Watson v Greenwoods & Herbert Smith Freehills Pty Ltd

Solicitor for the First Respondent: Kennedys (Australasia) Partnership

Counsel for the Second Respondent: Ms E Collins SC with Mr B Lim

Solicitor for the Second Respondent: King & Wood Mallesons

AND: GREENWOODS & HERBERT SMITH FREEHILLS PTY LTD First Respondent

LENDLEASE CORPORATION LTD Second Respondent

order made by: MOSHINSKY, ABRAHAM and RAPER JJ DATE OF ORDER: 30 August 2023

1. The questions reserved for consideration be answered as follows: (a) On the proper construction of ss 1644(1) and 1644(2) of the Corporations Act 2001 (Cth), do ss 1317AD and 1317AE of the Corporations Act apply to detrimental conduct that was engaged in before the amendments under the Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 (Cth) came into effect on 1 July 2019, whether or not any detriment caused by the conduct continued on or after 1 July 2019 (where it commences before 1 July 2019)? Answer: No (b) On the proper construction of Item 16 of Pt 2 of Sch 1 to the Amendment Act, do ss 14ZZZ and 14ZZZA of the Taxation Administration Act 1953 (Cth) apply to detrimental conduct that was engaged in before the amendments under the Amendment Act came into effect on 1 July 2019, whether or not any detriment caused by the conduct continued on or after 1 July 2019 (where it commences before 1 July 2019)? Answer: No
2. Within seven days, the parties are to file any agreed minute of proposed consequential orders to give effect to the Court's reasons.
3. In the event that the parties are not able to agree as to the form of the minute, each party file and serve his or its proposed minute of orders and a short written submission of no more than two pages, within 14 days of the date of this judgment.
4. Subject to paragraphs 5 and 6, there be no order as to costs in relation to the hearing and determination of the separate questions.
5. If a costs application is to be made, then within seven days of the date of this judgment, any such application, any evidence in support of that application and written submissions (not exceeding two pages in length) which address the reasons why a costs order should be made, must be filed.
6. Any party opposing the costs application may, within 14 days of the date of this judgment, file any evidence in opposition to that application and written submissions (not exceeding two pages in length) which address the reasons why a costs order should not be made. The issue of costs will then be determined on the papers. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Introduction 1 This is a determination of two questions referred to the Full Court of the Federal Court of Australia for determination from a matter currently before the Federal Court of Australia (Primary Proceeding). The questions were identified in the orders of Raper J made on 21 March 2023 in the Primary Proceeding. The questions were then referred to this Court under a direction of the Chief Justice pursuant to s 20(1A) of the Federal Court of Australia Act 1976 (Cth). 2 The questions are as follows: (1) On the proper construction of ss 1644(1) and 1644(2) of the Corporations Act 2001 (Cth), do ss 1317AD and 1317AE of the Corporations Act apply to detrimental conduct that was engaged in before the amendments under the Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 (Cth) came into effect on 1 July 2019, whether or not any detriment caused by the conduct continued on or after 1 July 2019 (where it commences before 1 July 2019)? (2) On the proper construction of Item 16 of Pt 2 of Sch 1 to the Amendment Act, do ss 14ZZZ and 14ZZZA of the Taxation Administration Act 1953 (Cth) apply to detrimental conduct that was engaged in before the amendments under the Amendment Act came into effect on 1 July 2019, whether or not any detriment caused by the conduct continued on or after 1 July 2019 (where it commences before 1 July 2019)? 3 For the reasons which follow, both questions are answered in the negative.

Background 4 The Primary Proceeding concerns a claim by Mr Watson, a former partner of Greenwoods & Herbert Smith Freehills Pty Ltd (GHSF), a firm that provided taxation advisory services. GHSF and Mr Watson (in his capacity as a partner of GHSF) provided taxation advisory services to Lendlease Corporation Ltd, a construction and real estate firm. Mr Watson claims, inter alia, to have made disclosures protected under Pt 9.4AAA of the Corporations Act, and to have suffered detriments by reason of making those disclosures. 5 Mr Watson claims that he disclosed concerns about the correctness of Lendlease's financial statements and their compliance with Australian taxation law to senior persons at Lendlease in or around February to August 2013, and in March 2014. Mr Watson also claims in around August 2013 and in March 2014 that he disclosed his concerns about the financial statements to other partners and directors of GHSF. 6 Mr Watson contends that, between May 2014 and May 2016, he was subjected to detrimental conduct as a result of the disclosures to GHSF and Lendlease. The claimed detrimental conduct is pleaded to comprise Mr Watson's removal from the Lendlease account, the denial of paid sick leave, the reduction of his remuneration and his receipt of a notice of termination. Mr Watson resigned from his employment in May 2016 and he alleges that he was constructively dismissed. 7 After Mr Watson's employment with GHSF had ended, he claims that he disclosed his concerns about Lendlease's financial statements and its taxation position, in the period between November 2017 and November 2019, to the Chair of its Board, to its Chief Financial Officer, and to the Chair of its Audit Committee. He disclosed his concerns to the Australian Taxation Office on 15 December 2019. Mr Watson claims that, between August 2020 and June 2021, he further disclosed his concerns about Lendlease's financial statements and taxation position to Lendlease. 8 This determination is being made at an early stage in the proceedings: no defence to Mr Watson's amended statement of claim has yet been filed.

Overlapping considerations relevant to both questions 9 The parties' written and oral submissions concentrated almost exclusively on the first question given the substantial overlap in argument as between the two questions. This is because the relevant provisions under the amended Pt 9.4AAA of the Corporations Act and the newly inserted Pt IVD of the Taxation Administration Act are in largely identical terms. The central historical and legislative differences, relevant to these questions are that (1) the Corporations Act had contained whistleblower protections prior to the Amendment Act and the Taxation Administration Act had not; and (2) the transitional provision applicable to operation of the new whistleblower protections under the Taxation Administration Act, namely Item 16 of Pt 2 of Sch 1 to the Amendment Act, is in narrower terms.

