FEDERAL COURT OF AUSTRALIA

United Voice v Accolade Wines Australia Limited [2013] FCA 285

THE COURT ORDERS THAT:

1.    The application be dismissed.

2.    The prospective applicants pay the prospective respondent’s costs of the application.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    The prospective applicants, United Voice (UV) and the Australian Workers’ Union (AWU), are employee organisations registered under the Fair Work (Registered Organisations) Act 2009 (Cth), and are bodies corporate able to sue in their registered names.

2    The prospective respondent, Accolade Wines Australia Limited (Accolade Wines) operates a wine making business in Australia, Asia and North America. Its headquarters are located in Reynella, South Australia.

3    Accolade Wines is a wholly owned subsidiary of Accolade Wines Holdings Australia Pty Ltd (ACN 103 359 299) (Accolade Wines Holdings), which is owned as to 80.1% by CHAMP Private Equity and 19.9% by Constellation Brands Inc.

4    Prior to July 2012, Accolade Wines employed approximately 755 employees in South Australia whose terms and conditions of employment were governed by the Constellation Australia Ltd (Wineries – South Australia) Enterprise Agreement 2010-2013 (the Constellation Enterprise Agreement), which incorporated the Wine Industry Award 2010 and the Manufacturing and Associated Industries and Occupations Award 2010 (the Awards), to the extent that the terms of the Awards were not inconsistent with the terms of the Constellation Enterprise Agreement.

5    The Constellation Enterprise Agreement is an enterprise agreement approved by the Fair Work Commission (formerly Fair Work Australia) pursuant to s 186 of the Fair Work Act 2009 (Cth) (the Fair Work Act). Pursuant to s 201(2) of the Fair Work Act, the Constellation Enterprise Agreement also applies to UV and AWU, and to the Australian Manufacturing Workers Union, which is not one of the prospective applicants.

6    The prospective applicants have brought this application pursuant to rule 7.23 of the Federal Court Rules 2011 (the Rules) seeking an order that Accolade Wines make discovery to UV and AWU of the documents identified in the originating application. The documents sought are:

1.    Minutes of meetings of Accolade Wines Holdings Pty Ltd (AWH) in 2011 and 2012, which are held by you and which record any requests, or decisions to request, senior management and members of the businesses of the Prospective Respondent to prepare a business case for major changes in Prospective Respondent’s business operations, by ceasing the bottling and packaging and warehousing at the Reynella site, for submission to the Board of Directors of AWH;

2.    Any briefing papers or agenda papers held by the Prospective Respondent, which were distributed for or at the meetings referred to in paragraph 1 above;

3.    Reports by directors of the Prospective Respondent to its management in 2011 and 2012 of the matters referred to in paragraph 1 above;

4.    Minutes of meetings of the board of directors of the Prospective Respondent in 2011 and 2012 dealing with the matters referred to in paragraph 1 above;

5.    The business case or cases prepared by the Prospective Respondent in response to the request or requests referred to in paragraph 1 above;

6.    Any responses from AWH to the Prospective Respondent in relation to the business case or cases referred to in paragraph 5 above.

7    Rule 7.23 provides:

(1)    A prospective applicant may apply to the Court for an order under subrule (2) if the prospective applicant:

(a)    reasonably believes that he or she may have the right to obtain relief in the Court from a prospective respondent whose description has been ascertained; and

(b)    after making reasonable inquiries, does not have sufficient information to decide whether to start a proceeding in the Court to obtain that relief; and

(c)    reasonably believes that:

(i)    the prospective respondent has or is likely to have or has had or is likely to have had in the prospective respondent’s control documents directly relevant to the question whether the prospective applicant has a right to obtain the relief; and

(ii)    inspection of the documents by the prospective applicant would assist in making the decision.

(2)    If the Court is satisfied about matters mentioned in subrule (1), the Court may order the prospective respondent to give discovery to the prospective applicant of the documents of the kind mentioned in subparagraph (1)(c)(i).

8    A prospective applicant must comply with paragraphs (a), (b) and (c) of rule 7.23(1) before it can ask the Court to exercise its discretion under subrule (2) to order the prospective respondent to give discovery of the documents of the kind mentioned in rule 7.23(1)(c)(i).

