A matter arising under Commonwealth law?
44 A matter can arise under a law of the Commonwealth Parliament within the meaning of s 39B(1A)(c) of the Judiciary Act in a variety of ways. It is sufficient that a right or duty in question in the proceeding "owes its existence to Federal law or depends upon Federal law for its enforcement": R v Commonwealth Court of Conciliation and Arbitration: Ex parte Barrett [1945] HCA 50; 70 CLR 141 at 154 per Latham CJ. It follows that it is sufficient if the "subject matter of the controversy owes its existence to Commonwealth legislation": Rana v Google Inc [2017] FCAFC 156; 254 FCR 1 at 5-6 [18]. It is also sufficient if the proceeding could be disposed of by deciding an issue under a law of the Commonwealth, whether or not it is in fact so disposed of: Felton v Mulligan [1971] HCA 39; 124 CLR 367 at 374. As the plurality (Stephen, Mason, Aickin and Wilson JJ, Barwick CJ agreeing) explained in Moorgate Tobacco Co Ltd v Philip Morris Ltd [1980] HCA 32; 145 CLR 457 at 476:
The cases establish that federal jurisdiction is attracted if the right or duty based in a federal statute is directly asserted by the plaintiff or defendant, but not if the federal question arises only in some incidental fashion. So too federal jurisdiction is attracted if the court finds it necessary to decide whether or not a right or duty based in federal law exists, even if that matter has not been pleaded by the parties. But the converse is not true. If a federal matter is raised on the pleadings federal jurisdiction is exercised, notwithstanding that the court finds it unnecessary to decide the federal question because the case can be disposed of on other grounds.
45 In the present case, the originating application, by reference to the ASC, identified the alleged defamation as contained in the email Mr McKee sent on 9 June 2017 to Messrs Joyce and Heywood. We have set out the substance of the email and the pleadings and their development above. The following should be identified in the FAD by way of more focused attention:
(1) Mr McKee "confined the recipient list of the Email to Darren Joyce and David Heywood", who held the positions within the SRO identified above: paragraphs 11.1 and 11.2;
(2) the subject matter of the email related to allegations of workplace misconduct against the appellant: paragraph 11.3;
(3) the events leading up to the email included that when Mr McKee told Mr Joyce that the appellant may have accessed records of the SRO without a known SRO business purpose, Mr Joyce said to Mr McKee that "the allegations needed to be formally investigated and that it was appropriate for [Mr McKee] to record the allegations against the [appellant] in writing and submit a written request for appropriate action to be considered": paragraph 11.4(g);
(4) at the time of the publication of the email, if the appellant did behave as alleged, the conduct may have constituted, amongst other things, misconduct as defined in clauses 21.3(a) and (b) of the VPSEA: paragraphs 11.5(b) and 11.6(b);
(5) in the circumstances referred to in paragraphs 11.2 to 11.6 and by reason of his role and responsibilities at the SRO, at the time of publication of the email Mr McKee had a duty and/or an interest to record the allegations of workplace misconduct against the appellant and communicate them to Messrs Joyce and Heywood: paragraph 11.7; and
(6) in the circumstances referred to in paragraphs 11.2 to 11.6 and by reason of their roles and responsibilities at the SRO, at the time of publication of the email, Messrs Joyce and Heywood had the requisite corresponding interests in receiving a record of the allegations of workplace misconduct against the appellant: paragraph 11.8.
46 The primary judge considered the pleading in paragraphs 4(j) and (k) of the ASC that the defamatory imputations conveyed by the email included that the appellant had breached clause 21 of the VPSEA and s 50 of the Fair Work Act. The primary judge concluded that this pleaded matter "asserts a right or duty that owes its existence to a federal statute", but also concluded that this pleaded matter was colourable, being an "artificial attempt to invoke the Court's jurisdiction" as the alleged imputations were "untenable and…borderline risible": J[37], J[38] and J[40], see [30] above.
47 The respondents, by notice of contention, assert that the primary judge erred in concluding that paragraphs 4(j) and (k) of the ASC assert a right or duty that owes its existence to a federal statute, so as to bring the matter as a whole within federal jurisdiction by operation of s 39B(1A)(c) of the Judiciary Act. They also submitted that the pleadings of qualified privilege in the FAD do not attract federal jurisdiction.
