Rolfe v Pinnacle Act Pty Ltd
[2025] FCA 638
•18 June 2025
FEDERAL COURT OF AUSTRALIA
Rolfe v Pinnacle ACT Pty Ltd [2025] FCA 638
File number(s): ACD 18 of 2024
ACD 19 of 2024Judgment of: KENNETT J Date of judgment: 18 June 2025 Catchwords: PRACTICE AND PROCEDURE - pleadings – where the cross-respondents have not plead to certain allegations in their respective statements of cross-claim, relying on self-incrimination and penalty privilege – whether the cross-respondents have a bona fide apprehension, based on reasonable grounds, of exposure to conviction or penalty – whether there is a “real and appreciable risk” of proceedings being instituted by the relevant authorities if the cross-respondents plead to the allegations Legislation: Corporations Act 2001 (Cth) ss 180, 181, 182, 183, 1317H, 1317J
Criminal CodeAct 1995 (Cth) Sch (s 478.1)
Evidence Act 1995 (Cth) s 75
Fair Work Act 2009 (Cth) ss 340, 361
Federal Court Rules 2011 (Cth) rr 16.02, 16.07, 16.08
Cases cited: Accident Insurance Mutual Holdings Ltd v McFadden (1993) 31 NSWLR 412
Australian Securities and Investments Commission v Mining Projects Group Ltd [2007] FCA 1620; 164 FCR 32
Chardon v Bradley [2017] QCA 314
Connelly and Harris & Anor v McGrath & Anor [2019] QSC 304
Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49; 213 CLR 543
Deloitte Touche Tohmatsu (a firm)vSadie Ville Pty Ltd (as trustee for Sadie Ville Superannuation Fund) [2020] FCAFC 23; 144 ACSR 1
EFM Logistics v David Weerden & Ors [2019] VSC 100 at [11] (Garde J); Dale v Clayton Utz (a firm) (No 2) [2014] VSC 517
Le Roi Homestyle Cookies Pty Ltd (in liquidation) v Gemmell [2013] VSC 452
Pascoe v Divisional Security Group Pty Ltd [2007] NSWSC 211; 209 FLR 197
Police Service Board v Morris (1985) 156 CLR 397
Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328
QC Resource Investments Pty Ltd (In Liq) v Mulligan [2016] FCA 813
Quinlan v ERM Power Limited & Ors [2023] QSC 80
R v Associated Northern Collieries (1910) 11 CLR 738
Rio Tinto Zinc Corp v Westinghouse Electric Corp [1978] AC 547
Sadie Ville Pty Ltd v Deloitte Touche Tohmatsu (a firm) (No 3) [2018] FCA 1107; 357 ALR 695
Sorby v Commonwealth (1983) 152 CLR 281
Spotlight Pty Ltd v Mehta [2020] FCA 1422
TTAC Pty Ltd v Williams [2018] VSC 79
Division: Fair Work Division Registry: Australian Capital Territory National Practice Area: Employment and Industrial Relations Number of paragraphs: 38 Date of hearing: 18 March 2025 Counsel for the Cross-Claimants: M Follett KC with P Bindon Solicitor for the Cross-Claimants: HR Legal Counsel for the Cross-Respondents: S Meehan SC with T Wong Solicitor for the Cross-Respondents: MV Law ORDERS
ACD 18 of 2024
BETWEEN: PINNACLE ACT PTY LTD (ACN 165 487 669)
Cross-Claimant
AND: SCOTT ROLFE
Cross-Respondent
ORDER MADE BY:
KENNETT J
DATE OF ORDER:
18 JUNE 2025
THE COURT ORDERS THAT:
1.Paragraph 3 of the cross-respondent’s defence to the statement of cross-claim be struck out.
2.In accordance with the Federal Court Rules 2011 the cross-respondent file a defence which pleads to the allegations in the cross-claim.
3.Costs be reserved.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
ORDERS
ACD 19 of 2024
BETWEEN: PINNACLE ACT PTY LTD (ACN 165 487 669)
Cross-Claimant
FLEXIBLE PROPERTY GROUP PTY LTD (ACN 620 748 503)
Second Cross-Claimant
PINNACLE ACT PROPERTY PTY LTD (ACN 621 531 315)
Third Cross-Claimant
AND: TIMOTHY ROLFE
Cross-Respondent
ORDER MADE BY:
KENNETT J
DATE OF ORDER:
18 JUNE 2025
THE COURT ORDERS THAT:
1.Paragraph 5 of the cross-respondent’s amended defence to the amended statement of cross-claim be struck out.
