Zehnder v Sell Lease Property Pty Ltd T/As Sell Lease Property
[2016] FCCA 606
•23 March 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| ZEHNDER v SELL LEASE PROPERTY PTY LTD T/AS SELL LEASE PROPERTY & ORS | [2016] FCCA 606 |
| Catchwords: PRACTICE AND PROCEDURE – Subpoena – notice of objection – purpose for which documents called – whether legitimate forensic purpose – whether “fishing”. |
| Legislation: Fair Work Act 2009 (Cth), ss.44, 45, 90(2), 119, 125, 323, 324, 325, 326, 340(1), 341(1), 394, 570(1) and (2), 789FC Federal Circuit Court Rules 2001 (Cth), rr.15A.09, 15A.14, 21.02(1)(c) |
| Eaton v Sell Less Property Pty Ltd & Ors [2016] FCCA 538 |
| Applicant: | LEE ZEHNDER |
| First Respondent: | SELL LEASE PROPERTY PTY LTD T/AS SELL LEASE PROPERTY |
| Second Respondent | BRETT QUINN |
| Third Respondent | GRAEME MACEWAN |
| File Number: | PEG 128 of 2015 |
| Judgment of: | Judge Antoni Lucev |
| Hearing date: | 16 March 2016 |
| Date of Last Submission: | 16 March 2016 |
| Delivered at: | Perth |
| Delivered on: | 23 March 2016 |
REPRESENTATION
| For the Applicant: | In person |
| Counsel for the Respondents: | Mr RJS French |
| Solicitors for the Respondents: | DLA Piper Australia |
ORDERS
That the subpoena issued by the applicant on 2 February 2016 be set aside, in part, and specifically that categories 8 and 9 be set aside.
That the applicant not be permitted to inspect the documents produced in response to category 14 of the subpoena issued by the applicant on 2 February 2016.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PERTH |
PEG 128 of 2015
| LEE ZEHNDER |
Applicant
And
| SELL LEASE PROPERTY PTY LTD T/AS SELL LEASE PROPERTY |
First Respondent
| BRETT QUINN |
Second Respondent
| GRAEME MACEWAN |
Third Respondent
REASONS FOR JUDGMENT
Notice of objection to subpoena
Before the Court is an application under rr.15A.09 and 15A.14 of the Federal Circuit Court Rules 2001 (Cth) (“FCC Rules”) to set aside part of a subpoena issued by the applicant, Lee Zehnder (“Mr Zehnder”) on 2 February 2016 to the respondents, being Sell Lease Property Pty Ltd trading as Sell Lease Property (“Sell Lease Property”), Brett Quinn (“Mr Quinn”) and Graeme MacEwan (“Mr MacEwan”) respectively, and objecting to inspection of one category of documents sought under the subpoena.
Earlier on the day this matter was argued Reasons for Judgment in Eaton v Sell Less Property Pty Ltd & Ors [2016] FCCA 538 (“Eaton”) were delivered by the Court. This matter and Eaton involve similar issues.
Principles
The relevant principles were outlined in Eaton at [2]-[9] per Judge Lucev (“Eaton”) as follows:
2. In Lawlor v Courtesy Real Estate (NSW) Pty Ltd [2014] FCCA 1471 at [2] per Judge Manousaridis this Court observed that a party who issues a subpoena for production (“issuing party”) must, when challenged, be able to:
a) articulate the purpose for which the documents called by the subpoena are required;
b) demonstrate that the stated purpose is a legitimate forensic purpose; and
c) demonstrate the subpoena calls for, and only calls for, documents that are reasonably necessary to fulfil the articulated purpose.
3. In Ali Tastan (1994) 75 A Crim R 498 at 504 per Barr AJ (“Tastan”) the New South Wales Supreme Court said:
It is the duty of the Court, where the issue is raised, to require the party calling on a subpoena to produce documents to identify expressly and precisely the legitimate forensic purpose for which access to documents is sought and to refuse access unless such an identification is made.
(Quoted with approval by Brownie AJA in NSW Commissioner of Police v Tuxford & Ors [2002] NSWCA 139 at [22] (Spigelman CJ and Ipp AJA agreeing)).
