Casaubon v Department of Transport and Main Roads [2015] QIRC 25

QUEENSLAND INDUSTRIAL RELATIONS COMMISSION CITATION: D’arcy Casaubon v Department of Transport and Main Roads [2015] QIRC 025 PARTIES: D’arcy Casaubon (Applicant) v Department of Transport and Main Roads (Respondent) CASE NO: B/2011/50 PROCEEDING: Section 276 application to vary or void contract of service DELIVERED ON: 17 February 2015 HEARING DATES: 28 July 2014 29 July 2014 30 July 2014 31 July 2014 MEMBERS: Industrial Commissioner Black ORDERS: Application for orders for further and better discovery dismissed CATCHWORDS: Discovery, legal professional privilege, waiver of privilege, whether belief asserted was materially dependent on legal advice; whether legal advice pertinent to the formation of a state of mind. CASES: DSE (Holdings) Pty Ltd v Intertan Inc (2003) 127 FCR 499 Telstra Corporation Ltd v BT Australia Pty Ltd (1998) 156 ALR 634 Australian Agricultural Company Limited v AMP Life Limited (2006) FCA 371 Archer Capital 4A Pty Ltd as trustee for the Archer Capital Trust 4A v Sage Group plc (No. 3) (2013) FCA 1160 Mann v Carnell (1999) 201 CLR 1 at 13 [29] Commissioner of Taxation v Rio Tinto Limited (2006) 151 FCR 341 Ferella v Official Trustee in Bankruptcy (2010) 188 FCR 68 at [65] -- 1 of 10 -- 2 APPEARANCES: Mr K. Watson, Counsel instructed by Mr L. Beaton, for Susan Moriarty Solicitors the Appellant. Mr M. Spry, Counsel instructed by R. Cornes, Crown Law for the Respondent. Decision [1] The respondent seeks to renew an application1 for further and better disclosure including the disclosure of documents which would ordinarily be subject to legal professional privilege. The respondent's initial application was heard and determined by Deputy President Kaufman prior to the commencement of the substantive proceedings before the Commission as currently constituted. [2] In the proceedings before DP Kaufman the respondent relied on material available at the time including particulars disclosed in Mr Casaubon’s application to the Commission and specified paragraphs included in the first of two affidavits filed by Mr Casaubon in support of his application. [3] The grounds to Mr Casaubon's application to the Commission included the following paragraphs (page 8) which were related to the offer by the respondent of a voluntary early retirement package (VER): "(d) The Respondent's offer of a VER to the Applicant was made at a time when the Applicant was especially vulnerable as a result of the Applicant's state of mind;". … "(f) At the time the VER was proposed by the Respondent, the Applicant was not in a proper frame of mind to make an informed decision regarding the redeployment option or the VER offer;" [4] In an email to the respondent dated 23 October 2008, (Attachment G to the Application) Susan Moriarty & Associates, Mr Casaubon's legal advisors, wrote inter alia: "Our client has advised us that you wish him to attend a meeting to discuss a possible Voluntary Early Retirement (VER) package. We wish to advise you that our client will not be attending this meeting until we have advised him of his employment rights. We will receive his instructions and revert to you in due course." [5] In subsequent correspondence (Attachment H to the Application), the respondent wrote to Susan Moriarty & Associates and stated inter alia: "… I also continue to encourage your client to seek support from the department’s employee assistance program while he considers his options. 1 Application by the State of Queensland for Further and Better Disclosure B/2014/20 dated 12 May 2014 -- 2 of 10 -- 3 While I understand that this is a decision which requires careful consideration and I anticipate Mr Casaubon will seek your legal advice about his options, he has been on a considerable period of leave and I think it important to soon achieve certainty for both parties." [6] In his first affidavit dated 21 May 2014, Mr Casaubon made only limited reference to legal advice associated with his decision to accept or reject a VER offer. The reference appeared at paragraph 80 of his affidavit when Mr Casaubon stated: "My solicitors, Susan Moriarty & Associates, responded to Mr Kursius (via Mr McKeachie and Ms Sheffield) on 23 October 2008 advising that I would not be attending any meeting involving discussion of a VER until after I received legal advice and otherwise reserving my rights." [7] Mr Casaubon made the following statements at paragraphs 91 and 93 of the affidavit in relation to his state of mind: "91. The Respondent's offer of a VER was made at a time when I was especially vulnerable as a result of my state of mind. The Respondent was aware of my marriage breakup and my work circumstances including the burden of driving to and from Spring Hill on a daily basis. I was by this time tired and exhausted as a result of my treatment by the Respondent. I was effectively ready to give up after all I had been through over an extended period. … 93. At the time the VER was proposed by the Respondent, I was not in a proper frame of mind to make an informed decision regarding the redeployment option of the VER offer. I remained disillusioned and vulnerable after the extended period of dealing with the Respondent through my various WorkCover claims. This had been a tiring and exhausting process for me." [8] In the proceedings before DP