48 As the respondents put it, the reference to a "legal duty" in paragraph 11(a) of the FAD is superfluous. It is sufficient if the corresponding duty or interest as between the maker and the recipient of the communication can be characterised as a moral or a social duty or interest. The duty or interest need not be and, indeed, will rarely be enforceable by mandamus or legal action: Bashford v Information Australia (Newsletters) Pty Ltd [2004] HCA 5; 218 CLR 366 at 391 [68]. The particulars to paragraph 11, at least to the extent they refer to the VPSEA, are also superfluous according to the respondents. It is not necessary, they correctly say, that the respondents allege or prove that the appellant engaged in the alleged conduct or that, if he did so, the conduct was in fact "misconduct" in breach of the VPSEA. All that is required is that the Court consider the persons who sent and received the email, and the circumstances in which they did so, to ascertain if in those circumstances the relationship between the sender and receivers involved a moral or social right or duty to send and receive the email: Bashford at 389-390 [64].
49 There is an important difference between the pleaded matter in the ASC and these arguments concerning the FAD. In the ASC, the allegation is that the email conveyed the defamatory imputations that the appellant had breached clause 21 of the VPSEA and s 50 of the Fair Work Act. Whether or not an imputation was conveyed and was defamatory involves asking if the published matter was likely to lead an ordinary reasonable person to think less of the person: Radio 2UE Sydney Pty Ltd v Chesterton [2009] HCA 16; 238 CLR 460 at 467 [5] and 483-484 [60]. Accordingly, it is not relevant to the appellant's allegation in paragraphs 4(j) and (k) of the ASC if: (a) the VPSEA applied to the appellant or the respondents or not, (b) the appellant's alleged conduct occurred or not, or (c) the appellant's alleged conduct, if it occurred, involved misconduct under the VPSEA and/or the Fair Work Act or not. All that is relevant for the appellant's allegations in paragraphs 4(j) and (k) of the ASC are whether or not the email conveyed to the ordinary reasonable person that the appellant had breached clause 21 of the VPSEA and s 50 of the Fair Work Act and, if so, if this was likely to lead the ordinary reasonable person to think less of the appellant.
50 It follows that the pleaded matter in paragraphs 4(j) and (k) of the ASC could not be disposed of by any finding that: (a) the VPSEA applied to the appellant and the respondents, (b) the appellant's alleged conduct occurred, and/or (c) the appellant's conduct involved misconduct under the VPSEA and/or the Fair Work Act. Further, no right or duty asserted in paragraphs 4(j) and (k) of the ASC depends for its existence on Commonwealth law. This is because the matters identified (the application of the VPSEA, the occurrence of the alleged conduct, and whether the conduct was misconduct in breach of the VPSEA and so s 50 the Fair Work Act) are not relevant to the disposition of the pleaded matter. For the same reason, the subject matter of the controversy does not owe its existence to Commonwealth legislation. The subject matter of the controversy in paragraphs 4(j) and (k) of the ASC is confined to whether or not the email conveyed to the ordinary reasonable person that the appellant had breached clause 21 of the VPSEA and, if so, if this was likely to lead the ordinary reasonable person to think less of the appellant.
51 For these reasons, the primary judge was wrong at J[37] to conclude that the matter pleaded in paragraphs 4(j) and (k) of the ASC asserts a right or duty that owes its existence to a federal statute. Those pleadings do not engage s 39B(1A)(c) of the Judiciary Act. The submissions on the notice of contention on this point should be accepted.
52 Paragraph 11 of the FAD raises different issues for consideration. Leaving aside the respondents' submissions that those parts of paragraph 11 which refer to breach of the VPSEA and s 50 of the Fair Work Act are superfluous to the respondents' case, it may be accepted that those pleadings are that: (a) if the alleged conduct occurred it may have breached the VPSEA and s 50 of the Fair Work Act, and (b) the corresponding duty or interest as between Mr McKee as the sender and Mr Joyce and Mr Heywood as the recipients of the email was a legal, professional, social or moral duty or interest. It follows that the respondents are right that they do not have to prove any of the identified matters (the application of the VPSEA, the occurrence of the alleged conduct, and whether the conduct was misconduct in breach of the VPSEA and/or the Fair Work Act), or that the source of the alleged legal duty or interest is the VPSEA, to succeed in their defence. That, however, is not the end of the matter.
