Saridas v Papuan Oil Search Ltd

Supreme Court of NSW|2023-10-06|Before: Schmidt AJ

Solicitors: Gillis Delaney Lawyers (Plaintiff) Kingston Reid (Defendant) File Number(s): 2021/324287

JUDGMENT

Ms Saridas brought these proceedings in 2021 after her employment as the Chief Financial Officer designate of Papuan Oil Search Limited had come to an end with her resignation on an agreed date in 2020. Ms Saridas claimed that beforehand, Oil Search had breached her contract of employment, the parties later entering a deed by which her employment was brought to an end and that afterwards, it also breached both the deed and the whistleblower provisions of the Corporations Act 2001 (Cth): Pt 9.4AAA.

Issues

There was no issue about the principles which apply to the orders for dismissal or strike out, or in relation to the Court's discretion under s 192A of the Evidence Act.
The s 192A discretion must be exercised bearing in mind the requirements of s 56 of the Civil Procedure Act 2005 (NSW). It specifies the overriding purpose of the legislative scheme to be the just, quick, and cheap resolution of the real issues in the proceedings and imposes obligations on the Court, the parties, and their legal representatives in respect of its furtherance.
There must thus be some good reason advanced for the exercise of the s 192A powers, but it is not necessary to show "special circumstances", or even that they are "out of the ordinary": The Owners - Strata Plan No 90189 v Parkview Constructions Pty Ltd [2022] NSWSC 1382 at [4], citing Sydney Attractions Group Pty Ltd v Schulman [2012] NSWSC 951 at [5]-[6].
It may be appropriate to give an advance ruling if all matters relevant to an issue have been or can then be ascertained and if it is clear that a ruling will inevitably be required: TKWJ v The Queen [2002] HCA 46; (2002) 212 CLR 124 at [42].
Whether a good reason had been established was nevertheless in issue, as was whether the application for dismissal or strike out of parts of the third further amended statement of claim on which Ms Saridas has been given leave to proceed involves an abuse of process and was available, given the limited circumstances in which such orders can be made.

