Federal Court of Australia

Registered Clubs Association of New South Wales v Stolz [2021] FCA 576

File number:

NSD 405 of 2020

Judgment of:

YATES J

Date of judgment:

1 June 2021

Catchwords:

PRACTICE AND PROCEDUREapplication for access to documents produced pursuant to a court-ordered regime for the investigation of electronic devices and email and cloud accountsapplication for leave to use documents in other proceedings – application for leave to withdraw admissions made by failure to respond to a notice to admit –application for summary dismissal

Legislation:

Corporations Act 2001 (Cth) ss 31A(2), 183, 1317H

Fair Work Act 2009 (Cth)

Federal Court of Australia Act 1976 (Cth) s 37M

Federal Court Rules 2011 (Cth) rr 22.01, 22.02, 22.04, 22.06, 26.01

Long Service Leave Act 1955 (NSW)

Workers Compensation Act 1987 (NSW) s 11A

Cases cited:

Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd [2013] HCA 46; 250 CLR 303

Liberty Funding Pty Ltd v Phoenix Capital Ltd [2005] FCAFC 3; 218 ALR 283

Springfield Nominees Pty Ltd v Bridgelands (1992) 38 FCR 217; 100 ALR 685

Treasury Wine Estates Limited v Maurice Blackburn Pty Ltd [2020] FCAFC 226; 385 ALR 562

Division:

General Division

Registry:

New South Wales

National Practice Area:

Commercial and Corporations

Sub Area:

Commercial Contracts, Banking, Finance and Insurance

Number of paragraphs:

104

Date of hearing:

16 April 2021

    

Counsel for the Applicant:

Mr C Withers SC with Mr J Entwisle

Solicitor for the Applicant:

Thomson Geer

Counsel for the Respondents:

Mr A Harding SC

Solicitor for the Respondents:

Wotton & Kearney Lawyers

ORDERS

NSD 405 of 2020

BETWEEN:

THE REGISTERED CLUBS ASSOCIATION OF NEW SOUTH WALES ABN 61 724 302 100

Applicant

AND:

TROY GRAHAM STOLZ

First Respondent

DIANNE LESLEY STOLZ

Second Respondent

order made by:

YATES J

DATE OF ORDER:

1 June 2021

THE COURT ORDERS THAT:

1.    By 4.00 pm on 8 June 2021, the parties bring in agreed orders giving effect to these reasons.

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

REASONS FOR JUDGMENT

YATES J:

Introduction

1    There are two interlocutory applications before the Court.

2    The first is a further amended interlocutory application, dated 19 April 2021, on which the applicant, The Registered Clubs Association of New South Wales, seeks leave to rely. In that interlocutory application, the applicant seeks:

(a)    leave to use in other proceedings certain documents produced in this proceeding;

(b)    an order that certain documents be produced to the applicant (being documents that have been produced by the respondents to the applicant’s forensic analyst and analysed by him); and

(c)    an order granting leave to the applicant to serve a notice disputing facts or, alternatively, giving leave to the applicant to withdraw certain admissions deemed to have been made by it.

3    The second interlocutory application is dated 8 February 2021. In that interlocutory application, the second respondent, Dianne Lesley Stoltz, seeks an order that summary judgment be given in her favour against the applicant in respect of the claims made by the applicant against her in this proceeding.

Background

4    The applicant is the peak representative body for registered clubs in New South Wales. The first respondent, Troy Graham Stoltz, was employed by it as a senior compliance auditor in respect of a program called “ClubSAFE”, a responsible gambling and compliance program. In his position, the first respondent had access to sensitive information concerning the applicant and its member clubs—in particular, information regarding their compliance and anti-money laundering obligations. The first respondent resigned from his position with the applicant, with effect from 27 September 2019.

5    The applicant says that, as a senior employee, the first respondent owed it certain obligations. These obligations included the obligations he assumed under a written confidentiality agreement with the applicant that formed part of his written terms of employment. The applicant says that, after his employment ceased, and in breach of his obligations, the first respondent did not return all the applicant’s documents and information that he had obtained during the course of his employment. A large number of these documents have been identified on electronic devices and in accounts for personal email addresses, including addresses owned or controlled by the second respondent. Further, the applicant says that, after his employment ceased, and in breach of his obligations, the first respondent disclosed the applicant’s documents and information to various persons, including a Member of the Commonwealth Parliament and certain journalists.

6    The applicant commenced this proceeding on 7 April 2020. On 22 April 2020, orders were made, by consent, putting in place a regime (the disclosure regime) whereby the respondents’ electronic devices, and email and online accounts, would be inspected by a forensic analyst engaged by, but otherwise independent of, the applicant (the independent expert). The disclosure regime permitted the independent expert to make a complete copy of all information residing on the respondents’ devices and to provide the respondents’ solicitors with any information he believed to be: (a) confidential information or intellectual property belonging to the applicant; or (b) information that was evidence of the use, transfer, copying, or disclosure by either respondent of that confidential information or intellectual property (referred to in the regime as Search Results). This was to enable the respondents’ solicitors to raise, on a per item basis, any objection to the expert providing the Search Results to the applicant or its solicitors.

