroll. When asked about the document containing the information Mr Donaghey provided, Ms Srdanovic said:

‘The issue that I have with answering the question is what you mean by the word “statement” because the file note description is more accurate, in terms of how – the nature and character of the document. It is not, for example, a signed witness statement by Mr Donaghey, of the type that is attached to his statement.’ 9

[24] Ms Srdanovic said that one of the Category 1 documents was:

‘a note taken by the lawyer who attended the meeting with Stephen Donaghey which records information that he provided, for the purposes of Ashurst providing legal advice to the respondent.’ 10

[25] Ms Srdanovic said this note (and the other notes recording information provided by other managers who had been interviewed) was not provided to Ms Bryce. 11 She said that the file notes remained on Ashurst’s confidential file.12

Consideration

[26] Although the rules of evidence do not apply to the Commission, legal professional privilege is not merely a rule of evidence but also a substantive doctrine of the common law applicable to administrative tribunals, unless expressly excluded by statute. No such exclusion applies to the Commission’s proceedings.

[27] There are three separate categories of legal professional privilege. First, there is ‘advice privilege’, which is attached to confidential written and oral communications passing between a lawyer and the client, for the dominant purpose of the lawyer providing legal advice to that client. Secondly, legal professional privilege attaches to confidential written and oral communications made, or prepared, for the dominant purpose of use in existing or reasonably contemplated judicial or quasi-judicial proceedings. This is referred to as ‘litigation privilege’. The third category is an extension of ‘litigation privilege’ and involves confidential written and oral communications passing between a lawyer and third parties, or the client and third parties, if made or prepared when litigation was on foot or reasonably contemplated and the dominant purpose for the existence of the communication was related to such proceedings. 13

[28] In J-Corp, 14French J (as his Honour then was) stated:

‘The privilege attaching to statements taken from potential witnesses may not be supportable by public interest considerations of the same order as those enunciated in Grant v Downs in relation to solicitor-client communications although it arises in the context of the solicitor-client relationship. The confidentiality which attends their taking is of a limited character. There is nothing to stop a prospective witness who has given a statement to a solicitor from announcing that fact and the content of his statement to the world at large. In the ordinary course, neither the solicitor nor his client could do anything to prevent that disclosure.’

[29] Mr Vernier submitted that what he described as ‘the Initial Witness Statements’ given to Ashurst were not confidential documents and were therefore not subject to privilege. I do not agree that these documents were not confidential. They contained very sensitive information that was to be used amongst other things to make decisions that could lead to disciplinary action against employees of the respondent. They contained material that had been created for the purpose of advising the client. It would not be correct in this instance to say that the interviewees were entitled to announce the content of the ‘statements’ they gave to Ashurst to the world at large – not only because they were given to a solicitor for the purposes of providing legal advice, but also because of the very nature of that information.

[30] I have had the opportunity to examine all the documents in Categories 1 and 2, together with Ms Srdanovic’s evidence. I am satisfied that all the documents fall within the scope of ‘advice privilege’. In particular all the documents consist of confidential communications passing between Ashurst and the respondent for the dominant purpose of Ashurst providing legal advice to the respondent. As noted above, that advice was in relation to:

‘• The conduct of enquiries for the purpose of preparing a letter (or letters) of allegations;

• The nature of the investigation process to be undertaken; and

• Any consequential disciplinary action.’

[31] I am also satisfied that the documents were prepared in circumstances where legal proceedings were anticipated.

[32] If privilege does attach to documents, the privilege may be waived expressly or impliedly.

[33] In DSE, Allsop J said that an implied waiver will arise where:

‘…the party entitled to the privilege makes an assertion (express or implied), or brings a case which is either about the contents of the confidential communication or which necessarily lays open the confidential communication to scrutiny and, by such conduct, an inconsistency arises between the act and the maintenance of the confidence, informed partly by the forensic unfairness of allowing the claim to proceed without disclosure of the communication.’ 15

[34] In Krok, Wigney J stated:

‘Where a party to litigation discloses or deploys a partial disclosure of legal advice in order to achieve some forensic advantage, while claiming privilege and thereby seeking to deny the other party an opportunity to see the full text of the communication, this may amount to conduct inconsistent with the maintenance of privilege.

Questions of waiver are matters of fact and degree. Each case will turn on its own facts and circumstances and other cases in which implied waiver has been considered provide limited guidance unless they arise out of similar facts.’ 16 [references omitted]

[35] Mr Vernier submitted in this case that even if the documents are subject to legal professional privilege, that privilege has been waived. He noted that it was clear from the evidence that a number of the allegations contained in the letter of allegations given to the applicant came from information provided by witnesses to Ashurst. This, he submitted, contained ‘partial disclosure’ of some of the some of the documents that contained this information. In particular, he submitted that the respondent had:

a) laid open a purported confidential communication to scrutiny as referred to in DSE;

b) made a partial disclosure of a confidential document in order to achieve some forensic advantage, while claiming privilege and thereby seeking to deny the applicant an opportunity to see the full text of the communication as in Krok; and

c) waived any privilege that the documents containing information gathered from the witnesses that were used to form the allegations letter may have had.

