Pigozzo v Mineral Resources Ltd
[2023] FCA 331
•3 April 2023
FEDERAL COURT OF AUSTRALIA
Pigozzo v Mineral Resources Ltd [2023] FCA 331
Appeal from: Pigozzo v Mineral Resources Ltd [2022] FCA 1166 File number: WAD 217 of 2022 Judgment of: COLVIN J Date of judgment: 3 April 2023 Date of publication of reasons: 12 April 2023 Catchwords: PRACTICE AND PROCEDURE - application for leave to appeal a decision of the Federal Court of Australia - where primary judge struck out paragraphs of statement of claim with leave to re-plead - where applicant alleges primary judge adopted an overly technical approach to the expression of pleadings - where applicant alleges substantial injustice - application dismissed Cases cited: Adam P Brown Male Fashions Pty Ltd v Philip Morris Incorporated (1981) 148 CLR 170
Australian Securities and Investments Commission v Australia and New Zealand Banking Group Limited [2019] FCA 1284
Barclay Mowlem Construction Ltd v Dampier Port Authority [2006] WASC 281; (2006) 33 WAR 82
Décor Corporation Pty Ltd v Dart Industries Inc (1993) 33 FCR 397
Nationwide News Pty Limited v Rush [2018] FCAFC 70
Oztech Pty Ltd v Public Trustee of Queensland [2019] FCAFC 102; (2019) 269 FCR 349
Sabapathy v Jetstar Airways [2021] FCAFC 25; (2021) 283 FCR 348
Division: Fair Work Division Registry: Western Australia National Practice Area: Employment and Industrial Relations Number of paragraphs: 38 Date of hearing: 3 April 2023 Counsel for the Applicant: Mr B Collins KC with Ms CM Saraceni Solicitor for the Applicant: Harmers Workplace Lawyers Counsel for the First and Second Respondents: Mr S Penglis SC Solicitor for the First and Second Respondents: Bennett Counsel for the Third and Fourth Respondent: The Third and Fourth Respondents did not appear ORDERS
WAD 217 of 2022 BETWEEN: STEVEN PIGOZZO
Applicant
AND: MINERAL RESOURCES LTD (ACN 118 549 910)
First Respondent
CHRIS ELLISON
Second Respondent
BENNETT + CO
Third Respondent
ROBERT 'BOB' GAVRANICH
Fourth Respondent
ORDER MADE BY:
COLVIN J
DATE OF ORDER:
3 APRIL 2023
THE COURT ORDERS THAT:
1.Until further order, no person shall publish any account of the hearing of the proceedings today.
2.The application for leave to appeal is dismissed.
3.The question whether the order restricting publication of the hearing of these proceedings shall continue to be listed for hearing at 12.30 pm 3 April 2023.
4.The costs of the application for leave to appeal be reserved.
5.On or before 17 April 2023, any application for costs orders shall be brought by filing written submissions of no more than 5 pages and any necessary affidavit in support, such submissions to state the terms of any orders sought.
THE COURT NOTES THAT:
A.Later on 3 April 2023, a further order was made that order 1 shall not continue and limited non-publication orders were made.
Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
COLVIN J:
Mr Steven Pigozzo was formerly an employee of Mineral Resources Ltd (MRL). He claims to have been unlawfully dismissed from his employment. On 1 June 2022, he commenced proceedings against MRL, its chief executive officer (Mr Ellison), a firm of solicitors (Bennett + Co) and a senior manager employed by MRL. MRL and Mr Ellison applied to strike out the statement of claim in those proceedings. The application was successful and a number of paragraphs in the pleading were struck out with leave being given to re-plead. Non‑publication orders were also made in respect of the contents of the paragraphs that were struck out.
Mr Pigozzo sought leave to appeal the decision on the strike out application. The proposed grounds of appeal identify 39 grounds of appeal. I refused the application for leave and indicated that I would provide reasons for doing so. These are my reasons.
