DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Craig Patterson
v
Service Panel Pty Ltd T/A Service Panel Pty Ltd
(U2016/7870)

Order to produce documents – application to be released from implied undertaking applying to documents produced to the Commission.

[1] On 21 July 2016, Mr Craig Patterson made an application under section 394 of the Fair Work Act 2009 (the Act) alleging he was protected from unfair dismissal and was unfairly dismissed by Service Panel Pty Ltd T/A Service Panel Pty Ltd (Service Panel). Service Panel denied the allegation and claimed Mr Patterson’s employment came to an end when he voluntarily resigned.

[2] The matter was the subject of conciliation but did not resolve. Consequently, directions were issued and the matter was listed for hearing.

[3] Service Panel subsequently applied for a copy of the statements of each account in Mr Patterson’s name (including any joint account) with any bank or financial institution for the period commencing 1 September 2015 and ending 31 May 2016. On 31 August 2016, I ordered production of a copy of the records of any deposits in such documents pursuant to s.590(2) of the Act (Order for Production). I stipulated that all documents produced in compliance with the Order for Production could only be used for the purposes of Mr Patterson’s unfair dismissal application and could not lawfully be used for any other purpose except with written authorisation of the Fair Work Commission (the Commission).

[4] Documents comprising copies of five statements for a bank account in the name of Mr Patterson (the documents) were produced to the Commission on 8 September 2016 and the representative for Mr Patterson gave consent for the documents to be viewed by Service Panel. I directed that scanned copies of the documents be made available to Service Panel, with certain redactions.

[5] On 12 September 2016, the Commission was advised by the representative for Service Panel that the parties had reached an “in principle”’ settlement. On 14 September 2016, this was confirmed by the representative for Mr Patterson.

[6] In response to a query from the Commission as to when a Notice of Discontinuance might be filed, on 4 November 2016, the representative for Mr Patterson advised “…We confirm that our client still awaits a signed counterpart of the ‘in principle’ settlement agreement from the Respondent. Thereafter we will file our client’s Notice of Discontinuance without delay.” As a result, the hearing of the unfair dismissal application, which had been listed to commence on 10 November 2016, was cancelled.

[7] On 11 November 2016, Service Panel filed an application seeking an order enabling it to use the documents produced pursuant to the Order for Production for the purpose of proposed Supreme Court of Victoria proceedings against Mr Patterson. Service Panel advised it intended to commence Supreme Court proceedings seeking damages to compensate it for losses suffered as a result of Mr Patterson’s conduct, alleging that during his time as a manager, he had engaged in and was knowingly involved in, and benefited from, misappropriation of funds properly belonging to Service Panel.

[8] I conducted a telephone mention on 24 November 2016, during which it was put on behalf of Mr Patterson that he did not consent to Service Panel being released from the implied undertaking. I therefore made directions for the parties to file materials in respect of the application of Service Panel and what follows is my decision dealing with that application.

Submissions of Service Panel

[9] Service Panel submitted that the nature and content of implied undertakings of the nature present in this matter has been described by the High Court in Hearne v Street 1 in the following terms:

“Where one party to litigation is compelled, either by reason of a rule of court, or by reason of a specific order of the court, or otherwise, to disclose documents or information, the party obtaining the disclosure cannot, without the leave of the court, use it for any purpose other than that for which it was given unless it is received into evidence. The types of material disclosed to which this principle applies include… documents produced on subpoena…

…

It is common to speak of the relevant obligation as flowing from an 'implied undertaking’.” 2

[10] It was submitted that it has been recognised by the Federal Court 3 and has been accepted (or at least assumed) by the Commission4 that the implied undertaking applies to administrative and other non-curial tribunals.