9    First, the prospective applicant must satisfy the Court that the prospective applicant reasonably believes that the prospective applicant has a right to obtain relief in the Court from a prospective respondent. That requires the prospective applicant to actually hold the belief referred to in subrule 1(a) and if that belief is in fact held, it raises for consideration whether the belief is objectively reasonable.

10    No-one from UV or from AWU has deposed to holding any belief that UV or AWU has the right to obtain relief in this Court from Accolade Wines. The evidence relied on by UV and AWU is contained in an affidavit affirmed by Mr Michael Ats, solicitor for UV and AWU, on 26 November 2012, who has been advised by Mr David Di Troia, the South Australian Branch Secretary of UV and Mr Wayne Hanson, the South Australian Branch Secretary of AWU, that they both believe that UV and AWU may have the right to obtain relief in this Court from Accolade Wines because Accolade Wines may have contravened the Constellation Enterprise Agreement and Awards.

11    In both cases, they have each formed a belief for exactly the same reasons, which are identified in Mr Ats’ affidavit in the following terms:

(a)    [Mr Di Troia/Mr Hanson] believes that [UV/AWU] may have the right to obtain relief in this Court from the Prospective Respondent. In particular, he believes that the Prospective Respondent may have contravened:

(i)    clause 8.1 of the Wine Industry Award and clause 9.1 of the Manufacturing and Associated Industries and Occupations Award 2010 by failing to consult with [UV/AWU] and the [UV/AWU] employees about proposed changes in the business operations of the Prospective Respondent by ceasing the bottling, packaging and warehousing at the Reynella site. Those changes had a significant impact on the [UV/AWU] employees. The failure to consult includes the failure to discuss with the [UV/AWU] employees or [UV/AWU] the introduction of those changes, the effects the changes are likely to have on [UV/WU] employees and measures to avert or mitigate the adverse effects of such changes on the [UV/AWU] employees.

(ii)    clause 12.2 of the enterprise agreements by failing to consult with the [UV/AWU] employees about major changes in the business operations of the Prospective Respondent by ceasing the bottling, packaging and warehousing at the Reynella site. Those changes have impacted on the workplace and conditions of [UV/AWU] employees.

(b)    He believes that if the Prospective Respondent has contravened the award or enterprise agreement then relief is available in this Court, including the imposition of pecuniary penalties.

12    UV and AWU’s argument is that the beliefs of the two officials of the unions should be imputed to the unions for the purpose of this rule.

13    Secondly, the prospective applicant must establish that after making reasonable inquiries the prospective applicant does not have sufficient information to decide whether to start a proceeding in the Court to obtain the relief that the prospective applicant reasonably believes the prospective applicant may have the right to obtain in the Court. On this application, there was no issue that such sufficient information was not available to UV or AWU unless UV or AWU could obtain the information from Accolade Wines.

14    Thirdly, the prospective applicant must establish that the prospective applicant reasonably believes that the prospective respondent has, within the prospective respondent’s control, documents that are directly relevant to the question whether the prospective applicant has the right to obtain the relief that the prospective applicant reasonably believes that the prospective applicant may have the right to obtain in the Court.

15    The documents which are sought must be established to be or to have been in the prospective respondent’s control. “Control” is defined in the Dictionary of the Rules when referring to a document, to mean “possession, custody or power”.

16    As I have said, the documents must be directly relevant to the question whether there is a right to obtain the relief that the prospective applicant reasonably believes the prospective applicant may be entitled.

17    The Peruvian Guano test is no longer applicable in determining whether particular documents are relevant to the ascertainment of the documents sought to be discovered: Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Company (1882) 11 QBD 55.

18    The documents in rule 7.23(1)(c)(i) that are directly relevant to the question in rule 7.23(1)(a) are those documents which are identified in rule 20.14(2).

19    Rule 20.14(1) provides that a party, in giving discovery, must give discovery of documents that are directly relevant to the issues raised by the pleadings or in the affidavits: rule 20.14(1)(a).

