Damien Stephen v Seahill Enterprises Pty Ltd & Denise Fitzgibbons [2021] FWCFB 2623

[2]

[12] Also in response to Mr Stephen's email to the Commissioner's chambers, FHRI sent him a letter the same day which relevantly stated:

Damien Stephen v Seahill Enterprises Pty Ltd & Denise Fitzgibbons [2021] FWCFB 2623 | Case summary | Zoe

[55]

[20] The letter went on to direct Mr Stephen to attend a rescheduled interview that afternoon (11 December 2020) and to identify and bring to the interview any documents relevant to his bullying allegations.

[21] There was a further exchange of correspondence between ABL and OWL following this the same morning. ABL advised that Mr Stephen would not be attending the interview because he was seeking advice from counsel as to his position, and OWL responded by stating that if Mr Stephen did not attend the interview that afternoon, Seahill directed him to show cause by 5.00pm on 14 December 2020 why his employment should not be terminated for serious misconduct. Mr Stephen did not attend the interview. ABL replied to OWL's last correspondence on 14 December 2020 and, among other things, contested that the Commission had directed Mr Stephen's participation in the interview. In its reply correspondence of the same date, OWL accepted that the Commissioner had adjourned the matter so that Seahill could conduct whatever investigations it required and said: "The independent investigation that has been underway and conducted by Arron Hartnett is the investigation that our client requires, and is in accordance with Seahill's Workplace Bullying/Harassment Policy". It also extended the period for Mr Stephen to show cause why he should not be dismissed for serious misconduct until 2.30pm, 15 December 2020.

[22] On 15 December 2020, ABL sent a letter to OWL in which it stated, amongst other things, that while Mr Stephen maintained the position that Seahill's directions were unlawful and in contempt of the Commission proceedings and the rules of procedural fairness, he was prepared to submit to an interview with Mr Hartnett provided that he was legally represented. ABL's correspondence also made reference to the "apparent mixed purpose" of the investigation. In reply correspondence dated 17 December 2020, OWL proposed that the interview take place on 22 December 2020, and acceded to the request for Mr Stephen to be legally represented provided that this was in a support capacity only and not for the purpose of advocacy. OWL also responded to ABL's contention that the investigation had a mixed purpose as follows:

[117]

[36] In relation to categories 3 and 11 it is asserted that the documents sought are subject to legal professional privilege "as they were made in the course of obtaining advice from OWL".

[37] It may be observed that there are some difficulties in understanding some of the bases of the claims of legal professional privilege in the Schedule of Objections document. In particular, the first two bases of the privilege claim set out above arise because the documents related to advice to be provided to Seahill. However, the claim of privilege is said to be made on behalf of Mrs Fitzgibbons as the personal respondent. It is not explained on what basis Mrs Fitzgibbons may claim a privilege held by Seahill.

[38] The issue of the orders for production sought by Mr Stephen and the objections made in the Schedule of Objections document was the subject of a hearing before the Commissioner on 11 February 2021. Mr Spence of counsel appeared, presumably on behalf of both Seahill and Mrs Fitzgibbons, although he did not expressly identify who he was appearing for. Nor did he subsequently clarify who was making the claims of privilege. The hearing did not complete but was adjourned to 15 February 2021 in order for evidence to be filed supporting the claims of privilege.

[39] Confusingly, on 12 February 2021, Ms McCormack filed a witness statement in which she said that she had been engaged to act as agent for Seahill and Mrs Fitzgibbons in relation to the proceeding and had been authorised by Mrs Fitzgibbons and Seahill to provide instructions to OWL in relation to the proceedings. She set out objections to certain categories of documents sought by Mr Stephen on the basis of a claim for legal professional privilege made by both Seahill and Mrs Fitzgibbons. However, the categories she objects to are not the same as in the Schedule of Objections document. Ms McCormack did not claim privilege on behalf of Seahill and Mrs Fitzgibbons in respect of categories 3, 8, 9, 11 and 13 set out above. She also made an additional claim of privilege as to the order sought directed to Seahill in respect of "All notes, memoranda, minutes or other documents relating to ... [c]omplaints made by employees concerning the behaviour of Denise Fitzgibbons" (category 14).