[11] Service Panel indicated it proposes to allege in a proceeding to be brought in the Supreme Court of Victoria that the documents evidence:

a) on numerous occasions, Mr Patterson received into his private bank account, by way of internet transfer, substantial sums of money from customers of Service Panel, including transfers expressly stated to be in payment for work performed by Service Panel; and

b) on numerous occasions, deposits of substantial sums of cash were received into Mr Paterson's private bank account by way of Automated Teller Machine deposit, in circumstances (to be established by other evidence) that tend to prove those cash payments were the lawful property of Service Panel.

[12] It was submitted that combined with other evidence, the documents have significant probative value in establishing Mr Patterson engaged in and/or aided or abetted others to engage in the misappropriation of substantial sums of money from Service Panel, currently estimated to be more than $500,000.

[13] Service Panel says that without a release from the implied undertaking, it will not have available to it a proper basis for making an allegation of fraud or other serious unlawful conduct and will thus be significantly frustrated in its ability to obtain justice against Mr Patterson.

[14] Service Panel submitted that Hearne v Street stands for the proposition that a party may be released from the implied undertaking where "special circumstances" exist and while the courts have refrained from limiting or otherwise prescribing what circumstances will be considered special, its proposed use of the documents in Court proceedings is clearly sufficient to meet the test. It submitted that whether the Commission should exercise its discretion to do so is a further question, answered by consideration of a number of factors formulated by Wilcox J in Springfield Nominees Pty Ltd v Bridgelands Securities Ltd 5 (Springfield Nominees) and approved and adopted by the Full Federal Court in Liberty Funding Pty Ltd v Phoenix Capital Ltd6, as follows:

“For ‘special circumstances’ to exist it is enough that there is a special feature of the case which affords a reason for modifying or releasing the undertaking and is not usually present. The matter then becomes one of the proper exercise of the court’s discretion, many factors being relevant. It is neither possible nor desirable to propound an exhaustive list of those factors. But plainly they include the nature of the document, the circumstances under which it came into existence, the attitude of the author of the document and any prejudice the author may sustain, whether the document pre-existed litigation or was created for that purpose and therefore expected to enter the public domain, the nature of the information in the document (in particular whether it contains personal data or commercially sensitive information), the circumstances in which the document came into the hands of the applicant for leave and, perhaps most important of all, the likely contribution of the document to achieving justice in the second proceeding.” 7

[15] Service Panel asserted that releases from implied undertakings have been granted in circumstances where the material is sought for use in other proceedings. It submitted the ‘‘special feature’’ affording the reason for the release of the undertaking in this matter is the requirement for the documents to support the proposed proceedings, to legitimately invoke the powers of the Court in order for justice to be achieved between the parties. In support of the exercise of the discretion, Service Panel addressed the following factors derived from Springfield Nominees:

a) Achievement of Justice

By tending to establish Mr Patterson received money that was properly payable to it, the documents are an essential link in the forensic chain upon which Service Panel seeks to base its claim that Mr Patterson misappropriated and or otherwise unlawfully received money belonging to it. As such, Service Panel says an inability to use the documents would mean it is unable to properly plead its case against Mr Patterson, which could delay and complicate it, adding to costs and the dependence on other Court processes and resources or at worst, deny it the ability to bring its claim.

b) Nature of documents - Relevance

Service Panel submitted the documents are highly relevant to the issue of whether Mr Patterson had the requisite knowledge and received a benefit from the misappropriation of its funds and the probative value of the material is a relevant consideration. 8

c) Nature of documents – other

Service Panel says there is nothing remarkable about the documents because bank statements are commonly adduced as evidence in civil and criminal proceedings where financial receipts are at issue. They are the usual means by which receipt of money may be proved. It says it is significant that the documents were not produced by the Bank for the purposes of any litigation and are merely the standard business records of the Bank.

d) Personal / commercially sensitive information

Service Panel says the documents contain redactions and apart from recording the receipt by Mr Patterson of money other than his salary, which is the matter in issue, they do not disclose any personal information. It claims the entries indicating payment for repair of vehicles contain commercial information belonging to Service Panel and says it proposes to use the documents only in court proceedings, where further use and/or disclosure will be subject to the jurisdiction of the Court.