4. The purpose or purposes for which it is legitimate to issue a subpoena have been stated both positively and negatively. Positively, the purpose is not restricted to enabling the issuing party to have the documents for the purpose of tendering them into evidence: Waind v Hill and National Employers’ Mutual General Association Ltd [1978] 1 NSWLR 372 per Moffitt P at 384-385 (Hutley and Glass JJA agreeing). Negatively, it is not legitimate to issue a subpoena for the purpose of “fishing”, that is where a party endeavours, not to obtain evidence to support its case, but to discover whether the party has a case at all: Commissioner for Railways v Small (1938) 38 SR (NSW) 564 at 575 per Jordan CJ (“Small”); Tamawood Ltd (ACN 010 954 499) v Habitare Developments Pty Ltd (ACN 122 935 497) [2009] FCA 364 at [30] per Collier J (“Tamawood”). The purpose for which it is legitimate to issue a subpoena falls between the above two purposes. That purpose was identified in Small where the New South Wales Supreme Court distinguished the illegitimate purpose of “fishing” from the legitimate purpose of endeavouring to obtain evidence to support the issuing party’s case:
[A] party is no more entitled to use a subpoena … than he is a summons for interrogatories, for the purpose of ‘fishing’, i.e., endeavouring, not to obtain evidence to support his case, but to discover whether he has a case at all.
Small at 575 per Jordan CJ.
Thus, the purpose for which it is legitimate to issue a subpoena is to obtain evidence to support the issuing party’s case.
5. The test for determining whether the documents called for by the subpoena are documents, and only documents, that are reasonably necessary to fulfil the asserted legitimate forensic purpose, has been variously stated. The documents called for by a subpoena may be held to fulfil the asserted legitimate forensic purpose if the documents:
a) “… have an apparent relevance … to the issues in the principal proceedings, ie, is adjectival, as distinct from substantive, relevance established?”: Trade Practices Commission v Arnotts Ltd (No 2) (1989) 21 FCR 306; (1989) 88 ALR 90; [1990] ATPR 41-010 (1); ALR at 103 per Beaumont J;
b) have “at least some apparent potential relevance to the matters in issue in the litigation”: Australian Gas Light Company ACN 052 167 405 v Australian Competition & Consumer Commission [2003] FCA 1101; [2003] ATPR 41-956 at [8] per French J (“AGL”): Commonwealth v Albany Port Authority [2006] WASCA 185 at [18] per Steytler P; or
c) “could reasonably be expected to throw light on some of the issues in the principal proceedings”: Cosco Holdings Pty Ltd v Commissioner for Taxation & Anor (1997) 37 ATR 432 at 440 per Spender J.
6. The expression often used in determining an application is “on the cards”. That is, a subpoena will be issued for the legitimate purpose of obtaining evidence in support of the issuing party’s case if it is “on the cards” that “the documents will materially assist his case”: Tastan at 505 per Barr AJ; R v Saleam [1999] NSWCCA 86 at [11] per Simpson J.
7. There is an overlap between whether the purpose for which the issuing party asserts a subpoena is issued for a legitimate forensic purpose – to obtain evidence to support the issuing party’s case – and whether the documents called for by the subpoena fulfil the asserted purpose. If, for example, the documents called for by the subpoena include documents in relation to which it cannot be said that it is on the cards that they will materially assist the issuing party’s case, the inference will readily be drawn that the subpoena has not been issued for a legitimate forensic purpose.
8. When determining whether a subpoena or part of a subpoena should be set aside on the ground that it has not been issued for a legitimate forensic purpose, or on the ground that it calls for documents beyond what is necessary to fulfil the legitimate forensic purpose, the Court must:
a) identify the issue or issues with respect to which the issuing party claims his case will be materially assisted by the production of the documents called for by the subpoena; and
b) determine whether it is “on the cards” that the documents will materially assist the issuing party’s case on that issue.
9. It is therefore necessary to determine the relevance or apparent relevance of the documents by reference to the matters that are in issue in the proceedings. …
The same principles apply in this matter. Before turning to the issues in the proceedings the Court will set out the objections to production.
The objections to production
The subpoena seeks the production of the following documents, or categories of documents, to which the respondents take objection and in respect of which they seek to have the subpoena set aside:
a)“Category 8 (document titled Sell Lease Property Pty Ltd Risk Register – 12 Months 2015, dated 21 December 2014)”;
b)“Category 9 (settlement deed between SLP [Sell Lease Property] and a former employee)”; and
c)“Categories 15 to 20 (employment contracts between SLP and various employees who are not the applicant)”.