The previous Corporations Act regime 10 Under the pre-amendment provisions in Pt 9.4AAA of the Corporations Act, whistleblower protection from victimisation and compensatory relief arose from a combination of ss 1317AC and 1317AD. These provisions were as follows: 1317AC Victimisation prohibited Actually causing detriment to another person (1) A person (the first person) contravenes this subsection if: (a) the first person engages in conduct; and (b) the first person's conduct causes any detriment to another person (the second person); and (c) the first person intends that his or her conduct cause detriment to the second person; and (d) the first person engages in his or her conduct because the second person or a third person made a disclosure that qualifies for protection under this Part. Threatening to cause detriment to another person (2) A person (the first person) contravenes this subsection if: (a) the first person makes to another person (the second person) a threat to cause any detriment to the second person or to a third person; and (b) the first person: (i) intends the second person to fear that the threat will be carried out; or (ii) is reckless as to causing the second person to fear that the threat will be carried out; and (c) the first person makes the threat because a person: (i) makes a disclosure that qualifies for protection under this Part; or (ii) may make a disclosure that would qualify for protection under this Part. Officers and employees involved in contravention (3) If a company contravenes subsection (1) or (2), any officer or employee of the company who is involved in that contravention contravenes this subsection. Threats (4) For the purposes of subsection (2), a threat may be: (a) express or implied; or (b) conditional or unconditional. (5) In a prosecution for an offence against subsection (2), it is not necessary to prove that the person threatened actually feared that the threat would be carried out. 1317AD Right to compensation If: (a) a person (the person in contravention) contravenes subsection 1317AC(1), (2) or (3); and (b) a person (the victim) suffers damage because of the contravention; the person in contravention is liable to compensate the victim for the damage. 11 Under the former s 1317AC, the prohibition on victimisation operated in two ways. The first concerned actually causing detriment to a whistleblower (s 1317AC(1)). The second concerned threats to cause detriment to a whistleblower (s 1317AC(2)). This provision was not a civil penalty provision, but a contravention of s 1317AC was a criminal offence due to the operation of s 1311(1). A right to compensation for a victim of victimising conduct arose out of the operation of s 1317AD with respect to contraventions of s 1317AC.