[40] To add to the confusion, Ms O'Reilly swore and filed an affidavit on 12 February 2021 in which she said:

[120]

[42] The decision does not set out which categories of documents the Commissioner considered were subject to a claim of legal professional privilege, or by whom. In his consideration of the privilege claim, the Commissioner noted that the case was somewhat unusual because Mrs Fitzgibbons was the sole director and owner of Seahill and thus effectively controlled Seahill. In that situation, the Commissioner said, the employer and the "person named" were so closely associated that it was difficult to foresee that they could respond to the matter independently of each other, and that it was hardly surprising that Mrs Fitzgibbons and Seahill would seek legal advice about how to properly respond to the litigation commenced by Mr Stephen.[3]

[43] The Commissioner rejected the proposition that the adjournment of the matter on 11 November 2020 was the reason for Mrs Fitzgibbons and Seahill proceeding to conduct the Hartnett investigation, since the evidence supported the conclusion that the investigation was always going to occur.[4] The Commissioner found that the letters from OWL engaging Mr Hartnett and Mr Mackie to conduct their investigations made it clear that the obtaining of legal advice, and preparation for litigation, was the dominant purpose for the commencement of the two separate investigations and the intended subsequent production of work as part of those investigations.[5] References in OWL's various pieces of correspondence to the investigations being in alignment with the Commissioner's "direction" did not constitute compelling evidence that this was the true reason or dominant purpose of the Hartnett investigation, nor did any requirement to investigate Mr Stephen's bullying allegations under Seahill's internal policy or pursuant to obligations under the Work, Health and Safety Act 2011 (Qld) (WHS Act) displace legal advice and preparation for litigation as the dominant purpose.[6] Nor, the Commissioner found, did the description of the investigations as "independent" displace their dominant purpose since, in the ordinary course, investigations of this nature would be undertaken with an intention of affording procedural fairness.[7] The Commissioner also said:

[140]

[48] Mr Stephen submitted in relation to the first appeal ground that the Commissioner erred in the observation in paragraph [110] of the decision that an employer is "entitled to elect to conduct workplace investigations in a manner that ensures the product of that investigation is the subject of legal professional privilege or client legal privilege". It was submitted that there is no element of employer election involved, that for a document to be subject to legal professional privilege the dominant purpose for its creation must be a purpose which attracts privilege, and that a subjective intention that a document or class of documents should be privileged is not determinative. The mere fact that a document is to be provided to solicitors for advice is not determinative of the purpose for which it is created, and Mr Stephen submitted that the Commissioner placed undue weight upon the letters provided by OWL to Mr Hartnett as evidence of dominant purpose. Further, it was submitted, paragraph [100] of the decision described the letters sent by OWL to Mr Hartnett and Mr Mackie as making clear that they were engaged for the purpose of conducting an investigation into the complaints and to provide a report to OWL to assist OWL to provide advice to Seahill, and thus disclosed no evident or intelligible basis for the conclusion that obtaining legal advice and preparing for litigation was the dominant purpose for the commencement of the investigations.

[49] Mr Stephen submitted that the representations made by OWL and FHRI in relation to the investigations reveal them to have had a range of mixed purposes, each of which were substantial and important purposes in their own right. The question should not have been whether these purposes "displace" legal advice and preparation for litigation as the dominant purpose, but whether legal advice and preparation for litigation could truly be said to be the dominant - that is, the ruling, prevailing, paramount or most influential - purpose. In particular, the purpose of providing a report required to be considered by the Commission under s 789FF(2) of the FW Act was a significant and important purpose which could not be subservient to the purpose of providing legal advice to one party, and was incompatible with the dominant purpose being for a privileged purpose. Conversely, it was submitted, the outcomes contained in an investigation report which was obtained for the dominant purpose of giving legal advice or preparation for litigation could not attain the special status of outcomes for the purposes of s 789FF(2).