The basis for the objections is that the documents sought serve no legitimate forensic purpose in the proceeding.
Withdrawal of objection at hearing
Having regard to the Court’s Reasons for Judgment in Eaton, the respondents withdrew their objection to production of the documents in categories 15 to 20, being various employment contracts: see Eaton at [20]-[22] per Judge Lucev.
Issues in the proceedings and consideration of them
In a second “Form 2 – claim under the Fair Work Act 2009 alleging dismissal in contravention of a general protection” (“Form 2”), Mr Zehnder alleges that:
a)he was not given a Fair Work Information Statement (see s.125 of the Fair Work Act 2009 (Cth) (“FW Act”)) when he commenced employment with Sell Lease Property, or at any time thereafter;
b)on 9 December 2014 he was requested to sign a new casual employment contract or resign, and Mr Quinn (who was Sell Lease Property’s Chief Executive Officer) told him that this was due to recent legal advice in relation to Sell Lease Property’s employment contracts which indicated that the employment contracts were problematic and must be replaced;
c)on 18 December 2014 Richard King, a former employee of Sell Lease Property, reached a confidential settlement with Sell Lease Property in relation to a claim he brought against Sell Lease Property;
d)on 19 December 2014 Mr Quinn sent a text message to Mr Zehnder, and the two subsequently met, with Mr Quinn requesting Mr Zehnder’s resignation, and upon an explanation being sought Mr Zehnder was told that it was due to problems with Sell Lease Property’s employment contracts highlighted by a claim brought about by a former employee, whom Mr Zehnder presumed was Mr King;
e)in an email to Mr Quinn on 24 December 2014 Mr Zehnder indicated that he would neither resign nor sign a casual employment contract but would consider a revised part-time employment contract, and also sought advice about unpaid wages from the time he had commenced employment with Sell Lease Property;
f)on 31 December 2014 Mr Quinn and Mr Zehnder met and agreed upon a new mutually agreeable part-time employment contract, and Mr Zehnder also asked Mr Quinn about the payment of his unpaid wages, which he says Mr Quinn refused to back-pay;
g)on 18 January 2015 Mr Quinn sent Mr Zehnder an email in which he threatened to terminate Mr Zehnder’s employment contract if Mr Zehnder did not sign the new part-time employment contract, and Mr Quinn “reiterated previous legal advice that my existing contract was problematic”;
h)on 23 January 2015 Mr Zehnder signed the new part-time employment contract “despite ongoing concerns fearing that my employment would be terminated otherwise given the previous attempts to constructively dismiss me on 19 December 2014 and 18 January 2015”;
i)on 30 January 2015 Mr Zehnder sent Mr Quinn an email indicating that he intended to inform him of various issues and concerns with the roster, targets and related matters, and Mr Quinn says that it was also his intention (seemingly not disclosed to Mr Quinn) to discuss bullying;
j)on 31 January 2015 Mr Zehnder received a letter by email from Mr Quinn headed “Introduction to major change”, in which it was stated that a decision had been made to make all part-time sales representative positions redundant;
k)on 3 February 2015 following an email to Mr Quinn from Mr Zehnder indicating that in future he would only deal with the third respondent, Mr MacEwan, Mr Quinn sent an email to Mr Zehnder informing him that Sell Lease Property’s lawyer, Steven Heathcote, would be responding to all communications on behalf of Sell Lease Property;
l)Mr Zehnder sent an email to Mr Heathcote on 3 February 2015 asking him “a number of questions regarding the decision to make the part-time sales representative positions redundant, including how many positions were affected; who the decision-makers were; and when I could expect to receive my unpaid wages and entitlements”;
m)Mr Heathcote replied by email the same day “informing … that … [Mr Quinn] was the sole decision-maker; that at least one other person was affected by the decision; and that in the event … [Mr Zehnder’s] employment was terminated … [he] would receive everything to which … [he] was both contractually and legally entitled to under the national employment standards”;
n)on 4 February 2015 Mr Zehnder received an email from Mr Heathcote informing him that Mr Quinn had instructed Mr Heathcote that there were vacancies for full-time commission only sales representatives, and asked if Mr Zehnder would be interested;
o)Mr Zehnder replied and advised Mr Heathcote that he would not accept a commission only role as it would be illegal for him to be employed on a commission only basis as he did not meet the pre-requisite criteria under the relevant Award; and
p)on 9 February 2015 Mr Zehnder received a letter from Mr Quinn informing him that his employment had been terminated effective immediately on the grounds of redundancy, with payment of a week’s wages in lieu of notice together with accrued annual leave, but none of the other entitlements that Mr Zehnder says that he was owed, and with an amount deducted without Mr Zehnder’s authorisation.