20    Rule 20.14(2) defines those documents:

(2)    For paragraph (1)(a) the documents must meet at least one of the following criteria:

(a)    the documents are those on which the party intends to rely;

(b)    the documents adversely affect the party’s own case;

(c)    the documents support another party’s case;

(d)    the documents adversely affect another party’s case.

21    There is no need to inquire into what “directly relevant” means because the documents that are directly relevant are identified in rule 20.14(2). In my opinion, no other documents, other than those contained in rule 20.14(2), can be said to be directly relevant to the issues raised by the pleadings or in the affidavit and, in the case of an application under rule 7.23, relevant to the question.

22    A party who is ordered to give standard discovery must only discover those documents in rule 20.14(2) of which, after a reasonable search, the party is aware and which are or have been in the party’s possession, custody or power. The documents in rule 20.14(2) are identified by reference to their forensic qualities.

23    If a party does not intend in the proceeding to rely upon a document, that document should not be discovered unless the document would adversely affect the party’s own case or would support or adversely affect another party’s case.

24    Rule 7.23 should be read as not imposing any greater obligation on a prospective respondent in giving discovery before a proceeding is started than a prospective respondent would have as respondent after the proceeding is started.

25    Because the documents that must be discovered are those directly relevant to the question whether the prospective applicant has a right to obtain the relief, the question must be precisely identified by the applicant so that if discovery were to be ordered the documents also can be precisely identified by the prospective respondent, in order that the prospective respondent can comply with the order. Once the question has been precisely identified, the prospective respondent should only be required to give discovery of documents of the kind mentioned in rule 20.14(2).

26    Only those documents that the prospective respondent would rely upon to defend the proceeding that would be brought to obtain the relief that the prospective applicant believes is available would be discovered, unless the prospective respondent also had control of documents that would adversely affect the prospective respondent’s case or support or adversely affect the prospective applicant’s case.

27    If the prospective applicant is able to satisfy the Court that the prospective applicant has a belief that the prospective respondent has, in the prospective respondent’s control, documents directly relevant to the question, and that belief is objectively reasonable, the prospective applicant must then establish that it would assist the prospective applicant to make a decision by inspecting the documents.

28    Rule 7.23(1)(c)(i) was relevant in this application because the prospective applicants had, before bringing this application, sought almost all of the documents contained in the application and had been advised by the prospective respondent that some of those documents did not exist.

29    I will refer later to that correspondence, but it is enough at this stage to note that if a prospective applicant has been told by a prospective respondent that documents of the kind sought in the application do not exist or are not in the prospective respondent’s possession, custody or power, it is hard to think that the prospective applicant could thereafter reasonably believe that the documents did exist, unless the prospective applicant could point to other evidence apart from the prospective respondent’s denial that would support that belief.

30    There is one further matter to be addressed on an application under rule 7.23. If the prospective applicant can make out each of the matters in paragraphs (a), (b) and (c) of rule 7.23(1), the Court has a residual discretion to order the prospective respondent to give discovery of the documents limited to the documents in rule 7.23(1)(c)(i). That discretion is unfettered but must be exercised judicially.

31    On 24 July 2012, Accolade Wines employed 120 members of UV at the Reynella site, all of whom were covered by the terms and conditions of the Wine Industry Award 2010.

32    At the same day, Accolade Wines employed 8 members of AWU at the Reynella site, all of whom were covered by the terms and conditions in the Manufacturing and Associated Industries and Occupations Award 2010.

33    Both of those Awards were relevant by reason of the Constellation Enterprise Agreement made under the Fair Work Act.

34    Clause 4 of the Constellation Enterprise Agreement makes the agreement binding upon Accolade Wines (formerly Constellation Australia Ltd), UV (formerly Liquor, Hospitality and Miscellaneous Union), AWU, and the Australian Manufacturing Workers Union and its members. Clause 4.1.2 incorporates the awards.

