Federal Court of Australia

Pigozzo v Mineral Resources Ltd [2022] FCA 1166

ORDERS

THE COURT ORDERS THAT:

1.    The orders of the Court made on 1 June 2022 and varied on 13 June 2022 are continued such that until further order, a person who is not a party is not permitted to inspect the statement of claim filed on 1 June 2022 in the proper Registry, but may make an application in accordance with r 2.32(2) and (4) of the Federal Court Rules 2011 (Cth) for leave to inspect that document and, otherwise, the first, second and third respondents’ interlocutory application of 1 June 2022 for orders to restrict inspection and publication of the statement of claim is dismissed.

2.    Paragraphs 24-36, 55-60, 102, 103 (the word ‘falsely’), 104(a)-(c), 105-109, 111-113, 116, 127, 130(e), 131(a)-(d), 132(k), 133(i)-(ii), 135(a)-(b), 137(iv)-(v), 143, 144, 146-152, 153(b)-(c) 153(e), 153(l)-(m), 155(a), 155(c)-(d) of the statement of claim are struck-out and, otherwise the first and second respondents’ interlocutory application of 7 June 2022 for orders striking out the statement of claim is dismissed.

3.    The first and second respondents’ interlocutory application of 8 June 2022 for an interim injunction and non-publication orders is listed for hearing as to the final orders at 9.15 am on 13 October 2022 (AWST).

4.    The costs of the applications to strike-out, to restrict inspection and for an interim injunction and non-publication orders and the hearing of 13 June 2022 are reserved.

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

REASONS FOR JUDGMENT

FEUTRILL J:

INTRODUCTION

1    On 1 June 2022, the applicant (Mr Pigozzo) commenced proceedings by originating application and filed a statement of claim. Mr Pigozzo asserts causes of action and requests relief against the first respondent (MRL), second respondent (Mr Ellison), third respondent (Bennett & Co) and fourth respondent (Mr Gavranich). The asserted causes of action are for alleged contraventions of the Fair Work Act 2009 (Cth), Corporations Act 2001 (Cth) and Australian Consumer Law and breach of employment contracts.

2    Shortly after the proceedings were commenced, Mr Pigozzo issued a media release. The media release contained details of many of the allegations in the statement of claim. Copies of the statement of claim were also provided to the publishers of The West Australian and the Australian Financial Review newspapers.

3    Within a matter of hours after the proceedings were commenced, MRL, Mr Ellison and Bennett & Co made an interlocutory application for orders to restrict inspection and publication of the statement of claim and to keep it confidential on the grounds that it contains allegations of communications that are confidential and privileged. That application was heard urgently inter-partes on 1 June 2022. Interim orders were made to restrict inspection of the statement of claim and directions were made for the respondents to apply for orders to strike out the statement of claim and to hear that application and the application to restrict inspection.

4    On 7 June 2022, MRL and Mr Ellison made an interlocutory application to strike out the statement of claim in whole or alternatively in part. The application went beyond an application to strike out the paragraphs containing allegations MRL and Mr Ellison contend are confidential and privileged. Objection is taken to numerous paragraphs of the statement of claim on many grounds. A summary of the objections, grounds, response and ruling on the objections is set out in the Schedule to these reasons.

5    On 8 June 2022, MRL and Mr Ellison made an interlocutory application for an interim injunction and non-publication orders to restrain disclosure and publication of the statement of claim. The grounds of that application are that Mr Pigozzo provided copies of the statement of claim to, at least, the publishers of The West and the AFR before the orders restricting inspection of the pleading were made on 1 June 2022. The application was heard urgently inter-partes on 8 June 2022. Interim orders were made restraining Mr Pigozzo from disclosing the substance, purport or contents of the communications pleaded in paragraphs 35 and 102 of the statement of claim. Otherwise, the application was adjourned to be heard with the applications to restrict inspection and to strike out.

6    On 13 June 2022, the applications to strike out, to restrict inspection and for an interim injunction and non-publication orders were heard. At that hearing, orders were made varying the orders made to restrict inspection and to restrain Mr Pigozzo and a further interim suppression and non-publication order was made with respect to the substance, purport or contents of the communications pleaded in paragraphs 28, 35 and 102 of the statement of claim.

7    On 13 June 2022, Bennett & Co made an interlocutory application for summary judgment alternatively a permanent stay of the proceedings against Bennett &Co. That application was not heard on 13 June 2022 and is yet to be heard.

8    These reasons address the interlocutory orders made on each of the applications to strike out, application to restrict inspection and application for an interim injunction and non-publication orders. For the reasons set out below, parts of the statement of claim will be struck out. Mr Pigozzo may apply to amend the statement of claim and to re-plead the allegations that have been struck out. The interim orders made on the application to restrict inspection will be continued and made an interlocutory order. The interim orders made on the application for an interim injunction and non-publication orders will be dissolved and replaced with an interlocutory order for non-publication of paragraphs 26 – 31, 35 and 102 of the statement of claim.

EVIDENCE

9    A number of affidavits were filed, served and read on the applications. Certain parts of some of the affidavits were struck out. These were dealt with in orders made on 13 June 2022. Reasons were then given for striking out the applicable parts of the affidavits. The affidavits in evidence on the applications were as follows.

10    An affidavit of Mr Nicholas Parkinson affirmed on 1 June 2022 was filed and read on behalf of MRL, Mr Ellison and Bennett & Co on the application to restrict inspection (Parkinson affidavit).

11    An affidavit of Mr Thomas Coltrona sworn 7 June 2022 was filed and read in support of the application to strike out (Coltrona affidavit).

12    Affidavits of Mr Coltrona sworn 8 June 2022 (second Coltrona affidavit) and sworn 9 June 2022 (third Coltrona affidavit) were filed and read in support of the application for an interim injunction and non-publication orders.

13    An affidavit of Mr Michael Harmer affirmed on 10 June 2022 was filed and read in opposition to the applications to restrict inspection and for an interim injunction and non-publication orders (Harmer affidavit). Parts of the Harmer affidavit were struck out and removed from the Court file and replaced with a redacted affidavit.

14    An affidavit of Mr Coltrona sworn on 12 June 2022 was filed and read in support of objections to certain parts of the Harmer affidavit (fourth Coltrona affidavit). Parts of the fourth Coltrona affidavit were struck out or not read and removed from the Court file and replaced with a redacted affidavit.

15    Where relevant to one or more of the applications, the affidavit evidence is addressed in the reasons below.

STRIKE-OUT: APPLICABLE PRINCIPLES

16    The principles applicable to applications to strike-out pleadings under r 16.21(1) of the Federal Court Rules 2011 (Cth) are well established. Those that are relevant to the strike out application are as follows.

Basic function of pleadings

17    Pleadings and particulars perform the important function of ensuring a basic requirement of procedural fairness. To meet that requirement pleadings must state the case with sufficient clarity to allow the other party a fair opportunity to meet it: Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279 at 286-287; Gould v Mount Oxide Mines Ltd (In Liq) [1916] HCA 81; (1916) 22 CLR 490 at 517. Pleadings define the issues for decision in the litigation and, thereby, enable the relevance and admissibility of evidence to be determined at the trial. Apart from cases where the parties choose to disregard the pleadings and fight the case on different issues chosen at the trial, the relief which may be granted to a party must be founded on the pleadings: Dare v Pulham [1982] HCA 70; (1982) 148 CLR 658 at 664.

18    Rule 16.02 of the Rules specifies the general requirements for the content of a pleading. Rule 16.21(1) provides that a party may apply to the Court for an order that all or part of a pleading be struck out, in effect, on the grounds that it does not conform to one or more of the requirements specified in rr 16.02(1) or 16.02(2).

Case management context

19    In the context of contemporary case management techniques, the Court should not take an unduly technical or restrictive approach to pleadings: Thomson v STX Pan Ocean Co Ltd [2012] FCAFC 15 at [13]. The Rules, relevantly here r 16.21(1), must be interpreted and applied and the powers conferred under them exercised in a way that best promotes the overarching purpose identified in s 37M of the Federal Court of Australia Act 1976 (Cth): Sadie Ville Pty Ltd v Deloitte Touche Tohmatsu [2017] FCA 1202; (2017) 123 ACSR 223 at [15] – [21]; McKellar v Container Terminal Management Services Ltd [1999] FCA 1101; (1999) 165 ALR 409 at [20] – [32].

20    The Court should take a robust and non-pedantic approach to the determination of objections to pleadings and ‘provided a pleading fulfils its basic functions of identifying the issues, disclosing an arguable cause of action or defence, … and apprising the parties of the case that has to be met, the court ought properly be reluctant to allow the time and resources of the parties and the limited resources of the court to be spent extensively debating the application of technical pleadings rules that evolved in and derive from a very different case management environment’: Barclay Mowlem Construction Ltd v Dampier Port Authority [2006] WASC 281; (2006) 33 WAR 82 at [6] – [8], cited with apparent approval in Thomson at [13].

21    The power to strike out a pleading under r 16.21(1) is discretionary and the Court may refuse to exercise that power, provided that the pleading fulfils its basic functions, even if it is deficient in some respects: Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2017] FCAFC 50 at [44]; Wright Rubber Products Pty Limited v Bayer AG [2008] FCA 1510 at [5].

22    Taking the above matters into consideration and, in particular the overarching purpose identified in s 37M of the FCA Act, where voluminous objections of a technical, pedantic or pettifogging nature are taken to a pleading and the consideration and determination of each and every one of them would involve time and expense that is disproportionate to the benefit to be derived from that process in terms of identification of the true issues that have to be met in the case, it may be appropriate to dismiss all objections of that character in limine. That is so, even if buried within the bulk of numerous objections there may be some criticism that is valid and should be seriously entertained. Put another way, the question of whether the Court should consider and determine objections or dismiss them at the threshold may be answered by asking whether ‘any lawyer looking at that pleading, genuinely interested in knowing what issues are to be tried and the case that has to be met, would have [any] difficulty in ascertaining those matters’: Barclay Mowlem at [9] – [10]. If so, the objections should be determined, if not, the objections may be dismissed without proceeding to a specific determination of each and every one of them.

23    A non-technical, robust and non-pedantic approach to the resolution of pleadings disputes does not remove the need for a statement of claim to disclose a reasonable cause of action and fulfil its basic function of stating the case with sufficient clarity to allow the other party a fair opportunity to meet it. Further, what is necessary to meet the basic requirements of a pleading will depend, to some degree, on the nature of the allegations and the case to be met. Where fraud is pleaded, or something analogous, a rigorous approach to pleadings remains appropriate for the pleading to perform is basic function: KTC v David [2022] FCAFC 60 at [418(3)].

24    It has long been accepted that allegations of fraud, unlawfulness, illegality, criminality, professional misconduct or other serious impropriety must be clearly and completely pleaded and particularised: Davy v Garratt [1877] 7 Ch D 473 at 489; Krakowski v Eurolynx Properties Ltd [1995] HCA 68; (1995) 183 CLR 563 at 573; Streeter v Western Areas Exploration Pty Ltd (No 2) [2011] WASCA 17; (2011) 278 ALR 291 at [605] – [606]; Oldfield v Knott Architects Pty Ltd v Ortiz Investments Pty Ltd [2000] WASCA 255 at [35] – [38]; Forrest v Australian Securities and Investments Commission [2012] HCA 39; (2012) 247 CLR 486 at [26]. Making allegations of impropriety, in the absence of complete material facts supporting the allegations, is a basis for striking out a pleading as scandalous: Manolakis v Carter [2008] FCA 505 at [12] upheld on appeal in Manolakis v Carter [2008] FCAFC 183 at [28]; Crocker v Toys ‘R’ Us (Australia) Pty Ltd (No 3) [2015] FCA 728 at [9].

General principles

25    A number of the general principles relevant to the strike out application were recently summarised in KTC at [113] – [132] per Wigney J), [329] (per Anastassiou J, in dissent on the outcome, but not on the general principles), [418] (per Jackson J). These principles, together with some additional relevant principles, are as follows.

(1)    Rules 16.02 and 16.21 must be interpreted and applied in light of the overarching purpose of the civil practice and procedure provisions identified in s 37M of the FCA Act; namely, to facilitate the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible: KTC at [118].

(2)    As to r 16.02(1)(d) and the requirement that the pleading state the ‘material facts’ relied on, the material facts must be pleaded with a degree of specificity which is sufficient to convey to the opposite party the case that it has to meet and that a ‘bare conclusion’ is ordinarily not a proper allegation. A pleading that simply pleads a conclusion is embarrassing and should not be permitted to stand: KTC at [114] citing Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd [1994] FCA 636; (1994) 217 ALR 226 at 235; Young Investments Group Pty Ltd v Mann [2012] FCAFC 107 at [7]; (2012) 293 ALR 537. See, also, H 1976 Nominees Pty Ltd v Galli (1979) 30 ALR 181 at 186-187. The same may be said of a failure to state the provisions of any statute relied on, as required by r 16.02(1)(e), where it results in a failure to give adequate notice of the case to be met.

(3)    Rules 16.42 and 16.43 are also relevant. Rule 16.42 provides that a party who pleads fraud, misrepresentation, unconscionable conduct, breach of trust, wilful default or undue influence, must state in the pleading particulars of the facts on which the party relies: KTC at [115]. As noted earlier in these reasons, it is ‘fundamental, and long established, that if a case of fraud is to be mounted, it should be pleaded specifically and with particularity’: Forrest at [26]; KTC at [116]. Similarly, r 16.43(1) provides that a party who pleads a condition of mind must state in the pleading particulars of the facts at which the party relies.

(4)    As to r 16.21(1)(a) (scandalous material), a mere allegation of scandalous fact does not render the pleading liable to be struck out for containing scandalous material. The scandalous material will not be struck out unless it is also irrelevant: Christie v Christie (1873) LR 8 Ch App 499 at 503; Blake v Albion Life Assurance Society (1876) 45 LJCP 663 at 666. Material is ‘scandalous’ if, as well as being irrelevant, it is indecent or offensive or consists of allegations made for the purpose of abusing or (possibly) prejudicing the opposite party: Cashin v Craddock [1876] 3 Ch D 376 at 378-379. It has also been said that scandal consists in the allegation of ‘anything which is unbecoming to the dignity of the Court to hear or is contrary to good manners or which charges some person with a crime not necessary to be shown in the cause, to which may be added that any unnecessary (not relevant to the subject) allegation bearing cruelly upon the moral character of an individual': Hongkong Xinhe International Investment Co Ltd v Bullseye Mining Ltd (No 3) [2021] WASC 260 at [61] citing Legal Practice Board v Said (unreported, WASC, Library No 940003, 12 January 1994) at 3.

(5)    As to r 16.21(1)(b) (frivolous or vexatious material), the word ‘vexatious’ in the context of rules such as r 16.21 is an ‘omnibus expression’ that includes material which is scandalous, discloses no reasonable cause of action, is oppressive or embarrassing, or the inclusion of which is otherwise an abuse of the processes of the Court: Gallo v Attorney-General (Vic) (unreported, Supreme Court of Victoria, Full Court, Starke J, with whom Crockett and Beach JJ agreed at 12, 4 September 1984), referred to with approval in Mathews v State of Queensland [2015] FCA 1488 at [87]; KTC at [119].

(6)    Material in a pleading would also be considered to be vexatious or frivolous if it was included in the pleading with the intention of annoying or embarrassing, or for a collateral purpose, or if it raises matters that are ‘obviously untenable or manifestly groundless’: Attorney-General v Wentworth (1988) 14 NSWLR 481 at 491; see also Von Reisner v Commonwealth (2009) 177 FCR 531; [2009] FCAFC 97 at [27]; KTC at [119].

(7)    A proceeding is not frivolous if there is a triable issue; it is frivolous if it is obviously not sustainable: Young v Holloway [1895] P 87 at 90-91. An obviously unsustainable claim may also be characterised as vexatious: Peruvian Guano Co Ltd v Bockwoldt (1883) 23 Ch D 225 at 230. Proceedings that are foredoomed to fail (i.e., frivolous and (or) vexatious) may also be characterised as an abuse of the process of the Court: Walton v Gardiner (1993) 177 CLR 378 at 392-393. However, the concept of abuse of process is not confined to proceedings that are untenable.

(8)    As to r 16.21(1)(d) (prejudice, embarrass or delay), a pleading is likely to cause prejudice or embarrassment if it is susceptible to various meanings, contains inconsistent allegations, includes various alternatives which are confusingly intermixed, contains irrelevant allegations or includes defects which result in it being unintelligible, ambiguous, vague or too general: Bartlett v Swan Television & Radio Broadcasters Pty Ltd [1995] ATPR 41-434 at 40,889; Spiteri v Nine Network Australia Pty Ltd [2008] FCA 905 at [22]; Fair Work Ombudsman v Eastern Colour Pty Ltd [2011] FCA 803 at [18]; Shelton v National Roads and Motorists Association Ltd (2004) 51 ACSR 278; [2004] FCA 1393 at [18]; KTC at [120]. Such a pleading could equally be characterised as evasive or ambiguous for the purposes of r 16.21(1)(c): KTC at [120].

(9)    A pleading may also be struck out as embarrassing if it is plain that the pleading party cannot lawfully call any evidence at the hearing to substantiate the pleading: J C Techforce Pty Ltd & Steinhardt v Pearce, Neville & Oke Industrial Pty Ltd (1996) 138 ALR 522 at 531; KTC at [122]. Such a pleading may also be struck out under r 16.21(1)(b) (frivolous or vexations) or 16.21(1)(f) (abuse of the process) on the ground that the allegations are foredoomed to fail if they are not able to be proved: Pihiga Pty Ltd v Roche [2011] FCA 240 at [71], [76] – [79] see, also, DC Payments Pty Ltd v Next Payments Pty Ltd [2016] VSC 315; (2016) 51 VR 151 at [82] – [85].