The parties' cases

Oil Search relied on the provisions of s 1317AD(2B) of the Corporations Act to establish the existence of a good reason for making an advanced ruling.
Section 1317AD(1) permits compensation orders to be made under s 1317AE in favour of a whistleblower who has suffered detriment after making a protected disclosure, where the defendant has engaged in conduct which has caused the whistleblower detriment, then believing or suspecting that the whistleblower may have made, proposed to make or could make a protected disclosure and that belief or suspicion being the reason, or part of the reason for the detrimental conduct.
Section 1317(2B) deals with the respective burdens of proof imposed on the parties. The person seeking the order bearing the onus of adducing or pointing to evidence that suggests a reasonable possibility of the detriment having been caused by the defendant and the defendant then bearing the onus of establishing that the claim is not made out. "Detriment" is defined in s 1317ADA to include psychological injury as well as damage to a person's reputation and business or financial position.
The reversal of the onus was explained in the Explanatory Memorandum to the Treasury Laws (Amendment (Enhancing Whistleblower Protections) Bill 2018 (Cth) at 2.127 by reference to the "well documented propensity of organisations that are the subject of a disclosure of wrongdoing to accuse and victimise the whistleblower, citing reasons other than disclosure for their actions" and because actual knowledge of reasons for detrimental conduct will lie exclusively with the defendant.
Ms Saridas claims that she has suffered such detriment as the result of the conduct of Oil Search, its officers and employees after she made protected disclosures which led to the entry of the deed and her resignation. Her case is that the conduct which caused her detriment was pursued by Oil Search because of her disclosures, despite the settlement she had arrived at with it; its breaches of the deed and the whistleblower provisions having come to her attention as the result of what she was told by various third parties about the conduct of its officers and employees and in one case, conduct pursued by a former employee.
Oil Search contended that what fell on Ms Saridas to prove depended on admissible evidence being adduced in the proceedings, that depending on provisions of the Evidence Act, including those which regulate the admissibility of hearsay. The advance rulings it sought would assist with the efficient conduct of the proceedings, by clarifying what case it had to meet and what evidence it would have to adduce, to discharge any onus which fell upon it, which could not relate to the conduct of a former employee over whom it had no control.
Oil Search's case was that specified parts of Ms Saridas' third amended statement of claim should thus be dismissed, her claims being hopeless and bound to fail and causing it prejudice and embarrassment, given the generality of what had been pleaded and the material facts having been recounted in expressions difficult to understand. It now having had the benefit of having been served her evidence in chief, it was apparent that the challenged paragraphs of her pleading did not disclose a reasonable cause of action and involved an abuse of process and so should be dismissed.
Further, that justice required the making of the advance rulings because the evidence on which Ms Saridas advanced her case required that it call evidence from all of its employees, in order to meet the onus which fell upon it under the whistleblower provisions. This was disputed.
The case advanced for Ms Saridas was that the orders sought could not justly be made. The outlines which had been served were not intended to be tendered as evidence, but rather to put Oil Search on notice of evidence it was expected the witnesses Ms Saridas had to subpoenae could give. What evidence they would in fact give was not yet known. Nor had forensic decisions yet been made about what parts of Ms Saridas' affidavit would be read, they only being able to be made when all the evidence had been served, so that what was really in issue could be identified. But what was pursued could not result in Oil Search having to lead evidence from all of its employees, to meet the onus imposed upon it.
Further, that none of the disputed evidence was sought to be called for a hearsay purpose, as to the truth of words said, but rather to establish that they were said, including by officers and employees of Oil Search. Such evidence was relevant to the alleged breaches of the deed, the whistleblower claims and the detriment and resulting damage Ms Saridas claims she suffered, relying as she did on the grapevine effect well recognised in defamation cases, in circumstances where it is impossible to track a scandal and where it may have reached: Palmer-Bruyn and Parker Pty Ltd v Parsons [2001] HCA 69; 208 CLR 388 at [88].
The disputed evidence was also argued to be admissible under s 64 of the Evidence Act in the case of first-hand hearsay, it being proposed to call the person who made various representations, as well as under s 60, which was not so confined.
To pursue the course which Oil Search proposed was also argued to risk interference with the Parliament's intended reversal of the onus in whistleblower cases, all plaintiffs being required to establish in such cases being the existence of a reasonably possibility of the specified matters.
That onus could be met by reasonable inferences drawn from other facts. In this case the only sources of information about the circumstances in which Ms Saridas' employment came to an end were her and Oil Search, which necessarily acted through its officers, employees and agents. It had announced to the ASX in November 2020 that she had resigned, but not in terms agreed by the deed, which also required that she not be disparaged. The evidence would establish that it had not taken the necessary steps to ensure that this did not occur; the result of Oil Search's breaches being that her departure from its employ was later described not as a resignation, but in various damaging ways about which the witnesses whose outlines had been served would give evidence.
On Ms Saridas' case this evidence would all point to the reasonable possibility that Oil Search had engaged in the claimed detrimental conduct. This all being part of the grapevine of poisonous innuendo which she complained had damaged her as the result of the detrimental conduct it had pursued.
The claimed abuse of process arose out of Oil Search's unsuccessful earlier strike out motion, dealt with in Saridas (No 3). It could not now justly seek a second bite of the cherry, having already had an opportunity to advance its opposition to the pursuit of Ms Saridas' whistleblower claims. Its complaints about the claimed deficiencies of the evidence about which it sought advanced rulings, also not being a proper basis for the Court to make the dismissal and strike out orders sought.

