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[36]
[2019] FWC 2114
General information, not legal advice.
Fair Work Commission
2019-04-01
Original judgment source is linked above.
[2019] FWC 2114 [Note: An appeal pursuant to s.604 (C2019/2168) was lodged against this decision.]
s.789FC - Application for an order to stop bullying
Form F52 application for production of documents - claim of privilege - claim disputed - waiver of privilege - held privilege existed and not waived - application dismissed.
[1] In order to provide context I have set out a summary of the history of this matter to date.
[2] On 3 September 2018, Mr Benedict Hardless lodged a Form F72, a section 789FC application seeking orders to stop bullying.
[3] On 3 September 2018 Ms Stephanie Dewhurst, HR Manager BAE Systems Australia, filed a Form F73 response on behalf of BAE Systems and the persons named.
[4] On 4 September 2018, Mr Benedict Hardless (the Applicant) made a Form F52 application to the Commission (dated 29 August 2019) for orders requiring the production of two documents:
The investigation report prepared by the Consultant (the Investigation Report); and
The Culture Plan for the Wagga Wagga site (the Culture Plan).
[5] The substantive application was first listed by the Commission for Conference on 26 September 2019. At that time Mr Hardless was not represented, and was not attending the workplace. Mr Hardless advised he had lodged a workers compensation claim which had been accepted by Employers Mutual NSW Limited (EML) on 22 August 2018. The conference was adjourned until 29 October 2018 so as to ensure that the Applicant was safely able to participate.
[6] On 29 October 2018, Mr Hardless sought that the matter be adjourned for a further period of 12 months. The application was opposed and was listed for Hearing on 2 November 2018.
[7] On 2 November 2018, I declined the adjournment application noting the potential impact on the persons named and my performance obligations under s.577 of the Act, and issued Directions for the Hearing of the matter on 26 - 28 November 2018.
[8] On 5 November 2018, Mr Hardless sought that his Form F52 application be dealt with. On 6 November 2018 Ms Dewhurst advised that BAE Systems and the persons named opposed the application for production of documents on the basis of legal professional privilege.
[9] A Directions Hearing was conducted on 7 November 2018. Ms Erin Hawthorne sought to represent BAE Systems and the persons named, Mr Hardless opposed the application. Permission (as to the production of documents application) was granted pursuant to s.596 of the Act on the basis of complexity and efficiency.
[10] Mr Hardless provided written submissions as to the production of the documents sought on 7 November 2018.
[11] On 8 November 2018, I issued Directions requiring BAE Systems to provide confidential copies of the documents sought to be produced and file submissions as to the basis of their objection by 14 November 2018. The Form F52 was listed for Hearing on 14 November 2018.
[12] On 12 November 2018, Mr Hardless and all of the Respondents made written submissions seeking permission to be represented pursuant to s.596 of the Act.
[13] On the same day the Applicant's brother, Mr Phillip Hardless who is a lawyer, lodged a Form F53 Notice of Representative Commencing to Act on behalf of Mr Benedict Hardless. All references in this decision to Mr Hardless are references to the Applicant.
[14] On 14 November 2018, BAE Systems provided a written submission as to the basis on which it opposed production of the documents, and Mr Hardless (through his representative) submitted a further written submission as to why production should be ordered.
[15] On 15 November 2018, Mr Hardless submitted copies of two audio files in support of his claim that if privilege existed, it had been waived.
[16] On 16 November 2018, I conducted a Conference. Mr Hardless was represented by his brother, and BAE Systems and the persons named continued to be represented by Ms Hawthorne. Permission under s.596 was granted to all parties to be represented on the basis of complexity and efficiency.
[17] The parties agreed to participate in a conciliation conducted by myself. On that basis the determination of the contested application for production was adjourned and Hearing dates for the substantive matter vacated.
[18] On 24 November 2018 Mr Hardless lodged a Form F51 application requiring persons to attend in respect of a number of persons who were proposed to give evidence in this matter.
[19] On 29 November 2018 Mr Hardless filed a number of witness statements in support of his s.789FC application.
[20] Conciliation concluded on 22 November 2018 without resolving the matter. Revised Directions were issued on the same day. Further Directions were issued on 5 December 2018. The contested document production application was listed for Hearing on 19 February 2019.