35    The objectives of the Constellation Enterprise Agreement are identified in clause 10, which relevantly provides:

The objectives of this Enterprise Agreement are to develop an employee resource which is highly skilled and flexible and participative. This agreement will be built from shared responsibility, shared input and effective communications. We aim at a future based on mutual trust and job security through product, service and performance excellence. The objectives seek job satisfaction, high morale and real, sustainable improvements in productivity, service and performance, by way of:-

…

•    an organisation which shares information with its employees;

…

•   an organisation which encourages involvement of all employees and/or their chosen representatives in the decision making process;

•    continuing to develop a team approach to operations and improvement;

36    Clause 8 of the Wine Industry Award 2010 and clause 9 of the Manufacturing and Associated Industries and Occupations Award 2010 are in the same terms, and they relevantly provide:

8.    Consultation regarding major workplace change

8.1    Employer to notify

(a)    Where an employer has made a definite decision to introduce major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must notify the employees who may be affected by the proposed changes and their representatives, if any.

(b)    Significant effects include termination of employment; major changes in the composition, operation or size of the employer’s workforce or in the skills required; the elimination or diminution of job opportunities, promotion opportunities or job tenure; the alteration of hours of work; the need for retraining or transfer of employees to other work or locations; and the restructuring of jobs. Provided that where this award makes provision for alteration of any of these matters an alteration is deemed not to have significant effect.

8.2    Employer to discuss change

(a)    The employer must discuss with the employees affected and their representatives, if any, the introduction of the changes referred to in clause 8.1, the effects the changes are likely to have on employees and measures to avert or mitigate the adverse effects of such changes on employees and must give prompt consideration to matters raised by the employees and/or their representatives in relation to the changes.

(b)    The discussions must commence as early as practicable after a definite decision has been made by the employer to make the changes referred to in cause 8.1.

(c)    For the purposes of such discussion, the employer must provide in writing to the employees concerned and their representatives, if any, all relevant information about the changes including the nature of the changes proposed, the expected effects of the changes on employees and any other matters likely to affect employees provided that no employer is required to disclose confidential information the disclosure of which would be contrary to the employer’s interests.

37    On 24 July 2012, Accolade Wines entered into a contract with Treasury Wine Estates Vintners Limited (Treasury) pursuant to which Treasury would perform bottling and packaging operations previously performed by Accolade Wines at the Reynella site.

38    On the same day, Accolade Wines informed UV and AWU that it would make some of the UV and AWU employees redundant. On the next day, Accolade Wines informed UV that it would make redundant the jobs performed by 32 salaried staff, 8 logistics employees, 10 laboratory and quality assurance employees, 10 production maintenance employees, 1 maintenance employee, 72 packaging employees, 23 warehouse employees, and 19 winery employees.

39    UV and AWU allege, and it may be accepted for the purpose of this application, that Accolade Wines did not consult with any employees or representatives of UV or AWU about the decisions made on 24 July 2012, or provide employees of UV or AWU with any opportunity to be involved to express views about the decisions or the changes Accolade Wines was proposing to make. The first notification of the decisions made on 24 July 2012 was given to the UV and AWU employees, and UV and AWU on 24 July 2012.

40    Subsequently, on 2 August 2012, Accolade Wines entered into a contract with Mackenzie Hillebrand Pty Ltd (Mackenzie) pursuant to which Mackenzie would perform warehousing and distribution operations previously performed by the employees of Accolade Wines at the Reynella site. However, it is not clear to me the relevance of that decision on this application.

41    On 21 August 2012, Mr Di Troia of UV, who holds an entry permit under s 512 of the Fair Work Act, gave notice to Accolade Wines that he proposed to enter its premises at Reynella on Thursday, 21 August 2012 at 9.30am pursuant to regulation 3.27 of the Fair Work Regulations 2009 (Cth) claiming that Accolade Wines was bound by the Constellation Enterprise Agreement and it had made “definite decisions” which it had implemented or was implementing. The definite decisions identified in the entry notice were:

2.1    A decision to no longer conduct bottling at Reynella.

2.2    A decision to no longer conduct warehousing at Reynella.

2.3    A decision not to transfer bottling operations from Reynella to another Accolade site.

2.4    A decision not to transfer warehousing operations from Reynella to another Accolade site.

2.5    A decision to enter a contract with Treasury Wine Estates and not any other company.

2.6    A decision to enter a contract with McKenzie Hillebrand and not any other company.

2.7    A decision not to include terms in its contract with Treasury Wine Estates that provide for the McKenzie Hillebrand to offer employment of Accolade employees.

