John Holland Pty Ltd v Construction, Forestry, Mining and Energy Union (No 3) (Includes Corrigendum dated 18 July 2011) [2011] FCA 529 (19 May 2011)

Last Updated: 1 August 2011

FEDERAL COURT OF AUSTRALIA

John Holland Pty Ltd v Construction, Forestry, Mining and Energy Union (No 3) [2011] FCA 529

Citation:		John Holland Pty Ltd v Construction, Forestry, Mining and Energy Union (No 3) [2011] FCA 529
Parties:		JOHN HOLLAND PTY LTD (ACN 004 282 268) v CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION, AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION KNOWN AS THE AUSTRALIAN MANUFACTURING WORKERS' UNION, TROY SMART, GRAHAM PALLOT and SHANE O'REILLY
File number:		WAD 53 of 2010
Judge:		BARKER J
Date of judgment:		19 May 2011
Corrigendum:		18 July 2011
Catchwords:		PRACTICE AND PROCEDURE – civil penalty proceeding – where applicant seeks discovery against the third respondent – whether penalty privilege operates to excuse third respondent from being compelled to produce documents
Legislation:		Building and Construction Industry Improvement Act 2005 (Cth) s 38, s 48 Trade Practices Act 1974 (Cth) s 52
Cases cited:		Australian Securities and Investments Commission v Mining Projects Group Ltd [2007] FCA 1620; (2007) 164 FCR 32 Refrigerated Express Lines (Australasia) Pty Ltd v Australian Meat and Live-Stock Corporation (1979) 42 FLR 204
Date of hearing:	12 May 2011
Place:	Perth
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	40
Counsel for the Applicant:	Ms S Moody
Solicitor for the Applicant:	Herbert Geer Lawyers
Counsel for the Respondents:	Mr SA Millman
Solicitor for the Respondents:	Slater & Gordon

FEDERAL COURT OF AUSTRALIA

John Holland Pty Ltd v Construction, Forestry, Mining and Energy Union [2011] FCA 529

CORRIGENDUM

1. The medium neutral citation for this judgment to read: John Holland Pty Ltd v Construction, Forestry, Mining and Energy Union (No 3) [2011] FCA 529

I certify that the preceding one (1) numbered paragraph is a true copy of the Corrigendum to the Reasons for Judgment herein of the Honourable Justice Barker.

Associate:
Dated: 18 July 2011

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION	WAD 53 of 2010

BETWEEN:	JOHN HOLLAND PTY LTD (ACN 004 282 268) Applicant
AND:	CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION First Respondent AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION KNOWN AS THE AUSTRALIAN MANUFACTURING WORKERS' UNION Second Respondent TROY SMART Third Respondent GRAHAM PALLOT Fourth Respondent SHANE O'REILLY Fifth Respondent

JUDGE:	BARKER J
DATE OF ORDER:	19 MAY 2011
WHERE MADE:	PERTH

THE COURT ORDERS THAT:

1. The applicant’s notice of motion filed 13 April 2011 be dismissed.
2. The applicant pay the third respondent’s costs incidental to the application.
   

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION	WAD 53 of 2010

BETWEEN:	JOHN HOLLAND PTY LTD (ACN 004 282 268) Applicant
AND:	CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION First Respondent AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION KNOWN AS THE AUSTRALIAN MANUFACTURING WORKERS' UNION Second Respondent TROY SMART Third Respondent GRAHAM PALLOT Fourth Respondent SHANE O'REILLY Fifth Respondent

JUDGE:	BARKER J
DATE:	19 MAY 2011
PLACE:	PERTH

REASONS FOR JUDGMENT

NOTICE OF MOTION FOR DISCOVERY

1. By notice of motion filed 13 April 2011 the applicant seeks discovery against the third respondent of the documents listed in part B of Sch 1 to the notice of motion, which are described as:
   4. Documents relating to or evidencing the term of the third respondent’s employment by the first respondent;
   5. Documents relating to or evidencing the scope of the third respondent’s role and duties as an employee and officer of the first respondent, including any relevant job descriptions, and policies of the first respondent relating to talking to the media;
   6. Documents relating to the article published by the Collie Mail newspaper on 14 January 2010 entitled “Millions of dollars’ lost after Worsley crane fall”, including but not only any document (including photographs) provided by the third respondent to any agent or employee of the Collie Mail newspaper and/or Fairfax Media Limited (including but not only journalist Elysia Tilbrook);
   7. Documents relating to or evidencing communications between the third respondent and any employee or agent of the Collie Mail newspaper and/or Fairfax Media Limited (including but not only journalist Elysia Tilbrook) such as file notes, mobile phone records, diary records and emails.