7    The independent expert, Mr McKemmish, examined the devices. In carrying out his task to identify the Search Results, he applied keyword searches. By this means, he identified over 2,000,000 documents, which were extracted and provided to the respondents then solicitors in readable form. The respondents notified objections, on a per item basis, to 181,883 documents. Of these, 8,716 objections were made on the basis of a claim of legal professional privilege, and 173,167 objections were made on the basis of a claim of parliamentary privilege.

8    Apart from the documents to which objections were raised, 2,359,839 documents have now been produced to the applicant and its solicitors. It is from this corpus that the applicant seeks leave to use certain documents in other proceedings involving the first respondent.

9    The respondents have now withdrawn their objections to production based on the claim of parliamentary privilege. They nevertheless resist production of these documents to the applicant, although not, it seems, its solicitors. It is convenient to commence with this aspect of the present dispute.

The production of documents

10    As advanced in oral submissions, the issue of production relates to two groups of documents.

The first group of documents

11    The first group has been referred to as the Annexure K documents. These are documents in respect of which an objection to production had been made on the basis of a claim of parliamentary privilege. No other objection was raised. As I have said, the claim of parliamentary privilege has been withdrawn.

12    However, in a letter dated 2 February 2021, after the time for making objections expired, and after the claim of parliamentary privilege was withdrawn, the respondents’ current solicitors wrote to the applicant’s solicitors stating that the respondents objected to the production of these documents.

13    The argument advanced in the letter of 2 February 2021 seems to rest on the following propositions:

(a)    The disclosure regime is directed solely to the applicant obtaining access to its confidential information and intellectual property, as defined in the confidentiality agreement and the first respondent’s employment contract, and determining whether there has been any use or disclosure of that information or property.

(b)    The applicant’s entitlement to relief under the disclosure regime is limited by the scope of the final relief claimed in its originating application. Under the disclosure regime, it cannot be entitled to more extensive relief.

(c)    The applicant’s claim for production of the Annexure K documents is a claim for documents which are not its confidential information and/or intellectual property, or evidence of the use or disclosure etc. of that information or property.

(d)    Therefore, under the disclosure regime, the applicant is asserting a claim for production which extends beyond the final relief it has claimed.

14    This argument is untenable, for the following reasons.

15    The originating application seeks, as final relief, an injunction which, in substance, restrains the respondents from using, disclosing, or divulging the applicant’s confidential information and intellectual property, as defined. The originating application also seeks a declaration that the first respondent has contravened s 183 of the Corporations Act 2001 (Cth) (the Act) and an order for compensation, pursuant to s 1317H of the Act, in respect of that contravention.

16    Plainly, the orders made on 22 April 2020 were interlocutory orders which, on their face, were directed to the discovery of documents. They were obviously made to facilitate the determination by the Court of questions such as:

(a)    Were the respondents wrongfully in possession of the applicant’s confidential information and intellectual property, as defined?

(b)    If so, did the respondents wrongfully use, disclose, or divulge that information or property?

(c)    If so, did the first respondent thereby contravene s 183 of the Act?

(d)    If so, should an order for compensation under s 1317H of the Act be made against the first respondent?

(e)    If so, what should the amount of that compensation be?

(f)    Further, should the respondents be restrained from further disclosing that information and property?

17    The disclosure regime was not put in place as a means of bypassing or supplanting the Court’s role of fact-finding at a final hearing. Rather, its role was to facilitate the just resolution of the parties’ dispute by requiring the respondents to make documents and information available to the applicant for use in the proceeding, while at the same time providing a structure for the orderly and timely determination and resolution of proper objections to production.

18    The disclosure regime was, itself, to be facilitated by an independent expert whose role, as made clear by the terms of the disclosure regime, was, amongst other things, to use his particular expertise to:

(a)    employ such forensic tools and methods as were necessary for him to make a copy of all information on the respondents’ devices which had been provided to him (which turns out to have been a vast amount of information);

(b)    provide the respondents’ solicitors with copies of any information which he believed to be confidential information or intellectual property, as defined;

(c)    provide the respondents’ solicitors with copies of any information which he believed evidenced, amongst other things, the use or disclosure of that information or property;

(d)    provide any such information—the Search Results—to the applicant’s solicitors (for availability to the applicant itself) where no specific objection had been made, on a per item basis, to that production;

(e)    provide a report to the applicant’s solicitors containing such of the Search Results to which objection had been taken (in accordance with the disclosure regime) for the purpose of allowing the solicitors to assess the objections; and

(f)    provide such of the Search Results, to which objection had been taken, to the applicant’s solicitors (for availability to the applicant) if the applicant’s solicitors and the respondents’ solicitors resolved those objections.