Kaufman the respondent sought disclosure of documents described as "all advices, letters written, communication, file notes, etcetera that relate to legal advice Mr Casaubon received from his law firm Susan Moriarty & Associates in the period 1 September 2008 to 15 December 2008" 2. DP Kaufman's decision, which was given on 4 July 2014 3, is set out below: "In relation to the seeking of the legal advice and all documents pertaining to it, I intend to adopt the position that Justice Beaumont adopted in Telstra in dissent, a dissent which seems to have been widely approved by several judges consequently. It seems to me that it's too early for me to be able to ascertain whether or not the reference to the applicant's state of mind and to the fact of him having obtained legal advice is inconsistent with the maintenance of his professional – legal professional privilege. Justice Allsop in – I can't remember the name of the case now – I think it might have been Thomason – but noted that Justice Beaumont emphasised the need for 2 Transcript of proceedings before Deputy President Kaufman on 26 May 2014 – page 6, line 45 3 Transcript of proceedings on 4 July 2014 – page 10, line 39 -- 3 of 10 -- 4 the advice itself to be put in issue – I'm not satisfied at this stage that that's happened – and that not merely that a state of mind was in issue in respect of the formation of which state of mind the communication was or could be likely seen as a material factor. I think that pertains to this matter at this stage, at any rate. That was put in another way in DSE Holdings4, I think, by Justice Allsop. The party entitled to the privilege makes an assertion expressed or implied or brings a case which is either about the contents of the confidential communication or which necessarily lays open a confidential communication to scrutiny and by such conduct an inconsistency arises between the act and the maintenance of the confidence informed partly by the forensic unfairness of allowing the claim to proceed without disclosure of the communication. Again, I rely on that passage. I don't think I need to go further at this stage, but it seems to me that the manner in which the privileged communication is relevant to the ultimate issue and the reliance of it have not yet been [indistinct] and it has not yet been sufficiently made apparent at this preliminary stage for me to conclude that the privilege has been waived, so I will not make the order in relation to the documents going to the legal advice." [9] However after Mr Casaubon gave his evidence in the substantive proceedings the respondent determined to renew its application for further and better disclosure. In this regard the respondent asserted that the evidence given by Mr Casaubon in the substantive proceedings brought the disclosure of the legal advice back into issue and warranted the re-agitation of the application for further and better disclosure. [10] The applicant contested this position and challenged the respondent's right to re-agitate the privilege issue. It was submitted that "it is not in the public interest to allow a party to pursue applications where there has been no significant change in circumstances justifying the re-agitation of an issue that has previously been ruled upon." The view was advanced that the evidence given by Mr Casaubon in cross-examination and relied on by the respondent did not represent a significant change in circumstances. The respondent on the other hand maintained that DP Kaufman had expressly left the door open for the matter to be raised at a later stage and that his decision did not conclude the matter. [11] While the submission of the applicant is not without merit I have decided to give the respondent the opportunity to re-agitate its case in circumstances where all the evidence in the substantive proceedings (subject to the decision in this instance) has now been adduced and is able to be considered. Having so concluded it is noted that the only new evidence of significance introduced in Mr Casaubon's oral testimony was his evidence that the legal advice he received included advice to the effect that avenues for litigation were available to him after his employment with the department had ended, and notwithstanding that he had accepted a VER. In this context Mr Casaubon had conceded in cross-examination that while he was considering acceptance of the VER he was also contemplating his options for legal action at a later stage. 4 DSE (Holdings) Pty Ltd v Intertan Inc (2003) 127 FCR 499 -- 4 of 10 -- 5 [12] The respondent relied on the following evidence adduced in the substantive proceedings to substantiate its submission that Mr Casaubon's evidence brought the matter of privilege into issue5: (a) T1-45: lines 33-45 and T1-46: lines 1-18 (b) T1-59: lines 33-47 and T2-10: lines 23-44 (c) T2-13: lines 22-47 and T2-14: line1 [13] The effect or meaning of the evidence adduced is summarised as follows:  Mr Casaubon did not approach the union, nor receive from the union, any advice in respect to the circumstances associated with the offer of the VER;  Mr Casaubon took legal advice from Susan Moriarty & Associates about the circumstances associated with the offer of the VER;  When the VER offer was under consideration, Mr Casaubon had contemplated bringing an action against the department;  The inference was that Mr Casaubon's inclination was to accept the VER offer on the basis that it did not preclude him from bringing a subsequent action, if he was of a mind to do so. Mr Casaubon's evidence around this matter is set out below (T2-10): "So you thought you'd take the VER and then take some action?