[36] The key principle underlying the concept of waiver is that the party asserting privilege has acted inconsistently with the maintenance of confidentiality over the lawyer-client communications. As stated in Krok, such inconsistency may arise where one party discloses or deploys a partial disclosure of legal advice in order to achieve some forensic advantage, while claiming privilege and thereby seeking to deny the other party an opportunity to see the full text of the communication. The concept of fairness is integral. As Deane J said in Maurice:

‘Waiver of legal professional privilege by imputation or implication of law is based on notions of fairness. It occurs in circumstances where a person has used privileged material in such a way that it would be unfair for him to assert that legal professional privilege rendered him immune from procedures pursuant to which he would otherwise be compellable to produce or allow access to the material which he has elected to use to his own advantage….Where, however, he does no more than make use of privileged material (e.g. legal advice, expert opinion or statements of potential witnesses) for the purpose of formulating the statement in such a document of the details of the case which he proposes to make, it would be an affront to the ordinary notions of fairness to hold that the effect of his compliance with that procedural requirement was that he has waived his legal professional privilege in relation to such material.’ 17

[37] It is clear from the evidence that the documents that Mr Vernier is seeking were used, at least in part, to determine what allegations would be put to the applicant – not to make findings against her. I cannot see how there is any question of unfairness to the applicant in the respondent using information obtained by their lawyers, not to make findings against her, but simply to tell her what she was alleged to have done, and to give her an opportunity to respond to those allegations.

[38] In these circumstances, I am satisfied that the use of material, obtained by Ashurst in order to provide legal advice, in the letter of allegation given to the applicant, did not involve a waiver of legal professional privilege.

[39] Finally, I deal with the specific request made by Mr Vernier for the file note recording what Mr Donaghey described as the ‘statement’ he gave to Mr Carroll on 16 June 2018. As noted previously, Mr Donaghey said during cross-examination, in answer to a question from Mr Vernier to which the respondent did not object at the time, that he was ‘pretty confident’ that the ‘statement’ he gave Mr Carroll would be ‘very, very similar to the statement I gave on 3 July’ to Ms Bryce.

[40] Mr Vernier submitted that this situation was analogous to that in Divall v Mifsud. 18 In that case,a witness was cross-examined on a privileged statement. The witness was asked to reveal the substance of the privileged statement, which he did. Counsel for the party who called the witness did not object. The Court of Appeal held that privilege had been waived:

‘Although Mr Wilson initially claimed privilege over the statement, he did not object to counsel for Mr Mifsud asking two further questions the answers to which he conceded disclosed the substance of Mr Kent’s statement. His failure to object to those questions meant that the substance of Mr Kent’s statement had been “knowingly and voluntarily disclosed to another person.”’ 19 [references omitted]

[41] I have had the opportunity to examine both the file note recording what Mr Donaghey told Ashurst on 16 June 2018, and Attachment SD-6 to Exhibit 11, which is the statement Mr Donaghey provided to Ms Bryce on 3 July 2018. I am satisfied that the contents of both documents are substantially the same. I do not think that Mr Donaghey’s reference to the first document as his ‘statement’ to Ashurst alters the fact that the substance of the file note was ‘knowingly and voluntarily disclosed’. This puts it in another category than all the other material over which privilege has been claimed.

[42] I consider that the situation is indeed analogous to that in Divall v Mifsud. Accordingly, I order that the respondent provide Mr Vernier with the file note taken by Mr Carroll during his meeting with Mr Donaghey on 16 June 2018 (document 6 in KS-1). No other documents are to be provided, as I am satisfied that they are all covered by legal professional privilege that has not been waived.

SENIOR DEPUTY PRESIDENT

Appearances:

T Vernier, counsel, for Loata Petrunic.

R Kenzie QC with R Warren, counsel, for Q Catering Limited.

Hearing details:

Sydney.

2019.

February 20.

Printed by authority of the Commonwealth Government Printer

<PR705032>

 1   Exhibit S1.

 2   Exhibit 1, Attachment KS-1.

 3   PN 2095-101.

 4   PN2202.

 5   PN2206.

 6   PN2214, 2218.

 7   PN2217.

 8   PN2101.

 9   PN31.

 10   PN32.

 11   PN99.

 12   PN102.

 13   Bowker & Anor v DP World Melbourne Limited T/A DP World & Anor[2015] FWC 7887 [6].

 14   J-Corp Pty Ltd v Australian Builders Labourers Federation Union of Workers – Western Australia Branch (1992) 110 ALR 510, 515.

 15   DSE (Holdings) Pty Ltd v Intertan Inc (2003) 127 FCR 499 [58].

 16   Krok v Commissioner of Taxation [2015] FCA 51 [26]-[27].

 17   Attorney-General for the Northern Territory v Maurice and Ors (1986) 161 CLR 475, 492.

 18   Divall v Mifsud [2005] NSWCA 447.

 19   Ibid [10] (McColl JA); see also [6] (Ipp JA agreeing).