Mr Kevin Dailly v Victory Church

[2017] FWC 6319

[2017] FWC 6319

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Mr Kevin Dailly
v
Victory Church
(U2017/6959)

COMMISSIONER HUNT BRISBANE, 30 NOVEMBER 2017

Application for an unfair dismissal remedy.

[1] On 29 June 2017, Mr Kevin Dailly made an application pursuant to s.394 of the Fair Work Act 2009 (the Act) alleging that his dismissal from Victory Church was harsh, unjust or unreasonable.

[2] The purpose of this decision is to consider whether an order under s.590(2)(c) of the Act for the provision of records to the Fair Work Commission (the Commission) should be made.

[3] In ANMF v Victorian Hospitals’ Industrial Association 1 Commissioner Jones set out the principles to be followed by the Commission in deciding whether to issue a notice to produce as follows:

‘[7] The power to require the provision of copies of documents, records or other information has, under earlier legislative schemes, been expressed as a power to summons and compel the production of documents.

[8] Section 111(1)(s) of the Workplace Relations Act 1996, as it stood prior to 26 March 2006. provided the Commission with the power to:

“(s) summon before it the parties to the industrial dispute, the witnesses, and any other persons whose presence the Commission considers would help in the hearing or determination of the industrial dispute, and compel the production before it of documents and other things for the purpose of reference to such entries or matters only as relate to the industrial dispute;”

[9] I am satisfied that the jurisprudence in relation to the power of predecessors of Fair Work Australia to issue summons is applicable to the power under s.590(2)(c) of the Act.’

[10] The power to require the provision of documents, records or other things is a broad discretionary power to be exercised in accordance with the principles applied by the Courts.

[11] In The Queen v Marks; Ex parte Australian Building Construction Employees and Builders Labourers’ Federation,Justice Mason, as he then was, discussed the use of the discretion to issue a summons and said:

“When application is made for the issue of a summons the Commission has discretion to grant or refuse it. Generally speaking, the Commission will exercise its discretion in favour of the applicant unless it appears that it would be vexatious or frivolous or otherwise an abuse of process to issue the summons.”

[12] The principles applied by the Courts in the exercise of the discretionary power to issue a summons were identified by: Munro J in Re Clerks' (Alcoa of Australia - Mining and Refining) Consolidated Award 1985:

“In its exercise of a broad discretion and judgement over use of the power, the Commission will have regard to practice followed in courts of law where a judicial discretion has been applied to regulate use of a subpoena to produce document. Any such subpoena must specify with reasonable particularity documents which are required to be produced. It may be sufficiently specific to identify documents to be produced by reference to the subject matter to which they relate. In the case of a corporation, it is usually appropriate, where the custodianship of documents is not clear, to direct the subpoena to the `Proper Officer'. It is not legitimate to use a subpoena for what, in effect, would be discovery of documents against a person not liable to make discovery, or as a substitute for discovery which should be applied for at the proper time. The documents sought must be of a nature capable of being relevant to an issue which might legitimately arise on the hearing of the matters in dispute. In the first instance the documents are produced to the tribunal upon whom it falls to examine the documents, assess their relevance and determine what access by the parties to the documents may be appropriate; (section 187 of the Act appears to be the statutory counterpart of this principle of practice). A party will not be required to produce documents where to do so would be oppressive; or where the demand for production is a `fishing expedition', in the sense that it is an endeavour not to obtain evidence to support a case, but to discover whether there is a case at all. Where the proper use of legal compulsion to produce documents is in issue, the tribunal will need to carryout an exercise of judgement upon the particular facts in each case. That judgement requires a balance on the one hand of the reasonableness of the burden imposed upon the recipient, and of the invasion of private rights, with on the other hand, the public interest in the due administration of justice and in ensuring that all material relevant to the issues be available to the parties to enable them to advance their respective cases.”