e) Attitude of and prejudice to the author

Service Panel says the author of the documents, the ANZ Bank, makes no claim of confidentiality over them and, in any event, it is not possible to anticipate any prejudice the ANZ Bank may suffer as a result of the use of the documents in the proposed court proceedings. It says Mr Patterson has not identified any likely prejudice to him and that he would be afforded the opportunity to defend himself.

f) Circumstances of receipt

Service Panel submitted that as it was provided the documents pursuant to the lawful exercise of the Commission’s jurisdiction, using the documents to further assert its legitimate rights against Mr Patterson cannot be said to be an abuse of process or otherwise improper.

Submissions of Mr Patterson

[16] Mr Patterson conceded that Service Panel can be exempted from the rule which prohibits the collateral use of material obtained in judicial and quasi-judicial proceedings without leave of a Court or the Commission but argued it must establish the existence of special circumstances. 9 He submitted special circumstances do not exist here because Service Panel is able to obtain and use the material it seeks by making the appropriate application to the Supreme Court of Victoria.

[17] Mr Patterson relied on Rule 32.05 of the Supreme Court (General Civil Procedure) Rules 2015 (Supreme Court Rules) in this regard and submitted it is drafted specifically to address a situation where a potential party to litigation is not in possession of adequate material to commence proceedings. He said Order 32 allows parties to seek discovery from prospective defendants where there is reasonable cause to believe that the party against whom the order is sought, has or is likely to have documents in their possession which would assist the applicant in determining whether they have a cause of action and for the purpose of framing the cause of action. Further, any Order made pursuant to Order 32 would necessarily bind the parties and consequently override the implied undertaking.

[18] Mr Patterson said whilst some courts have occasionally released parties from the implied undertaking for purposes similar to that advanced by Service Panel, they have done so without reference to the existence of Order 32. He asserted Service Panel’s submissions suggesting it has no other way of obtaining and using the documents are misconceived because it can obtain and use the material it seeks by making the application prescribed by the Supreme Court Rules. Mr Patterson also submitted Service Panel cannot be exempted from the implied undertaking for “mere convenience” because convenience does not constitute a special circumstance.

Submissions of Service Panel in Reply

[19] In reply, Service Panel submitted that it is not correct to characterise Service Panel's application as being made for the mere purpose of convenience. It submitted there is no evidence before the Commission that an application for preliminary discovery of the documents would be successful and there are matters that may count against preliminary discovery being ordered under Order 32 of the Supreme Court Rules, such as the risk of a finding that in the circumstances, it is not seeking the documents to "decide whether to commence a proceeding" against Mr Patterson. 10

[20] Further, Service Panel submitted that requiring it to seek preliminary discovery in lieu of releasing it from the undertaking will also place it at risk of breaching the undertaking because in order to obtain preliminary discovery, an applicant must show that it has made "all reasonable enquiries" yet has not sufficient information to decide whether to commence a proceeding to obtain the relief. 11 It submitted that refusing to release the undertaking may result in substantial prejudice to it as victim of the alleged fraud, including by the possible result that it would be prevented from bringing a claim of fraud against Mr Patterson.

[21] Service Panel also submitted that even if the documents are able to be obtained through an application for preliminary discovery in the Supreme Court, it is not in the interests of justice to require it to undertake such an exercise. Service Panel asserted this is because it will place an additional and unnecessary burden upon the resources of the Supreme Court and will result in significant additional expense and delay, in circumstances where the Commission is apprised of the relevant facts and is the most appropriate forum to determine the application regarding the proposed use of the documents.