2.In accordance with the Federal Court Rules 2011 the cross-respondent file a defence which pleads to the allegations in the amended cross-claim.
3.Costs be reserved.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
KENNETT J:
Introduction
The applicants in these proceedings (together the Rolfes) are brothers who were employed in senior positions by the first respondent (Pinnacle) from October 2013 to April 2023. From August 2017 they were also directors of Pinnacle.
On 17 and 18 April 2023 Pinnacle terminated the Rolfes’ employment, asserting serious misconduct by them. Included in this serious misconduct was the deletion of large amounts of company data from Pinnacle’s IT systems.
Each of the Rolfes commenced proceedings against Pinnacle in July 2023, by way of a statement of claim filed in the Federal Circuit and Family Court of Australia (Division 2) (the FCFCOA). They sought compensation and civil penalties under the Fair Work Act 2009 (Cth) (the FW Act) and damages in contract. Each alleged that the claims of serious misconduct were false and an operative cause of his termination was his making of complaints and inquiries and submission of a workers compensation claim. Each therefore alleged a breach of s 340 and other provisions of the FW Act by Pinnacle and a breach of his employment contract. On 28 March 2024 orders were made in the FCFCOA transferring both proceedings to this Court. The transfer was confirmed by the Chief Justice on 3 April 2024.
On 24 May 2024 Pinnacle filed a notice of cross-claim in each proceeding. Pinnacle sought declarations of breach by each of the Rolfes of his duties under ss 180 to 183 of the Corporations Act 2001 (Cth) (the Corporations Act), duties under the general law and his employment contract. Pinnacle also sought compensation under s 1317H of the Corporations Act, equitable compensation and damages for breach of contract. The allegations supporting these prayers included what was referred to as the “orchestrated absence” and the “orchestrated deletion of data”, each of which formed part of the alleged serious misconduct which Pinnacle had relied on in terminating the Rolfes’ employment.
The Rolfes have filed defences to Pinnacle’s cross-claims but have not pleaded to the allegations concerning the orchestrated absence and orchestrated deletion of data in the manner required by rr 16.02, 16.07 and 16.08 of the Federal Court Rules 2011 (Cth) (the Rules). Their defences adopt the formula:
… the Cross-Respondent does not plead or otherwise respond to the matters alleged in relation to the claim that he contravened the Corporations Act and claims privilege against self-exposure to penalty.
(Emphasis in original.)
On 16 January 2025, Pinnacle filed an interlocutory application in each proceeding seeking orders that:
(a)the paragraph of his defence by which the cross-respondent claimed privilege and declined to plead to allegations against him be struck out; and
(b)the cross-respondent file an amended defence to the cross-claim that traverses the relevant allegations in accordance with the Rules.
Because the claims by the Rolfes are very similar, and Pinnacle’s claims against them focus on conduct said to have been “orchestrated” between them, it is not necessary to distinguish between the two proceedings in these reasons.
The Rolfes no longer rely on any form of privilege in relation to the “orchestrated absence” allegations and accordingly seek leave to file amended defences to the cross-claims which respond to those allegations. However, they maintain their reliance on the privilege against self-exposure to a penalty (penalty privilege) in response to the orchestrated deletion of data allegations. They also seek to invoke the privilege against self-incrimination (self-incrimination privilege) as a basis for resisting pleading to those allegations.
The allegations
The orchestrated deletion of data allegations can be summarised, taking the pleading against Mr Scott Rolfe as an example, as follows.
(a)As part of his employment with Pinnacle each of the Rolfes was issued with two laptops with specified asset numbers.
(b)As part of their roles each of the Rolfes had access to information confidential to Pinnacle and necessary for its business operations (including a technical bid for a critical infrastructure project with the Australian Capital Territory (ACT) Government).
(c)On 23, 24, 28, 29 and 30 March 2023 Mr Rolfe accessed Pinnacle’s network and deleted a large number of emails, a large number of OneDrive documents and folders, and 8 Sharepoint files.
(d)On 28 March 2023 Mr Timothy Rolfe accessed Pinnacle’s network and deleted a large number of emails together with one folder and 86 files from OneDrive.
(e)On 29 March 2023 Mr Jaks of Pinnacle issued to each of the Rolfes a direction in writing (inter alia) not to do any work during his period of absence and not to access Pinnacle’s IT systems or network.