---I had no choice. I had two choices. So – and did you take advice on the steps that you could take prior to taking the VER?---Advice? Yeah. Legal advice?---I don't think my lawyers gave me any legal advice in that respect. They may have. I don't remember, but I had asked them about whether I could proceed with it or legal stuff outside of the department."  Mr Casaubon confirmed this evidence at T2-13: "DR SPRY: Yes. You said a little while earlier this morning that you were always going to do something. You said you had all this documentation and you were always going to do something?---I had considered it, yes. Yeah. And that was before you left the department, was it not? That consideration?---Yes."  The inference can be drawn from the evidence that Mr Casaubon's legal advice included advice to the effect that avenues for litigation were available after the event, and notwithstanding that Mr Casaubon accepted the VER offer. 5 Transcript extracts from the substantive proceedings on 28 and 29 July 2014 -- 5 of 10 -- 6 Respondent's Submission [14] The respondent argued that privilege had been waived by Mr Casaubon's own conduct. Mr Casaubon took legal advice about whether to accept a VER and about the implications for further legal action if he took the VER. It was clear that Mr Casaubon in bringing the unfair contract proceedings was relying significantly on the proposition that he was not in a proper frame of mind to make an informed decision about whether to accept the VER or accept the alternative redeployment option. [15] The respondent submitted that, by his own application and his evidence given in cross- examination, Mr Casaubon had put his state of mind, and the quality of his assent to the relevant transaction in issue. Mr Casaubon had taken legal advice before and at the time of entering into the relevant transaction, and had disclosed the nature of the legal advice provided in giving his evidence. He had obtained legal advice as to his legal options prior to assenting to the transaction, and subsequently acted on that advice in accepting the VER and planning to pursue other legal avenues once outside the department. [16] It is in these circumstances that the respondent submitted that the majority decision in Telstra Corporation6 supported a conclusion that privilege had been waived. The majority's reasoning included the following: "Where, however, a party relies on a cause of action, an element of which is the party's state of mind (including the quality of the party's assent to a transaction) the party is taken to have waived privilege in respect of legal advice which the party had, before or at the time of the relevant events, material to the formation of that state of mind." Applicant's Submission [17] The applicant challenged the respondent's view that the taking of legal advice at or around the time of entering into the VER, and the disclosure of the nature of the advice during cross-examination, necessarily meant that Mr Casaubon had waived privilege. The applicant relied on the decision of Wigney J in Archer Capital7 in circumstances which the applicant considered were apposite to Mr Casaubon's pleaded application. [18] It was submitted that the evidence in the substantive proceedings relied on by the respondent "does not take the respondent anywhere near the raising of a plain inconsistency between the case being pursued by the applicant and his maintenance of the legal privilege with respect to the communications sought by the respondent." The applicant submitted that in giving evidence about what further action he may contemplate taking, Mr Casaubon was not referring to his unfair contract application but to remedies in relation to incidents that occurred during the course of his employment. [19] The applicant submitted that the relevant principle enunciated by the High Court in Mann v Carnell8 was that privilege should not be maintained when the very thing that is 6 Telstra Corporation Ltd v BT Australia Pty Ltd (1998) 156 ALR 634 7 Archer Capital 4A Pty Ltd as trustee for the Archer Capital Trust 4A v Sage Group plc (No. 3) (2013) FCA 1160 8Mann v Carnell (1999) 201 CLR 1 at 13 [29] -- 6 of 10 -- 7 being relied upon, which are the instructions given, is in dispute. It was emphasised that, for privilege to be waived, Mr Casaubon's conduct in prosecuting his unfair contract claim had to be seen to be plainly inconsistent with the maintenance of privilege. [20] The applicant also relied on the decision of Cowdroy J in Australian Agricultural Company9 in submitting that Mr Casaubon had not in his application asserted a belief which was materially dependent on legal advice. Mr Casaubon's position was that his state of mind was brought about by all the things that happened to him in 2008, including unreasonable management action and the predicament in which he was placed in being required to make a choice between a VER or redeployment to Brisbane. It was submitted that "the materiality is the state of mind that was brought about by the conduct of the respondent through its officers, leading up to 2008." 