PLEADED CASE AGAINST THIRD RESPONDENT

2. By its amended statement of claim filed 10 January 2011, in [1] the applicant relevantly pleads its status under the Building and Construction Industry Improvement Act 2005 (Cth) (the BCII Act), as well as the allegation that it is a party to a construction contract and the Worsley CFMEU Agreement and the Worsley Metal Trades Agreement, and that the third respondent:
   1. was an officer, employee or agent of the first respondent, and acted with the scope of his actual or ostensible authority in that role;
   2. was an officer, employee or agent of the first respondent’s Construction and General Division, WA Divisional Branch; and
   3. was a “person” for the purposes of the BCII Act
3. Statement of claim [1]-[4] appear by way of interlocutory pleas.
4. The heading “Background” then appears before [5]-[9] of the statement of claim. In [5], the applicant pleads the content of an article published in the Collie Mail newspaper on or about Thursday, 14 January 2010.
5. In [5A], the applicant pleads that the article quoted as its source “Construction, Forestry, Mining and Energy Union organiser Troy Smart” and that the article attributes comments or quotes to the third respondent, which are there particularised.
6. In [7], the applicant pleads that around 6am on Friday 15 January 2010, a meeting took place outside the entrance to the Site which was, amongst other things, organised and lead by the third respondent and attended by the third respondent and a number of the applicant’s employees who were also members of the first and second respondents.
7. In [8], the applicant pleads that, amongst other things, that during the Off-Site Meeting, the third respondent suggested to the employees present that a vote should be conducted to ascertain whether a majority of employees present wanted to take industrial action in the form of not working that day, and that the third respondent organised and facilitated a vote of the employees present as to whether or not they wished to participate in industrial action which took the form of not working that day and that employees voted not to work that day.
8. In [9], the applicant pleads that following the Off-Site Meeting and Vote the third respondent, amongst others, spoke to employees who had not attended that meeting and informed them of the vote, and/or counselled or procured other employees to make the vote and its outcome more generally known amongst the applicant’s employees and that 51 of the applicant’s employees engaged in unprotected industrial action by not attending for some or all of their rostered shifts on Friday 15 January 2010.
9. Statement of claim [10]-[18] are then prefaced by the heading “Breach of s. 52, Trade Practices Act 1974 (Cth)”.
10. In [10], the applicant pleads that the comments attributed to the third respondent in the article were made by him and made as an employee, officer or agent of the first respondent and within scope of his actual or apparent authority in that role, and particulars are given which include particulars of a telephone conversation on 13 January 2010 between the third respondent and Elysia Tilbrook, a journalist with Fairfax Media Limited and author of the article wherein the comments attributed to him in the article were made and he also said words to the effect that he was an officer, employee or agent of the first respondent. Further particular are there given that the third respondent participated in the interview and made the comments for and on behalf of the first respondent intending that his comments should be read and understood by the readers of the Collie Mail as those of the first respondent.
11. In [12], the applicant pleads that the first respondent’s conduct by the actions of its agent, the third respondent, was conduct in trade in commerce for the purposes of s 52 of the Trade Practices Act 1974 (Cth) (TP Act); and in [13], plead that those representations were either misleading or deceptive or likely to mislead or deceive.
12. In [14], those representations are pleaded by the applicant to have been made in circumstances when, amongst others, the third respondents knew the representations were false, amongst other things.
13. At [15], the applicant pleads that by reason of those matters, the first respondent breached s 52 of the TP Act.
14. By [16], the applicants pleads that by reason of the matters pleaded in [10]-[14] the third respondent was directly or indirectly knowingly concerned in or a party to the contravention and/or aided, abetted, counselled or procured the first respondent’s breach of s 52 of the TP Act.
15. In [18], the applicant pleads it has suffered loss by the contravention.
16. Statement of claim [19]-[28] are then prefaced by the heading “Breach of BCII Act” .
17. In [19] and [20] the applicant pleads that employees of the applicant engaged in “unlawful industrial activity” under the BCII Act.
18. In [21], the applicant pleads that the first respondent is vicariously liable for the conduct of the third and fourth respondents described in [7]-[9], that is to say, the meeting and related pleas under the s 52 heading.
19. In [23], the applicant pleads that by reason of matters earlier pleaded the third respondent, amongst others, aided, abetted, counselled, procured or induced the contravention and were directly or indirectly knowingly concerned in or party to the contravention, conspired with employees to effect the contravention and also were “involved in” the contravention for the purposes of s 48(2) of the BCII Act.
20. In [24], the applicant pleads that by reason of the matters pleaded in the preceding paragraph the respondents were “involved in” the employee’s contravention of s 38 of the BCII Act and are to be treated as also having contravened s 38 of the BCII Act.
21. The applicant seeks damages against the respondents and also seeks a pecuniary penalty against the respondents with respect to their breach of s 38 of the BCII Act.
22. Actions in tort – injurious falsehood and interference with contractual relations – are also sought against, amongst others, the third respondent, but are not presently relevant.
23. It is apparent from this brief account of the pleaded case that the applicant, amongst other things, seeks a pecuniary penalty against the third respondent in respect of the alleged breach of the BCII Act. This proceeding attracts what is known as a penalty privilege.

