BETWEEN : INTEGRATED MANAGEMENT SERVICES PTY LTD

Appeal - Practice and procedure - Further and better discovery - Whether documents in the "power" of the party

District Court Rules 2005 r 24(1)

Privacy Act 1988 (Cth) s 6 and cl 6 of Sch 3

Workplace Relations Regulations 2006 (Cth) Pt 19

Absolute Analogue Inc v Sundance Resources Ltd [2008] WASC 259

Biltoft Holdings Pty Ltd v Casselan Pty Ltd, unreported; SCt of WA; Library No. 940252; 20 May 1994

BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266

Chavarria v Rodman [2006] WADC 42

Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Company (1882) 11 QBD 55

Midalco Pty Ltd v Simpson, unreported; FCrt SCrt of WA; Library No. 6747; 5 June 1987

Sabre Corp Pty Ltd v Russ Kalvin's Hair Care Co [1993] FCA 557; (1993) 46 FCR 428; 124 ALR 400

Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd [1979] HCA 51; (1979) 144 CLR 596

Smith v Nomad Modular Building Pty Ltd [2007] WASCA 169

Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [2005] WASC 60

1 DAVIS DCJ: This is an appeal from a refusal of the Deputy Registrar to make orders on the appellant's application for further and better discovery of documents by the respondent.

2 The respondent had, for nearly two years, been employed by the appellant as a senior Industrial Relations Consultant. The respondent had been "hired out" to a client of the appellant's, Worley Parsons Services Pty Ltd ("Worley Parsons") to work on a project which was being carried out by Fortescue Metals Group Limited ("FMG").

3 In late March 2008 the contract of employment between the appellant and the respondent came to an end. There is an issue about how it came to an end. The respondent pleads that the appellant terminated the contract, while the appellant pleads that the respondent "abandoned" his employment. Shortly afterwards, on 7 April 2008, the respondent became employed directly by Worley Parsons.

4 The respondent then commenced action against the appellant, claiming certain bonus sums and other payments which he said were due to him by the appellant. The appellant has disputed these claims and has counterclaimed damages for alleged breaches of the contract of employment between the appellant and respondent, including a breach of the term of the contract containing post employment restraints. The appellant claims that this term restrained the respondent from soliciting the business of or otherwise dealing with Worley Parsons, FMG or the project on which he was working, for a period of 6 months after the end of the contract. In his defence to the counterclaim the respondent has raised whether the restraints are reasonable and has also raised an issue of estoppel, pleading that by an email to the respondent dated 13 March 2008 the appellant consented to the respondent taking up employment with Worley Parsons.

5 There are four documents or categories of document which the appellant seeks from the respondent by way of further and better discovery:

Category 1: The respondent's employment contract with Worley Parsons including the documents referred to in an Employment Schedule, which has been discovered by the respondent;

Category 2: The Special Conditions referred to in a letter from Worley Parsons to the appellant dated 4 April 2008;

Category 3: Copies of documentation "pertaining to the offer of employment by Worley Parsons"; and

Category 4: A statement of duties or a position description for the respondent's employment with Worley Parsons.

Principles relevant to an application for further and better discovery

6 The principles relating to further and better discovery were summarised by Master Newnes, as he then was, in Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [2005] WASC 60 at [3] to [6]. These are:

1. In determining whether to make an order for further discovery there must be reasonable grounds for the Court to be fairly certain that there are other relevant documents which ought to have been discovered.
2. The Court must be able to infer from the nature of the document in question that it is relevant and it will not speculate as to its relevance.
3. Relevance may either appear from the nature of the document or its contents and if the latter, there must be a prima facie case as to the contents before an order for further discovery will be made.
4. Where an application is made in respect of a document referred to in a document already discovered (the relevance of the latter being conceded by its discovery) it is generally reasonable to assume, in the absence of a contrary indication in the document discovered, that the document referred to is also relevant.
5. In determining whether a document relates to a matter in question the relevant test is that applied in Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Co (1882) 11 QBD 55 ("the Peruvian Guano test"), which is as follows:

"It seems to me that every document relates to matters in question in the action which not only would be evidence upon any issue, but also which, it is reasonable to suppose, contains information which may - not which must - either directly or indirectly enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary. I have put in words 'either directly or indirectly' because it seems to me, a document can properly be said to contain information which may enable the party requiring the affidavit either to advance its own case or to damage the case of its adversary, if it is a document which may fairly lead to a chain of inquiry, which may have either of those two consequences."