In relation to wages, entitlements and allowances Mr Zehnder alleges that he:
a)was not paid wages for the period 2 April 2014 to 4 January 2015;
b)was not paid superannuation on the abovementioned unpaid wages;
c)was required to use his own mobile phone during the course of employment and was not paid an entitlement to a mobile phone allowance;
d)was not paid any entitlement to leave loading upon termination;
e)was required to use his own motor vehicle during the course of employment and was not paid an entitlement to motor vehicle allowance;
f)was not paid accrued annual leave at the applicable minimum wage rate; and
g)was not reimbursed for employer required work-related expenses,
as required under the relevant Award.
Mr Zehnder further alleged that:
a)Sell Lease Property had deducted unauthorised payments from amounts payable to him; and
b)he was unreasonably required to spend part of an amount payable in relation to the performance of work.
Mr Zehnder alleges that his dismissal was not a genuine redundancy but rather a sham redundancy, and that Sell Lease Property took adverse action against him within the meaning of s.342(1) of the FW Act by:
a)injuring him in his employment on 9 December 2014, 18 January 2015, 31 January 2015, 4 February 2015 and 9 February 2015;
b)altering his position to his prejudice on 18 January 2015 and 9 February 2015; and
c)dismissing him on 9 February 2015,
in contravention of s.340(1) of the FW Act because he had workplace rights under s.341(1)(a), (b) and (c)(ii) of the FW Act.
Specifically in relation to the alleged workplace rights Mr Zehnder says that he was:
a)entitled to the benefit of a workplace law under s.341(1)(a) of the FW Act, namely:
i)section 323(1)(a) of the FW Act, which requires an employer to pay an employee, in full, amounts payable in relation to the performance of work, in relation to which he was owed wages and entitlements but was not paid;
ii)clause 19 of the relevant Award which requires employers to reimburse employees for any required work-related expenses incurred, for which he has not been reimbursed;
iii)clause 22.2 of the relevant Award which requires employers to make superannuation contributions to a superannuation fund for the benefit of the employee, which superannuation contributions have not been made on unpaid wages; and
iv)section 119 of the FW Act, which requires employers to pay redundancy pay to employees, which he was not paid because he was dismissed less than two months before the eligibility period of one year’s continuous service;
b)under s.341(1)(b) of the FW Act he was able to initiate a process or proceeding, namely an application for unfair dismissal under s.394 of the FW Act, and that he was prevented from exercising that workplace right as the dismissal was masked as a genuine redundancy;
c)under s.341(1)(b) of the FW Act he was able to initiate a process or proceeding, namely an application for a Fair Work Commission order to stop bullying pursuant to s.789FC of the FW Act, which right he was prevented from exercising when he was dismissed by way of adverse action after mentioning his concerns and issues; and
d)under s.341(1)(c)(ii) of the FW Act he was able to make a complaint or inquiry in relation to his employment, and he had concerns regarding his new roster and consultation requirements under cl.8.2 of the relevant Award, cl.9 of the relevant Award requiring that in the event of a dispute the parties must first attempt to resolve the matter at the workplace by discussions between the employee concerned and the relevant supervisor.
Mr Zehnder also alleges other contraventions of the FW Act, namely:
a)section 44 of the FW Act by:
i)failing to give him a copy of the Fair Work Information Statement; and
ii)failing to pay his accrued but untaken annual leave at the correct base rate of pay on termination of employment as required under s.90(2) of the FW Act;
b)section 45 of the FW Act by:
i)failing to pay superannuation on his wages in contravention of cl.22.2 of the relevant Award;
ii)failing to pay in accordance with the applicable minimum wage set by the relevant Award;
iii)failing to reimburse for work-related expenses therefore contravening the relevant Award; and
iv)failing to pay at least monthly in contravention of the relevant Award during the period;
c)section 323 of the FW Act by failing to pay, in relation to the performance of his work, the full contractual entitlement at least monthly;
d)section 324 of the FW Act by deducting an amount from an amount payable without authorisation;
e)section 325 of the FW Act by unreasonably requiring him to spend part of an amount payable in relation to the performance of work; and
f)section 326 of the FW Act by requiring payment of an amount from an amount payable without authorisation.