(f)Late on 29 March and on 30 March 2023, in breach of this direction, Mr Rolfe accessed Pinnacle’s network and deleted around 82,000 emails.
(g)On 4 April 2023 the Rolfes’ access to Pinnacle’s systems was suspended. Later that day each of them attempted to access those systems.
(h)Each of Mr Timothy Rolfe (on 13 April 2023) and Mr Rolfe (on 14 April 2023) removed all company data from one of the laptops in his possession and attempted to restore it to its factory settings. These laptops were then returned to Pinnacle but the other laptops were not.
(i)Each of the Rolfes had previously stored company documents in a Dropbox account outside Pinnacle’s storage system and then deleted them from that account.
(j)Pinnacle has been unable to restore or retrieve company files that were stored in and deleted from the laptops or the Dropbox accounts.
(k)On the basis of these allegations it is said that the Rolfes “orchestrated with each other to undertake the deletion of company information over the same period from around 23 March 2023 to around 12 May 2023”.
Self-incrimination privilege and penalty privilege
Although these privileges appear to have different origins (see Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49; 213 CLR 543 at [12]-[13] (Gleeson CJ, Guadron, Gummow and Hayne JJ)), and have been treated as distinct phenomena (eg Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328 at 337 (Mason ACJ, Wilson and Dawson JJ)), they have generally been regarded as emanations of the same general principle. Thus, in Police Service Board v Morris (1985) 156 CLR 397, Gibbs CJ stated a general rule as follows (at 403):
a person cannot be compelled to answer a question whenever the answer would tend to expose him to ‘any kind of punishment’ — ‘anything in the nature of a penalty’.
It is not in contest that the privileges extend to pleading as well as the giving of evidence and the production of documents. A defendant cannot be forced to make admissions that tend to expose them to the imposition of a civil penalty or conviction for a crime and therefore, while not excused from filing a defence, is relieved from compliance with the usual pleading rules to the extent that those rules would override the privilege: Australian Securities and Investments Commission v Mining Projects Group Ltd [2007] FCA 1620; 164 FCR 32 (Mining Projects) at [12] (Finkelstein J). Thus, in an action for civil penalties, a defendant who wishes to run a positive case is ordinarily allowed to wait until the plaintiff’s case is closed before articulating their case by way of an amended defence (eg Mining Products at [13]).
In a proceeding in which the relief sought includes civil penalties, or a criminal prosecution, the potential for disclosures by a defendant to result in the imposition of a penalty or conviction is obvious and nothing further need be demonstrated to justify reliance on the relevant privilege (see eg R v Associated Northern Collieries (1910) 11 CLR 738 at 742-743 (Isaacs J)). This is not such a case. Although ss 180 to 183 of the Corporations Act are civil penalty provisions, Pinnacle does not seek the imposition of penalties in these proceedings (and has no standing to do so: Corporations Act s 1317J).
What must be established in order for reliance to be placed on self-incrimination privilege or penalty privilege has been stated in various ways, all of which seek to encapsulate the requisite tendency for a disclosure (by answering a question, producing a document or traversing an allegation in a statement of claim) to expose a person to conviction or a penalty. That tendency may arise from admissions of wrongdoing, from evidence that could be used to establish the person’s liability or, sometimes, from disclosure pointing to a line of inquiry that relevant authorities might pursue. In each case, however, mere assertion is usually not sufficient. The person claiming privilege must identify the precise basis on which it is said to arise. Some cases have put this requirement in terms of a bona fide apprehension based on reasonable grounds (eg Pascoe v Divisional Security Group Pty Ltd [2007] NSWSC 211; 209 FLR 197 at [36] (White J)). Others have referred to a “real and appreciable risk” of the institution of proceedings (eg Mining Projects at [9]; Deloitte Touche Tohmatsu (a firm)vSadie Ville Pty Ltd (as trustee for Sadie Ville Superannuation Fund) [2020] FCAFC 23; 144 ACSR 1 at [6] (Wigney J), [207] (Markovic and O’Callaghan J) (Sadie Ville). (The same language had been used in one of the first instance judgments that was upheld in Sadie Ville: Sadie Ville Pty Ltd v Deloitte Touche Tohmatsu (a firm) (No 3) [2018] FCA 1107; 357 ALR 695 at [99] (Moshinsky J).)