(10)    While a point of law may be raised in accordance with r 16.02(3), it is not necessary to plead assertions or conclusion of law. Further, there is authority for the proposition that conclusion of law should not be pleaded, except by way of clarification of a case already pleaded by reference to material facts: Allstate at 235. Nonetheless, it is common to plead assertions or conclusions of law as a means of identifying the cause(s) of action alleged to support the relief claimed or defence. In other words, it may be necessary in complicated or complex cases to plead conclusions of law fairly to inform the other party of the case to be met. However, epithets such as ‘wrongfully’, ‘unlawfully’ and ‘improperly’ add nothing to a pleading. Any legal conclusion of wrongfulness, unlawfulness or impropriety is to be derived from the pleaded material facts alone. In the absence of such material facts, the pleading is bad and liable to be struck out for pleading unsupported conclusions: Day v Brownrigg (1878) 10 Ch D 294 at 302.

(11)    As to r 16.21(1)(e) (failure to disclose a reasonable cause of action), a ‘reasonable cause of action’ is a cause of action that has some chance of success having regard to the allegations pleaded. A cause of action cannot be struck out merely on the basis that it appears to be weak: KTC at [123], citing Polar Aviation Pty Ltd v Civil Aviation Safety Authority (2012) 203 FCR 325; [2012] FCAFC 97 at [42]-[43]; Allstate at 236.

(12)    A pleading may be struck out for disclosing no reasonable cause of action if, accepting all material facts pleaded as true and that on all other points (except points of law) the pleading is unassailable, it would not be open to the party upon the pleading to prove facts at trial that would constitute a cause of action or defence: Pancontinental Mining Ltd v Posgold Investments Pty Ltd (1994) 121 ALR 405 at 414; Mutual Life & Citizens’ Assurance Co Ltd v Evatt [1970] UKPCHCA 2; (1970) 122 CLR 628 at 631.

(13)    Inevitably, there is overlap between applications to strike out a pleading on the ground that it fails to disclose a reasonable cause of action under r 16.21(1)(e) and the grounds in r 16.21(1)(c) and r 16.21(1)(d) where pleadings omit material facts and (or) plead conclusions that are not supported by material facts. Depending on the nature and degree of the omission such deficiencies may be characterised as one or more of a failure to disclose a cause of action or defence, evasive or ambiguous or likely to prejudice, embarrass or delay the proceedings.

(14)    As to r 16.21(f) (abuse of process), the High Court has said that what amounts to an abuse of the process of the Court is ‘insusceptible of a formulation comprising closed categories’ and ‘the possible varieties of abuse of process are only limited by human ingenuity’: Batistatos v Roads Traffic Authority (NSW) [2006] HCA 27; (2006) 226 CLR 256 at [9]; Sea Culture International Pty Ltd v Scoles (1991) 32 FCR 275 at 279. There are many other authorities to the same or similar effect.

(15)    In general, abuse of process will exhibit at least one of three characteristics: PNJ v The Queen [2009] HCA 6; (2009) 252 ALR 612 at [3]:

(a)    the court’s process is invoked for an illegitimate or collateral purpose;

(b)    use of the court’s procedures would be unjustifiably oppressive to a party; or

(c)    use of the court’s procedures would bring the administration of justice into disrepute.

The concept extends ‘to all those categories of cases in which the processes and procedures of the court, which exist to administer justice with fairness and impartiality, may be converted into instruments of injustice or unfairness’: Walton at 392-393.

(16)    Although evidence may be, and often is, adduced in support of an application to strike out a pleading or proceeding on the ground of abuse of process, it is not necessary for an abuse of process to be proven by admissible evidence. An abuse of process may be manifest on the face of a pleading or other document filed in the Court. A document that ‘contains matter that is scandalous, vexatious or oppressive’ may be struck out of the document: r 6.01(b) of the Rules. Likewise, a pleading that ‘contains’ scandalous, frivolous or vexatious material or that is ‘otherwise’ an abuse of the process of the Court may be struck out in whole or in part: rr 16.21(1)(a) – (b), (f) of the Rules. Thus, the Court may strike out a pleading or proceeding as an abuse of process without evidence of abuse: e.g., Manolakis at [3] - [6] and [28] (insufficient information to support allegations of fraud or criminal conduct); Hodson v Pare [1899] 1 QB 455 (alleged defamation pleaded in circumstances of absolute privilege).

(17)    An applicant that has commenced proceedings founded on information obtained or used in breach of a duty of confidence may be restrained from continuing with or utilising the information in the proceedings: Glencore International AG v Federal Commissioner of Taxation [2019] HCA 26; (2019) 265 CLR 646 at [6]; Lord Ashburton v Pape [1913] 2 Ch 469 at 472-477; Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) (1984) 156 CLR 414 at 437-438; Commonwealth v John Fairfax & Sons Ltd (1980) 147 CLR 39 at 50; Pihiga at [76], [77], [97], [109] – [111]; Sullivan v Sclanders [2000] SASC 273; (2000) 77 SASR 419 at [1], [3], [31], [71]; AG Australia Holdings Ltd v Burton [2002] NSWSC 170; (2002) 58 NSWLR 464 at [129] – [163], [168], [169], [214], [215], [222], [223] (as to the form of orders made, see AG Australia Holdings Ltd v Burton [2002] NSWSC 454 at [59]). A third party whose conscience is relevantly affected may also be restrained: Johns v Australian Securities Commission (1993) 178 CLR 408. That may include, in appropriate circumstances, restraining a party’s legal advisors from acting in proceedings where the legal advisors have received confidential information: Michael Smith Real Estate Pty Ltd t/as Raine & Horne Marrickville v Chmait [2021] NSWSC 1160. The duty of confidence may arise from agreement (express or implied) or equity: AG Australia at [73].

(18)    In keeping with the overarching purpose identified in s 37M of the FCA Act, it is not necessary to commence separate proceedings or make an interlocutory application for injunctive relief if alternative orders that sufficiently protect and maintain the confidentiality of the information can be made: Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd [2013] HCA 46; (2013) 250 CLR 303 at [56] – [63], [69].

(19)    A pleading founded on misuse of confidential information may be struck out on the ground that the order should be made to deny the wrongdoer the benefit of using the confidential information and to ensure that no advantage is obtained in the litigation arising from the breach of confidence: DC Payments at [74] – [81], [85]; Sullivan at [1], [3], [31], [71]. An order striking out a pleading on the ground that it was drawn in breach of a duty of confidence may also be justified on the ground that to permit such a pleading to stand would involve an abuse of the process of the Court.

(20)    A person may also be restrained from relying upon or using confidential without prejudice communications in legal proceedings in breach of the express or implied agreement to maintain the confidentiality of and not adduce evidence of the communications: Pihiga at [71], [76], [77], [97], [109] – [111].

(21)    If substantial parts of a pleading are struck out, the Court may strike out the entire pleading on the basis that the ‘residue would be confusing’: Trade Practices Commission v Australian Iron & Steel Pty Ltd (1990) 22 FCR 305 at 323: KTC at [124].

(22)    Where summary dismissal of the whole or part of a proceeding would result, the power to strike out should be exercised only in plain and obvious cases, where no reasonable amendment could cure the alleged defect or deficiency. The power is discretionary and should be employed sparingly and only in a clear case lest a party is deprived of a case which in justice it ought to be able to bring: KTC at [125], citing Allstate at 236; Trade Practices Commission v Pioneer Concrete (Qld) Pty Ltd (1994) 52 FCR 164 at 175.

26    As Mr Pigozzo placed considerable reliance and emphasis on the last general principle referred to above and submitted, in effect, that the Court should not strike out any part of the statement of claim unless satisfied that there was no real question to be tried and that any defect could not be cured by reasonable amendment, it is necessary to identify an important qualification to that principle where, as here, the power to strike out a pleading will not have the effect of summarily dismissing a cause of action or defence of a party. The statement of principle in KTC (and the many other authorities to the same or similar effect) is to be understood in the context that the order under appeal in KTC was the dismissal of an application for leave to amend a statement of claim to re-plead a cause of action that had been struck out as the result of a previous order of the Court. Therefore, the effect of the decision to refuse leave to amend was to ‘to strike out’ and ‘summarily dismiss’ the cause of action in the proposed amended statement of claim. Other authorities in which the same or a similar statement of principle has been made were also concerned with striking out pleadings coupled with summary dismissal of all or part of the proceedings.

27    Subsection 31A(2) of the FCA Act relevantly provides that the Court may give judgment for a party if the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding. Rule 26.01 of the Rules, which also deals with summary judgment, provides that a party may apply to the Court for an order that judgment be given against another party on grounds that essentially mirror the grounds for striking out a pleading in r 16.21(1) of the Rules: KTC at [127].

28    The relevant principles in relation to summary judgment or dismissal under s 31A of the FCA Act were considered by the High Court in Spencer v The Commonwealth [2010] HCA 28; (2010) 241 CLR 118; and have been discussed in numerous judgments in this Court. In KTC they were summarised as follows (at [128] – [132]).

(1)    Section 31A of the FCA Act authorises summary disposition of proceedings ‘on a variety of bases under its general rubric’, including, but not limited to: where the pleading discloses no reasonable cause of action and the deficiency in that regard is ‘incurable’; where ‘there is unanswerable or unanswered evidence of a fact fatal to the pleaded case and any case which might be propounded by permissible amendment’; and the ‘longstanding category of cases which are “frivolous or vexatious or an abuse of process”’: Spencer at [22] (French CJ and Gummow J).

(2)    The power to summarily dismiss a proceeding is to be distinguished, in its application to deficient pleadings, from rules such as r 16.21 of the Rules: Spencer at [23] (French CJ and Gummow J). Where the evidence shows that a person may have a reasonable cause of action or reasonable prospects of success, but the person’s pleading does not disclose that to be the case, the Court may be empowered to strike out the pleading under r 16.21, but is not empowered to summarily dismiss the proceeding under s 31A of the FCA Act: see White Industries Aust Ltd v Commissioner of Taxation [2007] FCA 511; (2007) 160 FCR 298 at [47], referred to in Spencer at [23]. That said, a ‘failure after ample opportunity to plead a reasonable cause of action may suggest that none exists and therefore that the applicant has no reasonable prospects of success’: White Industries at [47].

(3)    An applicant may have no reasonable prospect of successfully prosecuting the proceeding even if it cannot be concluded that the proceeding is hopeless or bound to fail: Spencer at [17] (French CJ and Gummow J). The inquiry required under s 31A is ‘not an inquiry directed to whether a certain and concluded determination could be made that the proceeding would necessarily fail’: Spencer at [52] (Hayne, Crennan, Kiefel and Bell JJ).

(4)    The ‘exercise of powers to summarily terminate proceedings must always be attended with caution’, whatever may be the basis upon which that disposition is sought: Spencer at [24] (French CJ and Gummow J). It is not a power ‘to be exercised lightly’: Spencer at [60] (Hayne, Crennan, Kiefel and Bell JJ). There must be a ‘high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way’: Batistatos at [46], referred to in Spencer at [24] (French CJ and Gummow J).

29    As striking out a pleading for failing to disclose a cause of action under r 16.21(1)(e) involves a different question to that concerned in an application under s 31A of the FCA Act and (or) r 26.01 of the Rules, a pleading may be struck out under r 16.21(1)(e) even though the defect may be cured by reasonable amendment or there may be a real question to be tried. In Chandrasekaran v Commonwealth of Australia (No 3) [2020] FCA 1629 (at [102]) Wigney J said:

The grounds upon which a pleading can be struck out under r 16.21 of the Rules correspond, to a large extent, with the grounds upon which a proceeding may be summarily dismissed under s 31A of the FCA Act and r 26.01 of the Rules. The Court will proceed to strike out under r 16.21, rather than summarily dismiss the proceeding under r 26.01 of the Rules, where although there are deficiencies in the pleading, a reasonable case may still exist. The granting of leave to replead in those circumstances may allow the applicant to remedy the deficiencies.

30    On an application for summary dismissal of a proceeding under s 31A or r 26.01 of the Rules, evidence may be admitted to demonstrate that there is, or is not, a reasonable cause of action or defence: Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 109; Thorpe v Commonwealth of Australia (No 3) (1997) 144 ALR 677 at 681-682. However, on an application to strike out on the ground that a pleading fails to disclose a reasonable cause of action (or defence), except for documents referred to in or that from part of the pleading, no evidence is admissible: Day v William Hill (Park Lane) Ltd [1949] 1 KB 632 at 639. Otherwise, all facts alleged in the statement of claim must be accepted as true and on all other points (except points of law) the pleading as unassailable: Niven v Grant (1903) 29 VLR 102 at 106.

31    It follows that the general principles on an application to strike out for failing to disclose a reasonable cause of action, as expressed in KTC (at [125]), in Allstate at 235-236 and Polar Aviation at [42] – [43], are to be read and understood in the context that those decisions involved striking out pleadings and summary dismissal of the proceedings (or equivalent). These authorities demonstrate that a pleading may be struck out on the ground that it fails to disclose a reasonable cause of action or defence with the Court also being satisfied that there is no real question to be tried or no reasonable amendment could cure the defect resulting in summary dismissal of the proceedings.

32    A pleading may also be struck out for failing to disclose a reasonable cause of action or defence, but the party may be given leave to re-plead if the Court is satisfied that the party may be able to plead a viable cause of action or defence with ‘reasonable amendment’: e.g., Elston v Commonwealth of Australia [2013] FCA 108 at [31] – [32], [47] – [48]. Nonetheless, a ‘failure after ample opportunity to plead a reasonable cause of action may suggest that none exists and therefore that the applicant has no reasonable prospect of success’: White Industries at [47]. In such a case, leave to re-plead may be refused and (or) the proceedings summarily dismissed: see, e.g., Young Investments Group Pty Ltd v Stripe Capital Pty Ltd [2010] FCA 996 at [37], [45], [54], [60], [62]; Young Investments Group Pty Ltd v Stripe Capital Pty Ltd [2011] FCA 1147 at [49]; Young Investments Group Pty Ltd v Mann [2012] FCAFC 107; (2012) 293 ALR 537 at [2], [61], [62]; Polar Aviation Pty Ltd v Civil Aviation Safety Authority (No 4) [2011] FCA 1126; (2011) 203 FCR 293 at [124] – [125]; Polar Aviation at [85] – [89], [93]; see, also, J & A Vaughan Super Pty Ltd (Trustee) v Becton Property Group Ltd [2014] FCA 581 at [18].

33    MRL and Mr Ellison have not applied or submitted that Mr Pigozzo’s causes of action against them should be struck out and summarily dismissed. Therefore, the question for the Court is whether, accepting the pleaded facts as true, it is plain and obvious that the statement of claim should be struck out for failing to disclose a reasonable cause of action or on some other ground in r 16.21(1).

ADVERSE ACTION

Overview

34    MRL and Mr Ellison object to paras 24 – 36, 55 – 60 and 104 – 118 of the statement of claim on a number of grounds. These paragraphs contain allegations to the effect that MRL and Mr Ellison contravened s 340(1) of the FW Act.

35    MRL and Mr Ellison object to paras 28 and 35 of the statement of claim on the grounds that these paragraphs are founded on allegations of communications which, if accepted as true, are prima facie confidential and subject to legal professional privilege. It is submitted that insufficient material facts and particulars have been pleaded to disclose a reasonable argument that the communications are not protected by legal professional privilege. It is submitted that the paragraphs should be struck out as scandalous, vexatious and an abuse of process.

36    Mr Pigozzo submits that MRL and Mr Ellison have an onus of proving that the communications in question were subject to privilege and they have not done so. Further, the privilege does not attach to the communications because they fall within an ‘exception’ to the privilege under s 125 of the Evidence Act 1995 (Cth). And, in any event, MRL and Mr Ellison have waived that privilege.

37    MRL and Mr Ellison object to paras 24 – 36, 55 – 60, 104(a) – (c), 105(a) – (d), 107, 108, 109, 131(a) – (d), 133(i) – (ii), 135(a) – (b), 137(iv) – (v), 138(i), 143(c), 143(i) – (iii) and (iv) on the grounds that these paragraphs contain allegations of serious impropriety or misconduct which have not been pleaded with the completeness, clarity and particularity with which allegations of that character must be pleaded. It is submitted that the paragraphs should be struck out as scandalous, vexatious, ambiguous and an abuse of process. Although the strike out application also asserts these paragraphs fail to disclose a reasonable cause of action, that ground was not addressed in the written or to any significant extent in oral submissions.

38    Mr Pigozzo submits that the pleading meets its function of apprising MRL and Mr Ellison of the case that they have to meet. Otherwise, it is submitted, in effect, that the objections are technical and invite the Court to take the deprecated ‘pedantic approach’.

Fair Work Act: section 340(1)

39    Sections 340 of the FW Act is in the following terms (notes omitted):

340    Protection

(1)    A person must not take adverse action against another person:

(a)    because the other person:

(i)    has a workplace right; or

(ii)    has, or has not, exercised a workplace right; or

(iii)    proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right; or

(b)    to prevent the exercise of a workplace right by the other person.

(2)    A person must not take adverse action against another person (the second person) because a third person has exercised, or proposes or has at any time proposed to exercise, a workplace right for the second person’s benefit, or for the benefit of a class of persons to which the second person belongs.

40    An employee has a ‘workplace right’, relevantly, if the employee is able to make a complaint or inquiry in relation to his or her employment: s 341(1)(c)(ii) of the FW Act.

41    An employer takes 'adverse action' against an employee, relevantly, if the employer injures the employee in his or her employment or alters the position of the employee to the employee's prejudice: s 342, item 1(b), (c) of the FW Act.

42    As to the meaning of ‘complaint’ in s 341(1)(c)(ii), in Alam v National Australia Bank Ltd [2021] FCAFC 178; (2021) 288 FCR 301 the Court said (at [59] – [60]):

59    In the context of s 341(1)(c), the term “complaint” connotes an expression of discontent which seeks consideration, redress or relief from the matter about which the complainant is aggrieved: Cummins South Pacific at [13]. A complaint is more than a mere request for assistance and should state a particular grievance or finding of fault: Shea v TRUenergy at [579]-[581]; Cummins South Pacific at [13] per Dodds-Streeton J. Her Honour continued, at [626]-[627], by saying that it is unnecessary for the employee to identify expressly the communication as a complaint or grievance, or to use any particular form of words. Instead, what is required is a communication which, whatever its precise form, is reasonably understood in context as an expression of grievance and which seeks, whether or expressly or implicitly, that the recipient at least take notice of, and consider, it. The characterisation of a communication as a complaint is to be determined as a matter of substance, and not of form.