[22] In support of its position, Service Panel relied on Bailey v Minister for Education 12, in which Sanderson M of the Supreme Court of Western Australia stated:

"The second reason why I would release the plaintiff from his undertaking in this case has to do with practicalities of litigation. Under O26A pre-action discovery is possible. The plaintiff could have used that order in this case. Perhaps he should have done so. Be that as it may, it is the clear intent of the Rules that documents be available as soon as possible so that the parties and the court know the true position. To refuse this application would fly in the face of that policy. An application would undoubtedly be made under O26A and the result would be a waste of time and money." 13

[23] Service Panel submitted this decision stands for the proposition that the existence of an alternative procedure for obtaining documents to which the implied undertaking applies is either an irrelevant consideration or a factor that counts in favour of the undertaking being released, particularly where the alternative avenue is likely to result in unnecessary cost and delay. Service Panel indicated that while application was made to appeal the decision of Sanderson M, leave was refused. It highlighted that in Minister for Education v Bailey 14 Steytler J of the Full Court of the Supreme Court of Western Australia noted there had been no issue taken with the learned Master’s opinion that the discovered document in question was “highly relevant” to the matters in dispute in the second proceedings before stating:

“ [30]…It is, I think, important to bear in mind that the learned Master exercised his discretion in a context in which the second proceedings (and the s 47A leave application) involve the same parties as are involved in the first proceedings and, although raising different issues, are related to the first proceedings. It is also important to bear in mind that, if this was not a special category of case in which leave to bring the second proceedings was required, the document in question would, in any event, have been discovered in the course of those proceedings. Indeed, it may well be discoverable, if discovery was to be sought, in the s 47A leave application proceedings themselves (see O 26 r 1(1) of the Rules). When all of these circumstances are taken together there is, in my opinion, enough in them to justify their categorisation as ‘special’ and to warrant the grant of leave to make use of the discovered document in the s 47A leave application…

[33] As to the fifth ground of appeal, even if counsel for the appellant is right in his submission that the potential availability of O 26A, in circumstances in which no use had been made of that procedure, should not have borne upon the outcome of the application, the other circumstances to which I have referred above are, as I have said, sufficient to sustain the order which was made by the learned Master.”

Consideration

[24] In Esso Australia Resources Ltd v Plowman 15, Mason CJ outlined the nature of the implied undertaking disclosed in court proceedings and its applicability to an arbitration:

“In relation to documents produced by one party to another in the course of discovery in proceedings in a court, there is an implied undertaking, springing from the nature of discovery, by each party not to use any document disclosed for any purpose otherwise than in relation to the litigation in which it is disclosed.

…

The next step is to say that a similar obligation arises in an arbitration… consistently with the principle as it applies in court proceedings, the obligation of confidentiality attaches only in relation documents which are produced by a party compulsorily pursuant to a direction by the arbitrator.”  16

[25] In Otter Gold Mines Ltd v Deputy President G L McDonald of the Administrative Appeal & Ors 17 (Otter Gold), Sundberg J held the implied undertaking arose during the course of proceedings before the Administrative Appeals Tribunal.

[26] I am satisfied the implied undertaking applies to documents disclosed to the Commission and note that neither party disputed this proposition.

[27] I am also satisfied Service Panel gave the implied undertaking to the Commission in relation to the documents produced pursuant to the Order for Production. This is not in dispute either.

[28] The question to be determined is whether I should release Service Panel from the implied undertaking. The nature of such a release was described by Sundberg J in Otter Gold as follows:

“The power to release from the implied undertaking of confidentiality is incidental to the power to require the documents to be produced. Production under compulsion gives rise to the undertaking. The power to release is intrinsically associated with that undertaking. It is the other side of the coin.” 18

[29] In Otter Gold, the applicant sought release from the implied undertaking so that it could use certain documents in proceedings it proposed to bring and Sundberg J did not determine that a release was not available in such a scenario. I will therefore proceed to determine the application before me.