The amended Corporations Act regime 12 The previous regime was amended by the Amendment Act. Among other things, the Amendment Act separated the operation of the compensation provision (s 1317AD) from that of the provision prohibiting victimisation (s 1317AC). In the previous form of the provision, the operation of s 1317AD had depended upon contravention of s 1317AC. In amended form, s 1317AC prohibits victimisation on different bases to the predecessor provision; compare the former s 1317AC extracted above, to the following: 1317AC Victimisation prohibited Actually causing detriment to another person (1) A person (the first person) contravenes this subsection if: (a) the first person engages in conduct; and (b) the first person's conduct causes any detriment to another person (the second person); and (c) when the first person engages in the conduct, the first person believes or suspects that the second person or any other person made, may have made, proposes to make or could make a disclosure that qualifies for protection under this Part; and (d) the belief or suspicion referred to in paragraph (c) is the reason, or part of the reason, for the conduct. Note 1: Failure to comply with this subsection is an offence (see subsection 1311(1)). Note 2: This subsection is also a civil penalty provision (see section 1317E). For relief from liability to a civil penalty relating to this subsection, see section 1317S. Threatening to cause detriment to another person (2) A person (the first person) contravenes this subsection if: (a) the first person makes to another person (the second person) a threat to cause any detriment to the second person or to a third person; and (b) the first person: (i) intends the second person to fear that the threat will be carried out; or (ii) is reckless as to causing the second person to fear that the threat will be carried out; and (c) the first person makes the threat because a person: (i) makes a disclosure that qualifies for protection under this Part; or (ii) may make a disclosure that would qualify for protection under this Part. Note 1: Failure to comply with this subsection is an offence (see subsection 1311(1)). Note 2: This subsection is also a civil penalty provision (see section 1317E). For relief from liability to a civil penalty relating to this subsection, see section 1317S. Officers and employees involved in contravention (3) If a company contravenes subsection (1) or (2), any officer or employee of the company who is involved in that contravention contravenes this subsection. Note 1: Failure to comply with this subsection is an offence (see subsection 1311(1)). Note 2: This subsection is also a civil penalty provision (see section 1317E). For relief from liability to a civil penalty relating to this subsection, see section 1317S. Threats (4) For the purposes of subsection (2), a threat may be: (a) express or implied; or (b) conditional or unconditional. (5) In a prosecution for an offence against subsection (2) or proceedings in relation to a contravention of subsection (2), it is not necessary to prove that the person threatened actually feared that the threat would be carried out. 13 Section 1317AD confers a power on a court to make orders for compensation and other remedies (under s 1317AE) if the first person has engaged in detrimental conduct. The new provision adjusts the burden of proof and is extracted in full as follows: 1317AD Compensation and other remedies - circumstances in which an order may be made (1) A court may make an order under section 1317AE in relation to a person (the first person) if: (a) the first person engages in conduct (detrimental conduct) that: (i) causes any detriment to another person (the second person); or (ii) constitutes the making of a threat to cause any such detriment to another person (the second person); and (b) when the first person engages in the detrimental conduct, the first person believes or suspects that the second person or any other person made, may have made, proposes to make or could make a disclosure that qualifies for protection under this Part; and (c) the belief or suspicion referred to in paragraph (b) is the reason, or part of the reason, for the detrimental conduct. (2) A court may make an order under section 1317AE in relation to a person (the first person) if: (a) the first person is or was an officer or employee of a body corporate; and (b) paragraphs (1)(a), (b) and (c) of this section apply to the body corporate because of detrimental conduct engaged in by the body corporate; and (c) the first person: (i) aided, abetted, counselled or procured the detrimental conduct; or (ii) induced, whether by threats or promises or otherwise, the detrimental conduct; or (iii) was in any way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the detrimental conduct; or (iv) conspired with others to effect the detrimental conduct. (2A) A court may make an order under section 1317AE in relation to a person (the first person) that is a body corporate if: (a) another person (the third person) engages in conduct (detrimental conduct) that: (i) causes any detriment to a person (the second person) other than the first person or the third person; or (ii) constitutes the making of a threat to cause any such detriment to a person (the second person) other than the first person or the third person; and (b) when the third person engages in the detrimental conduct, the third person believes or suspects that the second person or any other person made, may have made, proposes to make or could make a disclosure that qualifies for protection under this Part; and (c) the belief or suspicion referred to in paragraph (b) is the reason, or part of the reason, for the detrimental conduct; and (d) the first person is under a duty to prevent the third person engaging in the detrimental conduct, or a duty to take reasonable steps to ensure that the third person does not engage in the detrimental conduct; and (e) the first person fails in part or whole to fulfil that duty. Burden of proof (2B) In proceedings where a person seeks an order under section 1317AE in relation to another person: (a) the person seeking the order bears the onus of adducing or pointing to evidence that suggests a reasonable possibility of the matters in: (i) if subsection (1) of this section applies - paragraph (1)(a); or (ii) if subsection (2) of this section applies - paragraph (1)(a), as mentioned in paragraph (2)(b); or (iii) if subsection (2A) of this section applies - paragraphs (2A)(a) and (d); and (b) if that onus is discharged - the other person bears the onus of proving that the claim is not made out. Threats (3) For the purposes of this section, a threat may be: (a) express or implied; or (b) conditional or unconditional. (4) In proceedings for the purposes of section 1317AE, it is not necessary to prove that the person threatened actually feared that the threat would be carried out. 14 Section 1317AE provides: 1317AE Compensation and other remedies - orders that may be made (1) For the purposes of subsections 1317AD(1), (2) and (2A), a court may make any of the following orders: (a) an order requiring the first person to compensate the second person, or any other person, for loss, damage or injury suffered as a result of the detrimental conduct; (b) if the court is satisfied that the first person engaged in the detrimental conduct in connection with the first person's position as an employee: (i) an order requiring the first person to compensate the second person, or any other person, for a part of loss, damage or injury as a result of the detrimental conduct, and an order requiring the first person's employer to compensate the second person, or any other person, for a part of loss, damage or injury as a result of the detrimental conduct; or (ii) an order requiring the first person and the first person's employer jointly to compensate the second person, or any other person, for loss, damage or injury suffered as a result of the detrimental conduct; or (iii) an order requiring the first person's employer to compensate the second person, or any other person, for loss, damage or injury as a result of the detrimental conduct; (c) an order granting an injunction, on such terms as the court thinks appropriate, to prevent, stop or remedy the effects of the detrimental conduct; (d) an order requiring the first person to apologise to the second person, or any other person, for engaging in the detrimental conduct; (e) if the second person is or was employed in a particular position and the detrimental conduct wholly or partly consists, or consisted, of the termination, or purported termination, of the second person's employment - an order that the second person be reinstated in that position or a position at a comparable level; (f) if the court thinks it is appropriate - an order requiring the first person to pay exemplary damages to the second person, or any other person; (g) any other order the court thinks appropriate. (2) If the detrimental conduct wholly or partly consists, or consisted, of terminating or purporting to terminate a person's employment (including detrimental conduct that forces or forced the person to resign), the court must, in making an order mentioned in paragraph (1)(a) or (b), consider the period, if any, the person is likely to be without employment as a result of the detrimental conduct. This subsection does not limit any other matter the court may consider. (3) In deciding whether to make an order under paragraph (1)(b) in relation to the first person's employer, the court may have regard to the following: (a) whether the employer took reasonable precautions, and exercised due diligence, to avoid the detrimental conduct; (b) if the employer has a policy dealing with any or all of the matters referred to in subsection 1317AI(5) (whether or not section 1317AI requires the employer to have such a policy) - the extent to which the employer gave effect to that policy; (c) any duty that the employer was under to prevent the detrimental conduct, or to take reasonable steps to ensure that the detrimental conduct was not engaged in. (4) If the court makes an order under subparagraph (1)(b)(ii), the first person and the first person's employer are jointly and severally liable to pay the compensation concerned. 15 These new provisions effected material changes which included, without being exhaustive: (1) the widening of the scope of what disclosures qualify for protection: s 1317AA; (2) orders for compensation can now be made without any contravention of the offence provision being established: s 1317AD; (3) it is now sufficient to establish that detrimental conduct occurred because the wrongdoer "believes or suspects" that the whistleblower or any other person "made, may have made, proposes to make or could make a disclosure", rather than needing to establish that the conduct occurred because of the disclosure: s 1317AC(1)(c); accordingly, the whistleblower need not have made a disclosure before the detrimental conduct occurred, but rather the detrimental conduct may have occurred because the wrongdoer believes or suspects the whistleblower "may have made, proposes to make or could make" a disclosure; (4) the burden of proof applicable to compensation orders has been modified such that the whistleblower need only adduce evidence that suggests a "reasonable possibility" that the detrimental conduct occurred, at which point the wrongdoer assumes an onus to negative the claim: s 1317AD(2B); and (5) failure to comply with s 1312AC gives rise to civil penalties where previously non-compliance constituted an offence (see s 1311(1)) (as it still does) but did not give rise to a civil penalty.