1. The matters in issue are to be determined by reference to the pleadings but regard must also be had to the conduct and admission of the parties and the nature of the action.
2. There is no strict entitlement to an order for discovery, including an order for further discovery. Moreover amendments to the Rules of the Supreme Court emphasise the need to have regard to the time and cost effective disposal of the action in the exercise of the discretion to order discovery.

7 A party obliged to give discovery is obliged to take all reasonable steps to obtain documents or copies of documents relevant to the matters in issue which it is in the party's power to obtain. If a relevant document is in possession of a third party who will surrender it for inspection or copying on request of the party who is under the obligation to give discovery, then the party under the obligation to give discovery ought to make that request. The authorities make it clear, however, that a document held by a third party is not within the "power" of a party under the obligation to provide discovery unless that party has a "presently enforceable legal right" to obtain the document or a copy of it without the need to obtain the consent of anyone else: Midalco Pty Ltd v Simpson, unreported; FCt SCt of WA; Library No. 6747; 5 June 1987; Biltoft Holdings Pty Ltd v Casselan Pty Ltd, unreported; SCt of WA; Library No. 940252; 20 May 1994; Absolute Analogue Inc v Sundance Resources Ltd [2008] WASC 259 at [21] to [25]. If the third party has the legal right to refuse to deal with the document at the request of a party to the action, this means that the power with respect to the document remains with the third party: Biltoft Holdings Pty Ltd v Casselan Pty Ltd (supra) per Anderson J. The fact that the third party is likely to comply voluntarily with a request to give a party to the action access to a document does not mean that the document is within that party's "power": Absolute Analogue Inc v Sundance Resources Ltd (supra) at [23].

8 With these principles in mind I turn now to the specific documents or categories of documents sought by way of further and better discovery by the appellant.

Categories 1 and 2 - The respondent's employment contract and special conditions

9 The respondent has discovered a signed document entitled "Worley Parsons Employment Schedule". The Worley Parsons Employment Schedule is a two page document with a header which contains the Worley Parsons' logo and the words "Worley Parsons Services Pty Ltd - Contract of Employment". Underneath that there is a heading "Employment Schedule". The opening words are that "This Employment Contract is effective on 4 April 2008", after which there is set out the parties, followed by a series of headings referring to clauses which appear to be clauses in a contract. For example the first heading is "Commencement Date (clause 3)". Further at the foot of the first page of the Employment Schedule the page number is shown as page number 2. On the face of it there is a first page missing and the Employment Schedule does not constitute the whole contract made between the respondent and Worley Parsons.

10 Further the Employment Schedule refers to "Special Conditions" stating "please refer to secondment to the FMG project (attached)". There is nothing attached. The final clause in the Employment Schedule refers to the fact that the respondent has read and agreed to abide by the Terms and Conditions of Employment. The Terms and Conditions of Employment referred to have not been discovered.

11 The respondent has also discovered a letter from Worley Parsons to the respondent dated 4 April 2008 which makes the offer of employment to the respondent and states "please find attached the Special Conditions applicable to this secondment". The Special Conditions are not attached and have not been discovered.

12 The appellant submitted that because the contract of employment, the Terms and Conditions and the Special Conditions are referred to in the documents signed by or delivered to the respondent, it is "beyond question" that the respondent did in fact have copies of those documents. The respondent has deposed by affidavit, however, that the Employment Schedule is the actual contract which he signed and he does not have in his possession, custody or power any other "contract of employment" with Worley Parsons. He has also deposed to the fact that although the letter dated 4 April 2008 refers to Special Conditions he had not been given a copy of the Special Conditions and does not have a copy of that document.