60    The distinction between a complaint and a mere request for assistance had been made in earlier authorities: Zhang v Royal Australian Chemical Institute Inc [2005] FCAFC 99, (2005) 144 FCR 347 at [36]-[37]; and Hill v Compass Ten Pty Ltd [2012] FCA 761, (2012) 205 FCR 94 at [48]. It is possible that some requests for assistance may be able to be characterised as “inquiries” for the purposes of s 341(1)(c) (for example, an inquiry as to whether the recipient is able to provide the requested assistance) but it was not suggested that a characterisation of that kind was appropriate in relation to any of the appellant’s alleged requests or inquiries.

43    As to the meaning of ‘inquiry’ in s 341(1)(c)(ii) of the FW Act, an inquiry involves an investigation or an examination made for the purposes of acquiring knowledge or information: Flageul v WeDrive Pty Ltd [2020] FCA 1666 at [248]. It includes a request for information or the posing of a question by an employee in relation to his or her employment: PIA Mortgage Services Pty Ltd v King [2020] FCAFC 15; (2020) 274 FCR 225 at [136] – [138]. It need not be an inquiry made of the employer and may include an inquiry made of a third party such as the employee’s lawyer: Murrihy v Betezy.com.au Pty Ltd [2013] FCA 908; (2013) 238 IR 307 at [143].

44    As to the meaning of the expression ‘is able to make a complaint or inquiry … in relation to his or her employment’ (emphasis added), differences of views have been expressed in the authorities that have considered that expression. However, it is now settled that the unanimous decision in Cigarette & Gift Warehouse Pty Ltd v Whelan [2019] FCAFC 16; (2019) 268 FCR 46 is to be followed despite evident differences between the reasoning in Whelan with that of the majority (Rangiah and Charlesworth JJ) in PIA Mortgage Services: Alam at [97]; Jess v Cooloola Milk Pty Ltd [2022] FCAFC 75 at [74] – [78].

45    In Whelan v Cigarette & Gift Warehouse Pty Ltd [2017] FCA 1534; (2017) 275 IR 285 (at [33] – [34]) Collier J identified the meaning of ‘complaint or inquiry … in relation to his or her employment’ and the principles to be applied as follows:

33    Section 341(c)(ii) defines a workplace right in an employee as being the entitlement of the employee to make a complaint or inquiry in relation to his employment. In such cases as Shea v TRUenergy Services Pty Ltd (No 6) [2014] FCA 271; (2014) 242 IR 1 (Shea), Murrihy v Betezy.com.au Pty Ltd [2013] FCA 908; (2013) 238 IR 307 and Walsh v Greater Metropolitan Cemeteries Trust (No 2) [2014] FCA 456; (2014) 243 IR 468 (Walsh), s 341(c)(ii) was interpreted broadly. In Walsh [at] [41], Bromberg J observed that the requirement in s 341(c)(ii) that a complaint or inquiry by the employee be “in relation to” his employment means that there must be a relationship between the subject matter of the complaint and the complainant’s employment. As Dodds-Streeton J further observed in Shea, a complaint that an employee is able to make in relation to his or her employment is not at large, but must be founded on a source of entitlement, whether instrumental or otherwise.

34    As a general proposition, a complaint or inquiry to the employer by an employee in relation to his or her entitlement to an incentive bonus, or the failure of the employer to prepare an incentive bonus plan, where the terms of employment of that employee make provision for payment of such bonuses or the preparation of such plans, would fall within the scope of s 341(c)(iii) of the FW Act.

46    On appeal, in Whelan (at [28]), the Full Court (Greenwood, Logan and Derrington JJ) said that the statement of principle set out above was ‘unremarkable and correct’ and held that the pleaded complaint or inquiry concerning a bonus was, for the reasons given by Collier J, the exercise of a workplace right for the purposes of the FW Act.

47    Sections 360 and 361 of the FW Act are also of relevance and importance to a cause of action for contravention of s 340(1). These sections are in the following terms.

360    Multiple reasons for action

For the purposes of this Part, a person takes action for a particular reason if the reasons for the action include that reason.

361    Reason for action to be presumed unless proved otherwise

(1)    If:

(a)    in an application in relation to a contravention of this Part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and

(b)    taking that action for that reason or with that intent would constitute a contravention of this Part;

it is presumed that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise.

(2)    Subsection (1) does not apply in relation to orders for an interim injunction.

48    The effect of these sections is that if an employee establishes as an objective fact the exercise of a workplace right and of the employer taking adverse action, the employer has an evidential onus of proving that the adverse action was not taken because of the exercise of the workplace right: General Motors-Holden Pty Ltd v Bowling (1976) 12 ALR 605 at 617; Tattsbet Ltd v Morrow [2015] FCAFC 62; (2015) 233 FCR 46 at [1], [119], [140]. In practical terms that has the effect, if the employer disputes causation, that the employer must call a witness to give evidence of the reason(s) for the employer taking the adverse action: Board of Bendigo Regional Institute of Technical and Further Education v Barclay (No 1) [2012] HCA 32; (2012) 248 CLR 500 at [44] – [45].

49    Leaving to one side the necessity to plead allegations of fraud or other serious impropriety clearly, fully and with particularity, allegations of contraventions of s 340(1) of the FW Act are also serious allegations. A person who contravenes s 340(1) may be liable to civil penalties: s 539, item 11 of the FW Act. Such allegations should also be pleaded clearly, fully and with particularity: Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2016] FCA 987 at [15].

Hamptons proceedings

50    Mr Pigozzo alleges that MRL and Mr Ellison contravened s 340(1) of the FW Act by taking adverse action against Mr Pigozzo because he exercised a workplace right. Mr Pigozzo alleges that adverse action was taken in a number of respects, many of which arise from alleged meetings and conversations involving MRL’s in-house lawyer (Mr Rushton) and MRL’s external lawyer (Mr Bennett) during June 2016. The most controversial allegations relate to legal proceedings Hamptons had brought against CSI (a subsidiary of MRL) (Hamptons proceedings).

51    To understand the cause of action asserted for contravention of s 340(1) of the FW Act it is helpful to start with paras 104 – 106 of the statement of claim. These paragraphs plead conclusions of fact, law, or mixed fact and law founded on facts pleaded in other parts of the statement of claim. The relevant parts of these paragraphs (amended to remove references to the communications pleaded in paras 26 - 29) are as follows.

104.    In the premises, contrary to s.340(1) of the FWA, the First and Second Respondents took adverse action against the Applicant. Pursuant to s.341(1)(c)(ii) of the FWA, the Applicant had a workplace right to make a complaint or inquiry in relation to his employment. The Applicant exercised this right on the following occasions:

(a)    in or about June 2016, at a meeting with Mr Rushton concerning the Hamptons Discovery, pleaded at [28] above;

(b)    in or about June 2016, at a meeting with the Second Respondent and Mr Rushton concerning the Hamptons Discovery, pleaded at [29] above;

(c)    in or about June 2016 at a meeting with Martin Bennett of the Third Respondent concerning the Hamptons Discovery, pleaded at [35] above;

…

105.    Because the Applicant exercised his workplace right on one or more of the occasions pleaded at [104] above, or for reasons that included the Applicant having exercised his workplace right on one or more of those occasions, the Respondents took the following action, including by omitting to act:

(a)    Mr Rushton failing to commend the Applicant’s honesty and integrity in raising [certain matters] with him and encouraging him to [take certain action in connection with the Hampton proceedings];

(b)    Mr Rushton failing to support the Applicant when the Applicant raised [certain matters] with the Second Respondent, instead running from the meeting with his fingers in his ears, knowingly leaving the Applicant to be directed by the Second Respondent to act unlawfully in breach of a court order and of his contractual obligation to act honestly, in good faith and in the best interests of the First Respondent and its shareholders set out in the First Respondent’s Code of Conduct incorporated into the First Employment Contract (by clause 19);

(c)    the Second Respondent directing the Applicant to act unlawfully in breach of a court order and in breach of his contractual obligation to act honestly, in good faith and in the best interests of the First Respondent and its shareholders set out in the First Respondent’s Code of Conduct incorporated into the First Employment Contract (by clause 19) by excluding [certain matters] from the material provided to the Third Respondent for the purposes of discovery;

(d)    the Second Respondent checking that the Applicant had excluded [certain matters] from the material provided to the Third Respondent for the purposes of discovery, in defiance of a court order and in breach of his contractual obligation to act honestly, in good faith and in the best interests of the First Respondent and its shareholders set out in the First Respondent’s Code of Conduct incorporated into the First Employment Contract (by clause 19);

…

106    The conduct pleaded at [105] above was adverse action within the meaning of s.342 of the FWA because it:

(a)    injured the Applicant in his employment;

(b)    altered the position of the Applicant to his prejudice; and

Particulars of [106](a) and (b)

(i)    It induced, compelled or otherwise caused the Applicant to act unlawfully or to assist the First Respondent to act unlawfully and/or in defiance of a court order;

(ii)    It induced, compelled or otherwise caused the Applicant to act in breach of the First Employment Contract, including the Code of Conduct;

…

(v)    It induced, compelled or otherwise caused the Applicant to act in breach of the Second Employment Contract.

52    The conclusions pleaded in paras 104, 105 and 106 depend upon the material facts and particulars pleaded in other parts of the statement of claim, in particular, the matters pleaded in paras 24 - 36.

Paragraphs 24 – 36

53    In para 24 of the statement of claim Mr Pigozzo alleges that ‘[b]etween February and July 2016, [Mr Ellison] and [MRL’s] in-house counsel, Simon Rushton, instructed [Mr Pigozzo] to perform work in relation to [the Hamptons proceedings]’. Paragraph 25 pleads Mr Pigozzo’s understanding of the nature of the Hamptons proceedings. Paragraph 26 pleads the substance of Mr Rushton’s instructions to Mr Pigozzo. Paragraph 27 pleads Mr Pigozzo’s understanding of information of which he became aware while performing Mr Rushton’s instructions. Paragraph 28 pleads the substance (and effect of words) of a conversation between Mr Pigozzo and Mr Rushton about the information.

54    Paragraph 29 pleads a subsequent meeting at which Mr Ellison, Mr Rushton and Mr Pigozzo were present and pleads the substance (and effect of words) of a conversation alleged to have taken place at that meeting. Paragraph 30 pleads the effect of words Mr Ellison is alleged to have said at that meeting. Paragraph 31 pleads the effect of Mr Rushton is alleged to have said at that meeting and pleads the fact of his physical actions.

55    Paragraphs 32 to 34 of the statement of claim are then in the following terms:

32.    [Mr Ellison] then said, firmly, words to the effect: “Steve, clean it up now!” [Mr Pigozzo] understood [Mr Ellison] to be directing him to omit the damaging emails from the discovery materials he provided to [Bennett & Co].

33.    As instructed by [Mr Ellison], [Mr Pigozzo] omitted the damaging emails from the material he sent to [Bennett & Co].

34.    Approximately one week later, [Mr Ellison] said to [Mr Pigozzo] words to the effect: “Is the problem sorted?” [Mr Pigozzo] understood this to be an inquiry as to whether he had omitted the damaging emails from the material provided to [Bennett & Co]. Accordingly, [Mr Pigozzo] replied “Yes.”

Particulars

(i)    Note of [Mr Ellison's] instruction made contemporaneously in [Mr Pigozzo's] electronic diary, saved to, or contained in, [MRL's] computer system.

(ii)    Further particulars to be provided following discovery.

56    Paragraph 35 pleads that, after the events pleaded in paras 24 to 34, in or around June 2016, Mr Pigozzo met with Mr Bennett, of Bennett & Co, in MRL’s boardroom to discuss a matter relating to the Hamptons proceeding. The paragraph pleads the substance (and effect of words) of what is alleged to have been said in a conversation at that meeting.

57    Paragraph 36 of the statement of claim then pleads the following:

To the best of the Applicant’s knowledge, the damaging emails were not subsequently added to the discovery bundle by either the Second Respondent or the Third Respondent before the documents were sent to lawyers acting for Hamptons.

58    Taking into account that for the purposes of s 341(1)(c)(ii) Mr Pigozzo has a workplace right if he ‘is able to make a complaint or inquiry … in relation to his … employment’ and the nature of such a complaint or inquiry is not at large, but must be founded on a source of entitlement, it is difficult to understand on what basis the allegations in paras 28, 29 and 35 could meet the description of the exercise of a workplace right as pleaded in paras 104(a), 104(b) and 104(c) of the statement of claim. None of the alleged statements of Mr Pigozzo pleaded in paras 28, 29 and 35 appears to be an expression of discontent in which Mr Pigozzo sought consideration, redress or relief from a matter about which he was aggrieved. Likewise, none of the alleged statements of Mr Pigozzo pleaded in those paragraphs appears to disclose an inquiry or investigation on the part of Mr Pigozzo made for the purpose of obtaining information. Moreover, none of the paragraphs concern a matter that relates to Mr Pigozzo’s employment. The alleged communications, as pleaded, do not appear to have been directed to any source of entitlement of Mr Pigozzo in connection with his employment. However, as these were not matters that were the subject of argument on the application to strike out, I have not relied on them or taken them into account when considering if paras 24 – 36, 104(a) – (c) and 105(a) – (d) disclose a reasonable cause of action or a cause of action with sufficient clarity and particularity.

59    The adverse action Mr Pigozzo alleges was taken against him involved or resulted in Mr Pigozzo being induced, compelled or otherwise caused to act unlawfully (and in breach of his contract of employment) or to assist MRL to act unlawfully and (or) in defiance of a court order: para 106(i) – (ii). That is, actual unlawfulness, defiance of a court order and breach of his contract of employment are alleged to be elements of the adverse action pleaded in para 106.

60    Therefore, paras 24 – 36 of the statement of claim, when read with paras 104(a) – (c), 105(a) – (d) and 106(i) – (ii) (and paragraph 116), contain allegations of serious impropriety or misconduct in a professional respect as these relate to Mr Rushton and Mr Bennett. Also, the allegations taken as a whole appear to allege interference in the administration of justice and (or) contempt of court on the part of MRL and the participation of Mr Pigozzo, Mr Ellison, Mr Rushton and Mr Bennett in that conduct.

61    The particulars of the conclusion pleaded in para 106 to the effect that the conclusion pleaded in para 105 was 'adverse action' are given in paras 106(i) and 106(ii). The particulars are to the effect that Mr Pigozzo was injured in his employment and (or) his position was altered to his prejudice in that the conduct of the respondents pleaded in para 105: (i) ‘induced, compelled or otherwise caused [Mr Pigozzo] to act unlawfully or to assist [MRL] to act unlawfully and/or in defiance of a court order’; and (ii) ‘induced, compelled or otherwise caused [Mr Pigozzo] to act in breach of [his contract of employment]’. The conduct pleaded in para 105 is not identified with any precision, but it may be inferred from the particulars given in paras 106(i) and 106(ii) to be the conduct pleaded in paras 105(a) – (d).

62    No or insufficient material facts are pleaded to disclose a reasonable cause of action founded on non-compliance or defiance of a court order.

(a)    There is no plea that any court made any order for discovery, the terms of that order or upon whom that order was binding.

(b)    There is no plea that any person bound by any order for discovery, in fact, failed to comply with that order and, if so, the manner in which there was a failure to comply.

Accordingly, there are no or insufficient material facts pleaded to support the conclusions pleaded in paras 106(i) – (ii) to the effect that Mr Pigozzo was induced, compelled or caused to act unlawfully or to assist MRL to act unlawfully and (or) in defiance of a court order.

63    There is also a lack of clarity and ambiguity in the allegations pleaded in paras 30 – 32, 34 and 36 of the statement of claim. These are the paragraphs that are the foundation for the conclusion about inducement, compulsion and causation of unlawful action and defiance of a court order.

64    In para 32 it is pleaded that ‘[Mr Pigozzo] understood [Mr Ellison] to be directing him to omit …the damaging emails from … discovery materials … provided to [Bennett & Co].’ Mr Pigozzo’s subjective understanding is not relevant except to the extent that it accorded with the objective meaning and effect of the words Mr Ellison is alleged to have said to Mr Pigozzo and explains Mr Pigozzo’s alleged actions. The relevant fact is the ‘instruction’, if any, Mr Ellison gave to Mr Pigozzo. In para 33 it is pleaded that ‘As instructed by [Mr Ellison], [Mr Pigozzo] omitted the damaging emails from the materials he sent to [Bennett & Co].’

65    The phrase ‘As instructed by [Mr Ellison]’ is a conclusion of fact. Taking a non-pedantic approach to the pleading, it is evident that Mr Pigozzo alleges that Mr Ellison gave him an instruction to the effect pleaded in para 33, words were spoken to Mr Pigozzo that he understood to convey that instruction to him, and Mr Pigozzo carried out that instruction. It is also evident that the ‘particulars’ of the alleged instruction or the ‘material facts’ through which it is alleged that the instruction was conveyed to Mr Pigozzo are the facts pleaded in paras 29 – 31 and the first sentence of para 32.

66    Paragraphs 29 – 32 plead the words it is alleged were said (i.e., evidence) and not the purport, substance or effect of what it is alleged was said. The difficulty that arises from these paragraphs is not so much that they plead evidence, but that the meaning of the words it is alleged were spoken, as pleaded, is equivocal and ambiguous. These words are not expressly to the effect of the instruction pleaded in para 33. Nor are these words, without more, capable of excluding other meanings that are, on the facts pleaded, at least as likely if not more likely than the meaning Mr Pigozzo attributes to them.

67    Paragraph 30 pleads words Mr Ellison is alleged to have said. The words pleaded, taken with the words Mr Pigozzo is alleged to have said as pleaded in para 29, are not clearly or obviously an instruction of the kind alleged in para 33.