The Court notes that at the hearing of these objections, it was told that, in relation to Award breach claims, liability was admitted, but there was still a dispute concerning quantum.
The rationale behind Mr Zehnder’s termination of employment was, according to Sell Lease Property’s 31 January 2015 Letter, premised upon the elimination of part-time contracts of employment at Sell Lease Property. Significantly, this followed the attempt to have Mr Zehnder sign a new part-time contract of employment, which Mr Zehnder says that he only signed because of his concerns that he would otherwise be terminated from his employment.
In relation to adverse action claims the Court observed in Eaton at [16]-[19] per Judge Lucev as follows:
16. In relation to proof in adverse action claims … [the employee] bears the onus of demonstrating that:
a) [he/] she has, or has exercised, a workplace right as defined in s.341 of the FW Act; and
b) one or more of the respondents has taken adverse action against [him/] her as defined in s.342(1) of the FW Act: Hodkinson v Commonwealth [2011] FMCA 171; (2011) 207 IR 129; (2011) 248 FLR 409; (2011) 63 AILR 101-328 at [130] per Cameron FM.
17. Once … [the employee] establishes these matters and alleges that the adverse action was taken because he had, or exercised, a workplace right, it is presumed that the respondents took the adverse action for that reason unless they prove otherwise: FW Act, s.361.
18. The principles, in determining whether an employer has proven otherwise were established in Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32; (2012) 248 CLR 500; (2012) 86 ALJR 1044; (2012) 220 IR 445; (2012) 290 ALR 647; (2012) 64 AILR 101-722 (“Barclay”), and can be summarised as follows:
a) the central question to be determined: “why was the adverse action taken?” is one of fact;
b) the central question is to be answered having regard to all the facts established in the proceeding;
c) the Court is concerned to determine the actual reason or reasons which motivated the decision-maker, but is not required to determine whether some proscribed reason had subconsciously influenced the decision-maker, and nor should such an inquiry be made;
d) it will be extremely difficult to displace the statutory presumption in s.361 of the FW Act if no direct testimony is given by the decision-maker acting on behalf of the employer;
e) even if the decision-maker gives evidence that they acted solely for non-proscribed reasons other evidence, including contradictory evidence given by the decision-maker, may render such assertions unreliable; and
f) if, however, the decision-maker’s testimony is accepted as reliable it will be capable of discharging the burden imposed on the employer by s.361 of the FW Act.
See State of Victoria (Office of Public Prosecutions) v Grant [2014] FCAFC 184; (2014) 246 IR 441; (2014) 67 AILR 102-322 at [32] per Tracey and Buchanan JJ.
19. It follows therefore that mere declarations of innocent reason or intent in taking adverse action may not satisfy the onus upon an employer if contrary inferences are available on the facts: Barclay at [54] per French CJ and Crennan J. The question is whether the proscribed reason was a substantial and operative factor such as to constitute a proscribed reason, or whether it was an operative and immediate reason for the adverse action: Barclay at [127] per Gummow and Hayne JJ; Storey v The Monitoring Centre Pty Ltd & Ors [2015] FCCA 3310 at [128] per Judge Manousaridis. The proscribed reason does not have to be the sole reason for taking the adverse action, and a person is regarded as having taken adverse action for a particular reason if the reasons for the action include that reason: FW Act, s.361.
The same principles apply in this matter.
At hearing, during the course of Mr Zehnder’s submissions, it emerged that Mr Zehnder is in possession of a copy of the Risk Register (the category 8 document), in which the name of the author has been redacted, and he only now sought the Risk Register for the purposes of establishing who the author of that document was. As the Court indicated at hearing, where the only issue is the identity of the author of the Risk Register, to the extent that that might be relevant, it is a matter about which Mr Zehnder can cross-examine Sell Lease Property’s witnesses at hearing. It does not require an order for the original of the Risk Register to be produced for inspection prior to the hearing.