The Corporations Act transitional provisions 16 The relevant transitional provisions, s 1644(1)-(2), provide: 1644 Application of amendments (1) The amendments made by Part 1 of Schedule 1 to the Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 apply in relation to disclosures that: (a) are made at or after the time that Part commences (the commencement time); and (b) relate to matters that occur or occurred before, at or after the commencement time. (2) Without limiting subsection (1), sections 1317AC, 1317AD and 1317AE, and any other provision of Part 9.4AAA to the extent that it relates to those sections, as in force immediately after the commencement time, also apply at and after the commencement time in relation to a disclosure that: (a) was made before the commencement time; and (b) would be a disclosure protected by Part 9.4AAA, if the amendments made by Part 1 of Schedule 1 to the Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 had been in force at the time the disclosure was made. … 17 A separate transitional provision, s 1644A, applies only to offences and provides: 1644A Application of amendments relating to penalties The amendments made by Part 4 of Schedule 1 to the Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 apply in relation to the commission of an offence if the conduct constituting the commission of the offence occurs wholly on or after the commencement of that Part.

The Amendment Act's commencement provision for the Corporations provisions 18 The commencement table contained in s 2 of the Amendment Act was as follows: Commencement information Column 1 Column 2 Column 3 Provisions Commencement Date/Details

1. Sections 1 to 3 and anything in this Act not elsewhere covered by this table The day this Act receives the Royal Assent. 12 March 2019
2. Schedule 1, Parts 1, 2 and 3 The first 1 January, 1 April, 1 July or 1 October to occur after the end of the period of 3 months beginning on the day this Act receives the Royal Assent. 1 July 2019
3. Schedule 1, Part 4 The later of: 1 July 2019 (a) immediately after the commencement of the provisions covered by table item 2; and (paragraph (a) applies) (b) immediately after the commencement of Schedule 1 to the Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019. However, the provisions do not commence at all if the event mentioned in paragraph (b) does not occur.

19 The bulk of the amendments to the Corporations Act were contained in Pt 1 of Sch 1 to the Amendment Act. The majority of the amendments to the Taxation Administration Act were contained in Pt 2. Additional amendments to the Banking Act 1959 (Cth), the Insurance Act 1973 (Cth), the Life Insurance Act 1995 (Cth) and the Superannuation Industry (Supervision) Act 1993 (Cth) were contained in Pt 3. Under s 2, all of the amendments contained in Pts 1, 2 and 3 commenced on the first 1 January, 1 April, 1 July or 1 October to occur after the end of the period of 3 months beginning on the day the Amendment Act received the Royal Assent. The Amendment Act was assented to on 12 March 2019, meaning Pts 1, 2 and 3 commenced on 1 July 2019. 20 Additional "contingent amendments" to the Corporations Act and Taxation Administration Act were contained in Pt 4, and their commencement operated differently. In the event that Sch 1 to the Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019 (Cth) had not commenced by the time that Pts 1, 2 and 3 commenced, the commencement of the contingent amendments would be delayed until Sch 1 to that Act commenced. The contingent amendments concerned the offences under the Corporations Act and Taxation Administration Act. They included a transitional provision relating to the commencement of the contingent amendments under the Corporations Act (s 1644A, extracted above at [17]) and an item in equivalent terms relating to the commencement of the contingent amendments under the Taxation Administration Act (Item 38). Because Sch 1 to the Treasury Laws Amendment (SCFSP) Act commenced on 13 March 2019, the contingent amendments in Pt 4 ultimately also commenced on 1 July 2019.

Extrinsic materials 21 The Revised Explanatory Memorandum, Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018 (Cth) describes purpose of the amendments in Pt 1, Sch 1 to the Amendment Act as being "so that a single, strengthened whistleblower protection regime covers the corporate, financial and credit sectors". At [1.7], the REM described the existing regime as "a confusing web for whistleblowers to navigate" and referred at [1.9] to the prospect that "[w]hile existing protections remain inadequate or unclear, it is likely that whistleblowers will continue to be discouraged from disclosing information about wrongdoing". 22 The REM also addressed the commencement of the amendments. It said at [2.160] that "[t]he amendments commence on the first day of the second quarter following Royal Assent", which was 1 July 2019. At [2.161], the REM described the effect of s 1644(1), "[t]he amendments will apply in relation to whistleblower disclosures made on or after commencement, including disclosures about events occurring before this date". Then, describing the effect of s 1644(2), the REM said at [2.162], "[t]he amendments will also apply to victimisation of whistleblowers after commencement, and to a whistleblower's right to compensation and other remedies, in relation to disclosures that have been made prior to this date".

The Taxation Administration Act provisions 23 The second separate question concerns the transitional application of ss 14ZZZ and 14ZZZA of the Taxation Administration Act. These provisions are materially identical to ss 1317AD and 1317AE of the Corporations Act and therefore do not need to be set out. Furthermore, unlike the provisions under the Corporations Act, these provisions were new additions to the Taxation Administration Act. 24 The relevant provisions prescribing the transitional application of ss 14ZZZ and 14ZZZA of the Taxation Administration Act are contained in Item 16 (equivalent to s 1644 in part) of Pt 2 of Sch 1 and Item 38 (equivalent to s 1644A) of Pt 4 of Sch 1 to the Amendment Act. Item 16 provides: 16 Application The amendments made by this Part apply in relation to disclosures that: (a) are made at or after the time this Part commences (the commencement time); and (b) relate to matters that occur or occurred before, at or after the commencement time. 25 Item 38 provides: 38 Application of amendments The amendments of the Taxation Administration Act 1953 made by this Part apply in relation to the commission of an offence if the conduct constituting the commission of the offence occurs wholly on or after the commencement of this Part. 26 The purpose of these amendments was "to create a regime to protect and compensate individuals who report breaches or suspected breaches of the tax law or misconduct in relation to an entity's tax affairs": REM at [3.5]. The REM, at [3.3], notes that, prior to the introduction of the Amendment Act, there was no specific legislative regime for the protection of tax whistleblowers. The REM also notes at page 73 that, before the introduction of the Amendment Act, there was no specific regime that provided remedies for individuals who suffer victimisation or other damage in relation to making disclosures.