In the usual case, an applicant for leave to appeal must demonstrate both that the relevant decision is attended with sufficient doubt to warrant its reconsideration and that substantial injustice would result if leave were refused (assuming the decision to be wrong): Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398. Further, where leave is sought to appeal in respect of a matter of practice or procedure, the Court is circumspect in granting leave: Adam P Brown Male Fashions Pty Ltd v Philip Morris Incorporated (1981) 148 CLR 170 at 177 and, as to pleading points, Nationwide News Pty Limited v Rush [2018] FCAFC 70 at [3]‑[6] (Lee J, Allsop CJ and Rares J generally agreeing).
Submissions to the following effect were advanced as reasons why there would be substantial injustice if leave was refused (assuming the decision to be wrong):
(1)the primary judge adopted an overly technical approach which was a departure from modern practice;
(2)the primary judge adopted an approach which required a form of pleading which was contrary to the policy of the Fair Work Act 2009 (Cth) being the statute relied upon as the basis for many of the claims advanced by Mr Pigozzo;
(3)in respect of one aspect of the decision (which concerned the parts of the pleading that dealt with what was described as the Hamptons proceedings), it was not possible to re‑plead the case because there was nothing further to plead;
(4)the approach of the primary judge was inconsistent with the reasoning in Sabapathy v Jetstar Airways [2021] FCAFC 25; (2021) 283 FCR 348;
(5)there was too much pedantry in his Honour's reasoning; and
(6)the proposed appeal grounds raised matters of general principle relating to (a) iniquity as a basis for denying a claim to privilege; (b) the limits of the relationship between a managing director and an employee; and (c) whistleblower provisions.
In written submissions, it was also said that the reasoning of the primary judge would give rise to substantial injustice because it would allow the respondents to succeed in deploying legal professional privilege as a cloak for iniquity. I will treat this as reason (7) as to why it was said that there would be substantial injustice if leave was refused.
Significantly, the only submission advanced to the effect that the decision by the primary judge would have some form of ongoing substantive effect was the claim made concerning the parts of the pleading that addressed the Hamptons proceedings.
It was made clear that there was no challenge to the non-publication order made by the primary judge unless the pleading points were able to be raised and were successful.
Each of the reasons advanced to support the submission of substantial injustice is addressed below.
As to (1), (2) and (5), these submissions complain about the overall approach adopted by the primary judge concerning the detail and precision with which allegations ought to be expressed in a pleading. They reflect submissions advanced in support of contentions that there was merit in the proposed appeal grounds. Those submissions placed reliance upon certain observations by Martin CJ in Barclay Mowlem Construction Ltd v Dampier Port Authority [2006] WASC 281; (2006) 33 WAR 82 at [4]-[5] to the effect that the contemporary role of pleadings has to be viewed in the context of modern case management techniques which afford a degree of confidence that following the close of pleadings other steps will be undertaken 'to aid in defining the issues and apprising the parties to the proceedings of the case that has to be met'.
As to those observations, it must be said that they are concerned with past practices whereby disputes ensued as to whether sufficient material facts had been alleged or whether further particulars should be provided. Such requests for further and more detailed articulation of the nature of a case are generally eschewed by modern practice because there are other means by which such detail is disclosed, for example by requiring the provision of statements or affidavits before trial, the exchange of expert reports and the filing of submissions (as well as bespoke directions designed to expose the real issues and confine the case to them).
However, no aspect of that practice should be seen to sanction vagueness or imprecision as to the fundamental nature of the claim (or defence) being alleged. The obligation to clearly and concisely state the nature of a party's case remains. So, in Oztech Pty Ltd v Public Trustee of Queensland [2019] FCAFC 102; (2019) 269 FCR 349 at [28]‑[30], Middleton, Perram and Anastassiou JJ observed:
The question of whether a pleading adequately raises a claim or defence is not concerned with the expression of the pleading as a matter of style, or of phrasing, or the structure of the pleading. Neither is it concerned with the formality of the process by which the issues in the proceeding are identified; be it a statement of claim, statement of contentions, concise statement, points of claim or points of defence. The verbal formulation of the allegations of fact, or the contentions of law, need not conform to a particular style guide or to any pro forma template.
The sole objective of a pleading is to clearly identify matters in dispute and difference by and between the parties to the dispute. This objective necessarily involves expressing the factual basis of each claim or defence. It is necessary that the legal elements of each cause of action or defence are expressed by reference to allegations of fact required to establish each element. It is not necessary to plead the legal conclusions that follow from the facts, but it is often convenient to do so. These are trite propositions but nevertheless vital to ensuring that the pleading serves its purpose.