19    This disclosure regime did not prescribe how the independent expert was to carry out the task of identifying information which he believed to be the applicant’s confidential information or intellectual property, or the task of identifying what he believed to be evidence that the respondents had used or disclosed that information or property. There is no reason why the independent expert could not undertake these tasks by using keyword searches. The respondents do not contend that the keywords used by the independent expert were not appropriate for that purpose. Further, it is understandable that the independent expert would undertake searches by this means. To do so would be consistent with the deployment of his expertise as a forensic analyst using the forensic tools and methods available to him.

20    It is ludicrous to suggest—as the respondents seem to suggest—that it was ever in the contemplation of the orders made on 22 April 2020 that the independent expert would forsake these tools and methods, and therefore his expertise, to, instead, personally read every electronic record which he had managed to retrieve from the respondents’ devices so as to form an inexpert and idiosyncratic assessment about whether each record was or was not, in fact, the applicant’s confidential information or intellectual property, or whether the record was, in fact, evidence of the use or disclosure of that confidential information or intellectual property.

21    Thus, the basis for restricting the production of the Annexure K documents, as advanced by the respondents in the letter of 2 February 2021, is entirely misconceived. Moreover, the respondents’ current position is a complete departure from the disclosure regime put in place by the orders made on 22 April 2020, to which they gave their consent.

22    It is convenient, at this stage, to record another argument which finds its way into the respondents’ submissions. The respondents draw attention to the fact that in January 2021 they sought the return of documents, which had already been produced to the applicant’s solicitors under the disclosure regime, on the basis that the documents did not, in fact, constitute the confidential information or intellectual property of the applicant. They contend that the documents had been produced to the applicant and its solicitors by mistake.

23    At the hearing of the present application, this argument was deployed in relation to the question of whether leave should be granted to the applicant to use such documents in the other proceedings involving it and the first respondent.

24    The argument is difficult to follow. It is purportedly based on Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd [2013] HCA 46; 250 CLR 303 at [45] and [48], although I see little similarity between that case and the present case. The argument is answered by the fact that, on the evidence before me, the documents were produced in accordance with the disclosure regime. There can be no complaint about the fact that the documents were produced. There was, in truth, no “mistake” beyond the respondents’ apparent misconception of the terms, scope, and operation of the orders made on 22 April 2020.

25    For the purposes of the present application, the respondents have done no more than advance a global objection to the production of the Annexure K documents based on an erroneous interpretation of the orders made on 22 April 2020. They have not brought any application to vary those orders; nor have they brought any application to protect any particular document.

26    In these circumstances, I am not persuaded that the respondents have advanced any cogent reason why, in accordance with the terms of the disclosure regime, the Annexure K documents should not now be produced to the applicant and its solicitors.

The second group of documents

27    The second group of documents is sourced from belatedly notified email and cloud accounts. To explain: the orders made on 22 April 2020 required the respondents, individually, to disclose, on oath, all email accounts and electronic storage accounts they each held or controlled or which were accessible to them. They were also required to disclose all user names, passwords, codes and access credentials that enable access to those accounts. The orders then provided a specific disclosure regime in respect of those accounts. The disclosure regime in respect of those accounts stipulated certain dates and time periods by which certain steps in the disclosure regime were to be undertaken.

28    At a case management hearing on 11 December 2020, the Court was informed that the respondents, in apparent non-compliance with the orders made on 22 April 2020, had failed to disclose certain email and cloud accounts. On 15 December 2020, an order was made that, in respect of certain identified email accounts, the respondents provide login or other access details to enable the independent expert to inspect those accounts.

29    At the time of making these orders, the Court was not asked to vary the specific dates or time periods stipulated in paragraphs 13 to 17 of the disclosure regime dealing specifically with email and cloud accounts. Nevertheless, the parties appear to have adopted the stepwise procedure provided in the disclosure regime for dealing with access.

30    The disclosure regime in respect of email and cloud accounts is similar to, but not the same as, the disclosure regime in respect of electronic devices. Paragraphs 16(a) and (b) of the disclosure regime in respect of email and cloud accounts requires the independent expert to analyse the disclosed accounts and to export, to hard drive storage, a copy of any item he identified as the applicant’s confidential information or intellectual property. These items are referred to in the disclosure regime as Relevant Items.

31    Within five business days of exporting the Relevant Items to the hard drive, the independent expert was then required to provide the respondents’ solicitors with a copy of these items to allow them to be reviewed “for the purpose of any claim or objection to be made by” the respondents: paragraph 16(c).

32    Paragraph 16(d) of the disclosure regime provides:

[T]he Respondents’ solicitors will complete their respective reviews of the Relevant Items within 5 business days of being provided with the Relevant Items by the Independent Expert and will advise the Independent Expert and the Applicant’s solicitors, in writing, of:

i.     any Relevant Items which either Respondent objects to the Independent Expert providing to the Applicant’s solicitors (including objection on the ground of legal professional privilege); and

ii.     the specific basis for any objection on a per item basis,

(Relevant Items Objections);

33    The disclosure regime provides that, within two business days after the step in paragraph 16(d), the independent expert is to provide to the applicant’s solicitors, for availability to the applicant, “all Relevant Items not subject to any Relevant Items Objections”: paragraph 16(e)(i).