13 The appellant has argued that it is in the respondent's power to obtain copies of these documents from his employer, Worley Parsons, because they relate to the terms and conditions of his employment. The appellant argued that the respondent has a presently enforceable legal right to request copies of these documents from his employer as they pertain to his current employment and it cannot be suggested that the respondent does not have possession, custody or "power" of his own employment contract.

14 Following the hearing of the appeal I gave the parties the opportunity to file supplementary submissions on the issue of whether an employee has a "presently enforceable legal right" to request documents relating to his employment from his employer. The appellant has submitted that as an employee the respondent has a presently enforceable legal right to copies of documents constituting his employment terms and conditions from Worley Parsons pursuant to the provisions of the Privacy Act 1988 (Cth) s 6 and cl 6 of Sch 3 to that Act, alternatively pursuant to the provisions of reg 19.18 of the Workplace Relations Regulations 2006 (Cth), made under the Workplace Relations Act 1996, as amended. It is also submitted that the right to copies of the contractual documents may arise from the express or alternatively implied terms of the employment contract.

15 I doubt that the rights of the respondent under the Privacy Act to obtain access to his employment records would constitute "power" over those records, particularly as the obligations of an organisation under the Privacy Act to allow a person access to a document may be fulfilled by allowing the person to inspect and take notes, or by the provision of a summary, and not necessarily the provision of the document itself or a copy of it: see the discussion of this in relation to health records in Chavarria v Rodman [2006] WADC 42 at [27] to [36].

16 Part 19, Div 2, reg 19.4 of the Workplace Relations Regulations 2006 requires an employer to keep records, as set out in Div 3 and Div 4, relating to all employees. The records required to be kept, as set out in Div 3, reg 19.8 to reg 19.15, relate to the names of the employer and employee, whether the employee is employed on a part-time or full time basis, whether the employment is permanent, temporary or casual, the date on which the employment began, overtime hours worked, details of the rate of remuneration and other pay records, leave, superannuation contributions and, if the employment has been terminated, when and how it was terminated. Regulation 19.6 does not require the records to be in any particular form, save that they must be in a legible form in English and readily accessible to a workplace inspector. Regulation 19.18 provides that an employer must make a copy of a record available to an employee upon request.

17 The submissions which the appellant has made proceed on the basis that the employment relationship between the respondent and Worley Parsons is regulated by the Workplace Relations Act 1996 and Workplace Relations Regulations 2006. This has not been disputed by the respondent. To the extent that the contract of employment, the Terms and Conditions and the Special Conditions form part of the records kept by Worley Parsons pursuant to the Regulations, these would be documents which Worley Parsons must copy and provide to the respondent, if he requests them, pursuant to reg 19.18.

18 The appellant has also submitted that without seeing the terms and conditions, it is not possible to say whether the legal right to obtain documents relating to his employment is an express term of the respondent's contract of employment with Worley Parsons, but that such a term would nonetheless be implied as a matter of law. It would be implied on the basis of the principle that each party to a contract agrees to do all such things as are necessary on their respective parts to enable the other party to have the benefit of the contract, applying Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd [1979] HCA 51; (1979) 144 CLR 596 at 607. The appellant has argued that this implied duty would encompass an obligation to provide the other party with copies of contractual documents, if required. Indeed, it is submitted that in order for a party in the position of the respondent to understand and abide by his contractual obligations he would need to know what the terms and conditions of the contract are and it would be odd if he could not request a copy of his own contract. In the alternative the appellant has submitted the term would be implied pursuant to the principles expressed in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 282-3.

19 Alternatively to the argument that the respondent has a presently enforceable legal right to his employment contract documents, the appellant has submitted that the Court has the power to direct that the respondent take all reasonable steps to obtain access to and then discover the employment contract documents which are in the possession of his employer, relying on the approach endorsed by the Federal Court in Sabre Corp Pty Ltd v Russ Kalvin's Hair Care Co [1993] FCA 557; (1993) 46 FCR 428; 124 ALR 400 at 404. It was accepted by Le Miere J in Absolute Anologue Inc v Sundance Resources Ltd that such an order can be made pursuant to O 29 r 2(1) of the Rules of the Supreme Court. The equivalent provision in the District Court Rules 2005 is r 24(1).