[13] An exposition of the principles with particular focus on issues of confidentiality is contained in the decision of His Honour Vice President Lawler in Association of Professional Engineers, Scientists and Managers and Airly Coal Pty. In McIlwain v Ramsey Food Packaging Pty Ltd and others, Justice Greenwood summarised the principles which govern the courts in relation to discovery and subpoena to produce documents. I have had regard to this summary, so far as it concerns subpoena to produce documents in considering this Application. Removing those aspects of the summary dealing with discovery, the relevant principles identified by Greenwood J relevant to these proceedings are:

a) A writ of subpoena duces tecum is competent against both a party and a stranger to the proceeding: The Adelaide Steamship Company v Spalvins (unreported, O’Loughlin J, 1 August 1997).

......

d) The documents for production must be identified with reasonable particularity. (The Commissioner for Railways v Small (1938) SR (NSW) 564, 574-575 per Jordan CJ). The category of documents must not be so wide as to be oppressive.

e) The documents must be relevant to an issue raised on the pleadings and be used to elicit documents to support the applicant’s existing case. It cannot be used for purposes of ‘fishing’ or for the purpose of determining a preliminary question as to whether the party has a supportable case (Hennessy v Wright (1888) 21 QBD 509), or to investigate the character of the opposing party’s evidence (Griebart v Morris [1920] 1 KB 659, 666).

f) The test for relevance does not require that a party demonstrate direct relevance to the contest between the parties. Rather, the documents must have some potential relevance to the pleadings as they stand. In Australian Gas Light Company v Australian Competition & Consumer Commission [2003] FCA 1101, French J summarised the matters which are relevant to the grant of leave:

"It is not appropriate to be overly prescriptive in setting out criteria for the grant of leave to issue a subpoena. Plainly, the documents sought must have at least some apparent potential relevance to the matters in issue in the litigation. The assistance that the requesting party may derive from the production of such documents must be taken into account. Case management considerations are also relevant. A wide-ranging subpoena, seeking documents of doubtful relevance at great inconvenience to, or that risk compromising the commercial privacy of, a third party, may not readily attract the grant of leave. Where the issue of such a subpoena is likely to delay progress to trial because of the legitimate interests of a party in resiting its issue, that may also be a practical factor to be weighed."

g) The same notion was expressed in Small (575) and Dorajay Pty Limited v Aristocratic Leisure Limited [2005] FCA 588, [34] in requiring the existence of a legitimate forensic purpose for the production of documents.

h) In Trade Practices Commission v Arnotts Limited (No. 2) (1989) 21 FCR 306, Beaumont J said that the question of whether a subpoena should go can conveniently be addressed by reference to two questions. First, does the material sought by the subpoena have an apparent relevance in a descriptive or adjectival sense rather than a substantive sense? Does the subpoena have a legitimate forensic purpose to this extent from the perspective of the party issuing the subpoena? Secondly, does the subpoena cast a serious and unfair burden or prejudice upon the respondent to the subpoena?

i) Spender J in Cosco Holdings Pty Ltd v Commissioner for Taxation [1997] FCA 1504 suggested that adjectival relevance looks toward the possibility whether the material sought could reasonably be expected to throw light on some of the issues in the principal proceedings.

j) When a party contends material that either is or may be or may have been in the possession, custody or power of a respondent relates to any question or issue raised on the pleadings, they will be taken to mean that the material is relevant in the sense contemplated by section 55 of the Evidence Act 1995 (Cth) namely, evidence that if accepted, could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceedings. This is the substantive relevance of the material. The test for the issue of the subpoena is whether the material appears to have relevance in the sense of throwing light on at least some of the issues in the principal proceeding.

k) The relevance of the documents must not be disproportional to any benefit that their production might have for the respondent: Dorajay [34].

l) A subpoena ought not issue in circumstances where it would unduly disrupt the conduct of the trial by requiring the Court to read documents which could have been obtained at an earlier stage in the proceedings: Diddams v Commonwealth Bank of Australia [1998] FCA 497.