There should be no doubt about whether any particular cause of action is relied upon. At a minimum, the pleading should be pellucidly clear about the causes of action, or claims, relied upon by the applicant, including any claims made upon an alternative hypothesis. The explicit clarity with which a claim is expressed should ensure that there be no need for the opposite party to closely scrutinise the pleading in a process of textual construction to determine whether a particular fact is relied upon, or the purpose for which it is alleged, much less to decide whether a particular cause of action is raised. The same basic requirement applies to any defence raised in answer to a claim.
There are real difficulties with the statement of claim in the present case. It is unduly long and pleads a considerable amount of evidence. Its length clothes imprecision. It narrates what occurred without exposing in a concise way the legal characterisation of those events. Narration may be appropriate when the nature of the case requires an evaluative consideration of a course of events undertaken in a particular context: see the reasoning of Allsop CJ in Australian Securities and Investments Commission v Australia and New Zealand Banking Group Limited [2019] FCA 1284. However, the present case was not in that category.
Views may differ as to whether the primary judge went further than was necessary in order to expose the problems with the pleading. However, a complaint of that kind is not one which suggests substantial injustice in circumstances where leave has been given to re-plead.
It was not suggested that it would be unduly expensive or onerous to prepare a new pleading with the precision that would be needed in order to address the concerns outlined in the reasons of the primary judge. On the other hand, before the hearing of the application for leave to amend, the applicant was directed to file a statement as to the likely legal costs of proceeding with the application for leave to amend. The statement filed was to the effect that the legal costs were likely to be of the order of $100,000. This did not include the legal costs for the appeal if leave was given. Assuming in favour of Mr Pigozzo that the approach of the primary judge did involve a detailed consideration of the pleading of a kind that would not normally be undertaken as part of modern practice, it was not demonstrated that there would be substantial injustice for Mr Pigozzo to be required to prepare an amended pleading that provided greater precision to address the matters identified by the primary judge.
Further, his Honour was dealing with an unusual case. The statement of claim contained a number of allegations of serious misconduct. Courts have long insisted upon claims of that kind being pleaded with precision and particularity. Meeting those requirements is a matter of professional obligation performance of which ensures that there is a proper foundation for such claims and that there is proper regard to their nature and extent before they are included in a pleading. MRL and Mr Ellison also claimed that a number of the paragraphs contained privileged material that should not have been included in the pleading. Aspects of the pleading were alleged to have been drawn by misusing confidential information. These were matters of importance which required close scrutiny.
As to (3), paras 24 to 36 of the statement of claim contained a narrative plea as to what was alleged to have occurred in relation to the provision of discovery by a wholly owned subsidiary of MRL. Bennett + Co was acting for the subsidiary. The allegations in the plea refer to a claim 'which had been brought by Hamptons' against the subsidiary. The plea set out, in terms, the instructions that were said to have been given to Mr Pigozzo by the then in-house legal counsel for MRL to review email correspondence so that relevant correspondence could be sent to Bennett + Co. The plea then set out a number of statements that were said to have been directed by Mr Ellison to Mr Pigozzo about what was to be done in relation to the email correspondence that was identified by Mr Pigozzo upon review. There was also a plea of communications at a meeting at the offices of Bennett + Co. The allegations are said to provide the foundation for contraventions of the Fair Work Act by MRL and Mr Ellison which are also said to have been aided and abetted by Bennett + Co.
The primary judge found that the pleading of the above matters was deficient in a number of respects. They included a failure to plead, in terms, (a) the existence of any order for discovery; and (b) the failure by any identified party not to comply with any order for discovery.
The primary judge also found that the pleading suffered from a lack of clarity and ambiguity as to precisely what was being alleged. In particular, his Honour found that there was no pleading as to the purport, substance or effect of what was alleged to have been said. It was said that the pleading was advanced at too high a level of generality to perform the basic function of informing MRL and Mr Ellison of the case to be met.
The submission advanced in support of the application for leave was to the effect that the statements and communications as pleaded were capable of only one interpretation and there is no need for any further plea. Indeed, it was said that there is nothing more that can be pleaded and for that reason it is not possible to re-plead. In consequence, it was said that the case would be struck out because there was nothing more that could be said.