[21] On 17 December 2018, BAE Systems filed an application to dismiss the s.789FC application as (inter alia) it had no reasonable prospects of success. Directions as to the filing of material and the Hearing of this "dismissal application" were made on 21 December 2018.
[22] On 20 December 2018, Mr Hardless made a second Form F52 order for production and a Form F51 application requiring a person to attend.
[23] On 7 January 2018, the Commissioner advised the parties that it would not make the orders sought in the second Form F52 and provided reasons for this decision.
[24] On 8 January 2018, BAE Systems sought that the dismissal application be adjourned to allow it to consider the information provided by Mr Hardless. The adjournment request was refused.
[25] On 9 January 2019, the summary dismissal application was withdrawn.
[26] On 10 January 2019, Mr Hardless made an application for interim orders that he not be required to attend certain meetings by BAE Systems until the conclusion of the substantive application. This application was dealt with in a Conference on 11 January 2019, the orders sought were not granted.
[27] On 11 January 2019, the parties agreed to engage in further conciliation. On 19 February 2019 I accepted that the further conciliation had not resolved the matter. Further Directions were issued and the first application for production of documents was listed for Hearing on 1 March 2019 with any further submissions to be filed by 27 February 2019.
[28] On 21 February 2019, BAE Systems sought that I strike out objectionable material from the statements filed on behalf of Mr Hardless.
[29] On 25 February 2019, Mr Hardless advised that the Form F51 application filed on 20 December 2019 would not be pursued.
[30] On 1 March 2019, I heard the parties as to the Form 51 application made on 24 November 2019 as amended by Mr Hardless' representative on the day. Each application was refused for reasons given in transcript. I then dealt with the remaining Form F52 application for production. The Respondent indicated that the Culture Plan would be provided to the Applicant on a confidential basis for use in the current proceedings. The only document in dispute was the investigation report.
[31] I had previously received written submissions from the parties and provided an opportunity for any additional oral submissions in respect of the F52 order for production of the investigation report over which BAE Systems asserted legal professional privilege. Additional oral submissions, as to how the confidential material would be dealt with were received on 15 March 2019.
[32] The investigation report was submitted to the Commission on a confidential basis together with a witness statement of Ms Erin Hawthorne and a number of attachments. I have reviewed this material. The information of most relevance to the claim of legal privilege is summarised as follows:
- An email from Australian Business Lawyers and Advisors (ABLA) dated 22 November 2017. The document included a cost estimate over which legal professional privilege was claimed separately. The cost estimate contained the following scope:
"BAE Systems Australia (BAE) has requested that Australian Business Lawyers & Advisors provide legal advice in relation to undertaking an investigation into the complaint for the purposes of providing legal advice in relation to its validity and any liability issues that may arise from the complaint and/or any results or findings of such an investigation."
"We act on behalf of BAE Systems Australia Pty Ltd (BAE) in relation to providing advice with respect to a complaint that has been lodged by one of their employees through its Ethics Helpline. We have been instructed by BAE to undertake an investigation into the complaint for the purposes of providing legal advice in relation to its validity and any liability issues that may arise from the complaint and/or any results or findings of such an investigation.
Further to our discussion we wish to retain AblesonHowes and Associates Pty Ltd, in particular your [Consultant], to undertake the investigation into the complaint which has been lodged by Mr Benedict Hardless."
[33] After considering the matters discussed on 15 March 2019, I provided these extracts to the Applicant on 19 March 2019 in order to allow him to respond. The Applicant responded by email dated 21 March 2019 and contended that I should not receive or rely on the confidential material provided including the witness statement of Ms Hawthorne.
[34] I have determined not to rely on the assertions contained in Ms Hawthorne's statement but I believe it is appropriate in the circumstances to rely on those portions of the attached documents extracted and provided to the Applicant.