m) The issue of the subpoena must not, in all the circumstances be oppressive in terms of its impact on the recipient. That is, the issue of the subpoena must not be ‘seriously unfairly burdensome, prejudicial or damaging’ and ‘productive of serious and unjustified trouble and harassment’. (Hamilton v. Oades [1989] HCA 21; (1989) 166 CLR 486, 502, Oceanic SunLine Special Shipping Co. Inc. v. Fay [1988] HCA 32; (1988) 165 CLR 197, Seven Network Limited v News Limited (No 5) [2005] FCA 510; [2005] 216 ALR 147, [12].

n) The issue of a subpoena against a stranger to the proceeding is more likely to succeed later in the proceeding. Though there is no formal barrier to a subpoena to produce being returnable prior to the hearing, the document may well be premature where no trial date has been fixed. Where the proceeding is of considerable evidentiary complexity there is stronger force to serving the subpoena at an earlier stage: Hughes v Western Australian Cricket Association (1986) 66 ALR 541.

o) In Dorajay Pty Limited v. Aristocrat Leisure Limited [2005] FCA 588 at paragraph [17], Stone J noted the observations of Waddell J in Spencer Motors Pty Ltd v. LNC Industries Ltd [1982] 2 NSWLR 921 at 927, summarising the views of Moffitt P in National Employers’ Mutual General Association Ltd v. Waind & Hill [1978] 1 NSWLR 372 to the effect that whether subpoenas are oppressive or an abusive process depends on whether "it is reasonably likely to add, in the end, in some way or other, to the relevant evidence in the case". Her Honour said at paragraph [18]:

"These authorities show that the criteria by which one determines whether a subpoena should be set aside, in whole or in part, may be expressed in different ways but ultimately, they all come down to whether such action is required to prevent an abuse of the processes of the court to prevent injustice. As Deane and Gaudron JJ recognised [Hamilton v Oades [1989] HCA 21; (1989) 85 ALR 1 at p.11] in the comments quoted by Beaumont J [in Trade Practices Commission v. Arnotts Limited], various terms may be used in focusing these concerns on the circumstances of a particular case. In this case, whether the documents are relevant (in the sense used by Beaumont J) will determine the issue provided that the requirements of the subpoena are not otherwise oppressive.’ [endnotes not reproduced]

Telephone records

[4] In the Form F2 filed by Mr Dailly, a ‘show cause’ letter dated 25 May 2017 was included. One of the matters for which Mr Dailly had to show cause to the respondent as to why his employment should not be terminated was for alleged access of pornographic internet and chatroom sites at the respondent’s expense on the phone used by Mr Dailly. Specific examples were cited by the respondent.

[5] Mr Dailly responded to the show cause letter on 5 June 2017 through his legal representative at the time, stating that he denied using any work mobile telephone for the purposes alleged by the respondent, and requested records to support the assertion. Mr Dailly did not address the specific examples cited by the respondent.

[6] On 9 June 2017, the respondent dismissed Mr Dailly. One of the reasons for the dismissal includes the respondent’s findings that Mr Dailly did access pornographic material utilising his work mobile phone. The following paragraph is included in the termination letter:

‘With respect to your client’s access of pornographic material utilising his work mobile phone, we enclose extracts from two (2) phone accounts. Entry [number] on 9 October 2016, and entry [number] on 3 October 2016 are to telephone numbers which access the pornographic sites to which we have made reference.

The allegation concerning your client’s misuse of his work mobile telephone to access pornographic sites is substantiated.’

[7] On 22 November 2017, Mr Dailly filed a statutory declaration of a former Telstra employee, deposing that she had been contacted by the respondent seeking copies of Mr Dailly’s telephone records and Apple ITunes account. The former Telstra employee declined to provide the records sought by the respondent, but did orally advise the respondent that as far as she could see, Mr Dailly had not accessed pornographic sites.