20 In answering submissions filed on behalf of the respondent, the respondent does not dispute the appellant's submissions that he has a presently enforceable legal right to request employment contract documents from his employer. The respondent has conceded that an employee is able to obtain from his employer copies of documents that pertain to his employment and, in particular, documents that go to the terms and conditions of that employment. The respondent also accepts that the Court has the power to direct a party to take steps to obtain access to and discover documents which are in the possession, power and control of a third party, but argues that this only applies if the documents in question are discoverable. The respondent contends that the documents in question are not discoverable as they are not relevant to any matters in issue between the parties in the action, since it is not in dispute that the respondent took up employment with Worley Parsons.

21 I consider that the contract of employment which is referred to in the Employment Schedule and appears to be the first page of a document of which the Employment Schedule forms only part, the Terms and Conditions referred to in the Employment Schedule and the Special Conditions, which are referred to in both the Employment Schedule and the letter of 4 April 2008 (and whether or not they are the same special conditions remains to be seen), are relevant and discoverable documents. Since the Employment Schedule and the letter of 4 April 2008 have been discovered and are relevant, any document referred to in those documents will also be relevant: see Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd (supra) at [3]. In addition, applying the Peruvian Guano test, the terms and conditions of the respondent's contract of employment with Worley Parsons, particularly if these contain post employment restraints, may be relevant to the issue of the reasonableness of the restraints in the respondent's contract of employment with the appellant: see Smith v Nomad Modular Building Pty Ltd [2007] WASCA 169 per McLure JA at [18].

22 In the circumstances and given the employment relationship between the respondent and the third party, Worley Parsons, I am fairly certain that the contract of employment, the Terms and Conditions and the Special Conditions are in fact in existence and in possession of Worley Parsons. I am also satisfied that if the respondent requests copies from Worley Parsons he will be given access to or copies of them. It is conceded by the respondent that he does have a "presently enforceable legal right" to the documents and, accordingly, he does have "power" over the documents within the meaning of Order 26 r 6, applying the test in Midalco Pty Ltd v Simpson.

23 As also submitted by the appellant and conceded by the respondent, I also have the power, pursuant to the District Court Rules r 24(1), to make "any procedural direction that in the Court's opinion it is just to make in a case to facilitate the case being conducted and concluded efficiently, economically and expeditiously". This is similar in its operation to O 29 r 2(1) of the Rules of the Supreme Court, which provides that "the Court may at any time of its own motion on notice to the parties or upon the hearing of a summons for directions or other application review the progress of the proceedings and make such orders or give such directions to lead to their efficient and timely disposal as it may consider just and expedient". That power to make directions would include, as discussed by Le Miere J in Absolute Analogue Inc v Sundance Resources Ltd at [33] to [35], an order directing a party to take steps to obtain access to and discover documents which are in the possession, power or control of a third party where there is a real likelihood that the party to the proceedings would be given the documents upon request. The power to make such order or give such direction must be exercised cautiously, however, and it is not appropriate to make that type of order unless:

1. There is evidence that the third party has in its possession documents within the relevant category. Such an order will not be made if it is a matter of conjecture or speculation whether the third party does possess the documents;
2. There is evidence that it is likely that the party giving discovery would be given access to the documents in possession of the third party upon request; and
3. There is a relationship between the party giving discovery and the third party that would make it appropriate to make such an order. An example of an appropriate relationship given by Le Miere J in Absolute Analogue Inc v Sundance Resources Ltd was a subsidiary and parent company.

24 In my view there is evidence that Worley Parsons would have copies of the relevant documents relating to the respondent's contract of employment as sought by the appellant and it is likely that the respondent would be given access to the documents if he requested them. As the relationship between the respondent and the third party is one of employer and employee, which is a close fiduciary relationship, it would be appropriate to make such an order.

25 The provisions of O 26A do enable the appellant to apply for discovery of the documents from Worley Parsons. However an application under O 26A will involve further delay in the action and costs on the part of the appellant in having to make a further application.