2.8    A decision not to include terms in its contract with Treasury Wine Estates that provide for Treasury Wine Estates to offer employment of Accolade employees.

2.9    A decision to make 175 employees redundant.

2.10    A decision about which 175 employees will be made redundant.

2.11    A decision to relocate “line 7” to Tintara.

42    The entry notice identified the relevant provisions of the Wine Industry Award and claimed that UV suspects that Accolade Wines contravened the provisions of clause 8 of that Award and clause 12.2 of the Constellation Enterprise Agreement in respect of some or all of the matters itemised in paragraph 2.1 to 2.11 of the entry notice, set out above.

43    It claimed, pursuant to s 482(1)(c) of the Fair Work Act, the right to inspect the documents identified in the notice as follows:

7.1    Minutes of Accolade’s board of directors and papers submitted to Accolade’s board of directors dealing with any or all of the matters set out in paragraph 2 above.

7.2    Documents recording decisions made by Accolade, its directors or other authorised officers, in relation to any or all of the matters set out in paragraph 2.

7.3    Confidentiality agreements with Accolade employees based at the Reynella site, such as Tim Flaherty, relating to any or all of the matters set out in paragraph 2 above.

7.4    Documents passing between Accolade and Treasury Wine Estates (“TWE”) between 1 January and 24 July 2012 relating to the takeover by TWE of bottling and packaging Accolade’s wine in Australia.

7.5    Documents passing between Accolade and MacKenzie Hillebrand between 1 January and 24 July 2012 relating to the takeover by MacKenzie Hillebrand of Accolade’s domestic warehousing and distribution functions.

7.6    Documents recording communications between Accolade’s Reynella and Tintara sites about the matter set out in paragraph 2.11.

7.7    Documents that show how each of the 175 employees selected for redundancy were chosen and when decisions about which employees would be made redundant, were made.

44    On 27 August 2012, Accolade Wines responded in writing by addressing the entry notice and what it called the “Bottling Decision”. It said:

Our response to that request for documents is set out in paragraph D of this letter.

Accolade Wines has always been cognisant of its consultation obligations and provides the following detail to assist the Union in understanding how, and when, definite decisions are made by Accolade Wines.

A.    Decision making authority – Accolade Wines

Accolade Wines Australia Limited (AWAL) is the operating company of the Australian, Asian and North American group of companies of the global wine business of “Accolade Wines”.

AWAL is the party to the Constellation Australia Ltd (Wineries – South Australia) Enterprise Agreement 2010 – 2013 (Enterprise Agreement).

AWAL is wholly owed by Accolade Wines Holdings Australia Pty Ltd (Holding Company), which is the entity that the major shareholders of “Accolade Wines” (CHAMP Private Equity and Constellation Brands Inc) each hold their financial (ie shareholding) interest in.

There is no delegated authority from the Holding Company to AWAL, other than in relation to day to day business decisions. Furthermore, certain actions cannot be taken by Accolade Wines without the consent of its global financier, GE Capital.

On the basis of the above:

(a)    AWAL and its officers and management could not make the Bottling Decision; and

(b)    the Bottling Decision could only be made by the board of directors of the Holding Company (Board of Directors).

As you are aware, the Holding Company is not a party to the Enterprise Agreement, nor is it a party to the Award as it employs no staff.

B    The Making of the Bottling Decision

The Bottling Decision was made by the Board of Directors of the Holding Company in accordance with the following process:

(a)    The Board of Directors of the Holding Company requested senior management and various members of the businesses of AWAL prepare a robust business case for submission to the Board of Directors for their consideration.

(b)    A request to make the Bottling Decision and commence consultation with all impacted employees and unions was sought by AWAL from the Board of Directors of the Holding Company on the basis of a non-binding term sheet on 9 July 2012. The Board of Directors of the Holding Company did not make the decision and requested that further work be done on the proposal, including by preparing draft legal documents complete with all details of the proposed transaction, before they would consider making the Bottling Decision.

(c)    The draft agreements were finalised and taken to the Board of Directors of the Holding Company for approval on 23 July 2012.