34    The evidence indicates that, on 2 March 2021, the independent expert sent “additional emails” to the respondents’ solicitors for consideration”. The identity of the Relevant Items, which were forwarded by the independent expert to the respondents’ solicitors in that email, is not known. What is known is that the respondents’ solicitors did not make any Relevant Items Objections to the material that was sent. The five day period referred to in paragraph 16(d) of the disclosure regime, in respect of email and cloud accounts, has well and truly passed. The applicant contends that the Relevant Items should now be produced to it and its solicitors.

35    The respondents’ position in respect of these documents is captured in an email dated 3 March 2021 from their solicitors to the independent expert. In that letter, the respondents’ solicitors tell the independent expert that, under the orders made on 22 April 2020, it is his role to identify the documents that can be disclosed to the applicant. However, there is an implicit warning given to the independent expert that he must not disclose documents that, in fact, are not the applicant’s confidential information or intellectual property on the basis that, to do so, would involve the independent expert in a breach of the orders made on 22 April 2020. The same warning was made by the respondents’ previous solicitors in an email to the independent expert on 17 June 2020.

36    The respondents’ current solicitors were more explicit in an email to the independent expert on 3 February 2021:

The Orders do not permit you to disclose any and all documents you found as a part of your search. Any documents outside the description in the Orders remain our clients’ own confidential information and cannot be disclosed. There are clearly documents in Green and Orange which do not fit within the description of documents in the Orders and you have no entitlement to release copies of same.

Accordingly, you should not release any documents without receiving an email from our office confirming our agreement to such disclosure. We remind you of your obligations as an Independent Expert. If you release any of the Respondents’ own confidential information in circumstances where you have no entitlement to do so under the Orders then our clients reserve their rights to institute proceedings against you for a breach of their confidentiality.

37    This position reflects the respondents’ misunderstanding of the orders made on 22 April 2020. As I have said, the disclosure regime in respect of both the devices and the email and cloud accounts was obviously put in place as a form of discovery. It was not put in place as the means by which final findings of fact were to be made by the independent expert independently of the Court making such findings at a final hearing.

38    Under this particular regime, the independent expert is to do no more than identify items which he considers to be the applicant’s confidential information and intellectual property and to place those items before the respondents’ solicitors. Once that is done, it is for the respondents, through their solicitors, to make, within a limited time period, any objections to production as part of a structure for the orderly and timely determination and resolution of proper objections to production.

39    In the case of the email and cloud accounts, if no Relevant Items Objections are made, the Relevant Items are to be provided to the applicant’s solicitors and made available to the applicant itself. This is the disclosure regime to which the respondents consented. To contend, as a basis for objection, that a Relevant Item is not, in fact, the applicant’s confidential information or intellectual property, is, as I said in the course of oral submissions, to put the cart before the horse. The disclosure regime is intended to elicit documents for use in determining, by the Court, whether the respondents are wrongfully in possession of the applicant’s confidential information and intellectual property and have wrongfully used that information and property, amongst other things.

40    The respondents have not made Relevant Items Objections to the Relevant Items identified by the independent expert and forwarded to the respondents’ solicitors on 2 March 2021, in accordance with the disclosure regime.

41    In the course of oral submissions, the respondents contended that some of the communications evidenced by the Relevant Items were privileged, and some were not. The respondents were no more specific than that. There was no attempt to identify the communications that were said to be privileged, the nature of the privilege, or the basis on which the claim of privilege could be made good. I am not prepared to act on such generalised and unsubstantiated claims.

42    These documents should now be produced to the applicant and its solicitors, as contemplated by the disclosure regime.

Release from the implied undertaking

Introduction

43    It is not in dispute that a document produced pursuant to the compulsory processes of a court is entitled to special protection, such that it may not be used for any purpose other than that related to the litigation in the course of which, and for the purposes of which, the document is produced. As the obligation is owed to the court, it can be released or modified by leave granted by that court. The scope of the leave may be general or limited, and leave may be granted on terms.

44    The circumstances in which leave may be granted are discussed in a number of cases including: Springfield Nominees Pty Ltd v Bridgelands (1992) 38 FCR 217; 100 ALR 685 (Springfield); Liberty Funding Pty Ltd v Phoenix Capital Ltd [2005] FCAFC 3; 218 ALR 283 (Liberty); and Treasury Wine Estates Limited v Maurice Blackburn Pty Ltd [2020] FCAFC 226; 385 ALR 562. Generally, it is said that the party seeking the release must show “special circumstances”. However, as explained in, Liberty at [31]:

... The notion of “special circumstances” does not require that some extraordinary factors must bear on the question before the discretion will be exercised. It is sufficient to say that, in all the circumstances, good reason must be shown why, contrary to the usual position, documents produced or information obtained in one piece of litigation should be used for the advantage of a party in another piece of litigation or for other non-litigious purposes. The discretion is a broad one and all the circumstances of the case must be examined. ...