The disputed parts of the pleadings cannot be dismissed or struck out

I am satisfied that the orders sought in respect of the disputed aspects of the third amended statement of claim cannot justly be made given the limited circumstances in which dismissal and strike out orders may be made, Oil Search's earlier strike out application having failed as it did and it then having had a fair opportunity to advance its strike out application. The disputed evidence in respect of which it seeks advance rulings cannot now lead to a different result.
Rule 13. 4 is concerned with dismissal of a claim for relief, not particulars. Even if it were, it is long settled that on a dismissal application the onus is on the defendant to show that there is no possibility of the plaintiff's claim succeeding consistently with the pleadings and the facts: Bayne v Baillieu (1908) 6 CLR 382; [1909] HCA 39 at 387. As explained in Spellson v George (1992) 26 NSWLR 666; [1992] NSWCA 254 at 678, such orders will rarely be made where there is any serious conflict as to any matter of fact: Sidebottom v Cureton (1937) 54 WN (NSW) 88.
While proceedings should not generally be dismissed if there is "a real question to be tried", where "upon full legal argument it is established that there was no legally tenable cause of action, summary dismissal is an appropriate course": Bott v Carter [2012] NSWCA 89 at [13]. This is not such a case.
A strike out of a claim without a hearing on the merits is also not lightly granted: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69 at [129]-[130]. What is required is a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way: Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41 at [57]; Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256; [2006] HCA 27 at [44]-[46]; Spencer v The Commonwealth (2010) 241 CLR 118; [2010] HCA 28 at [24].
While part of a pleading may be struck out under r 14.28, I am also satisfied that a proper basis for strike out of the disputed parts of Ms Saridas' pleading has not been established.
Here, what is in issue is not only whether Oil Search breached the deed, but also whether, as a result, false information was communicated to third parties about the reasons for Ms Saridas' departure from its employ which disparaged her and caused her the claimed detriments. That being the result of communications for which it is responsible, she being a whistleblower, and it having breached the whistleblower provisions which applied in the parties' situation.
In Saridas (No 3), I dealt with the parties' dispute about the construction of the whistleblower provisions, not accepting that the legislative scheme had to be construed in the way for which Oil Search then contended: at [78]. There I concluded, amongst other things, that the third further amended statement of claim satisfied the requirements of the Rules, by adequately putting Oil Search on notice of the basis of the claim Ms Saridas seeks to advance against it under the whistleblower provisions, by the pleaded facts and particulars she had given and the construction of the legislative scheme which she advances: at [79].
In Saridas (No 3) I also dealt with the aspects of the third further amended statement of claim which Oil Search then sought to have struck out, which was refused. They included paragraphs 35(i), 35(c), 35(d), 35(j), 35(k) and 36A: at [54]. It then unsuccessfully contended that the pleaded case impermissibly relied on alleged conduct of persons who were not officers or employees of Oil Search, when they disseminated statements about Ms Saridas: at [55]. Oil Search's case being that the disputed particulars disclosed no reasonable cause of action and had a tendency to cause prejudice, embarrassment or delay, as well as impermissibly seeking to elide the conduct of its officers and employees with the conduct of others, that seeking impermissibly to bring their conduct within s 1317AD(1) and attribution of it to Oil Search: at [56].
I concluded that the conduct of third parties which evidences the detriments and harm Ms Saridas claims Oil Search caused her, appeared to be relevant to what falls to her to establish under s 1317AD(1)(a): at [68]-[69].
Despite this Oil Search's further motion is addressed to paragraphs of the pleadings to which it has already unsuccessfully taken objection, as well as to other parts, namely, paragraphs 20, 23, 25, 35 and 37.
The third further amended statement of claim provides particulars of the basis on which Ms Saridas claims to be entitled to the whistleblower protections on which she relies and the circumstances in which she claims Oil Search caused her detriment for which she is entitled to compensation. Ms Saridas pleads:

in paragraph 20 various alleged breaches of the deed, including by failing to instruct its officers and employees as to relevant terms of the deed, its active misrepresentation of the circumstances in which she left its employ and statements later made by its chairman which misrepresented those circumstances;
in 23 that as a result she was passed over for various other employment;
in 25 that Oil Search's breaches adversely affected her reputation and capacity to obtain other employment for which she was qualified;
in 27 the claimed damages for breach of the deed;
in 35 the circumstances in which the power to make orders under s 1317AD arises, given the conduct of the chairmen and others which resulted in false information being given by Oil Search about the circumstances in which her employment ceased, as well as particulars of detriment which resulted;
in 36 why this amounts to detrimental conduct; and
in 37 the operation of the whistleblower provisions Ms Saridas advances and the compensation which is pursued as a result.

What is relied on includes claimed untrue statements made about Ms Saridas by Oil Search's chairman Mr Lee; its VP Investor Relations, Ms Diamant whose employment came to an end before some of the communications attributed to her were made; the chairman of its POSR audit committee, Ms Harris; and other unidentified employees and officers. The claimed result is that false information about her was disseminated in the marketplace, which caused her detriment as the natural and probable consequence of Oil Search's breaches of the deed.
These claims must be understood in the context of what the parties agreed by their deed. It relevantly provided in Clause 3.1 and Schedule 2: 3.1 The Company will use the communication contained in Schedule 2 to this Deed both internally and externally to explain (where necessary) the Termination. … Schedule 2 Oil Search CFO Designate Ayten Saridas has decided to resign from her position to pursue other opportunities in the corporate sector. Ms Saridas will finish with Oil Search on 1 December 2020 by mutual agreement. Oil Search CEO and Managing Director Kieran Wulff wished Ms Saridas all the best in her next career chapter and thanked her for the valuable contributions made to both corporate strategy and financial stewardship during her time with the Company.
In 5.3 and 5.4: 5.3 The Company agrees not to disparage or otherwise bring the Employee into disrepute as a result of or in connection with their Employment and Termination. 5.4 The Company will make all reasonable endeavours to ensure that its employees who have knowledge of the terms of this Deed conduct themselves in accordance with clause 5.3. Clause 5.3 does not apply to the Company or Group in circumstances where any of its employees make disparaging comments or criticism of the Employee without the knowledge or consent of the Company.
The terms in which Ms Saridas' resignation was communicated to the ASX appear to have departed from the agreed terms. It was there notified that Ms Diament was Oil Search's contact. Given the time of Ms Diament's departure from Oil Search's employ, not long after Ms Saridas' resignation, that accords with Ms Diament and potentially her successor or other members of her investor relations team having communicated with third parties about Ms Saridas.
Oil Search's case was that Clause 5.4 of the deed was not engaged in Ms Diament's case because she was not given knowledge of the terms of the deed, and further, it was not responsible for her conduct after she left its employ.
But Ms Saridas relies on its failure to communicate the terms of the deed to Ms Diament, given her role, contending that this evidences Oil Search's breach of the deed, it not having communicated what the deed provided about non disparagement of Ms Saridas to those through whom it necessarily had to act to ensure that the deed was complied with and she was not disparaged. Such persons included Ms Diament. It was its breaches which made it responsible for the incorrect and damaging information its officers and employees conveyed to others about Ms Saridas. That also made it responsible for what Ms Diament wrongly conveyed to third parties about Ms Saridas after she left its employ.