(d)    The Bottling Decision was made by the Board of Directors of the Holding Company on 23 July 2012, but was conditional on the successful negotiation of the consent of GE Capital. Until that consent was obtained, no definite decision to make the Bottling Decision could occur.

(e)    The terms of the GE Capital consent were negotiated on the evening of 23 July 2012, and ultimately signed and received on the morning of 24 July 2012, immediately prior to the announcement to employees and consultation with all relevant unions.

As is evident from this chronology, a definite decision to make the Bottling Decision occurred on the morning of 24 July 2012. AWAL then immediately proceeded to comply with its consultation obligations under the Enterprise Agreement and the Award (and will continue to do so, as the Bottling Decision is implemented over the coming months).

45    On 27 September 2012, Mr Ats, as UV and AWU’s solicitor, responded to that letter in the following terms:

We act for United Voice and the Australian Workers Union in relation to a proposed action in the Federal Court of Australia for contraventions of the Constellation Australia Ltd (Wineries – South Australia) Enterprise Agreement 2010-2013, the Wine Industry Award 2010 and the Manufacturing and Associated Industries Occupations Award 2010 by your company in relation to the recent announcement of major changes in the operations of your company at its Reynella site.

The contraventions concern the failure by your company to consult in accordance with the above industrial instruments. United Voice has previously communicated with you about that.

Our clients believe that they may have the right to obtain relief against your company in the Federal Court in respect to the aforementioned contraventions, by reason of its actions in developing and implementing the strategy for the major changes at Reynella.

46    The letter then went on to seek a number of documents. The documents sought to be inspected were:

1.    Minutes of meetings of Accolade Wines Holdings Pty Ltd (AWH) in 2011 and 2012, which are held by you and which record any requests, or decisions to request, senior management and members of the businesses of Australian (sic) Wines Australia Limited (AWAL) to prepare a business case for major changes in AWAL’s business operations, for submission to the Board of Directors of AWH.

2.    Any briefing papers or agenda papers held by you, which were distributed for or at the meetings referred to in item 1 above.

3.    Reports by directors of AWAL to its management in 2011 and 2012 of the matters referred to in item 1 above.

4.    Minutes of meetings of the board of directors of AWAL in 2011 and 2012 dealing with the matters referred to in item 1 above.

5.    The business case or cases prepared by AWAL in response to the request or requests refered to in item 1 above.

6.    Any responses from AWH to the business case or cases referred to in item 5 above.

47    The letter concluded:

Unless you agree within 7 days of this date to provide our clients inspection of the above documents, we advise that application will be made to the Federal Court without further notice for an order for preliminary discovery.

48    On 3 October 2012, Accolade Wines responded to that letter saying that it assumed the solicitor’s request had been made pursuant to s 483 of the Fair Work Act.

49    In its letter, Accolade Wines indicated that because the AWU had not issued a valid entry notice it was under no obligation to provide the documents to AWU.

50    Its letter continued by saying that Accolade Wines consented to AWU being provided with documents that had previously been provided to UV with the letter of 27 August 2012. It then addressed the solicitor’s letter. It said:

We have carefully considered the six categories of documents set out in your letter of 27 September 2012.

Firstly, we note that your clients’ requests relate to documents concerning “…major changes in Accolade Wines Australia Limited’s business operations.” The scope of this request is extraordinarily broad and it would be oppressive to expect us to provide a full response to it. However, we assume given the context of your letter that the “major changes to business operations” are in fact limited to the Company’s decision to cease bottling and packaging activities at its Reynella site. On that basis, we advise that:

1.    No documents of the nature described in paragraphs 3 or 4 of your letter dated 27 September 2012 exist.

2.    As for paragraphs 1, 2 and 6 of your letter, the Company has not been able to determine by your stated deadline whether any documents of the nature described exist. However, if they do exist, we do not consider the Company is under any obligation to provide them to the Unions.

51    On 9 October 2012, UV and AWU’s solicitor wrote again to Accolade Wines indicating that Accolade Wines’ assumption that the inspection was sought under s 483 of the Fair Work Act was wrong, but that the application had been made as a “precursor” to an application for preliminary discovery under rule 7.23.