[30] I accept that a party may be released from the implied undertaking where "special circumstances" exist and in relation to this, it is worth repeating the propositions outlined by Wilcox J in Springfield Nominees:

“For ‘special circumstances’ to exist it is enough that there is a special feature of the case which affords a reason for modifying or releasing the undertaking and is not usually present. The matter then becomes one of the proper exercise of the court’s discretion, many factors being relevant. It is neither possible nor desirable to propound an exhaustive list of those factors. But plainly they include the nature of the document, the circumstances under which it came into existence, the attitude of the author of the document and any prejudice the author may sustain, whether the document pre-existed litigation or was created for that purpose and therefore expected to enter the public domain, the nature of the information in the document (in particular whether it contains personal data or commercially sensitive information), the circumstances in which the document came into the hands of the applicant for leave and, perhaps most important of all, the likely contribution of the document to achieving justice in the second proceeding.” 19 (my emphasis)

[31] Prior to Springfield Nominees, Burchett J had characterised “special circumstances” and the release of an implied undertaking in Holpitt Pty Ltd v Varimu Pty Ltd 20 (Holpitt) in the following terms:

"In my opinion, the court's duty, in an ... [application] of this kind, is to consider whether the applicant has shown some circumstance which takes the matter out of the ordinary course, according to which production of documents pursuant to an obligation to make discovery involves the implied undertaking to the court; and, if so, whether an exercise of the court's discretion in favour of the application would be in the interests of justice..." 21

[32] Referring to both Springfield Nominees and Holpitt in Australian Trade Commission v McMahon 22, Lehane J subsequently said: 

"The general principle is, no doubt, that a release of the implied undertaking will be given only if 'special circumstances' are established: Crest Homes PLC v Marks [1987] AC 829. Where an application for release is decided in contested proceedings, it seems that 'special circumstances' will fairly readily be found where it is established that the use of documents discovered in a proceeding is reasonably required for the purpose of doing justice between the parties in other proceedings.” 23

[33] Having reviewed these cases and others in Minister for Education v Bailey 24, Steytler J concluded:

“It is neither necessary nor appropriate, in this case, to attempt any general definition of what might amount to ‘special circumstances’. Each case must, inevitably, depend upon its own peculiar facts and circumstances.” 25

[34] Examples of what have been considered “special circumstances” include:

• Applications to use documents which had been discovered in one set of proceedings in other proceedings where there were common respondents, the same solicitors acting for each set of applicants and some commonality of fact (Sweetman v Australian Thoroughbred Finance Pty Ltd 26);

• An application to use a statement pursuant to directions in one set of proceedings, which settled, in subsequent proceedings where both proceedings concerned overlapping time periods and the relationship between the maker of the statement with certain companies (Springfield Nominees 27); and

• An application to use a document discovered in set of proceedings in second proceedings where the second proceedings involved the same parties and solicitors, were related to the first proceedings (albeit raising different issues), and the document in question would have been discovered in the second proceedings (Minister for Education v Bailey 28).

[35] As can be seen from the cases referred to, once satisfied "special circumstances" exist, the decision as to whether or not the discretion to release a party from the implied undertaking should be exercised will turn on a range of factors, the foremost being the achievement of justice in the second proceedings.

[36] In essence, Service Panel submitted the “special feature” was the requirement for the documents to support the proposed proceeding, while Mr Patterson submitted “special circumstances” do not exist because Service Panel is able to obtain and use the documents via an application for preliminary discovery pursuant to Order 32 of the Supreme Court Rules.

[37] Order 32 of the Supreme Court contains Rule 32.05, which is expressed in similar terms to Order 26A Rule 4 of the Rules of the Supreme Court of Western Australia 1971. As outlined above at [17]-[18], the availability of a procedure for pre-action discovery pursuant to this latter order was considered at first instance in Bailey v Minister for Education 29 and then on appeal in Minister for Education v Bailey30, and the findings are relied on by Service Panel to rebut the proposition of Mr Patterson that “special circumstances” do not exist because Service Panel is able to obtain and use the documents via Order 32 of the Supreme Court Rules.