68    Paragraph 31 pleads the words Mr Rushton is alleged to have said and his actions. The pleaded words do not express Mr Rushton’s understanding of the meaning of what it is alleged Mr Ellison said in para 30. There is an implication that Mr Rushton’s understanding was consistent with the understanding of Mr Pigozzo pleaded in para 32. However, Mr Rushton’s subjective state of mind is also not relevant and it is not alleged that he expressed his understanding of Mr Ellison's instructions during the alleged conversation, such that Mr Ellison's silence or response may infer his concurrence with that meaning. Otherwise, the relevance and significance of the facts pleaded in para 31 to the allegation of ‘instruction’ is not obvious and is not identified in the pleading. In short, the alleged words and actions of Mr Rushton pleaded in para 31 are ambiguous in meaning and significance.

69    Paragraph 32 pleads words Mr Ellison is alleged to have said and Mr Pigozzo’s alleged understanding of those words. Again, there is no express instruction of the kind pleaded in para 33. Nor is there any allegation that Mr Pigozzo conveyed his understanding of what Mr Ellison had said to him to Mr Ellison and (or) that Mr Ellison confirmed with Mr Pigozzo that was the intended meaning of his alleged statement.

70    The words Mr Ellison is alleged to have said, as pleaded in paras 30 and 32, in the context of what Mr Pigozzo is alleged to have said in para 29, without more, do not convey an instruction of the kind pleaded in para 33. It is open on the pleaded facts and at least equally, if not more likely on those facts, that the words it is alleged that Mr Ellison said were in response to Mr Pigozzo’s views about the manner in which the Hamptons proceedings should be resolved. Further, Mr Pigozzo was able to carry out the instruction to ‘get rid of the problem’ or ‘[c]lear it up’ or ‘clean it up’ it ways that would not involve engaging in unlawful or improper conduct. In short, on the pleaded facts, it is not open to Mr Pigozzo to adduce evidence at trial that, if accepted, would exclude other equally or more likely meanings of the words Mr Ellison is alleged to have said as pleaded in paras 30 and 32. In short, the pleaded words are equivocal and ambiguous and do not convey the 'instruction' pleaded in para 33.

71    The allegations in para 34 take the matter no further. In the absence of an express or evidently implicit instruction of the kind pleaded in para 33, the words Mr Ellison and Mr Pigozzo are alleged to have said to each other pleaded in para 34 are not confirmatory of the instruction pleaded in para 33. The alleged words are equally consistent with an instruction requiring Mr Pigozzo to take lawful and proper steps to have ‘the problem sorted’. Again, Mr Pigozzo’s understanding of the words it is alleged Mr Ellison said is not relevant except to the extent that it explains his actions.

72    Paragraph 33 pleads, in effect, that Mr Pigozzo omitted emails from ‘material he sent to Bennett & Co’. Paragraph 36 pleads that ‘[t]o the best of [Mr Pigozzo’s] knowledge, the damaging emails were not subsequently added to the discovery bundle by either [Mr Ellison] or [Bennett & Co] before the documents were sent to lawyers acting for Hamptons’. These pleas are evasive and ambiguous.

73    It is not alleged that the relevant emails were not provided to Bennett & Co, at all. It is not alleged that the relevant emails were not included in the discovery in the Hamptons proceedings. For example, it is not alleged that it is to be inferred from the facts pleaded in paras 33 and 36 that the relevant emails were not discovered in the Hamptons proceedings. Also, to the extent his knowledge is relevant, the ‘particulars’ of Mr Pigozzo’s knowledge are not pleaded or identified contrary to r 16.43 of the Rules.

74    It follows that Mr Pigozzo has not clearly and unambiguously pleaded facts and particulars in the statement of claim to the effect that:

(a)    MRL or Mr Ellison gave Mr Pigozzo an instruction or direction not to include certain documents in discovery materials provided to Bennett & Co; or

(b)    certain documents were not included in the discovery documents provided to the lawyers for Hamptons.

75    There is also a lack of clarity and ambiguity in paras 105(b), 105(c) and 105(d) of the statement of claim. Each of these paras includes an allegation to the effect that Mr Pigozzo was directed to breach a term of the First Employment Contract (a term defined elsewhere in the statement of claim) to act honestly, in good faith and in the best interests of MRL and its shareholders set out in the Code of Conduct. However, nowhere are the following matters pleaded:

(a)    there was an express or implied term of the First Employment Contract to the effect pleaded in paras 105(b) – (d);

(b)    the material terms, if any, of the Code of Conduct;

(c)    the manner in which Mr Pigozzo was directed to breach a term of the First Employment Contract or the Code of Conduct; or

(d)    the manner in which Mr Pigozzo breached a term of the First Employment Contract or the Code of Conduct pleaded.

76    The paragraphs of the statement of claim containing allegations concerning the Hamptons proceedings are evasive or ambiguous and, otherwise, are likely to prejudice, embarrass or delay the proceedings. The allegations of defiance of court orders, unlawfulness and breach of the employment contract are made a too high a level of generality for the pleading to meet its basic function of informing MRL and Mr Ellison of the case to be met. Paragraphs 24 – 36, 104(a)-(c) and 105(a)-(d) should be struck-out on these grounds.

77    The extent to which para 35 should nonetheless not be struck out because it may support the allegation in para 116 (accessorial liability) is considered later in these reasons. Likewise, the extent to which paras 28, 29, 35 and 36 should not be struck-out because they may support the allegations pleaded in paras 131- 141 (whistleblower claims) are considered later in these reasons. Otherwise, subject to an application to amend and re-plead the Hampton proceedings allegations referred to below, paras 24-27, 30-34 and 104(a)-(c) and 105(a)-(d) will be struck out.

COVID equipment

78    Mr Pigozzo also alleges that MRL and Mr Ellison contravened s 340(1) of the FW Act by taking adverse action against Mr Pigozzo because he exercised a workplace right in connection with alleged instructions given to Mr Pigozzo concerning the importation of certain COVID-19 testing equipment and re-agents into Australia during 2020. It is alleged that importation of that equipment was not lawful. As a consequence of that alleged instruction and associated conduct, it is alleged that MRL and Mr Ellison contravened s 340 of the FW Act and s 1317AC of the Corporations Act.

79    As with the Hamptons proceedings allegations, it is useful to start the consideration of these paragraphs with the pleaded conclusions of fact, law and mixed fact and law. These are pleaded in paragraphs 105 – 109 of the statement of claim.

80    In paragraph 105(l) of the statement of claim, Mr Pigozzo alleges that because he exercised his workplace right on one or more of the occasions pleaded at para 104, or for reasons that included that Mr Pigozzo having exercised his workplace right on one or more of those occasions, Mr Ellison directed Mr Pigozzo to act in breach of clause 5 of the Second Employment Contract (a term defined elsewhere in the statement of claim) requiring Mr Pigozzo to comply with MRL’s Code of Conduct in arranging for the unlawful importation of COVID-19 testing equipment. Paragraph 106(v) pleads that the conduct was adverse action within the meaning of s 342 of the FW Act because it injured Mr Pigozzo in his employment and (or) altered his position to his prejudice in that it induced, compelled or otherwise caused him to act in breach of the Second Employment Contract.

81    Paragraph 107 pleads that Mr Pigozzo again exercised his right to make a complaint or inquiry in relation to his employment in or around March 2021 when Mr Pigozzo informed Mr Ellison that the importation of COVID-19 testing equipment into Australia was unlawful as pleaded at para 56. Paragraph 108 pleads that because Mr Pigozzo exercised his workplace right as pleaded in para 107, or for reasons that included Mr Pigozzo having exercised that right on that occasion, MRL, Mr Ellison and Mr Gavranich took action including by omitting to act in relation to Mr Ellison directing Mr Pigozzo to proceed with the unlawful importation of the COVID-19 equipment, including by devising an elaborate plan to deceive Australian customs agents.

82    Paragraph 109 pleads that the conduct pleaded at para 108 was adverse action within the meaning of s 342 of the FW Act because it injured Mr Pigozzo in his employment and (or) altered his position to his prejudice in that:

(a)    it induced, compelled or otherwise caused Mr Pigozzo to act unlawfully or to assist MRL and Mr Ellison to act unlawfully and exposed Mr Pigozzo to the prospect of criminal prosecution; and

(b)    it induced, compelled or otherwise caused Mr Pigozzo to act in breach of the Second Employment Contract, including the Code of Conduct.

83    The conclusions by which contraventions of s 340(1) of the FW Act are alleged in paragraphs 105(l), 106(v) and 105 – 109 are founded on the allegations pleaded in paras 55 – 60 of the statement of claim.

Paragraphs 55 – 60

84    Paragraph 55 alleges that, in or around March 2020, Mr Ellison and Mr Gavranich instructed Mr Pigozzo to arrange the unlawful importation of certain COVID-19 testing equipment. Paragraph 56 pleads that at the material time importation of the COVID-19 testing equipment in Australia was prohibited and Mr Pigozzo informed Mr Ellison of that prohibition. Paragraph 57 pleads, in effect, that Mr Ellison instructed Mr Pigozzo to arrange for the importation of the COVID-19 testing equipment. Paragraphs 58 and 59 plead, in effect, that Mr Pigozzo arranged for the importation of the COVID-19 testing equipment. Paragraph 60 pleads, in effect, that Mr Pigozzo kept Mr Ellison informed and that Mr Ellison continued to urge Mr Pigozzo to import the COVID-19 testing equipment.

85    While para 55 identifies the COVID-19 testing equipment alleged to have been imported and para 56 pleads that importation was prohibited ‘at the material time’, the following matters are not pleaded.

(a)    The statute law pursuant to which it is alleged that importation was prohibited.

(b)    The ‘material time’ during which it is alleged that importation was prohibited.

(c)    That COVID-19 testing equipment was imported at the time it is alleged that importation was prohibited.

Accordingly, no or insufficient material facts are pleaded to support the conclusions of unlawful conduct pleaded in paras 106(v) and 109. Further, the provisions of the statute relied upon to support the allegation that importation was prohibited have not been pleaded as is required under r 16.02(1)(e) of the Rules.

86    There is also a lack of clarity and ambiguity in paras 57 – 60 of the statement of claim. Paragraph 57 pleads the words it is alleged that Mr Ellison said to Mr Pigozzo. These words are capable of supporting a plea of a material fact to the effect that Mr Ellison instructed or directed Mr Pigozzo to arrange for the importation of the COVID-19 testing equipment. However, these words are not capable of supporting the allegation pleaded in para 58 to the effect that Mr Ellison directed Mr Pigozzo to arrange for the first machine to be relabelled, in effect, to deceive Australian customs. Nor are the words capable of supporting the allegation pleaded in para 108(a) to the effect that Mr Ellison directed Mr Pigozzo to devise a plan to deceive Australian customs agents or to perform the actions Mr Pigozzo alleges that he performed pleaded in para 59. Paragraph 60 does not identify the matters of which it is alleged Mr Pigozzo kept Mr Ellison ‘abreast’.

87    As Mr Pigozzo has framed the alleged contravention of s 340(1) of the FW Act as depending upon alleged unlawful conduct that is alleged to have been adverse action within the meaning of s 342, the allegations pleaded in paras 55 - 60 are evasive or ambiguous or are likely to prejudice, embarrass or delay the proceedings because no or insufficient facts to support the conclusions of unlawful conduct are pleaded. Paragraphs 55-60 should be struck-out on these grounds.

88    The extent to which para 56 should nonetheless not be struck-out because the paragraph may support the allegations in paras 131-141 (whistleblower claims) is considered later in these reasons. Otherwise, subject to any application to amend to re-plead the COVID-19 testing equipment allegations referred to below, paras 55 and 57-60 will be struck out.

Paragraphs 104 - 109

89    As set out earlier in these reasons, paragraphs 104 – 109 contain pleas of conclusions of fact, law or mixed fact and law. The conclusions pleaded in these paragraphs are founded on the allegations contained in paras 24 – 36 (Hamptons proceedings) and paras 55 – 60 (COVID equipment). As the allegations concerning the primary facts are evasive or ambiguous or likely to prejudice, embarrass or delay the proceedings, the conclusions pleaded in paras 104 – 109 are not supported by the material facts and particulars pleaded elsewhere in the statement of claim. For these reasons, subject to any application to amend and re-plead the Hampton proceedings and COVID-19 testing equipment allegations referred to below, paras 104(a)-(c), 105(a)-(d), (e), 106(i), (ii), (v) and 107-109 will be struck-out.

Amendment to cure defects and re-pleading

90    Notwithstanding the observations made earlier in these reasons concerning the extent to which allegations of the kind pleaded in paras 24 – 36 and 55 – 60 may be characterised as the exercise of ‘workplace rights’, the deficiencies in the manner in which the Hamptons proceedings allegations are pleaded in paras 24 – 36 and the COVID testing equipment allegations are pleaded in para 55 – 60, may be cured by reasonable amendment and there may be a reasonable cause of action founded on those allegations. Therefore, Mr Pigozzo may apply to amend the statement of claim to re-plead causes of action founded on Hamptons proceedings and (or) COVID equipment allegations. With appropriate amendment, taking into account these reasons, there may be parts of paras 24-36, 55-60 and 104-109 that can be salvaged.

WHISTLEBLOWER CLAIMS

91    In paras 131 – 141 of the statement of claim Mr Pigozzo alleges that MRL, Mr Ellison and Mr Gavranich contravened s 1317AC of the Corporations Act (victimisation of a whistleblower) and each of Mr Ellison and Mr Gavranich was involved in MRL’s contravention of that section in one or more of the ways described in s 1317AD(2). The allegations relied upon in support of the matters pleaded in paras 131 – 141 are drawn in large part from the allegations concerning the Hamptons proceedings, the COVID testing equipment and the Mediation Threat. MRL and Mr Ellison object to paras 131(a) – (d), 133(i) – (ii), 135(a) – (b), 135(d)(xi), 135(e)(i), 137 (iv) – (v) and 138(i) on the basis of the connection between those allegations and the causes of action asserted in paras 131 – 141.

Corporations Act: ss 1317AA and 1317AAC

92    Section 1317AA of the Corporations Act provides, relevantly, that disclosure of information by an individual qualifies for protection under Part 9.4AAA (Protection for Whistleblowers) if the discloser is an employee of a regulated entity and the discloser has reasonable grounds to suspect that the information concerns misconduct, or an improper state of affairs or circumstances, in relation to the regulated entity or a related body corporate of that entity and ‘the disclosure is made to an eligible recipient in relation to the regulated entity’.

93    Pursuant to s 1317AAC each of the following persons are an ‘eligible recipient in relation to a regulated entity that is a body corporate’:

(a)    an officer or senior manager of the body corporate or a related body corporate;

(b)    an auditor, or a member of an audit team conducting an audit, of the body corporate or a related body corporate;

(c)    an actuary of the body corporate or a related body corporate;

(d)    a person authorised by the body corporate to receive disclosures that may qualify for protection under Part 9.4AAA.

Paragraphs 131, 133, 135 and 137

94    Paragraphs 131 - 135 of the statement of claim plead the following.

131.    In the premises pleaded above, on the following occasions, [Mr Pigozzo] made the following disclosures:

(a)    in June 2016, at a meeting with Mr Rushton concerning the Hamptons Discovery, pleaded at [28] above;

(b)    in June 2016, at a meeting with [Mr Ellison] and Mr Rushton concerning the Hamptons Discovery, pleaded at [29] above;

(c)    in June 2016 at a meeting with Martin Bennett of [Bennett & Co] concerning the Hamptons Discovery, pleaded at [35] above;

(d)    in or around March 2020, informing [Mr Ellison] that the importation of covid-19 testing equipment into Australia, which [Mr Ellison] had instructed [Mr Pigozzo] to arrange, was unlawful, as pleaded at [56] above;

…

(f)    from 22 October 2021 – 16 November 2021, that he was being denied procedural fairness and natural justice by [MRL] refusing to allow him sufficient time or access to the necessary information saved to [MRL's] computer system in order to reply to its Show Cause Letter;

(g)    made General Protections applications to the Fair Work Commission on 23 December 2021 and 7 February 2022 (together the Whistleblower disclosures).

132.    Each Whistleblower disclosure was made to an eligible recipient within s.1317AAC of the Corporations Act 2001 (Cth) (Corporations Act), namely:

(a)    Mr Rushton;

(b)    [Mr Ellison];

(c)    [Mr Gavranich];

…

(k)    Mr Martin Bennett;

…

133.    In respect of the Whistleblower disclosures set out at [131] above, [Mr Pigozzo] had reasonable grounds to suspect that the information disclosed included disclosable matters within the meaning of section 1317AA(4) of the Corporations Act in that the information disclosed concerned misconduct, or an improper state of affairs or circumstances in relation to [MRL].

Particulars

(i)    The reasonable grounds for suspecting, and the misconduct, are apparent on the face of the disclosures pleaded at [131] (a) – (c). The misconduct or improper state of affairs were that [MRL] and/or its subsidiary, CSI, had behaved inappropriately in their/its dealings with Hamptons and that email correspondence evidencing this was relevant to the discovery process and must be disclosed; failure to disclose it was improper and unlawful (a contempt of court). The reasonable grounds for [Mr Pigozzo's] suspicion were, as pleaded above, his involvement in [certain conduct] and the direction of [Mr Ellison] that [Mr Pigozzo] not disclose the emails to [Bennett & Co].

(ii)    The misconduct or improper state of affairs revealed by the disclosure pleaded at [131] (d) is that [Mr Ellison's] direction that [Mr Pigozzo] arrange for the importation of covid-19 testing equipment would involve [Mr Pigozzo] and [MRL and Mr Ellison] in unlawful conduct, including deceiving Australian customs agents and exposing [Mr Pigozzo, Mr Ellison and Mr Gavranich] to criminal prosecution. The reasonable grounds for suspecting the misconduct were [Mr Pigozzo's] knowledge of the law concerning the importation of covid-19 testing equipment and [Mr Ellison's] insistence to [Mr Pigozzo] that [Mr Pigozzo] arrange for their importation regardless.