45    In Springfield, when describing the nature of the discretion, Wilcox J said (at 225) that many factors may be relevant. His Honour continued:

... 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.

46    The documents for which leave is sought in the present case are:

(a)    affidavits made by Mr Stoltz on 17 April 2020 and 22 December 2020;

(b)    affidavits made by Ms Stoltz on 17 April 2020 and 22 December 2020;

(c)    Mr McKemmish’s report dated 23 September 2020; and

(d)    documents produced by the respondents pursuant to the orders made on 22 April 2020, being certain text messages, and certain emails and other documents, reproduced or extracted in exhibits identified as Exhibit SF–3 and SF–10 to affidavits made by the applicant’s solicitor Ms Fernandez.

47    The applicant submits that the “special circumstances” in the present case are that the applicant and the first respondent are involved in overlapping disputes and that the documents in question are adjectivally relevant to those other disputes because they contradict statements made by the first respondent in those disputes.

48    For completeness, I note that the orders made on 22 April 2020 were also granted on an undertaking by the applicant, given to the Court, that it will not, without leave of the Court, use any information, document or thing obtained as a result of the execution of those orders for the purpose of any civil or criminal proceeding, either within or outside Australia, other than this proceeding.

49    The respondents do not oppose leave being granted in respect of the affidavits referred to above. However, they maintain their opposition in relation to the remaining documents including, it would seem, Mr McKemmish’s report dated 23 September 2020.

50    In order to deal with the large number of documents involved, the applicant took me to a sample of the documents in order to explain their adjectival relevance to the other proceedings. The parties suggested that I should make rulings in respect of these documents so that, guided by these rulings, they can confer in respect of the remainder of the documents with a view to reaching an agreed position on their use. If agreement is not reached, the parties contemplate the question of leave would then come back to the Court for determination on a document-by-document basis.

51    Before considering the sample documents, it is necessary to say something about the issues raised in the other proceedings.

Proceedings NSD1225/2020

52    The first respondent commenced proceeding SYG299/2020 in the Federal Circuit Court of Australia. The proceeding was transferred to this Court as proceeding NSD1225/2020. It is a proceeding commenced under the Fair Work Act 2009 (Cth) (the Fair Work Act). It also includes claims in defamation, amongst other claims.

53    In that proceeding, the first respondent alleges that, during his initial tenure at the applicant, before he signed his employment contract, he was an employee of the applicant, not an independent contractor. He alleges that he was covered by a particular industrial award.

54    The first respondent alleges that the applicant contravened the Fair Work Act by:

(a)    misrepresenting his employment status;

(b)    failing to pay him annual leave;

(c)    failing to make superannuation contributions for his benefit;

(d)    failing to make and keep proper records in respect of his employment; and

(e)    engaging in various forms of alleged coercion, in contravention of s 355 of the Fair Work Act.

55    The first respondent also alleges that the applicant contravened the Long Service Leave Act 1955 (NSW) by failing to pay him accrued long service leave in circumstances where the first respondent says that he terminated his services on account of “pressing necessity”.

56    Further, the first respondent alleges that the applicant defamed him by various acts of publication said to contain a large number of pleaded imputations. It is not necessary for me to survey all these imputations beyond noting that, in broad terms, they concern the first respondent as a person who does not respect intellectual property rights. They also concern the first respondent’s work performance, including imputations that the first respondent was a “bad” employee and that his work was substandard.

57    The applicant defends these various allegations and claims with denials of liability. It denies that:

(a)    it misrepresented the first respondent’s employment status;

(b)    the first respondent is entitled to payments on account of annual leave;

(c)    it was required to make contributions on the first respondent’s behalf for superannuation;

(d)    it was required to make and keep employment records, as claimed; and

(e)    it engaged in conduct contravening s 355 of the Fair Work Act.

58    The applicant also denies that the first respondent is entitled to payments on account of long service leave. In this connection, it contends that the first respondent in fact resigned from his employment with the applicant for the genuine purpose of pursuing other business interests.

59    As to the claims in defamation, the applicant denies that a number of the pleaded imputations arise from the acts of publication relied on. It also pleads defences of justification, qualified privilege, and contextual truth, amongst other defences.

The workers compensation claim

60    The first respondent has made a workers compensation claim alleging that he suffered a psychological injury arising out of, or in the course of, his employment with the applicant, and that his employment was a substantial contributing factor of the injury.