In relation to the document in category 9, that is a settlement deed between Sell Lease Property and a former employee, which it is common ground is Mr Richard King. The Court adheres to what it said in Eaton, namely that “the settlement deed will not shed any light upon the reason for any action, let alone adverse action, being taken … whether by reason of … seeking to exercise … workplace rights, or otherwise as to … monetary entitlements”: Eaton at [26] per Judge Lucev. Although Mr Zehnder did suggest in submissions that the fact that he alleges that on 19 December 2014 Mr Quinn indicated to him that the request for his resignation arose due to problems with an employee, the mere fact that problems with an employment contract had been highlighted by a claim brought by a former employee, does not distinguish this case from the rationale in Eaton.
Furthermore, the fact that Sell Lease Property has voluntarily disclosed the legal advice given which was utilised by Mr Quinn in determining a course of action to be adopted with respect to the status of Sell Lease Property’s part-time contracts of employment: Affidavit of Brett Richard Quinn, affirmed 19 February 2016 at [13] and Annexure BRQ-2 (“Mr Quinn’s Affidavit”), which advice was obtained in relation to Mr King, makes it unnecessary to produce the settlement deed, as the basis for the action ultimately taken against Mr Zehnder is effectively said by Sell Lease Property and Mr Quinn to be the voluntarily disclosed legal advice. In the circumstances, the settlement deed would not add anything material.
In the above circumstances, the subpoena should be set aside in relation to categories 8 and 9.
Objection to inspection
Category 14 of the documents sought by the subpoena is as follows:
14. a copy of any and all documents and records, including but not limited to notes, email, messages, letters and memos, between Sell Lease Property Pty Ltd (or any of its employees) and Steven Heathcote in relation to abolishing the part time sales representative positions and/or terminating the employment of any part time sales representatives.
Inspection of these categories of documents is objected to on the basis that they contain confidential communications between Sell Lease Property and its solicitor created for the dominant purpose of providing legal advice.
Relevantly, in Eaton at [30] per Judge Lucev the Court observed as follows (amended to refer to category 14 in this matter):
30. In determining whether legal professional privilege will prevent the production of the documents in categor[y] [14] the Court must determine whether the purpose for which the documents were brought into existence was the dominant purpose of obtaining legal advice: Grant v Downs (1976) 135 CLR 674; (1976) 51 ALJR 198; (1976)11 ALR 577; CLR at 678 per Barwick CJ; AWB Ltd v Cole & Anor (No 5) [2006] FCA 1234; (2006) 155 FCR 30; (2006) 234 ALR 651 at [44] per Young J, and whether the privilege has been lost, effectively by client waiver: Evidence Act 1995 (Cth), ss.117 and 118; Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1; (1999) 74 ALJR 378; (1999) 168 ALR 86; [2000] Aust Torts Reports 81-539 at [29] and [34] per Gleeson CJ, Gaudron, Gummow and Callinan JJ; Commissioner of Taxation v Rio Tinto Ltd [2006] FCAFC 86; (2006) 151 FCR 341; (2006) 63 ATR 79; (2006) 229 ALR 304 at [68] per Kenny, Stone and Edmonds JJ.
In relation to the documents in category 14, the Court refers to and adopts what was said by the Court in Eaton at [31]-[33] per Judge Lucev, as follows (again amended to refer to category 14 in this matter):
31. There is no serious issue or dispute in this case that the documents in categor[y] [14] were brought into existence for the dominant purpose of obtaining legal advice on the part of Sell Lease Property.
32. The issue of whether the legal professional privilege in the documents in categor[y] [14] has been waived is more contentious. In relation to that issue the Court adopts as a relevant summary of the law what was said by the Court in Bartolo v Doutta Galla Aged Services Ltd [2014] FCCA 1517 at [86]-[90] per Judge Whelan (“Bartolo”) as follows:
86. In Mann, the majority of the High Court held that what brings about a waiver of legal professional privilege is inconsistency between the conduct of the person entitled to the benefit of confidentiality of communication between lawyer and client and maintenance of confidentiality. At paragraph 29 of the majority decision, the Court said:
What brings about the waiver is the inconsistency, which the courts, where necessary informed by consideration of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large.
87. At paragraph 34 of the majority decision, the Court went on to say:
Disclosure by a client of confidential legal advice received by the client, which may be for the purpose of explaining or justifying the client’s actions, or for some other purpose, will waive privilege if such disclosure is inconsistent with the confidentiality which the privilege serves to protect. Depending upon the circumstances of the case, considerations of fairness may be relevant to a determination of whether there is such inconsistency.