52    The solicitor wrote:

You are however correct in your assumption that the “major changes to business operations” referred to the cessation of bottling and packaging at the Reynella site.

The documents which we have requested to inspect are directly relevant in establishing the role of AWAL in the decision to make the operational changes at Reynella, referred to above.

53    On 12 October 2012, Accolade Wines responded, disputing UV and AWU’s entitlement to any further inspection and saying:

Our client is not going to facilitate a fishing expedition by searching for and providing documents (if indeed they exist) which are not directly relevant to the contravention alleged by your clients, particularly where those documents may contain highly sensitive, commercial-in-confidence information that is not relevant to the matters in dispute. We also repeat our client’s concerns as set out in its letter dated 3 October 2012 relating to the breadth of the categories of documents sought by your clients. In our view the Court will not grant discovery orders of the scope sought by the Unions and we therefore decline to provide them.

54    That refusal by Accolade Wines’ solicitor led to the issue of this application.

55    The only evidence adduced by UV or AWU in relation to their belief that they may have a claim in this Court against Accolade Wines is that to which I have referred. There is no suggestion in the affidavit sworn by UV and AWU’s solicitor that they have a belief in relation to any other proceeding other than that mentioned in the affidavit.

56    The decision which is referred to in the affidavit is undoubtedly the decision made by Accolade Wines on 24 July 2012.

57    That is the decision referred to in paragraph 13 of Mr Ats’ affidavit. It is that decision to which reference is made in the further paragraphs of his affidavit when Mr Ats deposes to that which occurred after 24 July 2012.

58    The definite decision complained of by UV and AWU is the decision made on 24 July 2012.

59    Accolade Wines’ solicitor, Ms Clare Raimondo, has sworn an affidavit in reply to UV and AWU’s solicitor’s affidavit.

60    On 8 December 2011, Accolade Holdings adopted a protocol, the revised version of which was adopted at the Board Meeting on 28 June 2012, for the governance and operating procedures of the companies, being Accolade Wines Holdings and Accolade Wines Holdings Europe Limited.

61    That protocol provided that certain actions required the consent of the Board through its operating committee of Accolade Wines Holdings.

62    It is claimed that the decision to cease bottling at Accolade Wines’ Reynella site and outsource those activities to Treasury, and to outsource certain warehousing and distribution activities to Mackenzie, could not have been made without the consent of the operating committee of Accolade Wines Holdings.

63    That consent was not given until 10.30am on 23 July 2012 and was confirmed in an email on the same day.

64    That consent was also subject to approval by Accolade Wines’ financiers who are GE Capital.

65    On 19 July 2012, GE Capital informed Accolade Wines that the required consents would need to be in writing and signed by GE Capital’s entities in Australia, the United Kingdom and the United States of America, because GE Capital’s entities in the United Kingdom and the United States of America hold security against the assets of Accolade Wines.

66    On 23 July 2012, it was not certain, so it is said, that the consents required by the facility agreement would be obtained and they were not obtained until the evening of 23 July 2012 and were not signed until 8.00am on 24 July 2012.

67    It is asserted that immediately upon receipt of that consent from GE Capital, the then director of Accolade Wines, Mr Troy Christensen, made the decision, and Accolade Wines then notified its employees of that decision on the same day.

68    It is asserted that Accolade Wines could not have consulted with UV and AWU before 24 July 2012 because the decision which was made on 24 July 2012 required the consent of both its holding company through its operating committee, and its financier, which consents were not completed until the morning of 24 July 2012.

69    The parties provided the Court with written submissions in support and opposition to the application.

70    UV and AWU say in their written submissions:

5.    In light of the explanation given by the employer, the unions in this application raise a very different issue. The affidavit of Ms Raimondo appears to be incorrectly based on the premise that this application concerns a decision made on 23 July 2012 (sic). This premise is incorrect.

6.    There is a reasonable basis for believing that the employer made a decision, some time in 2011 or earlier than July in 2012, that, if certain conditions were met, it would close down part of the business, outsource it or restructure it in a significant manner. The precise decision is currently unknown to the unions. For example, there may have been a decision to close down or outsource the bottling and packaging operations so long as a suitable buyer could be found; or to restructure the bottling and packaging operations if a suitable buyer cannot be found.