61    The applicant opposes the acceptance of the claim on the basis that:

(a)    the first respondent is not genuinely suffering from a psychological injury;

(b)    if he is suffering from a psychological injury, that injury did not arise out of, or in the course of, his employment with the applicant and/or that employment was not a substantial contributing factor to the injury; and

(c)    if the first respondent is suffering from a psychological injury, it arose wholly or predominantly from reasonable action taken in a reasonable manner with respect to his performance appraisal pursuant to the exemption provided in s 11A of the Workers Compensation Act 1987 (NSW).

62    Although the applicant accepts that the question of whether this claim will be accepted is one to be determined by its workers compensation insurer, it contends that it has a significant involvement in this claim for a number of reasons, including that it has a right to seek a review of any decision by the insurer to accept the claim and that acceptance of the claim will impact on its future premiums and costs for workers compensation insurance.

63    The applicant contends that documents relevant to this claim include those that demonstrate:

(a)    the first respondent’s capacity for work;

(b)    that any psychological injury suffered by the first respondent did not arise out of, or in the course of, his employment with the applicant; and

(c)    the availability of the s 11A exemption.

64    As to the first category, the applicant submits that there are a number of documents that demonstrate that the first respondent carried out work, or was looking for work, after leaving his employment with the applicant. It argues that these documents indicate that the first respondent was not suffering a work-related injury that prevented him from performing any paid work. It contends that these documents demonstrate a capacity to perform work.

65    As to the second category, the applicant submits that there are documents that suggest that any stress suffered by the first respondent is caused by the litigation with which he has been involved since the conclusion of his employment, rather than events occurring during that employment.

66    The third category speaks for itself.

Sampling

67    As I have noted, the sample documents were sourced from SF–10 and SF–3. The applicant addressed their adjectival relevance by reference to the following topics:

(a)    documents in relation to the defence of truth to the allegations of defamation, specifically in relation to the pleaded imputations that the first respondent breached his confidentiality obligations: SF–10 documents 62, 66, 108, 109, 112, and 115; SF–3 Court Book (CB) 1005 and 1006 (referred to in submissions at T 34–36);

(b)    documents in relation to whether the first respondent was an employee of the applicant or an independent contractor, at the relevant time: SF–10 documents 34, 36, 51, 52, and 54;

(c)    documents in relation to the circumstances of the first respondent’s termination of his employment with the applicant (also said to be relevant in relation to the category immediately above): SF–10 documents 25, 30, and 31; SF–3 CB 995 (referred to in submissions at T 43), CB 986–987 (referred to in submissions at T 44), and CB 1001 (referred to in submissions at T 43–44);

(d)    documents in relation to the damages claimed in respect of the alleged contraventions of the Fair Work Act: SF–10 documents 61 and 119; and

(e)    documents in relation to the workers compensation claim that allegedly reveal the first respondent’s capacity to work: SF–10 documents 2, 9, and 11; SF–3 CB 995 (referred to in submissions at T 43), and CB 1001 (referred to in submissions at T 43–44).

Consideration

68    The applicant submits that it would be unfair if its ability to defend the claims made against it by the first respondent is restricted by a prohibition on its use of the relevant documents, especially when their contents have been revealed to the applicant in this proceeding. It submits that Mr McKemmish’s report is, in any event, likely to be read or referred to in open court in this proceeding in a way that discloses its contents, such that the implied undertaking will no longer apply in respect of that document because of the operation of r 20.03 of the Federal Court Rules 2011 (Cth) (the FCR).

69    With respect to the emails and text messages, the applicant submits that, while they do include some personal messages sent by the first respondent, they do not contain sensitive material or material that could be considered to be embarrassing or prejudicial to the first respondent outside the disputes between him and the applicant.

70    Further, the applicant submits that the orders made on 22 April 2020 were supported by an undertaking that the applicant would retain the documents produced as a result of that order until the conclusion of the Fair Work Act/defamation proceeding. The applicant submits that this undertaking can only have been necessary because of the contemplation that the documents in question may be relevant to and used in that proceeding.

71    The respondents submit that it is important to bear in mind how the documents came into the applicant’s hands, namely as documents produced under compulsion which, they contend, are not the applicant’s confidential information or intellectual property. They go so far as to submit that the applicant and its solicitors should not even have the documents which have already been produced. They say that they have never consented to the applicant’s possession of those documents. They contend, as I have noted at [22] above, that the documents were produced by “mistake”.

72    The tenor of this submission is addressed by the observations and findings I have already made concerning the terms of the disclosure regime and its function. Further, the fact that the documents were produced under compulsion does not advance the resolution of the question whether leave should now be granted to use them in the other proceedings.

73    The respondents addressed some of the sample documents, disputing the significance which the applicant seeks to place on them. There are clearly matters in dispute between the parties as to what the documents show or do not show, and as to their utility in the other proceedings to which I have referred. For example, one particular matter raised by the first respondent is the relevance of the documents said to go to his capacity to work. He argues that the only matter presently before the Workers Compensation Commission is his claim for permanent impairment lump sum compensation. He argues that there is no present question about whether he has suffered an incapacity for work arising from an “injury”. He disputes the fact that other statutory decisions made in respect of his claims are reviewable.