The discretion to make the advance rulings cannot be justly exercised

I am also satisfied that the advanced evidentiary rulings sought cannot be made, because I do not accept that the disputed evidence cannot be reasonably understood or responded to, as was Oil Search's case.
The evidence admissible at the hearing will be evidence that is relevant, namely, "evidence that, if it were accepted, could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue": s 55 of the Evidence Act.
Those issues will depend not only on the statement of claim and the defence, but what Oil Search finally puts in issue, having complied with the requirements of s 56 of the Civil Procedure Act, earlier discussed. That will no doubt depend on what evidence it decides to lead, given the outcome of enquiries it makes about Ms Saridas' claims.
To make out her case Ms Saridas must establish on the evidence not only that Oil Search breached the deed, but that those breaches and the other evidence on which she relies point to the reasonable possibility that it engaged in the detrimental conduct she alleges, which resulted in her suffering the detriments for which she seeks compensation as a whistleblower. She will succeed if Oil Search does not meet the onus which then falls upon it.
Ms Saridas seeks to meet her onus by leading evidence to establish that Oil Search did not adhere to the deed when it communicated the reasons for her departure, internally and externally, with the result not only that it breached the deed, but that it was responsible for damaging, incorrect information communicated to third parties by its officers and employees, in breach of its obligations to her as a whistleblower.
She has served her affidavits, as well as the outlines of evidence she expects the third parties earlier discussed to give, she intending to rely on their evidence as well as her own, to meet her onus.
Section 192A is concerned with rulings about evidence that a party proposes to call. What Ms Saridas said in her affidavit, to which objection is taken, concerns what others told her about false information circulating about her after her resignation. This evidence appears to be relevant not only to the claimed breaches of the deed, but the resulting reputational damage Ms Saridas claims she has suffered as the result of Oil Search's whistleblower obligations. What Ms Saridas expects to be corroborating evidence has been notified by way of the outlines served..
But Ms Saridas does not intend at trial to tender these outlines, which were served as the result of the Court's earlier orders. They were required in order to help ensure a fair trial, in circumstances where it is necessary for her to subpoena those witnesses, because they cannot be required to provide the affidavits they object to providing. Thereby she has given notice of how she will seek to meet the onus which falls upon her.
I am persuaded that it follows that any objections to the oral evidence which such witnesses may give will necessarily have to be dealt with when they are called at the hearing, in light of what then remains in issue. That cannot sensibly or justly be the subject of the s 192A advance ruling Oil Search sought.
That their evidence will not be relevant to what is in issue at trial is not apparent, that depending as it must both on the pleadings and what the parties identify at trial to be the real issues remaining between them to be. That will depend no doubt on whether Oil Search considers it is able to meet the onus which it may have to meet in relation to Ms Saridas' whistleblower claims, having made relevant enquiries of potential witnesses.
That the evidence of the third parties Ms Saridas proposes to call will necessarily be inadmissible hearsay may not be accepted. If not called for a hearsay purpose, as is Ms Saridas' case, their evidence will be admissible, s 59(1) of the Evidence Act providing as it does that "Evidence of a previous representation made by a person is not admissible to prove the existence of a fact that it can reasonably be supposed that the person intended to assert by the representation."
Ms Saridas does not propose to lead the disputed evidence to establish that what I will compendiously describe as the rumours about her employment having come to an end as the result of her poor performance, were true. She rather seeks to establish what was later said to her by those witnesses, in order to help establish not only that Oil Search breached the deed, but to point to the claimed result, the circulation of the false information by which she was disparaged, contrary to Oil Search's whistleblower obligations, with the resulting detriment for which she seeks compensation.
It is conduct involving the dissemination of false information, contrary to what was agreed in the deed, which will thus be in issue at trial. In Ms Saridas' pleadings, affidavit and the outlines of evidence she has served how this came to her attention is explained. Her claim being that Oil Search was responsible for both the breaches of the deed and the resulting dissemination of the false information about her, which proved to be to her considerable detriment.