The first separate question 27 The first separate question is concerned with whether ss 1317AD and 1317AE (as affected by transitional provisions in s 1644) of the Corporations Act apply to detrimental conduct that was engaged in before the commencement date of the Amendment Act (being 1 July 2019), whether or not any detriment caused by the conduct continued after that date. 28 The respective positions of the parties on the first separate question are as follows. 29 The respondents contend that the question should be answered "No". In summary, they contend that, on the proper construction of s 1644(1) and (2) of the Corporations Act, ss 1317AD and 1317AE of that Act as amended by the Amendment Act (the Amended Provisions) do not apply to detrimental conduct that was engaged in before 1 July 2019. The respondents accept that s 1644(1) and (2) provide for the Amended Provisions to operate retrospectively to a limited extent; however, that retrospective operation does not extend to detrimental conduct that was engaged in before 1 July 2019. 30 Mr Watson contends that first question should be answered "Yes", subject to certain qualifications. Mr Watson's proposed answer to the first separate question is as follows: Yes, where the disclosure about which the respondent held the relevant belief or suspicion was made (or, at the time of the detrimental conduct, was to be made) either: a. on or after 1 July 2019 (where the disclosure related to matters that occurred before, on or after 1 July 2019); or b. before 1 July 2019, provided the disclosure would be a disclosure protected by Pt 9.4AAA of the Corporations Act 2001 (Cth) (Corporations Act) had the amendments made by Pt 1 of Sched 1 to the Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 (Cth) (Amending Act) been in force at the time the disclosure was made. 31 Mr Watson places emphasis on the fact that the Amended Provisions can apply to detrimental conduct that is engaged in in anticipation of a disclosure, as well as in response to a disclosure that has already occurred (see s 1317AD(1)(b)). In light of this (and other matters), he contends that, on the proper construction of s 1644(1) and (2), the Amended Provisions apply to detrimental conduct engaged in before 1 July 2019 in the circumstances identified in his answer set out above.