Bona fide apprehension
In Accident Insurance Mutual Holdings Ltd v McFadden (1993) 31 NSWLR 412 at 422-423, Kirby P recognised that there was some authority for the view that a bona fide apprehension on the part of the claimant of being exposed to conviction or penalty was a necessary condition for a successful claim of privilege but expressed significant doubt as to the correctness of that view. There is a good deal of force in his Honour’s observations; however, I have not found it necessary to resolve the point.
Pinnacle’s written submissions complained that there was no satisfactory evidence in the present case of any bona fide apprehension on the part of the Rolfes. The only evidence touching the point was an affidavit of their solicitor, who deposed that each of her clients had expressed an apprehension of potential punitive consequences to her. However, because the hearsay rule does not apply in the present context (Evidence Act 1995 (Cth), s 75) and no particular order was sought limiting the use to be made of this evidence, it would seem that the solicitor’s evidence of these statements being made can be relied on as evidence of the truth of what was said (ie, that the Rolfes were indeed concerned about the potential for criminal or civil penalty proceedings to be commenced). That evidence was not contradicted and I would therefore find, if necessary, that each of the Rolfes had a bona fide apprehension as to criminal or civil penalty proceedings being commenced against them.
That finding is not determinative, however, because of my conclusions (set out below) concerning the objective likelihood of the Rolfes being exposed to criminal convictions or civil penalties in the event that they file defences that comply with the Rules. Whether or not a bona fide concern is a necessary condition, it is clear that it is not a sufficient one.
“Real and appreciable risk”
Formulations of the relevant test in terms involving a “real and appreciable risk” generally trace that language back to Rio Tinto Zinc Corp v Westinghouse Electric Corporation [1978] AC 547. In the Court of Appeal in that case Lord Denning MR, upholding a claim of privilege, said (at 574):
It is not necessary for him to show that proceedings are likely to be taken against him, or would probably be taken against him. It may be improbable that they will be taken, but nevertheless, if there is some risk of their being taken—a real and appreciable risk—as distinct from a remote or insubstantial risk, then he should not be made to answer or to disclose the documents.
Roskill and Shaw LJJ agreed with Lord Denning in the result and gave separate reasons. Shaw LJ said (at 581):
The precise measure or degree of the risk to the witness is something which the court is not called upon to assess so long as there is a degree of risk which cannot be dismissed as tenuous or illusory or so improbable as to be virtually without substance. The question is, whether there is a recognisable risk? …
It is sufficient if it is shown that there is an appreciable chance [that proceedings may be brought].
On appeal, the House of Lords upheld the judgment of the Court of Appeal on this issue. Viscount Dilhorne expressed agreement with the statement by Lord Denning set out above (at 627). The other Law Lords agreed generally with the reasons of the Court of Appeal (at 612 (Lord Wilberforce), 637 (Lord Diplock (with whom Lord Kieth of Kinkel agreed), 647 (Lord Fraser of Tullybelton)). Lord Diplock noted that the risk of further action against the companies could not be dismissed as “fanciful”. Lord Fraser of Tullybelton said:
Although the members of the Court of Appeal expressed themselves in various words they all purported to follow the decision in [Triplex Safety Glass Co Ltd v Lancegaye Safety Class (1934) Ltd [1939] 2 KB 395]. The test is not a rigorous one. All that is necessary is that it should be reasonable to believe that production would “tend to expose” (not “would expose”) the possessor of the documents to proceedings. I agree with the Court of Appeal that that test is satisfied in the present case.
The written submissions of the Rolfes referred to a line of cases in the Supreme Court of Queensland (including the Court of Appeal) and the Supreme Court of Victoria in which language akin to that of Shaw LJ was adopted: Chardon v Bradley [2017] QCA 314 at [34] (Morrison JA; Fraser and Mc Murdo JJA agreeing) (Chardon v Bradley); Le Roi Homestyle Cookies Pty Ltd (in liquidation) v Gemmell [2013] VSC 452 at [11] (Ferguson J); Connelly and Harris & Anor v McGrath & Anor [2019] QSC 304 at [147] (Ryan J); EFM Logistics v David Weerden & Ors [2019] VSC 100 at [11] (Garde J); Dale v Clayton Utz (a firm) (No 2) [2014] VSC 517 at [96] (Croft J); Quinlan v ERM Power Limited & Ors [2023] QSC 80 at [39] (Brown J). Pinnacle’s written submissions argued that this approach was wrong and referred to Spotlight Pty Ltd v Mehta [2020] FCA 1422 at [31]-[32] (Mehta), where Bromwich J expressly rejected his Lordship’s formulation to the extent that it purported to express a different test from that of Lord Denning MR. In oral submissions, however, senior counsel on both sides of the record stepped away from suggesting that there was a real difference in the authorities as to the test to be applied.