74    I cannot determine in this application the ultimate significance of the documents in the other proceedings. It is, after all, no more than an application for leave to use the documents for the purposes of those proceedings. If, for example, the applicant’s intended use of the information in respect of the first respondent’s workers compensation claims is futile, then so be it. But I do not think that it would be an appropriate exercise of discretion to shut out the applicant from using the information on the basis of the first respondent’s assessment of where those claims now lie, especially when there appears to be a dispute about that matter.

75    I am satisfied that the applicant has shown sufficient cause for it to be released from the implied undertaking (and the express undertaking included in the orders of 22 April 2020) in respect of the use of the documents which have been drawn to my attention as samples.

76    This is particularly so in relation to proceeding NSD1225/2020. There is something artificial in the notion that the applicant is privy to information which it can use in the present proceeding and yet be inhibited from using the same information in another proceeding in the Court to which the information is also germane. There is no unfairness or prejudice to the first respondent in allowing this information to be used in the other proceeding. I accept the applicant’s submission that, while some of the text messages include personal messages sent by the first respondent, they do not contain sensitive material or material that could be considered to be embarrassing or prejudicial to the first respondent outside the disputes between himself and the applicant

77    I also bear in mind that s 37M of the Federal Court of Australia Act 1976 (Cth) (the Act) requires the Court to apply its civil practice and procedure in a way that best promotes the overarching purpose of facilitating the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. I am satisfied that those aims would be satisfied by granting the leave that is sought in relation to proceeding NSD1225/2020. As s 37M(2)(a) makes clear, this purpose includes the just determination of all proceedings before the Court.

78    The position in relation to the first respondent’s workers compensation claims stands in a slightly different position, but not one that would warrant a different conclusion to be drawn on the question of whether leave should be granted. Once again, there is no unfairness or prejudice to the first respondent in leave being granted.

The notice to admit

79    On 3 November 2020, the first respondent served a notice to admit on the applicant, pursuant to 22.01 FCR. In substance, this notice reproduced a notice to admit which the first respondent had served on the applicant on 5 June 2020, but had withdrawn on 17 June 2020 in circumstances where the applicant had contended that the process under the orders made on 22 April 2020 was ongoing and that the dispute between the applicant and the respondents had not reached the stage where the issues between them could be crystallised by way of pleadings.

80    On 16 November 2020, the applicant, through its solicitors, objected to the notice to admit served on 3 November 2020, on the same basis that the applicant had objected to the notice to admit served on 5 June 2020. Having raised its objection in these circumstances, the applicant did not serve a notice disputing facts pursuant to r 22.02 FCR.

81    On 19 November 2020, the first respondent’s solicitors advised that the first respondent considered the facts stated in the notice to admit to have been admitted. On 10 December 2020, the applicant, through its solicitors, sent an email to the respondents’ solicitors setting out the facts in the notice to admit which it disputed.

82    A party who has been served with a notice to admit and who does not, within 14 days, serve a notice of dispute in accordance with r 22.02, will be taken to have admitted the truth of each fact specified in the notice to admit: r 22.04 FCR. However, a party may apply for the leave of the Court to withdraw an admission made in this fashion: r 22.06 FCR.

83    The applicant contends that it does not admit all the facts set out in the notice to admit. Specifically, it does not admit the facts specified in items 1, 6, 10, 16, 17, and 20 of the notice to admit. It seeks an order extending the time under r 22.02 to enable it to serve a notice disputing facts. Alternatively, it seeks leave to withdraw the deemed admissions in respect of facts specified in the items I have identified.

84    The respondents do not oppose leave being granted to the applicant to withdraw the deemed admissions save for those arising from items 10 and 20 of the notice to admit.

85    The applicant submits that it is appropriate for this relief to be granted. It submits that the proceedings are still at an early stage. Pleadings have not been filed and the first respondent will suffer no prejudice by reason of the late service of a notice disputing facts. The applicant says that the first respondent has been on notice of the facts which it disputes since 10 December 2020. It contends that the relevant facts are properly disputed, for the reasons set out in an affidavit of Brandon Punter made 10 February 2020. Mr Punter is the Executive Manager, Corporate Services of the applicant. He is responsible for the management and reporting of the applicant’s financial performance including the financial and membership arrangements between the applicant and its member clubs. In his affidavit, Mr Punter summarises the basis on which the applicant disputes the relevant items.

86    The two admissions in dispute are:

10.    No member who has paid an annual charge to use ClubSafe Standard services for the period of 1 July 2020 to 30 June 2021 has cancelled the payment of any annual charge since 13 February 2020.