This will require consideration of how Oil Search conducted itself. Even though not responsible for the actions of third parties, a company acts through its directors, other officers, employees and agents, including when it disseminates information. It is thus entirely possible that a course of conduct may be pursued by those for whom it is responsible, with the intention of disseminating false or damaging information, contrary to its whistleblower obligations.
Thus, while the company's rights, interests and duties can differ from those of its directors and their conduct and states of mind are not always to be attributed to it, ordinarily, a director's knowledge of conduct will be imputed to the company, if it is not totally in fraud of the company: Gerace v Auzhair Supplies Pty Ltd [2014] NSWCA 181.
It follows that evidence about the conduct of Oil Search's chairman, its directors, employees or agents in disseminating information about the termination of Ms Saridas' employment, as well as in Ms Diamant's case, after her employment came to an end, may thus be relevant to what lies in issue between these parties.
Not only the claimed breaches of the terms of the deed which governed what information Oil Search would disseminate about Ms Saridas internally and externally, but also its resulting claimed breaches of the whistleblower provisions and the detriment Ms Saridas claims she suffered as a result. If disparaging information was disseminated by Oil Search's officers or employees to third parties about Ms Saridas, such third parties may also have relevant evidence to give about what is in issue. So too may persons who are no longer in its employ.
It also follows that both Ms Saridas' affidavit and the oral evidence which she proposes to call from third parties may be admissible, given that s 60 of the Evidence Act, which is not restricted to first-hand hearsay, permits evidence of a previous representation which is relevant for a purpose other than proof of the facts asserted, to be led.
If evidence of previous representations is not adduced to prove the existence of a fact asserted by those representations, it is not hearsay: Walton v The Queen [1989] HCA 9; (1988-1989) CLR 283 at 289 and Pollitt v The Queen [1992] HCA 35; (1992) 174 CLR 558 at 571. If the purpose of evidence of a conversation is to establish what the participants were talking about, rather than the truth of what was said, it will also be admissible: Li, Wing Cheong v R [2010] NSWCCA 40 at [50]-[60].
Section 64 may also support the admission of some of the disputed evidence, although it is limited to first-hand hearsay. It may be that orders about such evidence could be made under s 135 of the Evidence Act, but that would require it to be concluded that the probative value of the evidence is substantially outweighed by the danger that it is unfairly prejudicial to Oil Search. There is no suggestion that such evidence would be misused at the hearing or not given appropriate weight. On a s135 application it will also be relevant that persons who made the representations in question will be available to be cross examined: see for example Australian Competition and Consumer Commission v BlueScope Steel Limited (No 3) [2021] FCA 114 at [104]. Indeed, as I have explained, Oil Search now has an opportunity to make enquiries of them itself.
In the result, I am thus not persuaded that what is in issue about the disputed evidence can justly be dealt with in advance of the hearing.
That the result of evidence such as that which Ms Saridas has served and given notice of can present evidentiary challenges for a defendant in proceedings brought under the whistleblower provisions, given the reversal of the onus there provided, can well be accepted. But that is what the Parliament has unusually provided for in this statutory scheme, with the result that it cannot follow that any overwhelming unfairness necessarily results for a defendant, from a plaintiff leading evidence of which notice has been given, to meet the evidentiary onus which falls upon him or her under that scheme.
Certainly that cannot be the case in a situation such as this. Oil Search has an opportunity not only to make enquiries of existing or former directors, employees or former employees who have relevant information about what variously lies in issue between the parties, but also of the third parties Ms Saridas proposes to call, in order to meet the onus which falls upon her.
In the result I am not satisfied that there is good reason established in this case for a departure from the usual course of dealing with objections to the evidence which Ms Saridas has given notice she proposes to lead at the hearing, by making the advance rulings now sought by Oil Search.

Orders

For the reasons given I order that: 1. For these reasons Oil Search's motion must be dismissed. The usual costs order under the Rules is that costs follow the event. In this case that is an order that Oil Search must pay Ms Saridas' costs of the motion, as agreed or assessed. 2. Unless the parties approach to be heard within 7 days, that will be the Court's order.

Amendments 10 October 2023 - Incorrect Counsel for the Plaintiff on cover page DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 10 October 2023

Corporations Act 2001(Cth)ss 1317AD, 1317ADA, 1317AE, Evidence

Evidence Act 1995(NSW)ss 55, 59, 60, 64, 192A

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