[38] Master Sanderson’s finding at first instance, that to refuse an application to be released from an implied undertaking because of the availability of pre-action discovery would be contrary to the “clear intent” of the rules that documents be available as soon as possible and the court know the true position, was not disturbed on appeal because the Full Court considered the other circumstances in that case constituted “special circumstances” sufficient to sustain the order granting the application for release from the implied undertaking. In other words, irrespective of the availability of Order 26A, the Full Court was satisfied there were special circumstances. I am guided by this.

[39] As to the question of whether there are special circumstances in this application before me, I consider there are. Drawing upon the various authorities to which I have referred, I consider the following factors relevant:

• The parties would be the same in the two proceedings and presumably they would retain the same solicitors;

• The two proceedings arise out of the same relationship between the parties; and

• There are likely to be common facts and next to identical time periods involved.

[40] I am not persuaded that the capacity to make application for preliminary discovery pursuant to Order 32 of the Supreme Court Rules negates the factors that enable the circumstances in this matter to be considered “special”.

[41] I must then determine whether I will exercise my discretion to release Service Panel from the implied undertaking. I am persuaded the following factors combine to make it appropriate for me to grant Service Panel leave to use the documents for the purpose of proposed Supreme Court of Victoria proceedings against Mr Patterson:

• The documents are standard bank statements created by the ANZ Bank, for Mr Patterson, on a periodical basis. There is no material before me to suggest the ANZ Bank claims confidentiality over the documents or that it would suffer any prejudice;

• The documents were received by Service Panel via a legitimate process, namely pursuant to an Order for Production made by the Commission pursuant to s.590(2)(c) of the Act;

• The documents produced to Service Panel contain significant redactions and while the remaining content that has not been redacted records money received by Mr Patterson, this is the matter likely to be in issue;

• While it is not possible to assess the extent to which the documents might contribute to the achievement of justice in the proposed (second) proceedings, they contain material relevant to the central issue likely to be in dispute - whether or not Mr Patterson misappropriated or unlawfully received money payable to Service Panel; and

• The availability of the documents will assist Service Panel to pursue its claim and will not prevent Mr Patterson from defending it. They are important to the ultimate determination of that contest.

[42] Accordingly, in conjunction with this decision, I will issue an order granting leave to Service Panel to use the redacted copies of the records produced pursuant to my Order made on 31 August 2016 in the conduct of its proposed proceedings in the Supreme Court of Victoria.

DEPUTY PRESIDENT

 1   (2008) 235 CLR 125.

 2   Ibid at 154-155.

 3   Otter Gold Mines Ltd v Deputy President G L McDonald of the Administrative Appeal & Ors (1997) 76 FCR 467.

 4   Coates Hire Operations Pty Limited v AMWU & Ors [2013] FWC 1585 at [52]; Bowker v DP World Melbourne Ltd [2015] FWC 4542.

 5   (1992) 38 FCR 217.

 6   [2005] FCAFC 3 at 31.

 7   (1992) 38 FCR 217 at 225.

 8   Minister for Education v Bailey [2000] WASCA 377.

 9   Otter Gold Mines Ltd v Deputy President G L McDonald of the Administrative Appeal & Ors (1997) 76 FCR 467.

 10   Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 32.05(b).

 11   Ibid.

 12   [2000] WASC 50.

 13   Ibid at [12].

 14   [2000] WASCA 377.

 15   (1995) 183 CLR 10.

 16   Ibid at 32-33.

 17   (1997) 76 FCR 467.

 18   Ibid at 473.

 19   (1992) 38 FCR 217 at 225.

 20   (1991) 29 FCR 576.

 21   Ibid at 579.

 22   (1997) 73 FCR 211.

 23   Ibid at 217.

 24   [2000] WASCA 377.

 25   Ibid at [29].

 26   Sweetman v Australian Thoroughbred Finance Pty Ltd (Unreported, Federal Court of Australia, Lockhart J, 23 July 1992).

 27   (1992) 38 FCR 217.

 28   [2000] WASCA 377 at [30].

 29   [2000] WASC 50.

 30   [2000] WASCA 377 at [30] and [33].

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