APPLICANT’S POSITION

24. The applicant’s position is that it is entitled to have discovery of the documents mentioned, which as it can be seen have much to do with the third respondent’s dealings with the Collie Mail journalist, in order to make good its pleas in the TP Act cause of action against the third respondent, and that representations made in that article were based on information that had been supplied to the journalist by the third respondent as the employee or agent of the first respondent.
25. Consequently, the applicant says that this proceeding does not involve any penalty privilege and the documents the applicant asked for should be provided.

THE THIRD RESPONDENT’S POSITION

26. The third respondents says that it has an undoubted right to claim penalty privilege in respect of the proceedings for pecuniary penalty under the BCII Act.
27. The third respondent says the claims made by the applicant are based on the same factual substratum as those advanced under the TP Act, and in particular points to the pleas in [1], [5]-[9] of the statement of claim as amended.
28. The third respondent submits that it follows that it is not appropriate, therefore, to divorce the other claims pressed against the third respondent, from the pecuniary penalty claim, because evidence concerning the other claims will have the tendency to expose the third respondent to the risk of liability to a penalty under the pecuniary penalty claim.
29. Further, the third respondents contends that the pecuniary penalty claim is parasitic on the s 38 claim in the sense that evidence provided concerning the s 38 claim may be used as a “link in the chain” to establish the third respondent’s liability to a penalty under the pecuniary penalty claim.
30. Moreover, the third respondent submits that each of the categories of documents sought by the applicant will have the tendency to directly or indirectly expose the third respondent to the risk of liability to a penalty under the pecuniary penalty claim.

CONSIDERATION

31. The background to and nature of the privilege against self-incrimination and the penalty privilege are discussed in Australian Securities and Investments Commission v Mining Projects Group Ltd [2007] FCA 1620; (2007) 164 FCR 32. Justice Finkelstein, at [7], makes it clear that the privilege operates to excuse a person from being compelled to answer any question or produce any document if doing so would have the tendency to expose a person either directly or indirectly to a penalty. His Honour at [11] makes the point that the circumstances in which penalty privilege may be claimed are not settled, but notes that it may prevent a plaintiff obtaining an order for discovery of documents or the administration of interrogatories. His Honour accepts, however, that the privilege has a wider scope and may operate to prevent an order being made for the provision of witness statements or for the production of documents on subpoena. By reference to Refrigerated Express Lines (Australasia) Pty Ltd v Australian Meat and Live-Stock Corporation (1979) 42 FLR 204 at 207-208, per Deane J, his Honour plainly accepted that the privilege operates to prevent a plaintiff obtaining any information that will assist in establishing the defendant’s liability to a penalty.
32. When all is said and done, I share the concern of the third respondent. I do not think it is appropriate for the Court, where it is not entirely clear whether disclosure may infringe the penalty privilege, to take the risk of ordering disclosure only later to find that the disclosure indeed was used to prove the penalty case.
33. So far as the breach of the BCII Act is concerned, the applicant claims that the first respondent is vicariously liable for the conduct of the third and fourth respondents pleaded in [7]-[9], which are under the s 52 cause of action heading. The third respondent, in particular, is said at material times to have acted within the actual or apparent scope of authority as an employee, agent or official of the first respondent. The third respondent is specifically said to have been “involved in” the contravention of the employees of the applicant of s 38 of the BCII Act and thereby also to be treated as having contravened that section.
34. Separating the TP Act proceeding from the pecuniary penalty proceeding is, in my view, not easy. It is important to the pleaded case of the applicant to prove that the third respondent was at material times acting within the scope of his actual or apparent authority as an employee, agent or official of the first respondent, not only for the purposes of obtaining a pecuniary penalty against the first respondent, but also for the purpose of obtaining a finding that the third respondent, as a person involved in the employees’ contravention of s 38, should be treated as having contravened s 38.
35. It is in reliance on breach of s 38 of the BCII Act, that the applicant seeks a pecuniary penalty against the third respondent, amongst others.
36. The applicant also seeks to prove in the BCII Act penalty proceeding against the first respondent, that the first, second, third, fourth and fifth respondents collectively aided, abetted, counselled, procured or induced the contravention and were involved in it and conspired with the employees and were otherwise involved in the contravention under s 48(2) of the BCII Act.
37. In so pleading, in [23] of the statement of claim, the applicant expressly relies on the matters pleaded in [7], [8], [9] as well as [21] and [22] in the statement of claim. The pleading therefore depends on the applicant’s pleas concerning the meeting and related acts that underpin the s 52 action.
38. In all of these circumstances, where it is not easy to disentangle the documents that may be relevant to the s 52 action from those that may be relevant to the penalty proceedings, I consider that it is unwise to order disclosure of the documents as sought by the applicant against the third respondent. I entertain the real concern that if I were to order disclosure, the Court might be obliging the third respondent to help the applicant prove the applicant’s case against the third respondent in the penalty proceeding.

CONCLUSION AND ORDER

39. For these reasons I would refuse the notice of motion for such disclosure by the applicant.
40. The Court therefore orders that:
    1. The applicant’s notice of motion filed 13 April 2011 be dismissed.
    2. The applicant pay the third respondent’s costs incidental to the application.

I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker.

Associate:

Dated: 19 May 2011