The obvious difficulty with this submission is that the primary judge simply required Mr Pigozzo to be precise about the circumstances concerning the discovery obligation, to specify the purport of the statements made and to identify how they related to the alleged breaches of the Fair Work Act. This was especially significant in circumstances where the case being alleged was that the events were connected in some way to the lawfulness of the way in which Mr Pigozzo was treated as an employee.
Even if Mr Pigozzo's case is that the words as spoken in context were only capable of one meaning then there is no undue burden in requiring Mr Pigozzo to be precise as to that meaning and to state it in the pleading. This is especially so in circumstances where the plea provides the foundation for later allegations. To impose that discipline is not to require Mr Pigozzo to plead more material facts or to find that the facts themselves are an insufficient foundation for any claim. Rather, it is to require Mr Pigozzo to expose the nature of his case as to what was being conveyed by the words that were spoken in circumstances where the primary judge had concluded that there was ambiguity. To cavil with his Honour's view is entirely arid. There can be no real burden (or difficulty) in adding a plea as to what it is alleged was conveyed by the words as pleaded.
Finally, as senior counsel for Mr Pigozzo accepted in the course of submissions, any view to the effect that the words that were spoken might be capable of more than one meaning would not be binding at the final hearing. Therefore, there is no forensic significance arising from the expression of that view by the primary judge in the course of determining the strike out application. The reasons of the primary judge will not prevent Mr Pigozzo from claiming at any final hearing that the words have only one meaning.
It was also submitted that, properly considered, the existing plea did state that there was an order for discovery. Again, there is very little to be gained by essaying whether this is so. There is no real burden for Mr Pigozzo in adopting a different formulation that states more explicitly the position concerning discovery at the time of the communications.
Therefore, there is no substantial injustice arising from that aspect of the decision.
Indeed, it must be observed that the problem with the discursive plea is that it fails to plead concisely the nature of the case alleged. The party responding to the plea is left with the task of having to formulate from the allegations as to what was said and done the precise nature of the claim that is made. In a case where the allegations are serious and maximum penalties are sought there is much to be said for requiring an applicant to be clear and concise as to the nature of the case that is being alleged. Views may differ as to where the line is to be drawn but it is not a matter that merits the attention of a Full Court trawling through some 39 separate grounds of appeal to determine whether his Honour required too much detail or precision.
As to (4), the purport of the submission is unclear. The decision in Sabapathy v Jetstar Airways concerned a case in which claims were being made under the Fair Work Act. The whole of the statement of claim was struck out and, although no such order had been sought, a further order was made removing a number of respondents. Leave to appeal the order striking out the statement of claim was refused. In joint reasons, Logan and Katzmann JJ identified various issues as to how the relevant procedural rules applied. Then, at [18] their Honours said:
This is not a suitable vehicle for resolving those questions, however. On the assumption that the primary judge did make a House v The King error, leave to appeal should still be refused. That is because, having regard to his Honour's decision to grant Mr Sabapathy leave to re-plead against the first and third respondents, the strike out order causes him no substantial injustice. In these circumstances, it is unnecessary to engage with the draft notice of appeal.
Their Honours went on to make 'some points' about what had occurred. Those points concluded with the following observation (at [42]):
While provision might be made for some level of informality in every case in the Circuit Court, in this kind of case where civil penalties are sought and an order has been made for the case to proceed by pleadings, the rules of pleading should be applied.
The same might be said of the present case having regard to the seriousness of the allegations being advanced by Mr Pigozzo.
On the application for leave to appeal the order striking out the statement of claim, the reasoning of Flick J at [92] was to similar effect:
A decision to strike out such pleadings by the primary Judge would have attracted no criticism. The allegations being made against each of the individual Respondents, it is to be recalled, are 'serious' and are 'akin to dishonesty': cf. Stefanovski v Digital Central Australia (Assets) Pty Ltd [2018] FCAFC 31 at [70], [2018] FCAFC 31; (2018) 368 ALR 607 at 627 per McKerracher, Roberston and Derrington JJ; Whitby v ZG Operations Australia Pty Ltd (No 2) [2019] FCA 201 at [29] per Thawley J. …
I am unable to discern from the reasoning in Sabapathy v Jetstar Airways any statement of principle that assists Mr Pigozzo's leave application in any way.