[35] Mr Hardless provided an audio recording of a telephone conversation between him and Ms Emma Proszkowiec, a Human Resources Advisor employed by BAE systems which occurred on 21 December 2017. Mr Hardless rang Ms Proszkowiec. It appears that the conversation was recorded and was made without the knowledge or consent of Ms Proszkowiec. The conversation predominantly concerns the welfare of Mr Hardless. About halfway through the conversation, almost as an aside, Mr Hardless makes a suggestion that the investigation was conducted for legal purposes, Ms Proszkowiec states "No its not, so we haven't actually sought the advice, the report comes from AblesonHowes, so [the Consultant], it's just it got...we...it goes through ABL, but anyway that doesn't matter I won't get into that, your solicitor sort of said all correspondence is to go through her, so I will reset to that."
[36] Mr Hardless also provided an audio file which contained a recording of a telephone conversation between him and the AblesonHowes Consultant who had been contracted by ABAL to conduct the investigation on 27 April 2018. I have listened to the recording. The Consultant rang Mr Hardless. The recording appears to have been made without the knowledge or consent of the Consultant. It is clear from the recording that the Consultant is aware that they do not have authority to provide a copy of the investigation report to Mr Hardless. Despite that, they discuss in general terms and then more specifically the findings. The Consultant appears to breach their instructions and any obligation of confidentiality.
[37] The Applicant filed submissions is support of production of the investigation report on the original application, on 7 November 2018 and 27 February 2019.
[38] Those submissions are summarised as follows:
The Commission's power to inform itself under s.590 of the act is broad, discretionary and includes the production of relevant documents or records.
The principles in relation to the exercise of that power are contained in Australian Nurses Federation v Victorian Hospitals' Industrial Association [2011] FWA 8756.
The contents of the investigation report is relevant to the current proceeding, in that:
It is an investigation into the facts surrounding the Applicant's complaint of bullying to the Respondent; and
That it will likely contains transcripts of interview which will be useful to compare with later recollection of events by the same witnesses.
A claim of legal privilege over the investigation report is not open to the Respondent.
[39] On 27 February 2019, BAE Systems filed written submissions opposing the application for production in respect of the investigation report.
[40] BAE Systems' submissions are summarised as follows:
The Commission's capacity to order disclosure of documents pursuant to s.590 is discretionary.
Legal privilege is addressed in s.118 - 119 of the Evidence Act 1995 (Cth).
Whilst the Commission is not bound by the rules of evidence, they are not irrelevant to its function.
There is no provision in the Act that excludes the operation of privilege.
• Legal privilege attaches to the communication in the circumstances set out in Bowker & Others v DP World Melbourne Limited and Others.[2] (Bowker)
• The test is the purpose for which the document was brought into existence.[3]
"Disclosure of the conclusion, gist, substance or effect of legal advice does not necessarily give rise to a waiver of privilege in respect of the whole advice. Whether it does or not in a particular case depends on whether, in the particular context and circumstances of the case, the requisite inconsistency exists between the partial disclosure, on the one hand, and the maintenance of confidentiality in the whole advice, on the other ... The relevant context and circumstances in this respect may include the evidence of the purpose of the disclosure and the legal and practical consequences of limited rather than complete disclosure."
• The provision of the letter dated 10 August 2018 providing a summary of the outcomes was sought by Mr Hardless and as a limited disclosure of the investigation findings[6] does not represent a waiver.
[41] Mr Hardless and BAE Systems also made oral submissions on 1 March 2019.
[42] In 1999, the High Court in Esso Australia Resources Ltd v Commissioner of Taxation overruled Grant v Downs, holding that the common law test for legal professional privilege is the dominant purpose.[7] The relevant principles as to the determination of privilege by the Commission have been usefully summarised in the more recent case of Bowker.
[43] As to waiver, in DSE (Holdings) Pty Ltd v Intertan Inc,[8] Justice Allsop asserted that an implied waiver will arise where "...the party entitled to the privilege makes and 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 confidence, informed partly by the forensic unfairness of allowing the claim to proceed without disclosure of the communication."
[44] In Krok v Commissioner of Taxation[9], Justice Wigney stated, "Where a party to litigation discloses or deploys a partial disclosure of legal advice in order to achieve some forensic advantage, while claiming privilege and there by seeking to deny the other party an opportunity to see the full text of the communication, this may amount to conduct inconsistent with the maintenance of privilege. Questions of waiver are matters of fact and degree. Each case will turn on its own facts and circumstances and other cases in which implied waiver has been considered provide limited guidance unless they arise out of the same facts."