…

(iv)    The misconduct or improper state of affairs revealed by the disclosures pleaded at [131] (f) is that, in order to divert attention from [Mr Pigozzo's] Whistleblower disclosures and [Mr Ellison's] involvement (including through Mrs Ellison) in the overspending on the WD Project, [Mr Pigozzo] was being denied natural justice in the face of serious allegations against him in breach of the Code of Conduct and the Second Employment Contract including clause 5 and the Good Faith Term. The reasonable grounds for suspecting the misconduct or improper state of affairs were, very shortly after [Mr Ellison] had threatened [Mr Pigozzo's] employment on 15 September 2021, [Mr Pigozzo] being informed of [MRL's] denial to him of sufficient time and resources to enable him properly to reply to the Show Cause Letter and legal advice from Harmers.

(v)    The misconduct or improper state of affairs revealed by [Mr Pigozzo's] General Protections Applications to the Fair Work Commission are those matters set out at (ii) – (iv) above. The reasonable grounds for suspecting the misconduct or improper state of affairs are as set out at (ii) – (iv) above.

134.    The Whistleblower disclosures did not concern a “personal work-related grievance” of [Mr Pigozzo] within the meaning of s.1317AADA of the Corporations Act.

135.    After the Whistleblower disclosures began to be made, [MRL, Mr Ellison and Mr Gavranich] engaged in following conduct:

(a)    in relation to the Whistleblower disclosures pleaded at [131] (a) – (c), the conduct pleaded at [105] (a) – (k) above;

(b)    in relation to the Whistleblower disclosure pleaded at [131] (d), the conduct pleaded at [108] (a) above;

(c)    in relation to the Whistleblower disclosures pleaded at [131] (e), the conduct pleaded above at [111] (a) – (q), constructively dismissing [Mr Pigozzo] on 6 December 2021 and the conduct pleaded at [113] (a) – (c), [102] and [103] above;

(d)    in relation to the Whistleblower disclosures pleaded at [131] (f), [MRL and Mr Ellison]:

…

xi.    made the Mediation Threat; and

…

(e)    in relation to the Whistleblower disclosure(s) pleaded at [131] (g), [MRL and Mr Ellison]:

i.    made the Mediation Threat; and

…

95    Paragraphs 136 – 140 of the statement of claim then plead that the alleged conduct: caused detriment to Mr Pigozzo or amounted to threats to cause such detriment; was engaged in at a time when MRL and Mr Gavranich believed or suspected that Mr Pigozzo had made one or more protected disclosures; resulted in belief or suspicion that was part of the reason for the alleged conduct and MRL; led Mr Ellison and Mr Gavranich to contravene the whistleblower protection provision in s 1317AC of the Corporations Act. Further, Mr Ellison and Mr Gavranich contravened s 1317AC as persons who were involved in MRL’s contravention as an officer or employee of MRL in one or more of the ways described in s 1317AD(2).

96    The difficulty with these allegations is that the substance of the communications pleaded in paras 28 and 29 of the statement of claim do not contain any disclosure of misconduct, or an improper state of affairs, or circumstances in relation to CSI (a related body corporate of MRL). The substance of the communications pleaded in para 35 arguably fall within that description, however, no material facts or particulars are pleaded that would bring Mr Bennett within the description of ‘eligible recipient’ in s 1317AAC. Accepting the pleaded facts to be true, none of paras 131(a) – (c) supports the conclusions pleaded in paras 133(i), 139 – 142 of the statement of claim.

97    Further, Mr Pigozzo submitted that the plea in para 36 that ‘to the best of [his] knowledge’ was support for the whistleblower allegations in that he had reasonable grounds to suspect misconduct. However, as has been observed earlier in these reasons, the statement of claim does not plead or particularise the foundation for the state of mind pleaded in para 36. That is, the material facts or particulars alleged to be the reasonable grounds for the ‘improper’ conduct of CSI are not pleaded.

98    As to para 131(d), it is reasonably arguable that the alleged statement of Mr Pigozzo pleaded in para 56 comprised disclosure of ‘misconduct, or an improper state of affairs, or circumstances’ in relation to MRL (a regulated entity) to an eligible recipient (Mr Ellison). However, as has been observed earlier in these reasons, the provisions of the legislation by which it is alleged that importation of the COVID-19 testing equipment pleaded in para 55 was prohibited is not pleaded. Nor is any other factual or legal foundation pleaded in support of Mr Pigozzo’s alleged state of mind (reasonable grounds to suspect) or ‘knowledge’ pleaded in para 133(ii). Therefore, accepting the pleaded facts to be true, para 131(d) does not support the conclusions pleaded in paras 133(ii) and 139 – 142 of the statement of claim.

99    Paragraphs 28, 29, 35, 36 and 56 do not support the allegations pleaded in paras 131(a) – (d), 132(k), 133(i), 133(ii), 135(a), 135(b), 137(iv) and 137(v). All these paragraphs are evasive or ambiguous or are likely to prejudice, embarrass or delay the proceedings. Subject to any application to amend and re-plead and the discussion concerning para 35 (accessorial liability) below, these paragraphs will be struck-out on these grounds.

Amendment to cure defects and re-pleading

100    As noted earlier in these reasons, the deficiencies in the manner in which the Hamptons proceedings allegations are pleaded in paras 24 – 36 and the COVID testing equipment allegations are pleaded in paras 55 – 60, may be cured by reasonable amendment. As a consequence, the defects in paras 131 – 142 that follow from the deficiencies in other parts of the statement of claim may be cured by reasonable amendment and there may be a reasonable cause of action founded on those allegations for contravention of s 1317AC of the Corporations Act. Therefore, Mr Pigozzo may apply to amend the statement of claim to re-plead the whistleblower allegations.

ACCESSORIAL LIABILITY

Involvement in alleged contravention

101    Paragraph 116 of the statement of claim pleads that ‘[i]n refraining, at a meeting with [Mr Pigozzo] (or ever thereafter), from [engaging in certain conduct], [Bennett & Co] aided and abetted [MRL] and [Mr Ellison’s] contravention of s 340(1) of the FWA. In addition, or alternatively, such refraining amounted to [Bennett & Co], by omission either directly or indirectly being concerned in or a party to [MRL] and [Mr Ellison’s] contravention of s.340(1) of the FWA.’ That is an allegation to the effect that Bennett & Co was ‘involved in’ a contravention of s 340(1) within the meaning of s 550 of the FW Act.

102    Objection is taken to para 116 of the statement of claim. Although para 116 does not identify with any particularity in which of the various contraventions of s 340(1) of the FW Act it is alleged Bennett & Co was involved, it is sufficiently clear from the first sentence of para 116 that the alleged involvement arises from and is directed to alleged action at the time of the meeting alleged in para 35 and omissions following that meeting. That is, it is sufficiently clear that the alleged contravention of s 340(1) in which Bennett & Co is alleged to have been involved is that alleged in paras 104(a) – (c), 105(a) – (d) and 106(i) – (ii).

103    It is evident that the primary purpose of para 35 is to support Mr Pigozzo’s claim that Bennett & Co was involved in MRL and Mr Ellison’s alleged contravention of s 340(1) of the FW Act arising in connection with Hamptons proceedings. However, there are two ancillary purposes of para 35. First, in paras 104(c) and 105 it is pleaded, in effect, that Mr Pigozzo exercised a workplace right to make a complaint or inquiry in relation to his employment within the meaning of s 341(1)(c)(ii) of the FW Act in or about June 2016 at the meeting with Mr Bennett pleaded in para 35. That is, the workplace right was exercised through a complaint or inquiry made of Mr Bennett. Second, in paras 131(c) and 132(k) it is pleaded, in effect, that Mr Pigozzo made a disclosure to Mr Bennett as an eligible recipient within the meaning of s 1317AAC of the Corporations Act in June 2016 at the meeting with Mr Bennett pleaded at para 35.

Paragraphs 104(c), 131(c), 132(k)

104    As noted earlier in these reasons, nowhere are any facts pleaded that would bring Mr Bennett within any description of an eligible person in s 1317AAC(1). Likewise, nowhere are any facts pleaded that would make Mr Bennett (or Bennett & Co ) an agent of MRL or Mr Ellison for the purpose of Mr Pigozzo exercising that workplace right by making a complaint or inquiry to Mr Bennett. That is, the facts pleaded do not support the plea that Mr Pigozzo ‘exercised a workplace right’ at the alleged meeting with Mr Bennett in June 2016. A complaint or inquiry made to a person could only involve the exercise of a workplace right if the person to whom the complaint or inquiry is made has the lawful authority to investigate it for the purpose of the exercise of that workplace right.

105    Therefore, para 35 does not support the allegation pleaded in paras 104(c) and 105 of alleged exercise of a workplace right for the purposes ss 340(1) and 341(1)(c)(ii) of the FW Act or the allegation pleaded in paras 131(c) and 132(k) of an alleged disclosure to an eligible person for the purposes of ss 1317AA and 1317AAC of the Corporations Act.

Fair Work Act: section 550

106    As to the alleged involvement of Bennett & Co in MRL’s and Mr Ellison’s alleged contravention of s 340(1) of the FW Act, s 550 of the FW Act provides (notes omitted):

550    Involvement in contravention treated in same way as actual contravention

(1)    A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.

(2)    A person is involved in a contravention of a civil remedy provision if, and only if, the person:

(a)    has aided, abetted, counselled or procured the contravention; or

(b)    has induced the contravention, whether by threats or promises or otherwise; or

(c)    has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or

(d)    has conspired with others to effect the contravention.

107    Here, it is alleged that, through the conduct pleaded in para 35, Bennett & Co aided and abetted, alternatively, directly or indirectly was knowingly concerned in or a party to the alleged contravention of s 340(1).

108    For a person to be involved in a contravention, within the meaning of s 550 of the FW Act, it must be established that the person has intentionally participated in the contravening conduct, with actual knowledge of the essential facts which constituted the contravention: Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661 at 667, 670; Leighton Contractors Pty Ltd v Construction, Forestry, Mining and Energy Union [2006] WASC 144; (2006) 154 IR 228 at [25] - [27]; Construction, Forestry and Energy Union v BHP Coal Pty Ltd [2017] FCAFC 50 at [59].

109    There must be actual knowledge of each of the material facts constituting the contravention (by the principle). Actual knowledge is required, constructive knowledge is not sufficient, nor is recklessness or negligence: Giorgianni v The Queen [1985] HCA 29; (1985) 156 CLR 473 at 504 - 507; Pereira v Director Of Public Prosecutions [1988] HCA 57; (1988) 63 ALJR 1 at 3; Rafferty v Madgwicks [2012] FCAFC 37; (2012) 203 FCR 1 at [261]; Richardson & Wrench (Holdings) Pty Ltd v Ligon No 174 Pty Ltd [1994] FCA 488; (1994) 123 ALR 681 at 693 - 694. Proof of actual knowledge must be knowledge of each of the material facts at the time of the contravention. Acquisition of actual knowledge after the fact is not sufficient: Australian Securities & Investments Commission v Australian Investors Forum Pty Ltd (No 2) [2005] NSWSC 267, (2005) 53 ACSR 305 at [113] - [118].

110    A person must participate in the contravention; the accessory should be linked in purpose with the perpetrators: Giorgianni at 479 – 480, 500. Ashbury v Reid [1961] WAR 49 at 51; Leighton Contractors at [27], [29]. The accessory must be implicated or involved in the contravention, or participate in, or assent to, the contravention: T v Tannous (1987) 10 NSWLR 303 at 304, 307 – 308, 310; Ashbury at 51; Emwest Productions Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2002] FCA 61; (2002) 117 FCR 588 at [34]; Construction, Forestry, Mining and Energy Union v Clarke [2007] FCAFC 87 at [26]. It is not necessary that the person physically do anything to further the contravention. It is sufficient if the person, by what he said and agreed to, in fact became associated with and thus involved, in the relevant sense, in the conduct constituting the contravention: Leighton Contractors at [29]; Fair Work Ombudsman v Priority Matters Pty Ltd [2017] FCA 833 at [118].

111    The accessory must be an intentional participant. Intention is a distinct element but the necessary intent is based upon knowledge of the essential elements of the contravention: Australian Securities and Investments Commission v ActiveSuper Pty Ltd (in liq) [2015] FCA 342; (2015) 235 FCR 181 at [429] – [433].

Paragraph 116

112    Mr Pigozzo has not pleaded that Mr Bennett or any other person whose knowledge is to be attributed to Bennett & Co had actual knowledge of the relevant elements of the contravention of s 340(1). Nor have particulars been given of that knowledge.

113    Rule 16.41(1) provides that a party must state in a pleading, or in a document filed and served with the pleading, the necessary particulars of each claim, defence or other matter pleaded by the party. Rule 16.45(1) provides that a party may apply to the Court for an order that the party who filed the pleading serve on that party particulars of each claim, defence or other matter pleaded by the party. Rule 16.43(1) provides that a party who pleads a condition of mind must state in the pleading particulars of the facts on which the party relies. Rule 16.43(3) provides that ‘condition of mind’ means, amongst other things, knowledge and any fraudulent intention. No particulars of ‘knowledge’ of Mr Bennett or any other person whose knowledge may be attributed to Bennett & Co have been provided in the statement of claim.

114    Further, to the extent that actual knowledge may be taken to have been acquired in the communications between Mr Pigozzo and Mr Bennett pleaded in para 35, the alleged conduct of MRL and Mr Ellison that is alleged to have comprised the relevant contravention of s 340(1) of the FW Act is alleged in paras 24 – 34, 104(a), 104(b), 105(a), 105(b) and 105(c) of the statement of claim. All that conduct is chronologically anterior to the alleged meeting with Mr Bennett pleaded in para 35.

115    Therefore, even on a beneficial reading of the statement of claim, the pleaded facts do not disclose any reasonable cause of action against Bennett & Co under s 550 of the FW Act because the pleaded facts do not plead that Mr Bennett had actual knowledge of all the essential facts of the contravention at the time of the alleged contravention. On the pleaded facts, Mr Bennett acquired knowledge of certain of the essential facts after the relevant alleged contravention of s 340(1) of the FW Act.

116    Paragraph 116 of the statement of claim will be struck-out.

Paragraphs 35 and 153(e)

117    As the primary purpose of para 35 is to support the plea in para 116 and its ancillary purpose is to support the pleas in paras 104(c), 105, 131(c) and 132(k) and it does not support any of those pleas, para 35 should also be struck-out on those grounds. As a consequence, the relief claimed in para 153(e) should also be struck-out. Subject to any application to amend and re-plead referred to below, paras 35 and 153(e) will be struck out.

Amendment to cure defects and re-pleading

118    The defects in paras 35, 116 and 153(e) may be cured by reasonable amendment and there may be a reasonable cause of action under s 550 of the FW Act. Therefore, subject to the discussion below concerning the privilege objection to para 35, Mr Pigozzo may apply to amend and re-plead a cause of action against Bennett & Co.

COERCION

Mediation Threat

119    Paragraphs 76 – 103 of the statement of claim plead allegations relating to the termination of Mr Pigozzo’s employment including alleged conduct and statements of Mr Ellison during a confidential mediation held on 2 May 2022.

120    Paragraph 102 of the statement of claim pleads allegations to the effect that on 2 May 2022, Mr Pigozzo attended a confidential mediation before mediator, the Hon. Rene Le Miere QC. On that occasion, Mr Ellison with a certain demeanour accused Mr Pigozzo of certain conduct. Mr Ellison said that Mr Pigozzo had caused certain outcomes adverse to MRL’s interests. Mr Ellison made a certain suggestion to Mr Pigozzo. It is alleged that the suggestion amounted to a threat, intended by Mr Ellison to dissuade Mr Pigozzo from bring the proceedings.

121    Paragraph 103 of the statement of claim then pleads as follows.

On 30 May 2022, [MRL] issued proceedings against [Mr Pigozzo] in the Corporations Division of the Federal Court. [MRL's] pleadings falsely alleged that [Mr Pigozzo] had breached the Corporations Act 2001 (Cth), the Second Employment Contract and fiduciary obligations allegedly owed to [MRL].

122    Paragraph 130(e) of the statement of claim pleads:

In:

…

(e)    [Mr Ellison], on 2 May 2022, making the Mediation Threat;

[Mr Gavranich, MRL and Mr Ellison] took action against [Mr Pigozzo] with intent to coerce [Mr Pigozzo] not to exercise his workplace right to make a complaint or inquiry in relation to his employment (specifically his work on the WD Project), or to exercise his right to initiate proceedings under a workplace law ([130](e) and (d)), contrary to s.343 of the FWA.

…

123    Paragraph 102 alleges that the suggestion pleaded in that para ‘amounted to a threat, intended by [Mr Ellison] to dissuade [Mr Pigozzo] from bringing the instant proceedings’. MRL and Mr Ellison submit that the pleaded allegation of ‘intent to dissuade’ is fundamentally different to and lesser than an ‘intent to coerce’. MRL and Mr Ellison also complain of circuity and inconsistency in that the Mediation Threat pleaded in para 102 is founded on an intent to dissuade whereas at para 130(e) it is alleged that the Mediation Threat was made with an intent to coerce.

124    Separately, objection is taken to the use of the word ‘falsely’ in para 103 [and ‘(false)’ in para 102]. The basis of the objection is that a serious allegation is made without pleading material facts or particulars in support of that allegation. Further, in the case of para 103, it also submitted that it is scandalous because it is not relied upon elsewhere in the statement of claim.

125    Mr Pigozzo submits that the objections are deprecated and pedantic insofar as objection is taken to the characterisation of Mr Ellison’s conduct as calculated to ‘dissuade’ rather than ‘coerce’ Mr Pigozzo. As to para 103, it is submitted that it is pleaded in support of the whistleblower claims. Otherwise, Mr Pigozzo’s submissions did not grapple with the complaint of an absence of material facts and particulars to support the use of ‘false’ and ‘falsely’ in paras 102 and 103.

Fair Work Act: section 343

126    Section 343 of the FW Act provides (noted omitted):

343    Coercion

(1)    A person must not organise or take, or threaten to organise or take, any action against another person with intent to coerce the other person, or a third person, to:

(a)    exercise or not exercise, or propose to exercise or not exercise, a workplace right; or

(b)    exercise, or propose to exercise, a workplace right in a particular way.

