Sharpe v TechnologyOne Limited

Federal Court of Australia|2024-08-20|Before: Anderson J

The Respondent's interlocutory application of 28 May 2024 be dismissed.
The costs of the Respondent's interlocutory application of 28 May 2024 be reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ANDERSON J: 1 By interlocutory application dated 28 May 2024, the respondent (TechOne), seeks, pursuant to r 3.11 of the Federal Court Rules 2011 (Cth) and s 35A(5) of the Federal Court of Australia Act 1976 (Cth), that the court review the exercise of power by the registrar and the determination made on 16 May 2024 to dismiss TechOne's application for strike-out. 2 TechOne seeks, pursuant to s 31A of the FCA Act and r 16.21 of the Rules, that paragraphs 31 to 56G, and 57 to 61 (inclusive), of the amended statement of claim filed 7 March 2024 (ASOC) be struck out. For the reasons that follow, the interlocutory application will be dismissed.

Consideration 12 I am not satisfied that it is plain that Mr Sharpe cannot tender in evidence at trial the letter and the enclosure which I have marked MFI-1.

Letter and enclosure may not be wholly privileged 13 It is reasonably open to find that the letter and enclosure contain both privileged and non-privileged communications. 14 Mr Denton, counsel for TechOne, submits that the whole of the communication is privileged and therefore inadmissible. Mr Denton submits that the letter and enclosure cannot be reviewed so as to divide the material into privileged and non-privileged communications. I disagree. 15 In support of its submission, TechOne refers to the decision of Lander J in Pihiga Pty Ltd v Roche (2011) 278 ALR 209; FCA 240 at [81]-[87] where Lander J observed the broad application of the without prejudice privilege rule, noting at [87] that the rule is not restricted simply to an offer made and not accepted, but includes communications of all kinds which are genuinely entered into for the purpose of trying to reach a compromise. In particular, Lander J at [84] referred to Unilever plc v Procter & Gamble Co [2000] 1 WLR 2436 at 2448-2449 where Robert Walker LJ stated: … the without prejudice rule is founded partly in public policy and partly in the agreement of the parties. They show that the protection of admissions against interest is the most important practical effect of the rule. But to dissect out identifiable admissions and withhold protection from the rest of without prejudice communications (except for a special reason) would not only create huge practical difficulties but would be contrary to the underlying objective of giving protection to the parties, in the words of Lord Griffiths in Rush & Tompkins Ltd v Greater London Council [1989] AC 1280 at 1300; [1988] 3 All ER 737 at 740: "to speak freely about all issues in the litigation both factual and legal when seeking compromise and, for the purpose of establishing a basis of compromise, admitting certain facts". 16 I do not consider that the authorities preclude the Court from reviewing the letter and enclosure so as to identify aspects of the material that are not covered by the without prejudice privilege. 17 I find, consistent with the authority of Unilever, that there are special reasons in this case why the privileged communications can be dissected from the non-privileged communications. 18 The letter commences by dealing with the alleged poor performance of Mr Sharpe, outlines several matters in which Mr Sharpe rebuts the allegations raised against him, and raises several issues in respect of Mr Sharpe's employment with TechOne. According to the ASOC, the concerns around Mr Sharpe's performance were first raised in a meeting on 29 June 2023. 19 I do not understand TechOne to submit that the raising of these concerns at the meeting on 29 June 2023, in any way, attracted the without prejudice privilege. In my view, it is reasonably open to determine that the communications in respect of Mr Sharpe's performance issues, and his concerns around his employment at TechOne, were separate and distinct from his engagement with the deed of release which was also presented to him at the 29 July 2023 meeting. Therefore, the entirety of the letter and enclosure may not attract the without prejudice privilege. 20 I am satisfied, having read the letter and the enclosure, MFI-1, that it is a relatively straightforward task in a practical sense, for the Court at trial to dissect privileged parts of the communication from the non-privileged parts of the communication. I consider this to be the case despite, as Mr Denton pointed out to me in submissions, that mixed with what may be non-privileged communications are some references to what are likely to be privileged communications. 21 I am also satisfied that there are good public policy reasons to dissect the letter and enclosure in such manner. The letter and the enclosure are relied upon as important elements of the cause of action which Mr Sharpe seeks to maintain at the trial, namely a cause of action under s 340 of the FW Act which forms part of a statutory scheme designed to provide protections to employees. 22 It is relevant to note that the Court has adopted similar approaches previously to reviewing specific pieces of communications to determine whether they attract without prejudice privilege. For example, in Australian Competition and Consumer Commission v NSW Ports Operations Hold Co Pty Ltd [2020] FCA 1232 at [141]-[142], Wigney J reviewed whether particular paragraphs of an email chain, which were sought to be redacted, could be considered to attract without prejudice privilege, as distinct from the remainder of the email chain.