It is apparent from the reasons of Bromwich J in Mehta that his Honour had some doubt as to whether Shaw LJ was proposing a lower threshold for a successful claim than Lord Denning MR. It also appears that his Honour had not been referred to any of the Queensland and Victorian cases relied on by the Rolfes. One of those cases (Chardon v Bradley) is a decision of an intermediate appellate court on the scope of a common law privilege, which a single judge of this Court should at least ordinarily follow. (It should also be noted that the statement of Lord Denning MR was referred to with apparent approval by Gibbs CJ in Sorby v Commonwealth (1983) 152 CLR 281 at 290, but on a point that his Honour found it unnecessary to decide.)
My view (consistent with the position at which counsel eventually arrived in this case) is that there is no material difference between:
(a)“a real and appreciable risk — as distinct from a remote or insubstantial risk”; and
(b)a risk which is “recognisable” and “which cannot be dismissed as tenuous or illusory or so improbable as to be virtually without substance”.
Neither formulation is particularly precise. While it may be unhelpful to add further glosses to the underlying concept, it can be observed that both formulations attempt to distinguish between a risk that is “appreciable” (or “recognisable”) and one which is “remote”, “insubstantial”, “tenuous or illusory”. Neither Lord Denning MR nor Shaw LJ seems to have apprehended that they were proposing different criteria, and no member of the House of Lords seems to have understood their formulations to have been different.
I therefore consider that “real and appreciable risk” can safely be adopted as a statement of the test to be applied (as it was by the Full Court in Sadie Ville), while noting that it is not a demanding standard.
The risk of exposure in this case
Self incrimination
In each proceeding the applicant alleges, and Pinnacle admits, that it was in the business of providing water infrastructure management services in the ACT. Pinnacle pleads that on 6 April 2023 it notified the Australian Federal Police (AFP) and the Australian Cyber Security Centre of alleged “destruction of data events”, relating to the conduct alleged against the Rolfes, because of the nature of the work that the “Flexible Group” (of which Pinnacle apparently forms part) did in relation to critical infrastructure in the ACT. Authorities including the AFP (which is responsible for general policing in the ACT as well as investigation of offences under Commonwealth law) can therefore be taken to have been aware since April 2023 of the orchestrated deletion of data allegations.
The Rolfes have also drawn attention to s 478.1(1) of the Criminal Code (Cth), which is a Schedule to the Criminal Code Act 1995 (Cth). Section 478.1(1) provides as follows.
(1) A person commits an offence if:
(a) the person causes any unauthorised access to, or modification of, restricted data; and
(b) the person intends to cause the access or modification; and
(c) the person knows that the access or modification is unauthorised.
Penalty: 2 years imprisonment.
“Restricted data” is defined by s 478.1(3) to mean data held in a “computer” (which includes a data storage device that is held in a computer or a network of which the computer forms part) to which access is restricted by an access control system.
The parties were not able to refer to any case law or other material that assists with the construction of s 478.1. It is appropriate to proceed on the basis that the conduct alleged against the Rolfes includes conduct that would amount to “unauthorised modification” of “restricted data” (in that they are alleged to have deleted significant amounts of data from a password-protected IT system) and, after 29 March 2023, “unauthorised access” to such data.
However, there is no evidence that the AFP (or any other Commonwealth or Territory authority) has attempted to make contact with Pinnacle (or any related entity) or with either of the Rolfes in the two years that have passed since the report was made. There is no evidence of any activity or interest on the part of Commonwealth or Territory authorities at all. There is no reason to think that the AFP would delay the commencement of an investigation into a matter in which it had an interest (in particular, the pendency of civil proceedings would not be a reason to do that). The lack of activity on the part of the AFP therefore points fairly strongly to a conclusion that it either does not see the conduct alleged against the Rolfes as potentially constituting an offence or does not see that conduct as sufficiently serious to warrant attention.
In these circumstances, the prospect of a criminal prosecution of either of the Rolfes is no more than theoretical. It is not a “real and appreciable risk” in the sense discussed above.