[50] In relation to the second appeal ground, it was submitted that to the extent that the Commissioner decided that no waiver could apply because he assumed that no investigation documents existed at the time of the inconsistent representations, the Commissioner erred because the unfair conduct is ongoing and there is a continuing direction that Mr Stephen subject himself to questioning by Mr Hartnett. The unfair conduct in this case, which was different to that in Bluescope, included that the continuing representations that the investigation was independent, the abuse of authority to issue purportedly lawful directions that Mr Stephen subject himself to interview and to coerce his participation by threatening and then commencing show cause proceedings, the invocation of the authority of the Commission to encourage compliance with the interview direction, and the representations that the interview was for the purpose of the Workplace Harassment/Bullying Policy and the WHS Act, and the representations that the investigation report would be a mandatory relevant consideration pursuant to s 789FF(2). The Commissioner, it was submitted, erred in failing to properly identify the unfair conduct of the party claiming privilege and instead focused on the conduct of Mr Stephen. The fact that Mr Stephen sought legal advice and resisted participation in an interview were not relevant distinguishing factors.

[51] Mr Stephen submitted that permission to appeal should be granted in the public interest and the interest of justice because:

the decision is attended by sufficient doubt to justify its reconsideration;

the circumstances in which an employer may cloak a workplace investigation in legal professional privilege by engaging solicitors to conduct the investigation and provide advice to the employer as to its findings is a matter which has implications for the conduct of workplace investigations generally;

legal professional privilege is a right which is fundamental to the administration of justice, and upholding a claim of privilege where none in truth exists fetters the Commission's power under s 590 of the FW Act to inform itself in such manner as it considers appropriate, and would give the respondents in the matter a forensic advantage contrary to s 577 of the FW Act; and

Ground 2 of the appeal concerns the scope and application of the fairness principle identified in Bluescope.

[52] Seahill and Mrs Fitzgibbons submitted that no appealable error has been identified in the Commissioner's exercise of the discretion conferred by s 590(2)(c) of the FW Act and accordingly permission to appeal should not be granted and the appeal should be dismissed. In relation to Ground 1 of the appeal, they submitted that the Commissioner gave appropriate weight to the letters from OWL which engaged Mr Hartnett and Mr Mackie, which expressly stated that the purpose of their engagement was so that OWL could provide legal advice to Seahill and Mrs Fitzgibbons in relation to their findings. Mr Hartnett's engagement letter also stated that the findings might potentially be made use of in Mr Stephen's anti-bullying application proceeding. It was submitted that it was open to the Commissioner to make a conclusion as to the dominant purpose of Mr Hartnett's and Mr Mackie's engagement on the basis of those letters without providing further detail in the decision given the letters themselves were protected by legal professional privilege. There was no error in the conclusion that an employer is entitled to elect to conduct workplace investigations in a manner that ensures the product of the investigation is the subject of legal professional privilege since, it was submitted, an employer can elect to have their solicitors provide them with legal advice and, as a part of that process, have those solicitors engage the independent investigators who undertake the factual enquiries resulting in the investigation report/findings being subject to advice and/or litigation privilege.

[53] Subsequent representations did not, it was submitted, undermine the fact that the documents were created for a purpose protected by legal professional privilege. The additional purposes identified were, in any event, all for the purpose of the provision of legal advice in connection with Mr Stephen's anti-bullying proceeding, and tied back to the dominant purpose of Mr Hartnett's and Mr Mackie's investigations. These representations, for the same reasons, were not inconsistent with the maintenance of legal professional privilege or bring about any waiver of that privilege. In requiring Mr Stephen's attendance at an interview with Mr Hartnett, Mr Stephen and his legal representatives were put on notice that the investigation was for the purpose of providing legal advice to Seahill and Mrs Fitzgibbons and that privilege was claimed over the investigation report. Additionally, it was submitted, the representations made regarding the independence of the investigations, Seahill's obligations under its internal workplace bullying policy and the WHS Act, and the relevance of the investigation report to the Commission's consideration pursuant to s 789FF(2) of the FW Act were honest and reasonable representations, and did not constitute conduct that was unfair or inconsistent with the maintenance of the privilege of the investigations.

[143]

[55] We commence by making some observations about the Commission's jurisdiction under Pt 6-4B. An application to invoke the Commission's jurisdiction may be made under s 789FC by a worker who reasonably believes that he or she has been "bullied at work". Section 789FD(1) defines when a worker is "bullied at work", and relevantly makes it clear that, for the purpose of the Part, bullying is something carried out by an "individual" or a "group of individuals" while the worker is at work in a "constitutionally-covered business". Thus, the alleged perpetrator of the bullying activity must be a natural person or persons, and will have a legal identity that is distinct from that of the business which, as defined in s 789FD(3), must in the private sector context be a constitutional corporation conducting a business or undertaking (within the meaning of the Work, Health and Safety Act 2001 (Cth)).