[45] In AG for Northern Territory v Maurice and Ors[10], Justice Deane said "Waiver of legal professional privilege by imputation or implication of law is based on notions of fairness. It occurs in circumstances where a person has used privileged material in such a way that it would be unfair for him to assert that legal professional privilege rendered him immune from procedures pursuant to which he would otherwise be compellable to produce or allow access to the material which he has elected to use to his own advantage....Where, however, he does no more than make use of privileged material (e.g. legal advice, expert opinion or statements of potential witnesses) for the purpose of formulating the statement in such a document of the details of the case which he proposes to make, it would be an affront to the ordinary notions of fairness to hold that the effect of his compliance with that procedural requirement was that he has waived his legal professional privilege in relation to such material."
[46] BAE systems advised it provided a statement and attachments on a confidential as a result of a fear that the submission of material might be claimed as a partial waiver by Mr Hardless. Mr Hardless' representative declined to give an undertaking that such a claim would not be made. I accept that BAE systems had a reasonable apprehension that if it did not provide the material confidentially it would face a further claim that privilege had been waived.
[47] The submission of confidential material presents issues of procedural fairness. The steps I advised earlier have sought to reduce the unfairness by disclosing a summary of the confidential information that I proposed to rely upon.
[48] I have determined not to rely on the confidential statement provided by Ms Hawthorne.
[49] Despite being urged not to do so by Mr Hardless, I have determined to receive and rely upon the attachments provided (which speak for themselves) and the investigation report.
[50] A review of that material does not support Mr Hardless' assertion that BAE systems sought to retrospectively assert privilege.
[51] As to the relevance of the report, any views expressed by the Consultant would have little relevance in my determination as to the conduct that occurred and its characterisation. I accept that statements made by witnesses would be relevant.
[52] Based on the information before me and the relevant authorities, I am satisfied that the investigation report was prepared for the dominant purpose of providing legal advice in relation to issues that may arise from the complaint made by Mr Hardless, and/or any results or findings of such an investigation.
[53] With respect to waiver in respect of the actions of Ms Proszkowiec, the statement made by her was a part of a general discussion and not one where she gave a considered response to a question about the dominant purpose of the report. Ms Proszkowiec statement is also at odds with the pre-existing written communications which clearly establish the dominant purpose for the preparation of the investigation report as discussed above.
[54] With respect to waiver by the AblesonHowes Consultant, it is clear to me that the Consultant knowingly breached their instructions and obligation not to release the report and its contents. It was not a disclosure authorised by ABAL or BAE Systems. There was no forensic advantage obtained by BAE systems as a result of the disclosure, and it would be an affront to the notion of fairness that disclosure by a rouge consultant would waive privilege. I do not accept that this disclosure has resulted in a waiver of privilege.
[55] With respect to the allegation that BAE System has disclosed the investigating report to Employers Mutual NSW Limited, I accept that the document was submitted under claim of privilege and do not accept that BAE systems has by this conduct waived privilege. If Mr Hardless has a belief that his entitlement to the report is a result of the operation of the NSW workers compensation law, then he should make an application in that jurisdiction.
[56] Taking into account all of the circumstances I do not believe it is appropriate to order production of the investigation report.
P Hardless (of Counsel) on behalf of the Applicant.
E Hawthorne (of Counsel) on behalf of the Respondent.
[1] Grant v Downs [1976] HCA 63; (1976) 135 CLR 674.
[3] Commissioner for AFP v Propend Finance Pty Ltd (1997) 188 CLR 501 at 508.
[5] [2015] FCA 51 at [25].
[6] Bowker (op. cit.) and Kirkman v DP World Melbourne [2016] FWC 605 referred to.
[7] Esso Australia Resources Ltd v Commissioner of Taxation [1999] HCA 67; (1999) 201 CLR 49.
Printed by authority of the Commonwealth Government Printer
(1999) 201 CLR 49
(1976) 135 CLR 674
(1997) 188 CLR 501
(2003) 127 FCR 499
(1986) 161 CLR 475