53 The respondents have pleaded a legal duty or interest, albeit in the alternative to a professional, moral or social duty or interest for Mr McKee to send and Mr Joyce and Mr Heywood to receive the email. The respondents also pleaded a range of alternative sources of that legal duty including the VPSEA. The fact that the legal duty and its source are all pleaded in the alternative is immaterial. The pleaded matter could be disposed of by deciding an issue under a law of the Commonwealth. That issue is whether, by operation of the VPSEA and the positions they held, Mr McKee had a legal duty or interest to send the email and Messrs Joyce and Heywood had a corresponding legal duty to receive the email. The fact that this aspect of the pleaded case could be disposed of by deciding whether the VPSEA (an instrument that exists and is enforceable under the Fair Work Act) was engaged is sufficient to make the matter one which arises under a law of the Commonwealth as provided for in s 39B(1A)(c) of the Judiciary Act. We elaborate.
54 The defence of qualified privilege arises when a maker and a recipient of a communication have a corresponding duty or interest to make and receive a communication: Bashford at 385-386 [53]. In the FAD, the respondents pleaded at paragraphs 11(a) and (b) that they published and received the email in the performance of a legal duty or interest in addition to a professional, social or moral duty or interest. In the particulars to paragraph 11, the respondents pleaded that the subject matter of the email related to allegations of workplace misconduct against the appellant which, if established, could amount to misconduct as defined in clauses 21.3 (a) and (b) of the VPSEA: see paragraphs 11.5(b) and 11.6(c) of the FAD. This corresponds with the email, which stated that the appellant's "conduct may have breached clause 21 of the [VPSEA] specifically that he may have engaged in improper conduct and improper use of information acquired by virtue of his position".
55 Whilst the VPSEA is not a law of the Commonwealth, it is a species of agreement which owes its existence to, and enforceability from, a law of the Parliament: Pt 2-4 and s 50 of the Fair Work Act; see Ridd v James Cook University [2021] HCA 32; 394 ALR 12 at 17 [11] and Toyota Motor Corporation Australia Ltd v Marmara [2014] FCAFC 84; 222 FCR 152 at 179-180 [89]. Under clause 21.2(a) of the VPSEA, the appellant's employer had a duty or interest to ensure that any investigation into the appellant's alleged misconduct was conducted in accordance with the clause. Where employee misconduct is alleged, the employer is entitled, pursuant to clause 21.7, to make an initial assessment of the alleged misconduct before commencing a formal process or to commence a formal investigation under clause 21.10. Therefore, Messrs McKee, Joyce and Heywood, acting as agents of the appellant's employer, arguably had a legal duty or interest (that is, it is asserted that they had a legal duty or interest) in order to fulfil their obligations under the VPSEA to communicate or receive an email concerning alleged misconduct under clause 21 due to the employer's interest in investigating such conduct in accordance with the mandatory procedures in that clause. That asserted legal duty or interest in sending and receiving the email would, at least in part, owe its existence to a federal law (the Fair Work Act) since the agreement itself and its enforceability depend upon the terms and application of the Fair Work Act. Therefore, the source of the propounded common law defence of qualified privilege pleaded by the respondents in the FAD, on the ground of a legal duty or interest owed its existence, at least in part, to a Commonwealth law. This is sufficient to give rise to federal jurisdiction: see Felton v Mulligan at 408; Phillip Morris at 476; LNC Industries Ltd v BMW (Australia) Ltd [1983] HCA 31; 151 CLR 575 at 581; Northern Territory v GPAO [1999] HCA 8; 196 CLR 553 at 591 [90]; CGU Insurance Ltd v Blakeley [2016] HCA 2; 259 CLR 339 at 351-352 [29]. This is so even if this particular aspect of the respondent's defence of qualified privilege ultimately does not arise for consideration: Phillip Morris at 476.
56 While it may be open to the respondents to obtain leave to amend the FAD to remove the references to the legal duty and the VPSEA from paragraph 11, that will not have the effect of disengaging s 39B(1A)(c) of the Judiciary Act. Federal jurisdiction once attracted, is not lost: Felton v Mulligan at 373; Philip Morris at 477.
57 Further, even if that alternative had never been pleaded, the result may have been the same, for the following reasons.