71    The claim that Ms Raimondo incorrectly responded to a decision made on 23 July 2012 is incorrect. She says, in paragraph 6 of her affidavit, that “[t]he Prospective Respondent says that the Decision was made on the morning of 24 July 2012”. In any event, Ms Raimondo was right to respond to what was said to be a decision on 24 July 2012. That was the only decision mentioned by UV and AWU to that time.

72    There was never any suggestion made in the correspondence from UV and AWU and its solicitors, and in the notice of the proposal to enter, that any other decision apart from that made on 24 July 2012 was the subject matter of the complaint and the notice.

73    In my opinion, UV and AWU reformulated their case because of the explanation given by Accolade Wines in response to the complaints made by them.

74    Accolade Wines demonstrated that it was not possible for them to consult with UV and AWU prior to 24 July 2012 in relation to the decision which was made on 24 July 2012. A decision could not be made until such time as Accolade Wines Holdings and GE Capital permitted the decision to be made.

75    In my opinion, UV and AWU realised that they could not make out a contravention of the Constellation Enterprise Agreement or the Awards in relation to the decision made on 24 July 2012.

76    As a result, they recast their case to claim documents in relation to what are said to be antecedent decisions, of which they were unaware and of which they cannot categorise as being definite decisions.

77    There are a number of difficulties with the application as reformulated by UV and AWU. First, the application that was made and to which Accolade Wines has responded identified the definite decision as having been made on 24 July 2012. The reformulated case by UV and AWU has arisen because they now recognise that they cannot make out a contravention by Accolade Wines in making the decision it made on 24 July 2012.

78    Therefore, UV and AWU address some antecedent decision, which they cannot identify, for a claim that they are entitled to discovery in relation to that unidentified decision, because they reasonably believe that they may have the right to obtain relief from Accolade Wines in relation to that decision.

79    There are further problems with the reformulated case. Rule 7.23 requires a prospective applicant to establish that the prospective applicant reasonably believes that the prospective applicant may have the right to obtain relief from the prospective respondent. In the absence of any decision known to UV or AWU, UV or AWU could not reasonably believe that it had a right to obtain relief in the Court from Accolade Wines.

80    Moreover, UV and AWU would only be entitled to obtain any relief against Accolade Wines if they could establish that the decision made was a “definite” decision to do that which is identified in the two Awards.

81    The decision which is referred to in paragraph 6 of the written submissions is not of that kind.

82    The further difficulty with the application as it has been reformulated is that there is no evidence that anyone believes that UV or AWU has any right to obtain relief against Accolade Wines in this Court in relation to a contravention of the Awards. The only evidence before the Court relates to a decision made on 24 July 2012 which is no longer relied upon by UV and AWU.

83    UV and AWU cannot satisfy the test in rule 7.23(1)(c)(i) in respect of those documents that Accolade Wines says it does not have. No-one could reasonably believe, in view of Accolade Wines’ statement, that those documents are in Accolade Wines’ control.

84    This application is no more than a fishing expedition to obtain evidence in the hope that that evidence will disclose that Accolade Wines has contravened the Fair Work Act.

85    Although rule 7.23 is to be construed beneficially, the jurisdiction to make the orders that the Court is empowered to make in rule 7.23 is circumscribed by the prospective applicant having a reasonable belief that the prospective applicant may have the right to obtain relief in the Court.

86    There is no evidence of the subjective belief. The belief, if it existed, would not be objectively reasonable.

87    For all those reasons, the application must be dismissed.

88    Accolade Wines should have the costs of the application which was brought under the Rules of Court. UV and AWU expressly denied, by their solicitor in an email dated 9 October 2012, that this application was brought under s 483 of the Fair Work Act.

89    In those circumstances, the Court is not exercising jurisdiction under the Fair Work Act and s 570(1) of the Fair Work Act has no application.

90    The Court is exercising jurisdiction under the Federal Court Rules.

91    Costs should follow the event.

Associate:

Dated:    4 April 2013