[56] The Commission's procedures concerning anti-bullying applications distinguish between the alleged individual perpetrators identified in such an application, and the entity conducting the business. In the former case, rule 23A(3) of the Fair Work Commission Rules 2013 (FWC Rules) permits an alleged individual perpetrator (often referred to by the shorthand expression "person named"), if they wish, to file a response to an anti-bullying application within 7 calendar days of being served. Rule 23A(1), by contrast, requires the "employer or principal" (of the applicant or the alleged perpetrator, or both) to lodge a response within 7 calendar days.

[57] If an application has been made under s 789FC and the Commission is satisfied as to the matters specified in s 789FF(1)(b), it has a very broad discretion as to the order it can make under s 789FF(1) subject only to the requirements that the order serve the purpose of preventing the worker being bullied at work by the relevant individual(s) and that the order not require the payment of a pecuniary amount. Thus, the discretion extends to the selection of the target of the order. The order, for example, could apply to an individual who has been found to have bullied the applicant worker at work, and require the individual to cease the bullying conduct. An order could also apply to an employer or principal of the applicant worker and/or the individual found to have engaged in bullying conduct, and require that entity to make arrangements to ensure that bullying does not occur in the future (by, for example, separating the applicant worker and the individual perpetrator into different work areas).

[58] This analysis demonstrates that, under the statutory scheme in Pt 6-4B, the alleged individual perpetrator and the employer/principal will potentially be affected in different ways and will consequently have distinct interests.

[59] Section 789FF(2)(a) requires the Commission, in considering the terms of an order to be made (that is, after it has already been satisfied as to the matters in s 789FF(1)(b)), to take into account the final or interim outcomes arising out of an investigation into the matter that is being, or has been, undertaken by another person or body of which the Commission is aware. It would seem to follow that if an employer/principal undertakes or commissions an investigation for the principal purpose of having the outcome of the investigation taken into account under s 789FF(2)(a), it cannot be the case that the investigation is intended to be confidential in nature since, in order to achieve its purpose, the Commission must be made aware of its outcome.

[60] Section 590 of the FW Act is a provision of general application and applies to proceedings under Pt 6-4B. Section 590(1) confers on the Commission a broad procedural power to inform itself in relation to matters before it in such manner as it considers appropriate, and is to be understood as operating in conjunction with s 591, which provides that the Commission is not bound by the rules of evidence and procedure. Section 590(2)(c) specifically empowers the Commission to inform itself by requiring a person to provide copies of documents or records or other information to the Commission. It is pursuant to s 590(2)(c) that the Commission, on application or of its own motion, may issue orders for the production of documents.

[61] Section 590(2)(c) specifically, and s 590 generally, operate subject to the doctrine of legal professional privilege. Legal professional privilege is not merely a rule of evidence, although given statutory articulation in Pt 3-10 Div 1 of the Evidence Act 1995 (Cth); it is a rule of substantive law and an important common law immunity which may not be abrogated by statute except by clear words or by necessary implication.[14] No provision of the FW Act operates to abrogate legal professional privilege.[15] Accordingly the Commission is not empowered under s 590(2)(c) to issue orders requiring the production of the documents containing communications which are subject to legal professional privilege where the person to whom the privilege belongs objects to the production of the documents.

[62] There are two main categories of legal professional privilege. The first is legal advice privilege. It applies to confidential written and oral communications between a lawyer and a client or between lawyers acting for a client, or the contents of a confidential communication prepared by the lawyer, the client, or another person, for the dominant purpose of the lawyer(s) providing legal advice to the client. Thus, not only is the advice of the lawyer to the client protected, but also any communication or document passing from the client to the lawyer (such as the request for advice or a set of factual instructions) for the purpose of the provision of the legal advice. The second is litigation privilege. It applies to a confidential communication between a client and another person or the client's lawyer and another person, or the contents of a confidential document that was prepared, for the dominant purpose of the client being provided with professional legal services relating to a current, anticipated or pending Australian or overseas legal proceeding (including a proceeding before the Commission) in which the client is, was or may be a party.