[8] Mr Dailly stated the following:

‘I have attached a statutory declaration signed by [name], a former employee and business accounts specialist of Telstra.

I respectfully request that this important document be entered into evidence for the upcoming hearing for this matter on 11^th and 12^th December.

In her statutory declaration [name] negates the unfounded allegations by the respondent that the applicant had pornographic material, or had sourced pornographic material, using the mobile phone provided by his employer.

The attached statutory declaration is vitally important to this matter as it shows that yet another one of the respondents allegations are untrue and unsubstantiated.’

[9] The following correspondence was sent from my Chambers on 23 November 2017:

‘The Commissioner acknowledges Mr Dailly’s request to admit [name] witness statement into evidence.

In response, the Commissioner enquires whether the parties wish for the Commission to issue orders to Telstra for the relevant IP addresses and to Apple for records relating to iTunes? If such orders are sought by the parties, they can be issued. Please advise as soon as practicable, and by 4.00pm tomorrow, 24 November 2017…’

[10] On 23 November 2017, the respondent communicated with the Commission, copying in Mr Dailly, and requested an order be made as proposed.

[11] On 24 November 2017, Mr Dailly communicated with the Commission, copying in the respondent as follows:

‘With all due respect Commissioner, and bearing in mind that the applicant has nothing to secrete or conceal, the applicant strongly objects to the Commission issuing orders to Telstra or to Apple.

The applicants reasoning for the very strong objection to orders being issued to Telstra or Apple are that the respondent has made many allegations about the applicant’s character and the reason why the applicant was dismissed; nonetheless the respondent has not provided any evidence to substantiate these allegations.

Furthermore, the respondent claims that the alleged pornographic material on the applicant’s mobile phone was a major reason why the applicant was dismissed. The respondent was obviously not relying on any orders from Telstra or Apple at the time he made the decision to dismiss the applicant, therefore the respondent should provide what evidence (if any) that he relied upon to dismiss the applicant in a supposed fair and just manner, not from orders supplied long after the applicant was dismissed.

The applicant consequently considers information from Telstra or Apple, by way of an order, is totally irrelevant to his dismissal and inadmissible in this manner.’

[12] The following email was sent from my Chambers:

‘Dear parties

I refer to the above matter and correspondence below.

The Commissioner enquires whether the Applicant seeks to be heard on his objection to the orders proposed. If the Applicant seeks to be heard, a hearing will be conducted by telephone. In his consideration, the Applicant may wish to have regard to the High Court decision in Shepherd v Felt & Textiles of Australia Ltd [1931] HCA 21 (4 June 1931), [(1931) 45 CLR 359 at pp. 373, 377‒378] (Shepherd). Shepherd is an authority for the proposition that facts justifying dismissal, which existed at the time of the dismissal, should be considered, even if the employer was unaware of those facts and did not rely on them at the time of dismissal.

The Respondent is directed to prepare draft orders to produce and provide to the Commission and the Applicant for consideration. The Applicant is directed to provide the name of his iTunes account for the purpose of the draft orders.

The Commissioner requests the Applicant provide a response to this email by 4:00pm on Monday, 27 November 2017. The Respondent is to provide a copy of the draft orders by 12:00pm on Tuesday 28 November 2017. If the Applicant so requests, a telephone hearing can be listed for 4.00pm on Tuesday 28 November 2017.’

Hearing

[13] The application for orders to be made requiring Telstra and Apple to produce relevant records was the subject of a telephone hearing before me on 29 November 2017. Mr Dailly represented himself and Mr Heath was granted leave pursuant to s.596 of the Act to appear for the respondent.

[14] Mr Dailly opposed the orders being made, and stated that particularly relevant to his iTunes account, if it was produced, many photos of his family would be provided and he considered it unnecessary and an intrusion into his personal life.

[15] The respondent made reference to an investigation undertaken by Pastor Rodriguez of the respondent into Mr Dailly’s alleged use of chat sites, which Pastor Rodriguez concluded were for sexual purposes.