Consideration 32 The first separate question raises an issue of statutory construction. The principles applicable to statutory construction are well established. The starting point is the text of the provision, having regard to its context and purpose: SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; 262 CLR 362 at [14] per Kiefel CJ, Nettle and Gordon JJ, citing Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [69]-[71] per McHugh, Gummow, Kirby and Hayne JJ; Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) [2009] HCA 41; 239 CLR 27 at [47] per Hayne, Heydon, Crennan and Kiefel JJ. 33 Also relevant, for present purposes, are the principles relating to what is often referred to as the retrospective operation of statutes (noting that the terminology can be a source of confusion - see Stephens v The Queen [2022] HCA 31; 273 CLR 635 at [29] per Keane, Gordon, Edelman and Gleeson JJ). The general rule of the common law is that a statute changing the law ought not, unless the intention appears with reasonable certainty, be understood as applying to facts and events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to past events: see ADCO Constructions Pty Ltd v Goudappel [2014] HCA 18; 254 CLR 1 at [27] per French CJ, Crennan, Kiefel and Keane JJ, citing Maxwell v Murphy (1957) 96 CLR 261 at 267 per Dixon CJ and Chang Jeeng v Nuffield (Australia) Pty Ltd (1959) 101 CLR 629 at 637-8 per Dixon CJ, see also ADCO at [48]-[50] per Gageler J. Here, on any view, the Amended Provisions have some retrospective operation in that sense; the issue is the extent of their retrospective operation. In Stephens, Keane, Gordon, Edelman and Gleeson JJ (with whom Steward J relevantly agreed at [49]) said at [33]-[34]: 33 Shorn of difficult-to-draw distinctions and difficult-to-apply nomenclature, the underlying principle concerning how to interpret the temporal operation of legislation is based on reasonable expectations. As H L A Hart explained, "the reason for regarding retrospective law-making as unjust is that it disappoints the justified expectations of those who, in acting, have relied on the assumption that the legal consequences of their acts will be determined by the known state of the law established at the time of their acts". The reasonable expectations of the public give rise to a presumption against interpreting the enactments of Parliament in a manner "that would conflict with recognized principles that Parliament would be prima facie expected to respect". In this context, what is a "reasonable expectation" will necessarily be informed by fundamental principles of criminal law, the accusatorial process, and the law in force at the relevant time. 34 The force of this presumption may depend upon the circumstances: "[t]he inhibition of the rule is a matter of degree, and must vary secundum materiam [according to the circumstances]". The more fundamental the rights, and the greater the extent to which they would be infringed by a retrospective or retroactive law, the less likely it is that such an intention will be ascribed to Parliament. Conversely, the less a provision would defeat reasonable expectations, and the less injustice it would cause, the less force there will be in the presumption against retrospective operation. Thus, the force of the presumption is reduced where the "wrongful nature of the conduct ought to have been apparent to those who engaged in it". And the presumption will often have little or no force in relation to future trials where the law affects rights and interests only slightly and indirectly, such as by the common iterative process of adjusting legal rules of evidence or procedure in the conduct of trials. (Citations omitted.) 34 Mr Watson's submissions in support of his construction of s 1644(1) and (2) can be summarised as follows. Unless otherwise indicated, references to ss 1317AC, 1317AD and 1317AE are to the amended versions of these provisions. (a) Section 1317AD, with s 1317AE, confers jurisdiction and power on the Court to grant compensation and other remedies if certain preconditions are met. Those preconditions broadly mirror the elements of the criminal offence in s 1317AC. The text of s 1317AD itself says nothing as to whether the Court has jurisdiction regarding detrimental conduct occurring prior to 1 July 2019. The use of the present tense ("engages") is immaterial. Unlike s 1317AC, s 1317AD does not directly prohibit or regulate conduct. It confers jurisdiction, on conditions. Section 1317AD only "bites" at the point that a Court is determining whether the cause of action has been made out. At that point in time, the detrimental conduct necessarily will have taken place in the past (although it may also be continuing). In this way, the use of the present tense "engages" encompasses both present and past detrimental conduct, relative to the point in time that the Court grants relief. (b) That the use of the present tense is immaterial is confirmed by s 1317AD(2). It enables the Court to make an order under s 1317AE where a person inter alia "aided, abetted, counselled or procured" the conduct: s 1317AD(2)(c)(i). It can hardly be suggested that the legislature intended s 1317AD(1) and (2) to have differential application to the conduct based on the choice of tense. (c) In any event, all parties agree that s 1644 modifies the application of s 1317AD. Even if s 1317AD, read in isolation, speaks to post-1 July 2019 detrimental conduct only, the question is whether that position is modified by s 1644. (d) Turning to the text of s 1644, "in relation to" is "an expression of broad import" (O'Grady v Northern Queensland Co Ltd (1990) 169 CLR 356 at 374 per Toohey and Gaudron JJ) the breadth of which must be gleaned from the context in which it appears: see, eg, Travelex Ltd v Federal Commissioner of Taxation [2010] HCA 33; 241 CLR 510 at [25] per French CJ and Hayne J, [90] per Crennan and Bell JJ; O'Grady at 367 per Dawson J, 376 per McHugh J. (e) When s 1644 says the amendments "apply in relation to" certain disclosures, it is instructing the Court that it can grant relief in respect of detrimental conduct where the person's belief/suspicion is about a disclosure made on or after 1 July 2019 relating to matters occurring before 1 July 2019 (s 1644(1)) and even where the person's belief/suspicion is about a disclosure that was made (or to be made) before 1 July 2019, if it would be a disclosure protected by the Amended Provisions (s 1644(2)). Thus, the application of s 1317AD turns upon certain features of the "disclosure". (f) The text of s 1644 therefore reveals an intention that the Court can grant relief in relation to certain disclosures, irrespective of when the detrimental conduct occurred. Of course, the protection given by s 1644(2) to disclosures is not unlimited - it is qualified by the reference to ss 1317AC-1317AE and "related" provisions. But s 1644(2) is not otherwise qualified, let alone by reference to the timing of the detrimental conduct. The effect of the respondents' submissions would be to read in a qualification - "except where the relevant detrimental conduct occurred before the commencement time" - when there is no textual basis for doing so. (g) The respondents' argument does not engage with the fact that detrimental conduct may pre-date an anticipated disclosure. By providing that the amended s 1317AD applies "in relation to disclosures" made on or after 1 July 2019 (s 1644(1)), the legislature was envisaging that it would apply to any detrimental conduct occurring in anticipation of disclosures made on or after 1 July 2019, and thus that it would apply to detrimental conduct occurring before 1 July 2019. Likewise, by providing that s 1317AD applies "in relation to a disclosure" made before 1 July 2019 (s 1644(2)), the legislature was envisaging that it would apply to detrimental conduct occurring in anticipation of such disclosures, that is before 1 July 2019. (h) The construction outlined above is confirmed by the context, including s 1644A. Parliament has expressly provided in s 1644A that the amendments in Pt 4 of Sch 1 apply in relation to the commission of an offence if the conduct constituting the commission of the offence occurs wholly after 1 July 2019. If Parliament had wished to do the same in s 1644, it easily could have done so. More importantly, s 1644A would not have been necessary in relation to the offences in s 1317AC if s 1644 (as the respondents contend) had the effect that s 1317AC only applies to detrimental conduct occurring on or after 1 July 2019. (i) Mr Watson's construction is also supported by the transitional provisions in Pt 3 of Sch 1 to the Amendment Act. Part 3 repealed whistleblower protections in the Banking Act, Insurance Act, Life Insurance Act and SIS Act. Part 3 also commenced on 1 July 2019. Items 20, 24, 28 and 32 are transitional provisions. The purpose of these items is different from s 1644: they provide for the continuation of the former regimes to disclosures made before commencement, whereas s 1644 provides for the application of the Amended Provisions to disclosures made before commencement. In addition, paragraphs (b) and (c) of these items are further instances of Parliament selecting the timing of the conduct as a factum on which application of the relevant provisions depends. Again, it would have been simple for Parliament to say the same in s 1644. (j) Mr Watson's construction is supported by the extrinsic materials (the REM). The purpose of the Amendment Act was to encourage disclosures and to enhance the protections enjoyed by whistleblowers. The REM recognised that the "existing protections" were "inadequate or unclear", with the likely effect that "whistleblowers will continue to be discouraged from disclosing information about wrongdoing": at [1.9]. To this end, Parliament enhanced both the offence and civil claim provisions. Mr Watson's construction better promotes that beneficial purpose: Acts Interpretation Act 1901 (Cth) s 15AA. (k) For the above reasons, Alexiou v Australia & New Zealand Banking Group Ltd [2020] FCA 1777; 303 IR 35 was wrongly decided. Further, at [10], his Honour appears to have overlooked the specific transitional provision (s 1644A) that governs the application of the offence provisions. The presence of this provision goes some way to relieving the court of the supposed "interpretative gymnastics" in relation to the application of s 1644(2) to s 1317AC, on the one hand, and to ss 1317AD and 1317AE, on the other: see Alexiou at [15]. 35 We do not accept Mr Watson's contention. On the proper construction of s 1644(1) and (2), the Amended Provisions do not apply to detrimental conduct that was engaged in before 1 July 2019. 36 Section 1644(1) and (2) are transitional provisions that provide for the Amended Provisions to operate retrospectively (in the sense described above) to a limited extent. That extent is defined by reference to "disclosures" that have a certain timing and character. 37 Section 1644(1) provides that the amendments made by Pt 1 of Sch 1 to the Amendment Act (which include the amended versions of ss 1317AD and 1317AE) apply in relation to disclosures that: (a) are made at or after the commencement time (1 July 2019); and (b) relate to matters that occur or occurred before, at or after the commencement time. 38 The evident purpose of s 1644(1) is to cover circumstances where a person (the whistleblower) makes a disclosure after 1 July 2019 about matters that occurred before 1 July 2019. In such a case, the Amended Provisions will apply, notwithstanding that, to that extent, the facts or events occurred before the commencement of the new provisions. 39 Section 1644(2) provides (in summary) that, without limiting s 1644(1), the amended versions of ss 1317AC, 1317AD and 1317AE (and any related provisions of Pt 9.4AAA), apply in relation to a disclosure that: (a) was made before the commencement time (1 July 2019); and (b) would be a disclosure protected by the new provisions, if they had been in force at the time the disclosure was made. 40 This provision would operate, for example, where: a person (the whistleblower) makes a disclosure before 1 July 2019; the disclosure would have been protected by the new provisions if they had been in force at the time of the disclosure; and a person engages in detrimental conduct as described in s 1317AD(1) after 1 July 2019. 41 As set out above, both subsections (1) and (2) of s 1644 are framed in terms of the timing and character of the disclosure. There is no apparent reason, in terms of their purpose, to read these provisions (or the Amended Provisions) as applying to detrimental conduct that is engaged in before 1 July 2019. Section 1644(1) and (2) are capable of sensible operation, as set out above, without reading them (or the Amended Provisions) as applying to detrimental conduct engaged in before 1 July 2019. 42 Consistently with the general principles regarding the retrospective operation of statutes set out above, it is appropriate to approach the matter on the basis that, if the legislature intended the Amended Provisions to apply to detrimental conduct that was engaged in before 1 July 2019, it would have made this intention clear. The reasonable expectation is that, where a person engages in conduct of the kind proscribed by Pt 9.4AAA (whether in its old or new form), the conduct will be subject to the laws in force at the time that the conduct is engaged in. For example, if a person engages in conduct on 1 June 2019 in relation to a disclosure, the reasonable expectation is that he or she will be subject to the provisions of Pt 9.4AAA as in force on 1 June 2019. There is nothing in the text, context or purpose of s 1644(1) and (2) that suggests that the legislature intended to depart from that position. 43 The fact that the Amended Provisions apply to anticipated disclosures as well as disclosures that have already occurred (see s 1317AD(1)(b)), does not provide a sound basis to construe s 1644(1) and (2) as having the effect that the Amended Provisions apply to detrimental conduct that was engaged in before 1 July 2019. True it is that one could imagine a situation where, for example, a person engages in detrimental conduct on 1 June 2019 in relation to a disclosure that is anticipated to occur (or does occur) after 1 July 2019. However, it would be giving s 1644(1) a strained construction to read it as covering such a situation 44 Section 1644A is a transitional provision relating to the amendments made by Pt 4 of Sch 1 to the Amending Act. The amendments made by that Part included specifying that s 1317AC(1), (2) and (3) are offence provisions (2 years imprisonment) and civil penalty provisions. In that context, s 1644A provided that the amendments made by Pt 4 of Sch 1 to the Amendment Act "apply in relation to the commission of an offence if the conduct constituting the commission of the offence occurs wholly on or after the commencement of [Pt 4 of Sch 1]". In context, that can be seen as a provision for the avoidance of doubt. It does not shed any light on the proper construction of s 1644(1) and (2). 45 Similarly, no real assistance is provided by the (differently worded) transitional provisions in Items 20, 24, 28 and 32, contained in Pt 3 of Sch 1 to the Amendment Act. They provide for a different transitional operation in a context where the relevant provisions of the legislation were repealed and not replaced. 46 In light of the above, it is unnecessary to consider certain submissions made by the respondents in relation to the construction issue, including: (a) the submission that, if Mr Watson's construction were correct, the old and new provisions of Pt 9.4AAA would operate concurrently in certain circumstances, which is unlikely to have been intended; and (b) the submission that, if Mr Watson's construction were correct, the new provisions could potentially apply to conduct that occurred many years before the new provisions commenced; there would be no limit on how far back they would reach. 47 For these reasons, the first separate question should be answered "No".