58 If the respondents' defence of qualified privilege had been confined to a moral or social duty or interest not sourced in the VPSEA then, in any event, the respondents cannot excise from the relevant circumstances the fact that the email itself says that Mr McKee believed that, if the allegations were proven, the conduct in issue may have been in breach of clause 21 of the VPSEA. That is, the content of the email requires the Court to consider, as part of the context and the existence of any relevant moral or social duty or interest, Mr McKee's asserted belief that if the conduct occurred it may have breached the VPSEA. It is not possible to evaluate the alleged moral or social duty outside of the context established by the contents of the email, that Mr McKee believed that if the conduct occurred it may have breached the VPSEA. The existence of that belief, its reasonableness, and its relevance to Mr McKee sending and Messrs Joyce and Heywood receiving the email are unavoidably relevant to the alleged moral or social duty. Those issues can only be determined by reference to the identified matters which are within federal jurisdiction whether pleaded or not (that is, the application of the VPSEA, the occurrence of the alleged conduct, and whether the conduct was misconduct in breach of the VPSEA and/or the Fair Work Act).
59 It is not that the respondents must prove any of the identified matters. It is that the Court, at the least, will have to assess the existence of Mr McKee's belief, its reasonableness, and its relevance to Mr McKee sending and Messrs Joyce and Heywood receiving the email. This will be a necessary part of the Court assessing if the email and its contents were "fairly warranted by any reasonable occasion or exigency, and honestly made": Toogood v Spyring (1834) 1 Cr M & R 181 at 193 quoted in Bashford at 373 [9] per Gleeson CJ, Hayne and Heydon JJ.
60 The subject matter of Mr McKee's belief was that the conduct, if it occurred, breached the VPSEA (and so, the Fair Work Act). As McHugh J observed in Bashford (albeit in dissent in the result) at 387-388 [58]:
A plea that defamatory matter was published on an occasion of qualified privilege is a plea of confession and avoidance. It accepts that the communication is defamatory, that the defamatory matter may be false and that its publication has caused or may cause harm to the plaintiff. It confesses the publication of defamatory matter, but contends that the publication is immune from liability because the public interest requires that the duty and interest of the publisher and recipient should be preferred to the protection of the plaintiff's reputation. The court cannot determine these issues of duty and interest without characterising the subject matter of the defamation. It cannot judge whether the particular duty and interest are so necessary for the proper functioning of society that the occasion should be privileged - despite the harm that the communication may cause - unless it knows what is the nature of the defamatory communication that allegedly gives rise to the duty and interest.
61 In Bashford at 388 [60] McHugh J explained:
…the practical working of the doctrine of qualified privilege requires that the occasion be defined concretely and precisely. That ordinarily requires the interest of the recipient to be defined first, and to be defined concretely and precisely, although sometimes it is necessary first to define the duty in that way. Unless the interest is so defined, the issues of duty, occasion, relevance and malice cannot be determined - at all events correctly.
62 Justice McHugh continued in Bashford at 389 [63]:
In determining the question of privilege, the court must consider all the circumstances and ask whether this publisher had a duty to publish or an interest in publishing this defamatory communication to this recipient.
(Emphasis in original)
63 For these reasons, a necessary aspect of the alleged moral or social duty (if the pleading had been so confined) may be seen to involve a part of a controversy that owes its existence to a federal law. That part of the controversy is whether, having regard to the terms and application of the VPSEA, the occurrence of the alleged conduct, and whether the conduct was misconduct in breach of the VPSEA, (and so, the Fair Work Act) the email and its contents (including Mr McKee's stated belief about potential breach of the VPSEA) were "fairly warranted by any reasonable occasion or exigency, and honestly made": Toogood v Spyring at 193. Relevantly: (a) the stated belief owes its existence to the Fair Work Act, under which the VPSEA was made and is enforceable, (b) the reasonableness of the belief depends, at least in part, on the application of the VPSEA, the occurrence of the alleged conduct, and whether the conduct was misconduct in breach of the VPSEA, and/or (c) in any event, the controversy could be disposed of by deciding if, under or by reason of the VPSEA and Mr McKee's belief that the appellant may have breached the VPSEA, there was as between Mr McKee (as sender) and Messrs Joyce and Heywood (as recipients) a relationship involving the alleged moral or social duty or, although not pleaded, a legal duty.
64 Accordingly, the respondents' defence of qualified privilege, howsoever it is or might have been pleaded, may be seen to involve a matter arising under a law of the Commonwealth within the meaning of s 39B(1A)(c) of the Judiciary Act.