Exception under s 131(2)(i) of the Evidence Act 23 Returning to the exception at s 131(2)(i), it provides an exception to the rule under s 131(1) if the making of the communication, or preparing the document, affects a right of a person. Counsel for Mr Sharpe, submitted that this exception is applicable to the communications in the letter and enclosure. 24 The reference to a right in paragraph (i) is to an existing right. The exception extends to communications relied on as acts having legal consequences, including acts which themselves form part of the cause of action in a claim: see Galafassi v Kelly (2014) 87 NSWLR 119 at [145] (Gleeson JA) citing Tenstat Pty Ltd v Permanent Trustee Australia Ltd (1992) 28 NSWLR 625 at 633 (McLelland J). 25 The sending of the letter and the enclosure are relied upon by Mr Sharpe as the assertion of workplace rights which actuated TechOne's decision to make his position redundant and ultimately dismiss him from his employment. The paragraphs of the ASOC the subject of the application relate to Mr Sharpe's claim that TechOne contravened s 340 of the FW Act by taking adverse action against him because of complaints about his employment and/or because he threatened to sue TechOne. The complaints and the threats to sue were contained in the letter and the enclosure. Accordingly, they are relevant to the cause of action under s 340 of the FW Act. 26 At all times, Mr Sharpe had a right under the FW Act to protection from adverse action taken for the reason of him having, exercising, or proposing to exercise a workplace right. Mr Sharpe's case is that TechOne breached that right by its conduct, which he alleges amounts to adverse action. 27 For Mr Sharpe's claim to be made out, TechOne's conduct must have been engaged in because Mr Sharpe exercised or proposed to exercise a workplace right by sending the letter and the enclosure. I am satisfied, for the purpose of this strikeout application, that it is at least arguable that this affected Mr Sharpe's rights by comprising one of the constituent elements of the breach of the cause of action under s 340 of the FW Act, and therefore, that the exception under s 131(2)(i) of the Evidence Act applies such that parts of the letter and enclosure will be admitted at trial into evidence.

Exception under s 131(2)(g) of the Evidence Act 28 I now turn to consider the second exception relied upon by Mr Sharpe. That is, s 131(2)(g) of the Evidence Act. 29 Section 131(2)(g) of the Evidence Act provides an exception to the privilege where evidence of the communication is necessary to prevent the court being misled by other evidence adduced in the proceeding. The exception may only be enlivened after evidence has been filed. That much was conceded by counsel for Mr Sharpe in submissions before me. 30 The purpose of the exception is to prevent a court being deceived as to the facts by shutting out evidence that would prove the fact and nature of the communication. 31 As I have said, Mr Sharpe accepts that if the question of admissibility were to be determined now, s 131(2)(g) of the Evidence Act would not apply because no evidence has been adduced. Indeed, no defence has been filed yet by TechOne. 32 However, the inquiry on this interlocutory application must look forward to the evidence that will be available at trial. Mr Sharpe proposes to rely on the letter and enclosure at trial to establish that complaints and threats to sue were made. If the letter and the enclosure are excluded from the evidence at trial, TechOne would be able to deny the occurrence of any exercise of, or proposal to exercise, a workplace right in a way which may be likely to mislead the court. For this reason, the exception in s 131(2)(g) may reasonably be engaged at trial such that the letter and the enclosure are admissible in evidence.

Disposition 33 For these reasons, I will dismiss TechOne's application to strike out paragraphs 31 to 56G, and 57 to 61, of the ASOC. 34 I will also dismiss the alternate basis upon which TechOne seeks to enter judgment against Mr Sharpe on those paragraphs under s 31A of the FCA Act. I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Anderson.

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