10 Authorities [21] On the facts and circumstances of this case I prefer to rely on the reasoning of Wigney J in Archer Capital11 and Cowdroy J in Australian Agricultural Company in distilling the principles relevant to the determination of this matter. Justice Wigney's judgment included an extensive review of authorities and also examined the extent to which the decision in Telstra Corporation had been modified by the High Court in Mann v Carnell12. Wigney J concluded that the "authorities in relation to implied waiver establish that a relevant inconsistency with the continued confidentiality of a communication can arise where the privilege holder directly or indirectly puts in issue the character or contents of the communication in the litigation". He also cited the decision of the Full Court of the Federal Court in Rio Tinto13 where the Court expressed the guiding principle in the following terms: "These authorities show that, where issue or implied waiver is made out, the privilege holder has expressly or impliedly made an assertion about the contents of an otherwise privileged communication for the purpose of mounting a case or substantiating a defence. Where the privilege holder has put the contents of the otherwise privileged communication in issue, such an act can be regarded as inconsistent with the confidentiality that would otherwise pertain to the communication." [22] Justice Wigney also adopted the reasoning of the Full Court in Rio Tinto14 when it stated: "As the previous examination of the authorities shows, the question is not whether the Commissioner has put his state of mind in issue but whether he has directly or indirectly put the contents of the otherwise privileged communications in issue in the litigation, either in making a claim or by way of defence. Put another way, to adapt Allsop J's language in DSE15, 9 Australian Agricultural Company Limited v AMP Life Limited (2006) FCA 371 10 Transcript of proceedings before Deputy President Kaufman on 26 May 2014 – page 26, line 22 11 Archer Capital 4A Pty Ltd as trustee for Archer Capital Trust 4A v Sage Group plc (No. 3) (2013) FCA 1160 12 Mann v Carnell (1999) 201 CLR 1 13 Commissioner of Taxation v Rio Tinto Limited (2006) 151 FCR 341 14 ibid 15DSE (Holdings) Pty Ltd v Intertan Inc (2003) 127 FCR 499 -- 7 of 10 -- 8 has the Commissioner (being the privilege holder) made an assertion as part of his or her case in the litigation that lays open the privileged documents to scrutiny, with the consequence that an inconsistency arises between the making of the assertion and the maintenance of the privilege?" [23] Wigney J concluded that in his opinion it was "tolerably clear that the mere fact that a party pleads a cause of action that includes their state of mind as a material fact, or otherwise puts their state of mind in issue in the proceedings, does not necessarily give rise to an implied waiver in respect of legal advice that may have been received by the party, even if that legal advice may be relevant to the party's state of mind". In expressing this opinion he relied on the position taken by Yates J in Ferella v Official Trustee in Bankruptcy16 where his Honour said: "However the question is not simply whether the holder of the privilege has put that person's state of mind in issue but whether that person has directly or indirectly put the contents of the otherwise privileged communication in issue: see [Rio Tinto] at [65]. Indeed, even the fact that the holder privilege makes clear that the advice was relevant or contributed to a particular course of conduct would not be sufficient to waive the privilege unless, possibly, the contents of the legal advice (and not merely the fact of the advice) are specifically put in issue by relying on the contents of the advice to vindicate a claimed state of mind: [Rio Tinto] at [67]." [24] In Australian Agricultural Company17, after referring to a line of authorities Justice Cowdroy stated: "The above authorities establish that the conduct of a party will be inconsistent with the maintenance of privilege if the nature and extent of legal advice has been raised, whether directly or by necessary implication, by that party as an issue in the proceedings. This will usually occur where a state of mind has been positively pleaded in circumstances where legal advice given would be specifically pertinent to the formation of that state of mind or where a party’s understanding of their legal position is critical to their defence. However I cannot accept the submission of the Australian Agricultural Company that any positive defence mounted by AMP, which raises its state of mind, necessarily constitutes a waiver of privilege. In my opinion, in order to waive privilege a party must assert a belief which is likely to have been, or is explicitly said to have been, materially dependent upon legal advice given to that party. In that case the proof or otherwise of the belief is dependent upon the legal advice and accordingly privilege is waived. This is the position in cases where the dispute relates to a party's understanding of its legal position at a given point in time." Conclusion 16 Ferella v Official Trustee in Bankruptcy (2010) 188 FCR 68 at [65] 17 Australian Agricultural Company Limited v AMP Life Limited (2006) FCA 371 -- 8 