As to (6), the submission was advanced in the most general of terms. There was no attempt to identify a particular issue of general importance. The mere subject matter of the claims does not give rise to a basis upon which leave should be given.
As to (7), the primary judge dealt with a submission that certain paragraphs should be struck out on the basis that they were founded on material that was the subject of legal professional privilege. The submission concerned the statements and communications that had been included in the plea about discovery in relation to legal proceedings brought by Hamptons against the subsidiary of MNL. His Honour found that on the face of the pleading the matters as pleaded were prima facie confidential and subject to a claim of legal professional privilege by the subsidiary. Therefore, without the consent of the subsidiary those facts could not be pleaded. His Honour found that to plead them was an abuse of process and that provided a further basis upon which the paragraphs should be struck out.
Before the primary judge it was submitted for Mr Pigozzo that the content of the communications as pleaded revealed a fraud or an iniquity of a kind that meant that there was no privilege. As to that proposition, his Honour referred to the earlier conclusion to the effect that the plea concerning what had occurred in relation to discovery of documents in the Hamptons proceedings was itself deficient. The key to that reasoning is to be found in [181] of the reasons of the primary judge which were expressed in the following terms:
As set out earlier in these reasons, the allegations of non-compliance with court orders and unlawfulness are vague, general, evasive and (or) ambiguous. The allegations, as pleaded, do not identify with any degree of precision a ‘direction' from Mr Ellison to Mr Pigozzo to engage in improper or dishonest conduct. The communications pleaded in paras 28 and 29 do not involve any allegations of any person requesting advice or communicating for the purpose of obtaining advice to engage in any improper or dishonest conduct. The communications pleaded in para 35, to the extent these concern conduct that may be characterised as improper, are in the nature of Mr Pigozzo informing Mr Bennett of Mr Pigozzo's historical conduct. That is, something that Mr Pigozzo has done. That conduct was performed before the communications with Mr Bennett. What, if anything, Mr Bennett or other solicitors of Bennett & Co are alleged to have done with that information so as to further or involve himself or themselves in Mr Pigozzo's conduct is not pleaded.
Therefore, the basis upon which the relevant parts of the pleading have been struck out concerns their vagueness and ambiguity. In short, the decision by the primary judge on the strike-out application did not finally determine the question whether there could be a pleading of a properly formulated claim that referred to the relevant conversations on the basis that there was no privilege by reason of fraud or iniquity. It remains open to Mr Pigozzo to seek to demonstrate that by reason of fraud or iniquity as properly articulated in such a pleading, there can be no claim to privilege. Therefore, no part of the reasoning by his Honour has an ongoing consequence as to such matters that might be said to support a claim of substantial injustice.
I note that if Mr Pigozzo maintains that there are reasons why otherwise privileged material can be referred to in the pleading, the usual practice would be to give notice of that claim to the party with the relevant interest (in the present case the subsidiary of MRL) before delivering the pleading and to take steps to preserve confidentiality until any dispute as to the privilege claim could be considered by the Court.
Finally, it is apparent from the extent of the grounds that Mr Pigozzo seeks to pursue on appeal that there has been no real effort to confine those grounds to what is significant. The identification of 39 separate grounds of appeal arising from a pleading summons each of which is alleged to be of sufficient significance that leave ought to be given for its consideration by the Full Court indicates a lack of discrimination. Senior counsel invited the Court on the leave application to consider each ground not specifically addressed in submissions. Each of the remaining grounds was said to be an example of the primary judge applying an unduly pedantic approach that was not consistent with modern practice. Nothing more was said about them. For reasons that have been given, a claim of that kind is not a sufficient basis upon which to seek leave. It is a complaint about a matter of pleading practice and procedure that is not said to have any particular consequence.
It follows that irrespective of the procedural merits of any of the many grounds in respect of which leave is sought, Mr Pigozzo has failed to show that any substantial injustice would result from the refusal of leave.
For those reasons, the application for leave to appeal was refused.
I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Colvin. Associate:
Dated: 12 April 2023
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