The second separate question 48 The second separate question is concerned with whether ss 14ZZZ and 14ZZZA of the Taxation Administration Act apply to detrimental conduct that was engaged in before the commencement date of the Amendment Act (being 1 July 2019), whether or not any detriment caused by the conduct continued after that date. 49 Relevantly, the amendments included the following: (1) an amendment establishing a whistleblower protection regime under the Taxation Administration Act in materially the same terms as that under the Corporations Act, where previously there was no such regime under the Taxation Administration Act (Item 15 of Pt 2 of Sch 1 to the Amendment Act); and (2) a provision mirroring s 1644(1) of the Corporations Act, applying the amendments in relation to disclosures made after 1 July 2019 but that relate to matters that occurred before, at or after the commencement time (Item 16 of Pt 2 of Sch 1 to the Amendment Act). 50 All parties' submissions, in essence, mirrored those raised with respect to the first question when dealing with the whistleblower protections under the Taxation Administration Act. GHSF submitted that the same result followed, by reference to Item 16 of Pt 2 of Sch 1 to the Amendment Act. 51 Mr Watson explained the relevance of the Taxation Administration Act provisions to his case as arising because he alleges detrimental conduct occurred prior to 1 July 2019 in response to anticipated disclosures, which he ultimately did make to the ATO in December 2019. He also observed that the amendments to the Taxation Administration Act included equivalents to s 1644(1) (in the form of Item 16 of Pt 2 of Sch 1 to the Amendment Act) and s 1644A (in the form of Item 38 of Pt 4 of Sch 1 to the Amendment Act). As a result, Mr Watson submitted that his submissions on the first separate question with respect to s 1644(1) and s 1644A also apply with respect to the second separate question. The effect of this would be that Pt IVD applies to disclosures made on or after 1 July 2019 that relate to matters that occurred before that date, regardless of when the detrimental conduct occurred. He did acknowledge, however, that the absence of an equivalent to s 1644(2) of the Corporations Act meant that there was no basis for applying the regime to disclosures made before 1 July 2019. 52 This question is answered in the negative for the reasons outlined above (in relation to the first separate question) as they arise from a textual analysis of s 1644(1) and otherwise from a contextual assessment. We note the operative difference between the two separate questions is the absence of an equivalent to s 1644(2) and that there was no previous whistleblower regime under the Taxation Administration Act, unlike under the Corporations Act. By reason of the latter, we accept the presumption against retrospectivity operates with a distinct force in this context. Further, the absence of an equivalent to s 1644(2) bespeaks with even greater clarity the intended temporal operation of the new provisions. Under the Taxation Administration Act provisions and the transitional provision at Item 16 of Sch 1 to the Amendment Act, only a disclosure made "at or after" 1 July 2019 attracts the statutory whistleblower protections and, for the same reasons as in relation to the first separate question, this says nothing about pre-commencement detrimental conduct.