[16] Some discussion was had relevant to the utility in having telephone records before the Commission during the upcoming hearing on 11 and 12 December 2017, as opposed to allegations made by the respondent and denials by Mr Dailly without the ability to properly test the evidence.

[17] Relevant to Mr Dailly’s concerns that irrelevant and family information may be discovered if the orders are made, I canvassed with Mr Dailly the opportunity to provide the material that is produced to Mr Dailly, and for appropriate redactions of irrelevant information to be made before the material is provided to the respondent.

[18] At the conclusion of the telephone hearing I reserved my decision.

Analysis undertaken by the Commission

[19] In Pastor Rodriguez’s statement, and in the show cause letter referred to in [4], the respondent relies on two purported telephone numbers to assert that Mr Dailly has used his work telephone to access ‘lascivious’ websites for the purposes of sexual activity.

[20] Relevant to one telephone number texted by Mr Dailly on 9 October 2016, Pastor Rodriguez’s investigation led him to conclude that the number is not contactable, however when he put the telephone number into an internet search engine, the number produced a link to a profile from the website ‘badoo.com’, including naked poses of a woman.

[21] On investigation of a limited number of phone records already produced to the Commission, it is clear that Mr Dailly texted the number once on 9 October 2016.

[22] On my instructions my Associate typed the telephone number into an internet browser, and it came up with a profile of a woman named ‘Roseanne’ on the website ‘badoo.com’. The profile number assigned by the website to Roseanne’s profile on the website matches the telephone number to which Mr Dailly sent a text message except for the zero at the front of the telephone number. Prima facie it appears that it is simply a coincidence that the telephone number to which Mr Dailly sent a text to matches a member profile or ‘URL’ of a person on the website. Even when one clicks on the profile of Roseanne, the number does not exist.

[23] Regarding the second ‘telephone’ number relied upon by the respondent, the number is a nine digit number, not a ten digit mobile number used in Australia. Mr Dailly was in New Zealand at the time the telephone call was made.

[24] It appears that the respondent has again typed the number into an internet search engine, and concluded that it matches an internet dating/sex chat website. On further investigation, the number appears to be a valid telephone number in New Zealand.

Consideration

[25] Mr Dailly strongly denies he ever used the respondent-supplied mobile telephone for the purposes of accessing pornographic websites or chat rooms. Mr Dailly has sought to have the statutory declaration of the former Telstra worker above admitted into evidence to support his denial.

[26] Upon learning that the Commission could order the production of the documents as opposed to relying on the evidence of a former Telstra worker who briefly reviewed Mr Dailly’s records, Mr Dailly opposed the Commission having access to the telephone and iTunes account records.

[27] Having regard to the investigation briefly undertaken by the Commission following the telephone hearing on 29 November 2017, prima facie, the respondent’s allegations in respect of Mr Dailly allegedly accessing pornographic sites or sex chat room sites may be unfounded.

[28] The respondent has in its possession some telephone records covering Mr Dailly’s employment. It does not, at this point in time have details of websites visited by Mr Dailly.

[29] Mr Dailly opposes the making of the orders sought on the basis that the respondent, if it does not have any evidence of Mr Dailly accessing such sites, should not be entitled to the benefit of obtaining records (if any exist) many months following the dismissal.

[30] I have had regard to the above authorities summarised by Jones C in ANMF, and I have adopted that approach. I have concluded that for the benefit of efficiency during the hearing before me on 11 and 12 December 2017, it is appropriate to have the telephone records and websites visited by Mr Dailly for the period 22 April 2016 until the date of the dismissal, 9 June 2017.

[31] The documents required to be produced will be identified with reasonable particularity. I determine that the category of documents to be produced is not so wide as to be oppressive.

[32] I have determined that the documents are relevant to the issue; the allegation that Mr Dailly was, as one of the reasons for the dismissal, accessing pornographic websites and sex chat rooms. I do not consider that the production of the documents results in the respondent ‘fishing’. Quite simply, Mr Dailly strongly denies the accusations. Both parties, and the Commission having access to the records will provide certainty as to whether Mr Dailly’s denial is accepted.