[63] The following principles concerning legal professional privilege are relevant to the circumstances of this case:

[153]

[64] As we have earlier stated, the Commissioner's decision did not identify the categories of documents that were the subject of claims of legal professional privilege. The decision dealt, in substance, with only two aspects of the claims, namely documents created in connection with the investigations which Mr Hartnett and Mr Mackie were commissioned to undertake. That appears to us to be a product of the fact that these were the only matters addressed in the submissions of the parties appearing before the Commissioner (and indeed, the position was the same in respect of the appeal submissions). As a result, it appears to us that the decision only dealt with categories 2(a), 5, 8, 9 and 13 of the claims for legal professional privilege set out in paragraph [32] above.

[65] The affidavit sworn by Ms O'Reilly discloses that both Mr Hartnett and Mr Mackie were engaged to undertake their respective investigations and report for the purpose of providing advice to Seahill. Insofar as the Schedule of Objections document filed by OWL on 10 February 2021, and Ms McCormack's witness statement of 12 February 2021, claimed privilege on behalf of Mrs Fitzgibbons personally in respect of documents created in connection with the Hartnett and Mackie investigations (categories 2(a), 5, 8, 9 and 13), those claims could obviously not be upheld because, on Ms O'Reilly's evidence, those investigations were not for the purpose of providing advice to Mrs Fitzgibbons and she had no personal right to claim a privilege held by Seahill. Insofar as Ms O'Reilly's affidavit makes a claim for privilege over the same categories of documents on behalf of OWL, that claim similarly has no validity since any privilege does not belong to OWL.

[66] The only claim clearly made on behalf of Seahill is that contained in Ms McCormack's witness statement filed on 12 February 2021. In relation to the Hartnett investigation, Seahill's claim is, as earlier stated, confined to categories 2(a) and 5 (and does not include the brief of documents sent by FHRI to Mr Hartnett under category 8 nor the documents sought to be produced by Mr Hartnett in category 13). No objection is made in respect to category 9, which concerns the Mackie investigation. This limited claim made on behalf of Seahill appears to us, on the basis of Ms O'Reilly's affidavit, to be the only valid claim for legal professional privilege that was made before the Commissioner.

[166]

[69] It was only in response to contentions advanced on behalf of Mr Stephen by ABL that the investigation had a mixed purpose and that documents created in the course of the investigation were not privileged that OWL disclosed (on 17 December 2020 and 23 December 2020) that the investigation was for the purpose of providing legal advice and to assist in the conduct of the litigation.

[70] We make the following observations about these representations we have set out in paragraph [68] above. First, they were not consistent with the true basis upon which Mr Hartnett had been commissioned by OWL to undertake his investigation, as we have earlier described it, and to that extent were misleading.

[71] Second, a number of the represented purposes, if they were in fact the true and dominant purpose, would not be protected by legal professional privilege. If the investigation was undertaken for the dominant purpose of consideration under s 789FF(2)(a), it clearly could not have been intended to be confidential because the provision is predicated on the outcomes of the investigation being made known to the Commission. Further, if the dominant purpose was to conduct a fair, independent and transparent investigation pursuant to Seahill's Workplace Bullying/Harassment Policy, there is no reason to consider that communications contained in documents associated with such an investigation were privileged merely because the investigation was being undertaken by a lawyer. As the AIRC Full Bench said in Brown v BlueScope Steel Limited, "[t]here is a very real difference between an independent inquiry and the provision of legal advice to a client".[26] A procedurally fair workplace investigation initiated by an employer the outcome of which is intended to be made known to relevant employees in the workplace and which is to lead, where necessary, to corrective or disciplinary action is not one which ordinarily has a purpose confidential to the employer. We note that in his decision, the Commissioner paraphrased a statement made in Bowker v DP World Melbourne Limited[27] when he stated the proposition that "Seahill is entitled to elect to conduct workplace investigations in a manner that ensures the product of that investigation is the subject of legal professional privilege or client legal privilege".[28] That proposition was criticised by Mr Stephen on the basis that an employer cannot "elect" to cloak a workplace investigation in privilege where it does not have the requisite dominant purpose. However, Bowker makes it clear that the type of workplace investigation being referred to in the paraphrased statement is one that has the provision of legal advice as its dominant purpose.[29] Bowker is not to be read as standing for the proposition that a workplace investigation which does not have the provision of legal advice and/or the provision of legal services in connection with litigation as its dominant purpose may nonetheless be subject to legal professional privilege merely on the basis that the investigation is undertaken by a lawyer.