20.    The object for which the Applicant is formed includes the financial gain for its members.

87    The respondents submit that Mr Punter’s affidavit does not, in fact, respond to these items.

88    Mr Punter’s evidence in relation to item 10 is that, since 13 February 2020, 22 member clubs, who had been subscribed to ClubSafe Standard services, have not renewed their memberships. The first respondent submits that there is a difference between member clubs cancelling their payments for services as opposed to not renewing their memberships and that Mr Punter has not addressed the cancellation of payments.

89    Mr Punter’s evidence in relation to item 20 is that the objects for which the applicant was formed do not include financial gain for its members. The first respondent submits that this evidence is not responsive because Mr Punter has used the past tense (was formed) and not the present tense (is formed). The first respondent submits that a body’s objects are ambulatory and that it is appropriate to look to whether the applicant is conforming to its objects.

90    Therefore, the first respondent submits that the applicant has not established a proper basis for leave to withdraw the admissions it has made in relation to items 10 and 20.

91    It seems to me that there is room for debate as to whether or not Mr Punter’s evidence addresses the substance of the admissions that have been made. There is sufficient doubt about that matter to warrant leave being granted to the applicant to withdraw those admissions, particularly having regard to the circumstances in which the admissions came to be made. I am satisfied, on the basis of Mr Punter’s evidence, that there is a sufficiently triable issue about those matters.

Summary dismissal

92    As I have noted, the second respondent, Mrs Stoltz, seeks an order that the proceeding against her be summarily dismissed under s 31A(2) of the Act and/or r 26.01 FCR. Her application proceeds on two bases.

93    First, she contends that, as she is bound by the orders made on 22 April 2020, there is no further relief that the applicant can obtain against her. She argues that this is reason enough to summarily dismiss the proceeding against her.

94    I am not persuaded by that contention. At the present time, there are no orders against the second respondent other than in relation to her obligation to file certain affidavits and provide certain information. In connection with the orders made on 22 April 2020, the second respondent gave undertakings to destroy or return certain “physical documents” in her possession, custody or control, and to not use or disclose documents or information covered by that undertaking. However, the final relief claimed against her is arguably wider in scope than the undertakings she has proffered. I note that in her affidavit the second respondent said that she gave her undertakings to the Court “on a without prejudice and without admission of liability basis”. I observe that the undertakings given to the Court on 22 April 2020 were not expressed to be on such a basis.

95    Secondly, the second respondent has made an affidavit in which she states that she is unaware of the first respondent’s contractual obligations concerning confidential information and intellectual property; that from time to time the first respondent would send emails to her “to do something with a document at home which he may need for his work related duties”; that she had no interest in these documents; that the documents were “unremarkable”; and that she does not have “any copies of any ClubsNSW information”. She contends that, in light of that affidavit, the applicant has no reasonable prospect of obtaining the final relief it claims against her.

96    The applicant is not obliged to accept these assurances or to accept them in exchange for the final relief it seeks, particularly at a time when the disclosure regime has not reached completion. I am not persuaded that, in and of themselves, the second respondent’s assurances establish that the applicant has no reasonable prospect of successfully prosecuting its present claim for final relief against her, which seems to be premised on the second respondent being a person involved in the first respondent’s alleged contravention of s 183(1) of the Corporations Act. Whether at trial this allegation can be established is another matter. But the proceeding is still at a very early stage. Pleadings have not been filed. As I have said, the applicant is still awaiting the disclosure regime to reach completion. I am not persuaded that it would be an appropriate exercise of the Court’s discretion to dismiss the proceeding against the second respondent on the basis that she has advanced in her present application.

Conclusion and disposition

97    Leave will be granted to the applicant to file and rely on its further amended interlocutory application dated 13 April 2021.

98    The Annexure K documents, and the emails sent by the independent expert to the respondents’ solicitors on or about 2 March 2021, are to be produced to the applicant’s solicitors. The documents can be made available to the applicant.

99    Leave will be granted to the applicant to use the sampled documents and Mr McKemmish’s report for the purposes of proceeding NSD1225/2020 and the first respondent’s workers compensation claim. The parties should confer with a view to reaching agreement on which of the remaining documents in dispute can be similarly deployed, bearing in mind the conclusion to which I have come in relation to the sampled documents. As a matter of general approach, it will not be a sufficient reason for the respondents to oppose leave being granted to contend that the documents have been produced under the compulsory processes of the Court or to contend that, on their case, the documents are not the applicant’s confidential information or intellectual property.

100    The Court notes that the respondents do not oppose leave being granted to the applicant to use the documents referred to in [46](a) and (b) above. Leave will be granted accordingly.

101    Leave will be granted to the applicant to withdraw the admissions in items 10 and 20 of the respondents’ notice to admit served on 3 November 2020.

102    The second respondent’s interlocutory application dated 8 February 2021 seeking summary dismissal of the applicant’s claim for final relief against her is to be dismissed.

103    The respondents are to pay the applicant’s costs of both interlocutory applications.

104    The parties are to bring in agreed orders giving effect to these reasons.

I certify that the preceding one hundred and four (104) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Yates.

Associate:

Dated:    1 June 2021