(2)    Subsection (1) does not apply to protected industrial action.

127    The authorities indicate that to prove ‘intent to coerce’ within the meaning of s 343 of the FW Act requires two elements. First, negation of choice; and second, the use of unlawful, or illegitimate or unconscionable means: e.g., Esso Australia Pty Ltd v The Australian Workers’ Union [2016] FCAFC 72 at [174] and the authorities to which reference is there made.

Paragraphs 102, 103 and 130(e)

128    As to the first element, subject to the issue of admissibility of evidence, the conduct and statements pleaded in para 102 are sufficient to permit Mr Pigozzo to adduce evidence at trial that, if accepted, would be capable of proving an intention to negate Mr Pigozzo’s choice. The use of the word ‘dissuade’ creates a lack of clarity and ambiguity, but when taken with para 130(e) the allegations are sufficient to inform the respondents of the case to be met and disclose an arguable case of negation of choice.

129    As to the second element, it is evident that the alleged illegitimacy is a threat to commence legal proceedings founded on false allegations. In context, ‘false’ must be taken to mean allegations that are untenable or baseless. That is, it is alleged that a threat was made to commence untenable or baseless legal proceedings.

130    The pleas in paras 102 and 103 to the effect that the allegations are ‘false’ is a conclusion. No material facts or particulars are pleaded in the statement of claim that support that conclusion. For example, the precise nature of the allegations that are alleged to have been made and the manner in which it is alleged that these allegations were ‘false’ (untenable or baseless) is not pleaded. Accordingly, that aspect of the alleged contravention of s 343 of the FW Act is not pleaded in a manner that discloses a reasonable cause of action and, otherwise, is likely to cause prejudice, embarrassment or delay in the proceeding. Paras 102 and 130(e) should be struck out on that ground. The word ‘falsely’ in para 103 should also be struck out on that ground.

Amendment to cure defects and re-pleading

131    The defects in paras 102, 103 and 130(e) may be cured by reasonable amendment and there may be a reasonable cause of action under s 343 of the FW Act. Therefore, subject to the discussion below concerning the privilege objection to para 102, Mr Pigozzo may apply to amend and re-plead a cause of action against MRL founded on the alleged mediation threat.

CONFIDENTIALITY, PRIVILEGE AND NON-PUBLICATION

Overview of applications

132    MRL, Mr Ellison and Bennett & Co have made an application to restrict inspection of the statement of claim. MRL and Mr Ellison have also made an application for an interim injunction and non-publication orders in respect of the statement of claim. On the application to strike out, MRL and Mr Ellison have also requested orders that the statement of claim be removed from the Court’s file. The applications, in substance, request suppression and non-publication orders on the whole statement of claim.

133    At the heart of the applications is the contention that, accepting the pleaded facts to be true, the communications pleaded in paras 28 and 35 of the statement of claim are prima facie confidential and subject to legal professional privilege and the communications pleaded in para 102 are prima facie confidential and subject to without prejudice privilege. MRL and Mr Ellison submit that these paragraphs are not pleaded with sufficient material facts and particulars to disclose reasonable arguments that the communications are not, or are no longer, confidential and privileged. Given the serious allegations contained in these paragraphs and the absence of a pleaded foundation for legitimately disclosing the communications, it is submitted that the allegations are scandalous, vexatious and an abuse of the process of the Court. Mr Pigozzo submits that, accepting the pleaded facts to be true, the communications are not prima facie confidential and privileged and (or) a proper foundation for the alleged communications falling within an ‘exception’ to legal professional privilege or without prejudice privilege is pleaded. He also submits that if the communications pleaded in paras 28 and 35 were subject to legal professional privilege, that privilege has been waived.

134    As noted earlier in these reasons, paras 28, 35 and 102 will be struck out, along with many other paragraphs, on the grounds that the allegations relating to contraventions of ss 340(1) and 343 of the FW Act are evasive or ambiguous or are likely to prejudice, embarrass or delay the proceedings. However, the mere striking out of parts of a pleading on these grounds is not a sufficient basis for making or maintaining orders to restrict inspection of the statement of claim or restrain or prohibit disclosure or publication of the substance of the allegations contained in those paragraphs of the pleading.

Powers of the Court to restrain or prohibit disclosure or publication of information

135    Rule 1.32 of the Rules provides that the Court may make any order considered appropriate in the interests of justice. The Court may dispense with or make an order that is inconsistent with the Rules: rr 1.34, 1.35. The Court may make orders other than in open court: r 1.36.

136    Rule 2.32(2)(c) of the Rules provides that a non-party may inspect a pleading or particulars of a pleading or a similar document. However, under r 2.32(3) a person is not entitled to inspect a document that the Court has ordered to be confidential or is forbidden from, or restricted from publication to, the person or class of persons of which the person is a member. And, under r 2.34(4) a person may apply to the Court for leave to inspect a document that a person is not otherwise entitled to inspect.

137    The overall effect of rr 1.32, 1.34, 1.35, 1.36, 2.32(2), 2.32(3) and 2.32(4) is that while the default position of the Rules is that a non-party may inspect a pleading, the Court may make an order that a pleading is confidential or restricted from publication and, as a consequence, a non-party must apply to the Court for leave to inspect such a pleading. It was in accordance with these powers and that effect that the orders of 1 and 13 June 2022 were made on the application to restrict inspection of the statement of claim. The effect of those orders is not to prevent public access to the statement of claim per se, but to change the default position under the Rules that permits access to pleadings. A non-party who wishes to inspect the statement of claim must apply to the Court to do so. If an application for access were made, the non-party may be able to justify inspection of the pleading taking into account the extent and nature of the non-party’s interest the proceedings and questions of confidentiality, privilege and the principle of open justice.

138    Rules 2.28 and 2.29 of the Rules provide that a document may be removed from a Court file on the application of a party under r 6.01 or r 16.21(2). Rule 6.01 provides that if a document filed in a proceeding contains matter that is scandalous, vexatious or oppressive, a party may apply to the Court for an order the document be removed from the Court file or that the matter be struck out of the document. Rule 16.21(2) provides that a party may apply for an order that a pleading be removed from the Court file if the pleading contains scandalous material, contains frivolous or vexatious material or is otherwise an abuse of the process of the Court.

139    Section 23 of the FCA Act provides that the Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue of, writs of such kinds, as the Court thinks appropriate. As explained earlier in these reasons, the Court has power to grant injunctive relief to restrain the disclosure of information in breach of a duty of confidence. A source of that power is s 23 of the FCA Act.

140    Under s 37AF(1)(b)(iv) of the FCA Act, the Court may prohibit or restrict the publication or disclosure of information lodged with or filed in the Court. Under s 37AF(2), the Court may make such orders as it thinks appropriate to give effect to such an order.

141    In accordance with s 37AG(1)(a) of the FCA Act, the Court may make a suppression or non-publication order on the ground that the order is necessary to prevent prejudice to the proper administration of justice. In accordance with s 37AE, in deciding whether to make a suppression or non-publication order, the Court must take into account that a primary objective of the administration of justice is to safeguard the public interest in open justice.

142    In accordance with s 37AH of the FCA Act, the Court may make a suppression or non-publication order on its own initiative or on the application of a party to the proceeding or any other person considered by the Court to have a sufficient interest in the making of the order. A suppression or non-publication order may be made without determining the merits as an interim order to have effect, subject to revocation, until the application is determined: s 37AI. Orders operate for the duration specified in the order: s 37AJ.

143    In accordance with s 17(1) of the FCA Act, ordinarily the jurisdiction of the Court must be exercised in open court. That reflects the public interest in open justice which ‘lies at the heart of the exercise of judicial power as part of the wider democratic process. The principle involves justice being seen to be done. A key part of this task is enabling accurate and fair public reports of proceedings.’ But, ‘[o]pen justice is not an absolute concept, unbending in its form. It must on occasion be balanced with other considerations, including but not limited to considerations such as the avoidance of prejudice in the administration of justice or the protection of victims. Nevertheless, an order restricting the ordinary open justice approach is not lightly made.’ The balancing exercise is reflected in ss 17, 37AE and 37AG and rr 2.31, 2.32: Minister for Immigration and Border Protection v Egan [2018] FCA 1320 at [4] (per Allsop CJ).

144    In Rush v Nationwide News Pty Ltd [2018] FCA 357; (2018) 359 ALR 473 (at [186] – [191], [194] – [196], [199] – [200]) Wigney J (drawing on the authorities there cited) summarised the court’s approach to suppression and non-publication orders as follows:

(1)    A suppression or non-publication order should only be made in exceptional circumstances: (at [186]).

(2)    In general, parties and witnesses have to accept the embarrassment and damage to their reputation and possible consequential loss which can be inherent in involvement in litigation: (at [187] – [188]).

(3)    The Rules providing that pleadings are ordinarily available for public inspection is an important part of the system of open justice. There is no reason for supposing that members of the public will not appreciate that allegations in pleadings are untested and may turn out to proved false or correct: (at [189] – [191], [194]).

(4)    The principle of open justice demands and requires that the public are able to follow and understand all stages of a proceeding, including interlocutory steps such as the striking out of part of a pleading: (at [195]).

(5)    There is no reason that the principles of open justice that apply to ss 37AF and 37AG should not apply equally to rr 2.32 and 16.21(2): (at [199] – [200]).

(6)    In exceptional cases, striking out manifestly scandalous and vexatious material may justify suppression or non-publication and (or) removal of the pleading or part of the pleading from the Court file: (at [196], [200]).

145    Further to the above principles, the administration of justice may be prejudiced if confidentiality orders agreed as part of a settlement are not made in that refusal to give effect to the parties’ agreement may have the effect of discouraging parties from settling all aspects of their disputes: Porter v Australian Broadcasting Corporation [2021] FCA 863 at [105]. That is, failure to make an order in such circumstances may undermine the rationale for without prejudice privilege. Likewise, the administration of justice may be prejudiced if pleadings containing information in respect of which a bona fide claim confidentiality has been asserted are disclosed before the resolution of that claim: Cantarella Bros Pty Ltd v Du Bois [2016] FCA 1115 at [10] – [14].

Legal professional privilege (client legal privilege)

Communications to which legal professional privilege attaches under the common law

146    Legal professional privilege is a rule of substantive law which may be availed of by a person to resist the giving of information or the production of documents which would reveal communications between a client and his or her lawyer made for the dominate purpose of giving or obtaining legal advice or the provision of legal services, including representation in legal proceedings: Daniels Corporation International Pty Ltd v Australian Competition & Consumer Commission [2002] HCA 49; (2002) 213 CLR 543 at [9]. While the privilege attaches to communications, not documents as such, the privilege also extends to prevent disclosure of documents brought into existence for the dominant purpose of giving or obtaining legal advice: Esso Australia Resources Ltd v Commissioner of Taxation (Commonwealth) [1999] HCA 67; (1999) 201 CLR 49 at [35]; AWB Ltd v Cole (No 5) [2006] FCA 1234; (2006) 155 FCR 30 at [41]. Privilege in these circumstances may be referred to as ‘advice privilege’.

147    It may be inferred from the context or circumstances in which a communication takes place that a client is requesting legal advice. Professional communications are such that ‘whenever a lay client gives instructions to a legal practitioner to perform specialist legal services involving the exercise of professional skill, there is imposed on the solicitor a duty to give any advice reasonably necessary to protect the client’s interests in the transaction whether expressly requested or not. … It is not a large step from that position to say that whenever a client give instructions to his solicitor there is assumed to be a request for advice’: Dalleagles Pty Ltd v Australian Securities Commission (1991) 4 WAR 325 at 332-333. See, also, DSE (Holdings) Pty Ltd v InterTAN Inc [2003] FCA 1191; (2003) 135 FCR 151 at [30] – [71]

148    Legal professional privilege may attach to confidential communications between an employer and its employed or ‘in-house’ lawyer provided that the employer consulted the employed lawyer in a ‘professional capacity in relation to a professional matter and the communications are made in confidence and arise from the relationship of lawyer and client: Cole (No 5) at [44(10)], paraphrasing Waterford v The Commonwealth (1978) 163 CLR 54 at 100. While there may be some uncertainty about the extent to which it is necessary to establish that the employed lawyer is also ‘independent’, the existence of independence is a question of fact and degree. Whether the necessary quality exists will depend on the structure of the role and the nature of the employment: DBCT Management Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd and Geosea Australia Pty Ltd Joint Venture [2021] FCA 512 at [80]. However, if it is established that confidential communications between and employer and its in-house lawyer fall within the scope of advice privilege or litigation privilege, the communications are subject to legal professional privilege in the same way and to the same extent as communications with a third-party or external lawyer: Sydney Airports Corporation Ltd v Singapore Airlines Ltd [2005] NSWCA 47 at [18]

149    The onus is on the party claiming legal professional privilege to make it out by evidence or argument. The privilege is not necessarily or conclusively established by resort to any verbal formula or ritual: Grant v Downs (1976) 135 CLR 674 at 689.

Common law exceptions to legal professional privilege

150    Communications between a lawyer and client which facilitate a crime or fraud are not protected by legal professional privilege. The principle is often referred to as the ‘fraud exception’ to legal professional privilege, but it is not an ‘exception’ in the true sense of that word. Legal professional privilege does not arise at all in such circumstances because the purpose of the communication is not a privileged purpose, but an illegal object: Commissioner of Australian Federal Police v Propend Finance Pty Limited (1997) 188 CLR 501 at 546, 556.

151    Young J summarised the principle and circumstances in which it applies in Cole (No 5) (at [211] – [219]), in a manner which has been cited with apparent approval in many subsequent authorities, as follows:

211    The principle encompasses a wide species of fraud, criminal activity or actions taken for illegal or improper purposes: see North J’s review of the authorities in Clements at [35]-[44]. The scope of conduct caught by the principle has been articulated in a variety of ways, often without particular precision: Propend at 545. Classic formulations have spoken of communications in furtherance of a “crime or fraud”: R v Cox (1884) 14 QBD 153 at 165; a “criminal or unlawful proceeding”: Bullivant v Attorney-General (Vic) [1901] AC 196 at 201; “any unlawful or wicked act”: Annesley v Anglesea (1743) 17 State Tr 1139 at 1229; and “all forms of fraud and dishonesty such as fraudulent breach of trust, fraudulent conspiracy, trickery, and sham contrivances”: Crescent Farm (Sidcup) Sports Ltd v Sterling Offıces Ltd [1972] Ch 553 at 565. In Kearney, the High Court applied the principle to deny legal professional privilege to legal advice obtained by the Northern Territory Government which was prima facie a “deliberate abuse of statutory power” to defeat a land claim under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth). In his reasons for judgment, Gibbs CJ (with whom Mason and Brennan JJ agreed) stated at 515 that “legal professional privilege will be denied to a communication which is made for the purpose of frustrating the processes of the law itself, even though no crime or fraud is contemplated”. Some authorities have expressed the principle as applicable to prevent a “fraud on justice” in a broad sense. The concept of a “fraud on justice” was adopted by Lander J in Gartner v Carter [2004] FCA 258 to deny protection to a communication between a lawyer and client for the purpose of the client putting assets beyond the reach of the legitimate claims of secured creditors: at [130] and [139]-[140].

212    The principle extends to “trickery” and “shams”. A “sham” refers to steps which take the form of a legally effective transaction but which the parties intend should not have the apparent, or any, legal consequences: Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2005) 218 CLR 471; see also Beazley v Steinhardt (1999) 106 A Crim R 21; affirmed on appeal in Beazley v Steinhardt [1999] FCA 1255 (Beazley). The recent case of Australian Securities and Investments Commission v Mercorella (No 3) [2006] FCA 772 provides an example of the denial of legal professional privilege to documents in furtherance of a sham transaction. In that case, creditors of a managed investment scheme claimed privilege over documents relating to securities obtained from the defendant and certain companies in the scheme. The transactions were allegedly entered into so as to advance those creditors’ interests over the interests of other creditors to the scheme. Mansfield J found that the communications were prima facie in furtherance of a sham and, as such, were not privileged. After referring to Lander J’s decision in Gartner v Carter and Barclays Bank plc v Eustice [1995] 4 All ER 511, his Honour stated (at [95]):

It is a short step from those decisions to the present facts, as prima facie found. The [creditors] engaged in the transactions reflected in the Deed, and the granting of the securities within the structures it created, to secure or advance their interests over others who had advanced money to [the first defendant] or to the Scheme. There is a prima facie case that the “restructure” of the advances so that they appear as advances to the partnership of Ajay and Opey is a sham.

213    Mansfield J drew a distinction at [96]-[100] between communications to obtain advice in relation to what, if anything, could lawfully be done to improve the prospects of being repaid or of obtaining the interest to which the client was entitled (which were privileged), and communications which have the effect of concealing the true nature of a transaction and which enable a client to present a picture which is not true (which were not privileged).

214    Where a client is engaged in fraudulent conduct, communications with his or her lawyer in furtherance of the fraud are not privileged, regardless of whether the lawyer is a party to the fraud or not: Clements at [213]. The principle applies to communications passing between a client and lawyer where the lawyer is innocent of the fraud or improper purpose: R v Bell; Ex parte Lees (1980) 146 CLR 141 at 145. Further, the fraud need not be that of the client or the lawyer; it may be that of a third party: Capar v Commissioner of Police (1994) 34 NSWLR 715; R v Central Criminal Court; Ex parte Francis [1989] AC 346, cited with approval in Clements at 562-565 [217]-[218].

215    It is important to bear in mind that the fraud exception is based on public policy grounds. The principle is sufficiently flexible to capture a range of situations where the protection of confidential communications between lawyer and client would be contrary to the public interest: see Kearney at 514-515; R v Cox at 614. This aspect of the principle is reflected in the statement that “[t]he privilege takes flight if the relationship between lawyer and client is abused”: Clarke v United States of America (1933) 289 US 1 at 15; see also Kearney at 514 and 524.