88. In Commissioner of Taxation v Rio Tinto Ltd [2006] FCAFC 86; (2006) 151 FCR 341, the Full Court of the Federal Court formulated the question, in the context of claimed issue waiver, as whether a party has:
[M]ade an assertion as part of his case that puts the contents of the privileged scheduled documents in issue, or necessarily lays them open to scrutiny, with the consequence that an inconsistency arises between the making of the assertion and the maintenance of the privilege.
89. In DSE (Holdings) Pty Ltd v InterTAN Inc [2003] FCA 384; (2003) 127 FCR 499 the test as to when an implied waiver arises was expressed as being when:
[T]he 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.
90. It is clearly not sufficient that a mere reference to legal advice will amount to disclosure. Nor could a mere reference to a decision having been made after consultation with lawyers, amount to a disclosure of the contents of that advice. Where, however, the client has put in issue its state of mind and it appears that legal advice was given at the relevant time, the privilege was lost where it was shown that there is a likelihood that the legal advice contributed to that state of mind.
33. Bartolo was a very particular case, and distinguishable from the present case. In Bartolo the Board of the employer arranged for the lawyers concerned to carry out an investigation in relation to the employee concerned, which investigation made a number of recommendations to the Board, including that the employee be dismissed. The Board then passed those recommendations on to the Chief Executive Officer who acted upon them, including terminating the employee concerned. The lawyer’s advice was therefore relevant to the state of mind formed by the Board in determining to implement the recommendation to terminate the employee concerned, that implementation being effected through the Chief Executive Officer. Ultimately, Bartolo turns upon the fact that the lawyers were investigating, that is, determining facts, as well as providing legal advice, and that the issue of the lawyers’ report to the Board was put in issue by reason of the fact that the Board determined to implement the recommendations of the lawyers’ report, which recommendations included the employee’s termination, and the employer pleaded that fact.
In relation to the issue of legal professional privilege it is relevant to note that:
a)Mr Quinn was the sole decision-maker in respect of issues associated with Mr Zehnder’s employment: Mr Quinn’s Affidavit at [39]-[40] and [47]-[48]; Affidavit of Graeme John MacEwan, affirmed 19 February 2016 at [10] and [18];
b)Sell Lease Property has disclosed the legal advice given to it by its then lawyer Mr Heathcote, which was utilised by Mr Quinn to determine the course of action to be adopted with respect to the status of Sell Lease Property’s part-time contracts of employment: see Mr Quinn’s Affidavit at [13] and Annexure BRQ-2;
c)it is not in dispute that the legal advice which appears at Annexure BRQ-2 to Mr Quinn’s Affidavit has been disclosed, and to the extent that it is disclosed, the legal professional privilege is waived in respect of the disclosed advice; and
d)to the extent that Mr Heathcote became involved in direct discussions with Mr Zehnder, nothing in those discussions appears to constitute the giving of legal advice, or the waiving of legal professional privilege, those conversations seemingly going no further than, at the highest, a commitment (not fulfilled according to Mr Zehnder) to pay Mr Zehnder in accordance with his statutory or relevant Award entitlements.
In all of the above circumstances the Court is of the view that the documents in category 14 of the subpoena amount to “fishing” by Mr Zehnder, it not having been demonstrated that those documents might be relevant, or might assist Mr Zehnder’s case. There is, therefore, no justification for allowing inspection of those documents, particularly where there is no evidence that any legal advice, save for that voluntarily disclosed, has been disclosed or was intended to be disclosed to Mr Zehnder. There was therefore no waiver of legal professional privilege, save for that legal advice voluntarily disclosed.
For the above reasons there will be an order that the applicant, Mr Zehnder, not be allowed to inspect the documents in category 14 of the subpoena.
Conclusions and orders
The Court has concluded that:
a)the subpoena should be set aside, in part, and specifically that categories 8 and 9 should be set aside; and
b)Mr Zehnder not be permitted to inspect the documents produced in response to category 14 of the subpoena.
There will be orders accordingly.
On the face of it this is a no costs matter: Fair Work Act 2009 (Cth), s.570(1) (“FW Act”). If, however, any party considers that they might be entitled to costs: see FW Act, s.570(2), an application for costs can be made within 14 days: FCC Rules, r.21.02(1)(c).
I certify that the preceding twenty-nine (29) paragraphs are a true copy of the reasons for judgment of Judge Antoni Lucev
Date: 23 March 2016
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