[33] I do not consider the production of the documents, and whatever is contained within them will cast a serious and unfair burden or prejudice upon Mr Dailly. If it is discovered that Mr Dailly accessed pornographic websites or sex chat rooms as alleged, the evidence may be admissible in accordance with the authorityin Shepherd. The respondent may seek to rely on the information discovered to argue that even if it did not know directly of the material at the time of the dismissal, it ought to be able to rely on it when it was known to the respondent to constitute a valid reason for the dismissal.

[34] While this may be put to the Commission for consideration, the respondent would need to overcome the authority in ASP Group (Placements) Pty Ltd v O’Loughlin 2 where the majority of the Full Bench stated:

‘….in relation to any reason not relied upon at the time of dismissal the employer will have to contend with the consequences of not giving the employee an opportunity to respond to such reason (see s.387(b) and (c) of the FW Act)’

[35] The proposition is that even if evidence adverse to Mr Dailly is discovered by the production of the documents the subject of the order, while it may assist the respondent with the determination at s.387(a), it may not provide any assistance relevant to the lack of procedural fairness provided to the applicant in not putting this information to the employee before dismissal.

[36] I am mindful that the possibility exists that the material sought might reasonably be expected to throw light on some of the issues in the substantive matter before the Commission.

[37] I do not consider that the relevance of the production of the documents is disproportional to any benefit that their production might have for the respondent. Mr Dailly was dismissed for a large range of issues, not just the alleged misconduct relevant to the use of the telephone.

[38] While it could be said that the respondent ought to have requested the production of the documents far earlier than in recent days, I have considered the desire of Mr Dailly to assert to the Commission that because the former Telstra employee perused his records, the Commission should, on the sworn statutory declaration, be satisfied that Mr Dailly’s evidence is correct. If Mr Dailly maintains his earlier submission that the records of his telephone activity will vindicate him, there should be no reason why the documents cannot be produced to assist the Commission in the determination of Mr Dailly’s application.

[39] In considering whether an order to produce would be oppressive, or an abusive process, I have determined that it is reasonably likely to add in some way or other to the efficient running of the proceedings before me.

[40] I do not consider there to be any utility in an order for the production of Mr Dailly’s iTunes account. The respondent has requested these records for the purposes of understanding any ‘applications’ used by Mr Dailly, and any websites visited by him. The websites visited by him are through an internet browser, and not through an Apple iTunes application. The websites visited by Mr Dailly can be discovered through an appropriate order to Telstra.

[41] I have determined it is appropriate to require the production of records for the period 22 April 2016 to 9 June 2017. This period of time covers a significant matter between the parties where Mr Dailly was warned about other conduct relevant to his use of the mobile phone. It is unnecessary in this decision to detail the specifics of that incident.

Conclusion

[42] I have concluded that it is appropriate to use my discretion pursuant to s.590(2)(c) of the Act to make an order on Telstra for the production of telephone records, SMS and websites visited by Mr Dailly for the period 22 April 2016 to 9 June 2017.

[43] The provision of this material will greatly assist the parties and the Commission during the hearing on 11 and 12 December 2017.

[44] The documents will be ordered to be produced to the Commission’s premises. On receipt, the documents will be forwarded electronically to Mr Dailly for his consideration, and any request he may make as to privacy matters and irrelevant material (for example, websites visited by him which are personal in nature and have no relevance in these proceedings), will be considered by me. If appropriate, redaction of some material may occur at my discretion. Redacted material will then be forwarded from my Chambers to the respondent.

COMMISSIONER

 1   Australian Nursing Federation v Victorian Hospitals' Industrial Association[2011] FWA 8756.

 2   ASP Group (Placements) Pty Ltd v O’Loughlin[2011] FWAFB 5230 at [51].

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