216    In Barclays Bank, communications between the client and his lawyer in relation to the setting up of transactions at an undervalue so as to prejudice the bank were held to be “sufficiently iniquitous for public policy” to require those communications to be discoverable. Schiemann LJ (with whom Aldous and Butler-Sloss LJJ agreed) stated (at 524):

If that view be correct, then it matters not whether either the client or the solicitor shared that view. They may well have thought that the transactions would not fall to be set aside … either because they thought that the transactions were not at an undervalue or because they thought that the court would not find that the purpose of the transactions was to prejudice the bank. But if this is what they thought then there is a strong prima facie case that they were wrong. Public policy does not require the communications of those who misapprehend the law to be privileged in circumstances where no privilege attaches to those who correctly understand the situation.

217    For the principle to apply, there must be more than a mere assertion or allegation of fraud or impropriety: Bullivant at 201, 203 and 204-205. In Propend at 514, Brennan CJ expressed the test as being one of “reasonable grounds for believing” that the relevant communication was for an improper purpose. The requirement has also been described as one of a “prima facie case”: Butler v Board of Trade [1971] 1 Ch 680 at 689; cf Baker v Evans (1987) 77 ALR 565 at 574. In Kearney at 516, Gibbs CJ approved the test formulated in O’Rourke v Darbishire [1920] AC 581 at 604, namely that “there must be something to give colour to the charge”; “the statement must be made in clear and definite terms, and there must further be some prima facie evidence that it has some foundation in fact”. The High Court in Propend applied this test: at 514 per Brennan CJ, 521 per Dawson J, 534 per Toohey J, 546 per Gaudron J, 556 per McHugh J, and 592 per Kirby J.

218    It is not necessary to prove an improper purpose on the balance of probabilities. The “prima facie” test arguably reflects the fact that issues of legal professional privilege are usually dealt with in the interlocutory stages of a proceeding, but the authorities have not departed from that formulation where a declaration is sought in relation to privilege issues: Butler; Propend; Beazley. It must also be established, on the same prima facie basis, that the communication which is the subject of the claim for privilege was made in furtherance of, or as a step preparatory to, the commission of the fraud or wrongdoing. In Butler, Goff J found at 687 that a letter written by the plaintiff’s lawyer which volunteered a warning that the plaintiff may incur serious consequences if he did not take care was not shown to be “in preparation for or in furtherance of or as part of any criminal designs on the part of the plaintiff”: see also Zemanek v Commonwealth Bank of Australia (unreported, Federal Court, Hill J, 2 October 1997).

219    In Propend, the High Court considered whether a charge of improper purpose must be based on evidence that is admissible in the proceeding. The only evidence of alleged illegality before the trial judge in Propend was the sworn information which supported the issue of a search warrant for the relevant documents. The Court held that, while the sworn information was admissible to establish the basis upon which the warrant was issued, it was not admissible to show that the copy documents were not privileged: see at 514 per Brennan CJ, 557 per McHugh J, 576 per Gummow J, 547 per Gaudron J, and 593 per Kirby J.

Loss of legal professional privilege under the common law: ‘waiver’

152    Legal professional privilege is ‘waived’ if the client acts in a manner that is inconsistent with the preservation of the confidentiality of the communication: Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1 at [28] – [29].

Client legal privilege under the Evidence Act

153    The Evidence Act contains provisions that are in similar, but not identical, terms to the common law rules relating to legal profession privilege. The Evidence Act rules are referred to as ‘client legal privilege’ and the relevant provisions are in ss 117 – 126. These provisions are concerned with adducing evidence at a trial and not with pre-trial processes and procedures of the Court.

154    Section 118 contains the Evidence Act equivalent of advice privilege and relevantly provides that evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of:

(a)    a confidential communication made between the client and a lawyer; or

(b)    a confidential communication made between two or more lawyers acting for the client; or

(c)    the contents of a confidential document (whether delivered or not) prepared by the client, lawyer or another person;

for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client.

155    Although s 118 refers to ‘on objection by a client’, a lawyer may object to disclosure of confidential communications relating to legal advice or litigation on behalf of the client: e.g. Propend at 589. An 'agent' of the client may also object: s 117 of the Evidence Act (definition of client)

Evidence Act exceptions to client legal privilege

156    Section 125(1)(a) of the Evidence Act relevantly provides that evidence of a communication made by a client or lawyer (or both), or a party who is not represented in the proceeding by a lawyer, in furtherance of the commission of a fraud or an offence or the commission of an act that renders a person liable to a civil penalty is not prevented by s 118.

157    Mr Pigozzo submitted that the meaning of ‘fraud’ in s 125 is not limited to fraud in the narrow sense (i.e., requiring actual dishonesty), but relying on the judgment of Santow J (as his Honour then was) in Kang v Kwan [2001] NSWSC 698 (at [37]), ‘fraud’ extends to all forms of fraud and dishonesty such as fraudulent breach of trust, fraudulent conspiracies, trickery and sham contrivances as well as ‘the kind of sharp practice often associated with equitable fraud encompassed by the Shorter Oxford Dictionary sense of dishonesty, namely ‘lack of probity; disposition to deceive, defraud or steal’. There is conflicting authority concerning the extent to which ‘fraud’ in s 125 of the Evidence Act requires an element of actual dishonesty and is narrower than the common law ‘fraud exception’ which extends to wider notions of fraud and impropriety such as ‘trickery’ and ‘shams’ of the kind Young J referred to in Cole (No 5) at [212]. However, it is not necessary, in this case, to attempt to resolve the conflicting authority because the conduct alleged to fall within the ‘fraud exception’ of s 125 of the Evidence Act may, at least, be characterised as the ‘offence’ of contempt of court.

Loss of client legal privilege under the Evidence Act

158    Section 122(2) contains the Evidence Act equivalent of waiver of privilege and provides that the adducing of evidence is not prevented if the client or party concerned has acted in a way that is inconsistent with the client or party objecting to the adducing of the evidence because it would result in a disclosure of a kind referred to in section 118, 119 or 120.

159    The principles recognised in Mann v Carnell articulated in relation to waiver at common law, apply with equal force in relation to the statutory question posed by s 122(2) of the Evidence Act: Expense at [32].

Without prejudice privilege

Without prejudice privilege under the common law

160    At common law, communications genuinely aimed at negotiating a settlement of an existing dispute are prima facie confidential and subject to without prejudice privilege: Quad Consulting Pty Ltd v David R Bleakley & Associates Pty Ltd (1990) 27 FCR 86 at 89-90; Rodgers v Rodgers (1964) 114 CLR 608 at 614; Rush & Tompkins Ltd v Greater London Council [1989] AC 1280 at 1299-1300. It is a joint privilege that cannot be waived by one party unilaterally: Re Turf Enterprises Pty Ltd [1975] Qd R 266 at 267; Walker v Wilsher (1889) 23 QBD 335 at 337. Subject to certain exceptions, it operates to prevent disclosure of the without prejudice communication to third parties and to prevent them from being admitted into evidence: Oceanbulk Shipping SA v TMT Asia Ltd [2011] 1 AC 662 at [19] – [29]; Unilever Plc v The Procter & Gamble Co [2000] 1 WLR 2436 at 2441-2442, 2444-2446, 2448-2450; Rush & Tompkins at 1299-1301; Pihiga at [80] – [97].

161    The rationale for the common law without prejudice privilege is founded in the public interest in encouraging full and frank negotiations in connection with the settlement of disputes. Also, an express or implied agreement of the parties that communications between them are confidential and are not admissible in evidence if the negotiations do not lead to a settlement: Pihiga at [82] – [86]; Unilever at 2448-2449; Oceanbulk at [26] – [27].

Common law exceptions to without prejudice privilege

162    At common law, a person is not precluded from relying upon and giving evidence of a communication that is otherwise without prejudice if exclusion of the evidence would suppress a threat if an offer is not accepted or would act as a cloak for perjury, blackmail or other unambiguous impropriety: Rush & Tompkins at 1300; Unilever at 2444.

Without prejudice privilege under the Evidence Act

163    Subject to certain exceptions, evidence in proceedings in this Court is not to be adduced of a communication that is made between persons in dispute, or between one or more persons in dispute and a third party, in connection with an attempt to negotiate a settlement of the dispute: s 131(1)(a) of the Evidence Act.

Evidence Act exceptions to without prejudice privilege

164    The exceptions to inadmissibility of communications under s 131(1)(a) of the Evidence Act include: making a communication that affects a right of a person: s 131(2)(i); and communications made in furtherance of the commission of a fraud or an act that renders a person liable to civil penalty: s 131(2)(j).

165    Fraud has the same meaning in s 131(2)(j) as it has in s 125: Van Der Lee v New South Wales [2002] NSWCA 268 at [61]. Again, it is unnecessary to resolve the conflicting authorities concerning the meaning of ‘fraud’ in s 125 because the communications alleged to fall within the exception in s 131(2)(j) is an alleged contravention of s 343 of the FW Act. Such a communication is arguably a communication in furtherance of an act that would render a person liable to a civil penalty within the meaning of the exception in s 131(2)(j): Evidence Act, Dictionary Part 2, Item 3; Fair Work Act, s 539(2), Item 11, s 546. A communication made in contravention of s 343 of the FW Act would also arguably be a communication affecting the right of a person to negotiate without being subject to coercion and, thereby, fall within the exception in s 131(2)(i) of the Evidence Act: Pihiga at [126] – [127]. Additionally, for the purposes of the pleading, a communication made in contravention of s 343 of the FW Act arguably falls within the ‘threat’ or ‘unambiguous impropriety’ common law exceptions.

Approach to objections to the statement of claim founded on ‘privilege’

166    While paras 28, 35 and 102 will be struck out on different grounds, as MRL and Mr Ellison have sought orders that would have the effect of suppressing publication of the matters pleaded in paras 28, 35 and 102 of the statement of claim on the ground that these allegations should be struck out as scandalous, frivolous or vexatious, or as an abuse of process, it is necessary to consider if these paragraphs should be struck out on one or more of those grounds as a precondition to any orders restricting inspection or for an injunction, or for suppression or non-publication in respect of the statement of claim.

167    There was no affidavit evidence on the application as to the circumstances in which any communications of the kind pleaded in para 28 and 35 took place. Therefore, there was no affidavit evidence before the Court from which a finding could be made, even in a preliminary manner, as to whether: (1) the pleaded conversations took place; (2) the dominant purpose of the communications were for giving or obtaining legal advice or services; or (3) the purpose of the communications were for furthering an illegal purpose. However, there was affidavit evidence upon which Mr Pigozzo relied to submit that, if the communications pleaded at paras 28 and 35 were confidential and privileged, MRL and Mr Ellison had waived that privilege.

168    There was also no affidavit evidence as to the circumstances in which the communication of the kind pleaded in para 102 took place. Again, there was no affidavit evidence before the Court from which a finding could be made as to whether: (1) the pleaded conversations took place; (2) the conversations were for the genuine purpose of negotiating the resolution of a dispute; or (3) the purpose of the communications was for furthering an illegal purpose. However, there was affidavit evidence before the Court that there was a mediation conference between Mr Pigozzo, on the one hand, and MRL and Mr Ellison, on the other, and of a written mediation agreement. That mediation agreement contains express provisions dealing with confidentiality and privilege.

169    Although evidence may be, and often is, adduced in support of an application to strike out a pleading or proceeding on the ground of abuse of process, it is not necessary for an abuse of process to be proven by admissible evidence. An abuse of process may be manifest on the face of a pleading or other document filed in the Court. As noted earlier in these reasons, a document that ‘contains matter that is scandalous, vexatious or oppressive’ may be struck out of the document: r 6.01(b) of the Rules. Likewise, a pleading that ‘contains’ scandalous, frivolous or vexatious material or that is ‘otherwise’ an abuse of the process of the Court may be struck out in whole or in part: rr 16.21(1)(a) – (b), (f) of the Rules. There is significant overlap of the grounds for striking out under r 16.21(1)(a) (contains scandalous material), r 16.21(1)(b) (contains frivolous or vexatious material) and r 16.21(1)(f) (otherwise an abuse of process). A pleading that contains material that is scandalous and (or) frivolous or vexatious may also contain material that manifests an abuse of the process of the Court. Thus, the Court may strike out a pleading or proceeding as an abuse of process without evidence of the abuse: e.g., Manolakis at [3] - [5] and [28]; Hodson (alleged defamation pleaded in circumstances of absolute privilege).

170    Accepting the material facts and particulars pleaded to be true, a pleading may be one or more of frivolous, vexatious, oppressive or otherwise an abuse of process if it contains allegations founded on communications that prima facie the pleading party has no right to disclose and a duty to keep confidential and to which legal professional privilege or without prejudice privilege attach. Permitting such a pleading to stand would bring the administration of justice into disrepute in that the Court would be permitting a party that is prima facie in breach of a duty of confidence to take advantage of its own wrong. That abuse is all the more acute where the information is also privileged.

171    The rationale of legal professional privilege (or client legal privilege) has been explained in a number of High Court authorities. In essence, the ‘privilege exists to serve the public interest in the administration of justice by encouraging full and frank disclosure by clients to their lawyers’: Esso at [35]. The rationale of without prejudice privilege has also been explained in many authorities. Again, the privilege exists to serve the public interest in the administration of justice in promoting the settlement of disputes without calling in aide the courts: Pihiga at [86]; Reynolds v JP Morgan Administrative Services Australia Limited (No 2) [2011] FCA 489; (2011) 193 FCR 507 at [30]. The public interest in the administration of justice for which the privileges exist would be undermined if a pleading were permitted to disclose, without justification, communications that are prima facie confidential and privileged.

172    Further, if prima facie confidential and privileged communications were pleaded against a party who is not the client (the holder of the privilege), the non-client party would not, without the consent of the client, be able to admit or plead a positive case in answer to such allegations: e.g. Arnold Bloch Leibler (A Firm) v Slater & Gordon Limited [2020] FCA 1496 at [1], [4], [57] - [60], [69], [74] and [110]. Similarly, if prima facie confidential and privileged communications were pleaded against the client (the holder of the privilege), the client (and a party who had not put the communications in issue) may have no real choice but to plead and, thereby, disclose confidential and privileged communications to answer the case against it. Each of these circumstances may meet the description of ‘unjustifiable oppression’ or ‘bringing the administration of justice into disrepute’.

173    On the other hand, in the absence of evidence and accepting the pleaded facts to be true, if the material facts and particulars disclose a cause of action or defence founded on communications between a client and lawyer or between parties to a dispute that prima facie fall within an ‘exception’ to the privilege, then the pleading would not contain material that is manifestly frivolous, vexatious, oppressive or otherwise an abuse of process. In the absence of evidence, the pleading or proceeding would not be liable to be struck out on those grounds. Likewise, if there were evidence that any privilege attaching to the pleaded communications has been ‘waived’, while the pleading may not plead a prima facie entitlement to rely on the communications, the evidence would establish such an entitlement and, therefore, pleading the facts would not amount to an evident abuse of process.

174    It follows that there are three questions for consideration on the strike out application regarding paras 28, 35 and 102 of the statement of claim.

(1)    Accepting the pleaded facts to be true, were the communications pleaded in paras 28, 35 and 102 evidently made in circumstances in which, absent any other facts, the communications would confidential and privileged?

(2)    If so, accepting the pleaded fact to be true, were the communications pleaded in paras 28, 35 and 102 evidence made in circumstances falling within an ‘exception’ to confidentiality and privilege?

(3)    If not, has Mr Pigozzo demonstrated that any legal professional privilege attached to the substance of the communications pleaded in paras 28 and 35 has been waived?

Are the allegations prima facie confidential and privileged or within an ‘exception’?

Paragraphs 28 and 35

175    The material facts pleaded in paras 24 – 27 are to the effect that Mr Rushton was the in-house counsel of MRL and Mr Ellison. Mr Ellison and Mr Rushton instructed Mr Pigozzo to perform work in relation to the Hamptons proceedings. Mr Rushton instructed Mr Pigozzo to perform a specific task in relation to the Hamptons proceedings and Mr Pigozzo performed that specific task. Paragraph 28 pleads a communication in which Mr Pigozzo conveyed information to Mr Rushton about the specific task he had performed and in which Mr Pigozzo expressed opinions about that information and its implications for the Hamptons proceedings.

176    From the facts pleaded in paragraphs 26, 33 and 35 it is evident that the specific task that Mr Pigozzo was instructed to perform was for the purpose of obtaining legal advice from Bennett & Co in connection with the Hamptons proceedings. In the context of the facts pleaded in paras 24 – 28, 33 and 35, there is little room to doubt that the dominant, if not the sole, purpose of Mr Rushton’s instruction to Mr Pigozzo pleaded in para 26 and Mr Pigozzo’s communications with Mr Rushton pleaded in para 28 was to obtain legal advice from Bennett & Co in respect of the Hamptons proceedings. The matters pleaded in paras 26, 27 and 28 form part of communications that on the face of the pleading were for the dominant purpose of obtaining legal advice from Bennett & Co in relation to the Hamptons proceedings. In the absence of any other pleaded material facts, these paragraphs contain allegations of communications that are prima facie confidential and subject to legal professional privilege.

177    Paragraph 29 pleads the substance of communications between Mr Pigozzo, Mr Rushton and Mr Ellison. The evident purpose of the communication was to convey to Mr Ellison information in connection with the Hamptons proceedings and Mr Pigozzo’s opinions about that information. These communications are in the nature of subordinates reporting on the work performed to a superior. Given the specific instruction Mr Rushton gave to Mr Pigozzo and the manifest purpose of that instruction, the communications pleaded in para 29 have the same character as the communications in para 28. Therefore, the communications pleaded in para 29 are also prima facie confidential and privileged and were for the dominant purpose of obtaining legal advice from Bennett & Co in relation to the Hamptons proceedings.