[72] Third, it is apparent to us that the misleading representations about the purpose of the Hartnett investigation were made disingenuously for the purpose of justifying the purported employment direction to Mr Stephen that he submit himself to a compulsory interview with Mr Hartnett, at pain of dismissal. We do not consider that Seahill could, pursuant to its employment contract with Mr Stephen, issue him a binding direction to assist its lawyers in providing it with legal advice concerning its defence of litigation which Mr Stephen had himself initiated. A direction of this nature would not be lawful or reasonable,[30] since the contemplated compulsory interview would amount to an extra-curial interrogatory or deposition process under which Mr Stephen could be required, contrary to his legal interests in the litigation, to make admissions or to disclose confidential information in an unprotected way. It was obviously convenient for Seahill to mischaracterise the dominant purpose of the investigation in a way which provided a proper foundation for the direction to attend the interview. It may be accepted that if the purpose of the engagement of Mr Hartnett by Seahill was to conduct a fair, independent and transparent investigation of the type discussed in the preceding paragraph, then it would have been lawful and reasonable to direct that Mr Stephen undergo an interview for the purpose of that investigation. However, as we have earlier found, the engagement of Mr Hartnett was not for that purpose.

[174]

[77] As earlier stated, the only valid objections to producing documents in connection with the Hartnett investigation based on legal professional privilege that were before the Commissioner were those made by Seahill in respect of categories 2(a) and 5. The Commissioner was correct in upholding these objections. No objections were made by Seahill in respect of categories 8 and 13, which equally concern the Hartnett investigation, and accordingly in a strict sense the Commissioner erred in upholding these objections. However, it remains open for Seahill to claim privilege with respect to these categories and, if that claim is made, it should be upheld for the same reasons as set out above unless some subsequent conduct of which we are not aware indicates a waiver of privilege.

[78] Seahill has also not yet claimed privilege with respect to the documents relating to the Mackie investigation covered in category 9. To the extent that the Commissioner considered that he had before him a valid claim of legal professional privilege in respect of the Mackie investigation documents, he was in error. As earlier stated, the affidavit of Ms O'Reilly makes it clear that the Mackie investigation was for the purpose of providing advice to Seahill only, and accordingly it was not open for Mrs Fitzgibbons or OWL to claim the benefit of this privilege. However, because the matter was fully argued before us, we are able to express a view about any claim of privilege that might be made by Seahill in the future. We consider, on the basis of Ms O'Reilly's affidavit, that the dominant purpose for the Mackie investigation was to assist in providing legal advice to Seahill, with the result that confidential communications contained in documents sent to Mr Mackie for the purpose of the investigation are privileged. There is no evidence before us upon which a waiver of this privilege may be imputed.

[79] It appears to us that the remaining categories of documents the subject of objections made by Seahill or Mrs Fitzgibbons on the grounds of legal professional privilege (categories 1, 2(b)-(c), 3, 4, 6, 7, 10, 11, 12 and 14) have simply not been dealt with by the Commissioner (and were not the subject of any submissions before us). In relation to categories 1, 2(b)-(c), 4, 6, 7, 10, and 12, which concern "decisions" made by Seahill at various points in the chronology we have earlier set out, we do not consider that it has been demonstrated that the documents in these categories are privileged simply because the Hartnett and Mackie investigations were undertaken for a predominantly privileged purpose. Category 1, for example, seeks among other things, documents relating to the "decision" to commence the Mackie investigation. If any such documents exist, they necessarily came into existence prior to and independently of the commissioning of the Mackie report by letter dated 23 November 2020, since the "decision" referred to was presumably made before this. The affidavit of Ms O'Reilly simply does not address this objection because it was concerned only with categories 2(a), 5, 8, 9 and 13. Accordingly, it will be necessary for the Commissioner to determine the outstanding objections, if they are pressed. Otherwise, the orders for production of the documents in these categories should be issued.

At a glance

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Decision date

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Judgment (202 paragraphs)

Parties

Legislation Cited (5)

Cases Cited (5)

Damien Stephen v Seahill Enterprises Pty Ltd & Denise Fitzgibbons [2021] FWCFB 2623 (12 May 2021)