Civil penalty
Civil penalty proceedings for breaches of ss 180-183 of the Corporations Act may only be commenced by the Australian Securities and Investments Commission (ASIC): see s 1317J of that Act. There is no evidence that ASIC has taken any interest in the orchestrated deletion of data allegations or that it is aware of them. As Edelman J observed in QC Resource Investments Pty Ltd (In Liq) v Mulligan [2016] FCA 813 at [24], it is not enough simply to say that there is a possibility of ASIC commencing civil penalty proceedings. It is necessary to descend to the detail of the claim and explain the basis for any apprehension that such proceedings might eventuate.
Other than pointing to the capacity of ASIC to commence civil penalty proceedings (in that the relevant limitation period has not expired), the most that the Rolfes can say in this connection is that the conduct alleged against them is serious. However, while the conduct is no doubt serious from Pinnacle’s point of view and may have been of some concern to the ACT Government, there is nothing to indicate that it would be of particular interest to a corporate regulator. The conduct alleged against the Rolfes is of a kind not infrequently seen in cases involving directors and managers of corporations. If the nature of the pleaded allegations in this case were sufficient to justify a dispensation from the Rules on the ground of an apprehension of civil penalty proceedings, it would be difficult to imagine a case of alleged contraventions of ss 180-183 that did not attract the same dispensation. As Sifris J said in TTAC Pty Ltd v Williams [2018] VSC 79 at [24]:
Ultimately the Court is required to take a realistic and pragmatic approach. Allegations of breach of ss 180-182 of the Corporations Act are regularly made in corporations and commercial cases. If the civil penalty is not sought in the proceeding itself, it is only in those more serious cases that there is a real and appreciable risk that the matter may go further. The run of the mill case does not, even though it potentially may. To exempt defendants from discovery (and pleadings and evidence) in a civil case not involving a penalty and with no real or appreciable risk of further civil penalty proceedings would be a serious and unwarranted intrusion into the proper orderly and cost-effective conduct of civil litigation of this kind. If there was no claim for breach of statutory duty, the gateway to the civil penalty provisions, there would be no issue and dispensation from discovery would be unthinkable. There is no reason why addition of the statutory claims in a case of this kind should make any difference.
No increased risk of exposure?
Pinnacle also submitted that, even if there were a “real and appreciable risk” of exposure of the Rolfes to criminal convictions or civil penalties, being required to plead to the orchestrated deletion of data allegations in accordance with the Rules would not materially add to the risk to which they are already subject. The submission was based on the fact that in their statements of claim the Rolfes have positively pleaded that the allegations of misconduct upon which Pinnacle relied to terminate their employment (which included the orchestrated deletion of data allegations) were false, and that they have given their versions of the relevant events in some detail in open correspondence.
These points are not without substance. First, rather than make a bare allegation of adverse action for the purposes of s 340 of the FW Act and put Pinnacle to proof of its true reasons for terminating their employment (under s 361 of the FW Act), the Rolfes have chosen to plead that the allegations of misconduct against them were false. It may be that they have taken that course because they also allege breaches of contract, as to which they bear the onus. It is hard to see how they could rely on privilege to avoid (for example) giving discovery of relevant documents or answering questions in cross-examination concerning the subject-matter of their own allegations. The issues are, so to speak, in play as a result of the choice that they have made. Secondly, while the letters referred to are primarily exculpatory, they may contain relevant admissions which could be tendered by Pinnacle. The extent to which the Rolfes’ exposure to criminal convictions or civil penalties would be increased by pleading to the allegations in Pinnacle’s cross-claim is therefore uncertain.
However, because it is Pinnacle that bears the onus of proving the true reasons for taking action against the Rolfes (at least for the purposes of their claims under the FW Act), it is preferable to rely on the reasons set out above rather than these arguments and I therefore express no concluded view as to their merit. It would be open to the Rolfes to amend their pleadings so as to withdraw the positive allegations of falsity, or “run dead” on those allegations at the trial, and it may be open to them to decide to go into evidence on these issues only after the close of Pinnacle’s case.
Disposition
The Rolfes have not shown a proper basis for relying on self incrimination privilege or penalty privilege as a basis for declining to traverse the allegations in Pinnacle’s cross-claims.
Paragraph 3 of the defence to the cross-claim in ACD18/2024 and para 5 of the amended defence to the cross-claim in ACD19/2024 will therefore be struck out. The cross-respondent in each proceeding will be ordered to file a defence which pleads to the allegations in the cross-claim in accordance with the Rules.
Pinnacle indicated that it might seek to be heard on costs. The costs of the interlocutory applications will be reserved.
I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Kennett. Associate:
Dated: 18 June 2025
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