of 10 -- 9 [25] In arriving at my decision I have had regard to the transcript of proceedings before DP Kaufman and the submissions made by the parties in those proceedings, to the transcript of the substantive proceedings, and to submissions received from the parties on the subject of privilege after the conclusion of the substantive proceedings. [26] The substantive issue before the Commission is whether the contract of service that was entered into between Mr Casaubon and his employer was unfair. In his application Mr Casaubon set out eight reasons explaining why the contract was unfair. Five of the reasons related to circumstances associated with the offer of a VER. The offer of the VER was made in a context where Mr Casaubon was informed that he needed to make a choice between three alternatives viz: (i) Accept the VER; (ii) Accept redeployment to Brisbane; (iii) Termination of employment. [27] The VER related reasons are summarised hereunder:  The offer of the VER was made at a time when Mr Casaubon was "especially vulnerable as a result of the Applicant’s (his) state of mind";  The link between redeployment and the VER disadvantaged Mr Casaubon given that if he did not accept the VER he would need to travel an additional 20 hours a week to his new workplace in Brisbane;  At the time that the VER was proposed Mr Casaubon was not in a proper frame of mind to make an informed decision;  The offer to redeploy was made at a time when Mr Casaubon's substantive position still existed;  The employer insisted that, despite being medically cleared to return to work in his substantive position, the only options available to Mr Casaubon were redeployment or acceptance of the VER. [28] This is not a case where it has been asserted that the proposed VER included a condition to the effect that acceptance of the VER constituted a bar to Mr Casaubon taking legal action against the department arising from his employment with the department. Such a proposition has not be adduced in the evidence or put in submissions disclosed thus far in the substantive proceedings. If the alternative were to apply however and, if in the process of trying to extricate himself from such a position, Mr Casaubon relied on communications with his legal advisers, a case for privilege to be waived would be more persuasive. In this case however the connection between the privileged communication and the frame of mind of the applicant or the basis for the action taken by the applicant, is obscure and not sufficiently clearly made out to warrant waiving of privilege. [29] In terms of the material relied on by the respondent prior to the commencement of the substantive proceedings I do not accept that the grounds to the application nor the relevant content of Mr Casaubon's affidavit support a conclusion that Mr Casaubon has put the contents of the legal advice received from his solicitors into issue. I accept the applicant's position that when Mr Casaubon said that he was not in a proper frame of mind to make an informed decision in response to the offer of a VER, he was referring to previous events including those matters referred to in paragraphs 91 and 93 of his affidavit. He was not, in my view, referring to his state of mind in circumstances where -- 9 of 10 -- 10 the legal advice given was specifically pertinent to the formation of that state of mind18. Nor was he relying on the contents of the legal advice to vindicate a claimed state of mind.19 Nor in discussing his state of mind was Mr Casaubon asserting a belief which was materially dependent on the legal advice in question. [30] The essence of Mr Casaubon's oral evidence in the proceedings was that he sought legal advice associated with the offer of a VER and about legal remedies, if any, available to him after he left the employ of the Department. Whether remedies discussed including the unfair contract application is not explicitly clear on the evidence, however it could be inferred that this may have been at least one of the remedies discussed arising out of events occurring in Mr Casaubon's workplace. In this regard I do not accept that Mr Casaubon has put this legal advice in issue in making his unfair contract application. [31] In mounting his unfair contract case, and in giving his evidence in chief, Mr Casaubon has not made an assertion which necessitates the laying open of the privileged documents to scrutiny. While he made certain concessions in cross-examination, these concessions in my view are not of such a nature as to warrant waiving of privilege. In prosecuting the merits of his unfair contract claim he does rely in any material way on the legal advice given to him arising from the VER offer. His state of mind was not related to the advice nor was any alleged unfairness in the terms of his contract related to the advice. What he relies on in trying to establish unfairness is derived from his historical circumstances, how he had been treated by his employer over time, and to the limited choice given to him as part of the VER process in respect to his continuing employment with the department. [32] The application for further and better disclosure is dismissed. I order accordingly. 18 Australian Agricultural Company Limited v AMP Life Limited (2006) FCA 371 19 Commissioner of Taxation v Rio Tinto Limited (2006) 151 FCR 341 -- 10 of 10 --