26 In these circumstances I am prepared to exercise my discretion and make an order that the respondent to make such requests and do all things as may be reasonably necessary to ascertain whether or not the complete contract of employment, including all documents referred to in the Employment Schedule, and the Special Conditions referred to in the letter from Worley Parsons to the respondent dated 4 April 2008 are in Worley Parsons' possession and to obtain those documents, and then file an affidavit stating what steps have been taken to ascertain whether the documents are in the possession of Worley Parsons, whether those documents have been provided to the respondent and, if so, discovering those documents.

Category 3 - the offer of employment from Worley Parsons

27 In the affidavit in support of the application for further and better discovery there is annexed correspondence between the parties' solicitors concerning this category of documents, in which the appellant's solicitors have requested "copies of documentation pertaining to the offer of employment by Worley Parsons". There is, however, no evidence that there are in fact any documents relating to the offer of employment by Worley Parsons to the respondent, other than the letter of 4 April 2008 by which, as I have discussed above, Worley Parsons made its offer of employment to the respondent. The appellant was unable to point to any discovered document which indicated that there are any other earlier documents in existence, but relied on an inference that there may be such documents.

28 The respondent has deposed that all discussions with Worley Parsons were verbal and he does not have any further documents in his possession custody or power that relate to the "offer of employment by Worley Parsons".

29 In addition, the letter of 4 April 2008 from Worley Parsons to the respondent refers to discussions and does not refer to previous correspondence.

30 The appellant argued that the fact that there were verbal discussions does not mean there may not have been records such as notes of the discussions made by Worley Parsons. The appellant has submitted that these documents may be relevant to the breach of the post employment restraints alleged by the appellant in the counterclaim and may also be relevant to the estoppel defence pleaded by the respondent, as they will show the manner in which Worley Parsons and the respondent communicated and the timing of that communication. If that communication took place before 13 March 2008, this may be particularly relevant to whether the respondent can rely on the consent said to have been given by the appellant on that date.

31 Like the Category 1 and 2 documents relating to the terms and conditions of the respondent's employment, the appellant has also argued that it is in the respondent's power to obtain copies of these documents from his employer, Worley Parsons.

32 In my view there is no evidence which would lead me to be fairly certain that there are any such further documents in existence relating to the offer of employment.

33 Even if there was sufficient evidence to show that such documents existed and are in the possession of Worley Parsons, and accepting that they would be relevant applying the Peruvian Guano test, these documents are in a different category from the terms and conditions of the respondent's employment. Unlike the documents in Category 1 and 2 which relate to the respondents' contract of employment, the respondent would have no presently enforceable legal right to obtain Worley Parsons' own notes and records of discussions that it may have had with the respondent before it wrote its offer of employment by the letter of 4 April 2008. In my view Worley Parsons would have the legal right to refuse to deal with the documents and I consider it unlikely that if these documents were requested by the respondent, Worley Parsons would provide them.

34 I therefore decline to make any order in relation to this category of document sought by way of further and better discovery by the appellant.

Category 4 - the statement of duties or position description

35 Like Category 3, there is no evidence adduced by the appellant which shows that there is in existence a statement of duties or position description for the respondent from Worley Parsons. The appellant argued that it may be inferred, based on the usual practice in an employment scenario, that a statement of duties or position description document is prepared in relation to senior employment roles. The appellant has not led any evidence that this is the "usual practice" or that Worley Parsons follows or would be expected to follow that practice.

36 The respondent has deposed that he has not been provided with a statement of duties or position description relating to his employment with Worley Parsons.

37 In my view there is nothing which would lead me to be fairly certain that there is a statement of duties or position description in existence. I am also unable to conclude that, if there was such document in existence, it would be of any relevance to the issues in this action.

38 I am not prepared to make any order in relation to this document.

39 The appeal succeeds in relation to the documents in Categories 1 and 2. The appeal in relation to the documents in Categories 3 and 4 is dismissed. I will hear the parties as to the form of orders which should be made and the issue of costs.