Continuing detriment 53 Lastly, Mr Watson made an alternative submission. He submitted that even if the amendments applied only to detrimental conduct occurring after the commencement of the new provisions, the new provisions applied to the pre-1 July 2019 detrimental conduct because it was continuing. Mr Watson submitted that because detrimental conduct is defined as conduct that causes or threatens to cause detriment, while the detriment continues, so too does the detrimental conduct. Mr Watson also appeared to adopt and extrapolate this principle from the submissions of the unsuccessful applicant in Alexiou when he submitted, citing that decision at [16], that detrimental conduct only occurs once the detriment arises and, therefore, the detrimental conduct continues for as long as the detriment itself does. The idea of continuing detriment was reflected in the remedies for which the amended s 1317AE provides, Mr Watson submitted. At s 1317AE(1)(c), the legislation provides for injunctions to prevent, stop or remedy the effects of detrimental conduct. At s 1317AE(1)(e), the legislation provides for an order reinstating the employment of a person whose employment had been terminated. 54 To illustrate this argument, he provided the example of the loss of his employment, which commenced in May 2016 when Mr Watson was, in his submission, constructively dismissed. This detrimental conduct, he submitted, continues today, because he had not been re-employed, and nor had he been reinstated to the Lendlease account or given an apology. As a result, the respondents continued to engage in the detrimental conduct alleged. Mr Watson submitted that the continuing detriment argument was reflected in his particularisation of a loss of future earnings in his pleadings. 55 The issue of continuing detriment does not arise from the questions. The questions are framed on the basis that the detrimental conduct occurred before 1 July 2019. This reading is consistent with Mr Watson's pleading. Mr Watson does not plead a continuing detriment. The pleaded conduct comprised discrete acts said to have occurred at fixed points in time. Rather, it appears that Mr Watson is now contending, rather than that the detrimental conduct is continuing, that the effects of that conduct are continuing. Further, this reading is consistent with the submissions of the parties (particularly Mr Watson's then counsel) during the Primary Proceeding at a case management hearing before Raper J on 6 October 2022. At the hearing, counsel for Mr Watson had told Raper J that Mr Watson made no allegation of any detrimental conduct as against either respondent after 1 July 2019, and did not propose to. 56 In the circumstances, we do not consider it necessary or appropriate to express a view on the alternative continuing detriment argument.

Costs 57 Mr Watson made brief submissions on the issue of the costs associated with the determination of the separate questions, in response to Lendlease's written submission that these should be paid by him. Mr Watson submitted that a costs order against him would be contrary to s 1317AH of the Corporations Act and s 14ZZZC of the Taxation Administration Act. Those provisions, drafted in relevantly the same terms across the two statutes, provided that costs for claims of the kind brought by Mr Watson must not be ordered against the claimant except where the proceedings were instituted vexatiously or without reasonable cause, or where the Court is satisfied that the claimant's unreasonable act or omission caused the other party to incur the costs. Mr Watson noted that no party, including Lendlease, had suggested that those circumstances were present in this case. He therefore submitted that, even if he was unsuccessful on the separate question, a costs order could not properly be made against him. Lendlease did not respond to this submission. GHSF reserved its position on costs. 58 We will make an order that there be no order as to costs unless any party wishing to make submissions regarding costs does so according to the timetable set out in our orders.

Conclusion 59 It follows form our conclusions that the separate questions are answered: (1) Separate question 1 - No; (2) Separate question 2 - No. 60 It follows from these answers that certain paragraphs of Mr Watson's amended originating application and amended statement of claim are to be struck out. While there was some agreement between the parties about the paragraphs to be struck out in the event that the separate questions were answered "No", that agreement was not comprehensive and in some respects was unclear. In these circumstances, the parties are ordered to file consent or competing short minutes of consequential orders to give effect to these reasons. 61 We will make the orders referred to above regarding costs. I certify that the preceding sixty-one (61) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Moshinsky, Abraham and Raper.