178    Paragraphs 30 and 31 fall into a different category. Although para 30 suffers from the problem of evasiveness and ambiguity referred to earlier in these reasons, it is evident that it is the form of an instruction from Mr Ellison to Mr Pigozzo. While the precise nature of the instruction is not clear from the pleading, on the facts pleaded it is not evident that it was an instruction made for the purpose of obtaining legal advice from Bennett & Co. Given what is pleaded in para 31, it appears to be characterised as both an instruction to Mr Pigozzo and implicitly a request for legal advice from Mr Rushton as the in-house legal counsel. From what is pleaded in para 31, it is alleged that Mr Rushton declined to give any legal advice in connection with the ‘instruction’ albeit that the nature of the instruction pleaded is unclear, vague and ambiguous and, for that reason, para 30 should be struck-out. In any event, it is not obvious that paras 30 and 31 plead communications that are prima facie confidential and privileged.

179    Paragraph 35 pleads communications that are prima facie confidential and privileged. The first sentence of the paragraph pleads the evident purpose of the meeting between Mr Pigozzo and Mr Bennett. Accepting the pleaded facts as true, it was manifestly a meeting for the purpose of obtaining from Mr Bennett and Mr Bennett giving legal advice in relation to the Hamptons proceedings. The pleaded substance of the communications confirms that was the purpose of the communications. There are two aspects of the communications. The first deals with the specific task Mr Pigozzo was instructed to perform and the manner in which he had performed it. The second deals with opinions Mr Pigozzo expressed about information and the Hamptons proceedings. Each aspect involves an implicit request or need for legal advice from Mr Bennett.

180    As noted earlier in these reasons, there is no affidavit evidence from which the Court could be satisfied that the pleaded communications took place or that there are reasonable grounds to conclude that the purpose of the communications falls within an ‘exception’ to legal professional privilege (or client legal privilege). Mr Pigozzo submitted that it was not appropriate for him to give evidence of these matters on an interlocutory application. Otherwise, Mr Pigozzo submitted that the basis for displacement of privilege was clear on the face of the pleading including the reference to ‘contempt of court’. It was also submitted that the statement of claim alleges that Mr Ellison acted dishonestly in directing Mr Pigozzo to act dishonestly and that, by not intervening, Bennett & Co was complicit in that dishonesty.

181    As set out earlier in these reasons, the allegations of non-compliance with court orders and unlawfulness are vague, general, evasive and (or) ambiguous. The allegations, as pleaded, do not identify with any degree of precision a ‘direction’ from Mr Ellison to Mr Pigozzo to engage in improper or dishonest conduct. The communications pleaded in paras 28 and 29 do not involve any allegations of any person requesting advice or communicating for the purpose of obtaining advice to engage in any improper or dishonest conduct. The communications pleaded in para 35, to the extent these concern conduct that may be characterised as improper, are in the nature of Mr Pigozzo informing Mr Bennett of Mr Pigozzo’s historical conduct. That is, something that Mr Pigozzo has done. That conduct was performed before the communications with Mr Bennett. What, if anything, Mr Bennett or other solicitors of Bennett & Co are alleged to have done with that information so as to further or involve himself or themselves in Mr Pigozzo’s conduct is not pleaded.

182    The material facts and particulars, pleaded in the statement of claim, have not raised an arguable claim that the communications between Mr Pigozzo and Mr Rushton pleaded in para 28, between Mr Pigozzo, Mr Rushton and Mr Ellison pleaded in para 29 and between Mr Pigozzo and Mr Bennett pleaded in para 35 were for the purpose of furthering the commission of a fraud, or an offence, or an act that renders a person liable to a civil penalty. Therefore, the communications pleaded in paras 26 – 29 and 35 are prima facie confidential and subject to legal professional privilege.

183    At this point it is necessary to make the obvious observation that the ‘client’ who is prima facie entitled to assert the privilege and to complain of misuse of confidential information is not MRL or Mr Ellison, but CSI. It is CSI which is alleged in paras 24 and 25 of the statement of claim to have been the company involved in the Hamptons proceedings. CSI is not a party to these proceedings and it is not CSI which is asserting the privilege.

184    Paragraph 5 of the statement of claim pleads that Mr Ellison is, and all material times was, Managing Director of MRL and the founding shareholder of three subsidiary companies of MRL including CSI. It is not pleaded that Mr Ellison was a director, officer or other agent of CSI. Likewise, it is not pleaded that Mr Rushton was ‘in-house counsel’ for CSI. Nonetheless, taking the pleas in para 5 with those in paras 24 – 36, the pleading discloses facts to the effect that Mr Rushton, as an employee and in-house counsel of MRL, was providing legal and other services to CSI in connection with the Hamptons proceedings. Similarly, Mr Pigozzo, as an employee of MRL, was providing services to CSI in connection with the Hamptons proceedings. It is to be inferred from the pleaded facts that MRL (as parent) provided corporate services to CSI (as subsidiary) in connection with the Hamptons proceedings. MRL was an agent of CSI for that purpose. Employees of MRL were sub-agents of CSI for that purpose. The sub-agents included Mr Ellison, Mr Rushton and Mr Pigozzo.

185    In the circumstances pleaded in paras 5 and 24 – 29 of the statement of claim, each of Mr Pigozzo, Mr Ellison, Mr Rushton and MRL owed a duty of confidence to CSI. Further, it is only CSI that is entitled to consent to disclosure of the communications or waive the privilege that attaches to the communications involving its agents that were made for the dominant purpose of obtaining legal advice in relation to the Hamptons proceedings. For similar reasons, Mr Pigozzo and Mr Bennett owed a duty of confidence to CSI. It is only CSI that is entitled to consent to disclosure of the communications or waive the privilege that attaches to the communications made for the dominant purpose of obtaining or giving legal advice in relation to the Hamptons proceedings.

186    Accepting the pleaded facts to be true, without the consent of CSI, none of Mr Pigozzo, MRL, Mr Ellison, Mr Rushton, Mr Bennett or Bennett & Co is entitled to plead the substance of the communications alleged at paras 26, 27, 28, 29 and 35 of the statement of claim. However, a lawyer or an agent of the ‘client’ or person entitled to assert legal professional privilege (or client legal privilege) may object to evidence of a privileged communication. Further, MRL, Mr Ellison and Bennett & Co, on the pleaded facts, are vexed or unjustifiably oppressed by allegations made in evident breach of a duty of confidence to which, absent consent none of them can plead positively to the allegations without also breaching a duty of confidence owed to CSI. Furthermore, even without specific complaint, the Court may act on its own motion and strike out all or part of a document filed in the Court which contains material that is manifestly an abuse of the Court’s process. Thus, subject to the issue of waiver of privilege, paras 26, 27, 28, 29 and 35 of the statement of claim should be struck-out as an abuse of process.

Paragraph 102

187    Paragraph 102 pleads that on ‘2 May 2022, [Mr Pigozzo] attended a confidential mediation before mediator, Rene Le Miere QC.’ Paragraphs 76 – 100 of the statement of claim plead facts that concern the termination of Mr Pigozzo’s employment with MRL and the existence of a dispute or disputes between Mr Pigozzo and MRL relating to the circumstance of his termination. Paragraph 101 pleads that on 2 February 2022, Mr Gavranich contacted Mr Pigozzo ‘in order to arrange a meeting between [Mr Pigozzo] and [Mr Ellison] to resolve the issues between them’.

188    Accepting the facts as pleaded as true, the pleaded factual context of the ‘confidential mediation’ pleaded in para 102 indicates that the mediation was for the purpose of negotiating to resolve a dispute or disputes between MRL and Mr Pigozzo. On the pleaded facts, the communications pleaded in para 102 formed part of without prejudice communications.

189    Separately, a copy of a mediation agreement was exhibit NJP-1 to the Parkinson affidavit. The parties to that agreement were Mr Pigozzo, MRL and Mr Ellison. Clause 21 of that agreement made provision for each party to ensure that any person attending the mediation on behalf of that party signed a confidentiality agreement in a form attached to the agreement as a condition of the person attending the mediation. Copies of confidentiality agreements signed by Mr Ellison and two others form part of exhibit NJP-1. Confidentiality agreements signed by Mr Pigozzo and his representatives form part of exhibits NJP-3 and NJP-2 to Mr Parkinson’s affidavit.

190    Clause 1 of the mediation agreement identifies the dispute that is the subject of the mediation as two legal proceedings in which Mr Pigozzo is the applicant and MRL and others are the respondents and ‘any claims contemplated by MRL as set out in the letter from Bennett & Co dated 20 January 2022’. A letter from Bennett & Co to Harmers Workplace Lawyers (Mr Pigozzo’s solicitors in these proceedings) is exhibit TAC-2 to the Coltrona affidavit. That letter asserts that an investigation was undertaken into certain dealings in which Mr Pigozzo was involved. Further, as a consequence of that investigation, MRL (through its Chief Financial Officer) had formed the view that Mr Pigozzo was in breach of the terms of the Code of Conduct, his employment contract and common law duties owed to MRL. And, MRL summarily dismissed Mr Pigozzo. The letter asserted that the investigation was ongoing and that MRL was considering referring Mr Pigozzo’s conduct to the Western Australian Police Force and commencing proceedings against Mr Pigozzo in the Supreme Court of Western Australia.

191    Clauses 19 and 23 of the mediation agreement are in the following terms:

Confidentiality of the Mediation

19.    The Parties and the Mediator will not disclose any information or documents disclosed or provided to them in the course of or for the purposes of the mediation to anyone not involved in the mediation unless:

(a)    authorised by the disclosing Party to do so; or

(b)    in accordance with a requirement imposed by or under a law of the State or the Commonwealth.

…

Privilege

23.    Subject to this agreement and any legal obligation, any admission, concession, proposal or other statement or document made, prepared or disclosed in connection with the mediation other than a binding settlement will:

(a)    be "without prejudice";

(b)    retain the benefit of any privilege, including legal professional privilege, that would otherwise have applied; and

(c)    not be disclosed in or relied upon or be the subject of a subpoena to give evidence or to produce documents in any arbitral or judicial proceedings.

192    On the face of the allegations pleaded in para 102 of the statement of claim, they would be confidential and fall within the privilege provision of the mediation agreement. However, neither MRL nor Mr Ellison appears to rely on the terms of the mediation agreement for that purpose. The formal submission and objection of MRL and Mr Ellison to para 102 of the statement of claim is that there is a conceptual difficulty with the alleged Mediation Threat in that the Mediation Threat was a statement ‘directly referable to the very claim being mediated’. It is submitted that it is difficult to understand how such a statement could fairly fall within s 343 of the FW Act. That is, MRL and Mr Ellison appear to rely on evidence of the subject matter of the mediation agreement to contest the factual foundation for the plea that the Mediation Threat comprised ‘intent to coerce’. However, for the purposes of a strike-out application, the facts pleaded in para 102 are not open to challenge on that ground.

193    It follows that it does not appear that MRL and Mr Ellison:

(a)    rely on the affidavits of Mr Parkinson and Mr Coltrona as evidence in support of the objection to paras 102 and 130(e) on the ground of abuse of process; or

(b)    contend that the statements pleaded in para 102 are not able to be pleaded in the proceedings because they fall within the scope of the express terms of the confidentiality and privilege provisions of the mediation agreement.

Nonetheless, it is unnecessary for MRL and Mr Ellison to rely on the mediation agreement in support of their submission that the communications pleaded in para 102 involve an abuse of process because, as already noted earlier in these reasons, accepting the pleaded facts as true and in the absence of any other pleaded facts, the communications are implicitly confidential and subject to without prejudice privilege.

194    A communication made in contravention of s 343 of the FW Act would arguably fall within the ‘threat’ or ‘unambiguous impropriety’ common law exceptions. A communication made in contravention of s 343 of the FW Act would arguably be a communication affecting the right of a person to negotiate without being subject to coercion and, thereby, fall within the exception in s 131(2)(i) of the Evidence Act: Pihiga at [126] – [127]. Such a communication would also arguably fall within the wider meaning of ‘furtherance of the commission of a fraud’ and the exception in s 131(2)(j).

195    Notwithstanding that a communication in contravention of s 343 of the FW Act may fall within an exception, paras 102 and 130(e) should also be struck out on the ground that these are vexatious or an abuse of process. For the reasons already given, the statement of claim has not disclosed a reasonable cause of action for contravention of s 343 of the FW Act. Thus, no or insufficient facts are pleaded of reasonably arguable grounds that the without prejudice communications fall within a common law or statutory exception to inadmissibility of evidence of those communications.

Has there been a waiver of legal professional privilege?

196    Mr Pigozzo made submissions to the effect that, if legal professional privilege attached to the communications pleaded in paras 28 and 35, MRL has waived the privilege. The waiver was said to arise from MRL communicating to the publishers of the AFR and The West, in effect, that the allegations in the statement of claim were denied. The consequence of any ‘waiver’ is that the communication is no longer subject to the duty of confidentiality and may be disclosed or used to found the allegations in the statement of claim.

197    The relevant affidavit evidence filed and read on the applications was to the following effect.

(1)    Mr Pigozzo filed general protection applications in the Fair Work Commission on 23 December 2021 and 7 February 2022. There were conciliation conferences in respect of those applications in the Fair Work Commission on 24 February 2022, 15 March 2022 and 10 May 2022.

(2)    On 2 May 2022, there was a private mediation concerning disputes between Mr Pigozzo, on the one hand, and MRL and Mr Ellison, on the other hand.

(3)    On 20 May 2022, Mr Pigozzo’s lawyers sent MRL and Mr Ellison’s lawyers emails in which Mr Pigozzo evinced an intention to commence the current proceedings in the Court.

(4)    On 30 May 2022, MRL and Mr Ellison terminated the private mediation. On the same day, MRL commenced separate proceedings in the Court against Mr Pigozzo (WAD 101 of 2022).

(5)    On 31 May 2022, Mr Pigozzo’s lawyers received a telephone enquiry from a journalist from The West in respect of an article concerning WAD 101 of 2022. In response to that enquiry, a media agent representing Mr Pigozzo issued a media release. On the same day, articles were published on The West and WA Business News websites concerning WAD 101 of 2022.

(6)    On 1 June 2022, Mr Pigozzo filed an originating application and the statement of claim in these proceedings (WAD 103 of 2022). The Court records indicate that these documents were lodged electronically for filing at 12.22pm on 1 June 2022.

(7)    On 1 June 2022, after the originating application and statement of claim were filed, Mr Pigozzo’s media agent issued a further media release. The media release contains allegations to the same or similar effect as the allegations contained in paras 28 – 36 of the statement of claim. The allegations pleaded in paragraph 102 are not contained in the media release. After issuing the media release the media agent was contacted by journalists from The West and the AFR who requested a copy of the statement of claim. The media agent provided them with a copy of the statement of claim.

(8)    On 1 June 2022, a copy of the originating process and statement of claim was sent to MRL and Mr Ellison's lawyers by an email from Mr Pigozzo’s lawyers recorded to have been sent at 12.43pm.

(9)    On 1 June 2022, at around 2.00pm a journalist at The West sent a copy of Mr Pigozzo’s media release to MRL’s media consultant.

(10)    On 1 June 2022, MRL and Mr Ellison made the application to restrict inspection of the statement of claim. That application was supported by the Parkinson affidavit. That affidavit exhibited a copy of Mr Pigozzo’s media release of 1 June 2022. The Court records indicate that the application and affidavit were lodged electronically for filing at 3.38pm. The application was listed for an urgent inter-parties before me that afternoon. The hearing commenced at 5.25pm on 1 June 2022.

(11)    On 1 June 2022, at 4.25pm MRL and Mr Ellison's lawyers sent an email to a journalist at The West attaching a letter. The letter said, amongst other things:

…

The Media Release contains confidential and privileged information that ought not to have been disclosed.

The publication of the Media Release may give rise to various causes of action to various individuals, causing substantial damage to our client, as well as to Bennett+Co itself, among others. Republication of the contents of the Media Release may exacerbate that damage.

In these circumstances, we demand that your organisation, its agents and employees:

•    Not publish any information contained in the Media Release; and

•    If relevant, immediately remove any publication of the information contained in the Media Release from the internet, or cancel any scheduled publication in any other media.

(12)    On 1 June 2022, an article was published on the AFR website at 4.57pm. The article published allegations to the same or similar effect as parts of the allegations pleaded in paras 27 – 33 and 102 of the statement of claim. The allegations in para 35 were not published and not all allegations in paras 27 – 33 and 102 were published. The article reported that MRL had said ‘many of the unsubstantiated and highly defamatory comments by Pigozzo in his statement of claim are entirely baseless’, ‘Mineral Resources will make an immediate application to strike out many parts of the statement of claim’ and ‘Mineral Resources is confident in its legal position and looks forward to the Federal Court process running its course. In the meantime, it would be inappropriate to comment further.’

(13)    On 1 June 2022, an article was also published on The West website at 5.21pm. The West published the same article in its printed newspaper on 2 June 2022. The article does not publish any details of the allegations in the media release or statement of claim. The article reported that a representative of Bennett & Co had said in a letter to The West that the media release ‘contains confidential and privileged information that ought not to have been disclosed’, MRL ‘would ask the Federal Court to strike out may parts of [the] statement of claim’ and ‘Mineral Resources is confident in its legal position and looks forward to the Federal Court process running its course’.

(14)    At some time on 1 June 2022 before publication of the articles, The West and the AFR approached MRL for comment on certain of the allegations in Mr Pigozzo’s media release. The West and the AFR received a response from MRL’s media consultant in the terms quoted in the articles. That response was provided before the hearing commenced on 1 June 2022.

(15)    On 2 June 2022, another article was published on The West website at 12.20pm. The information published in that article suggested that the author had a copy of the statement of claim, but had refrained from publishing details of the contents of it.

(16)    On 3 June 2022, another article was published on The West website at 2.31pm. Again, the information published in that article suggested that the author had a copy of the statement of claim, but had refrained from publishing details of the contents of it having regard to the orders of the Court made on 1 June 2022.

(17)    On 7 June 2022, MRL and Mr Ellison made the application to strike out the statement of claim. On 8 June 2022, another article was published on The West website at 4.59pm. That article largely reported on the application to strike out the statement of claim.

(18)    On 8 June 2022, MRL and Mr Ellison made the application for an interim injunction and non-publication orders. The Court records indicate that the application and supporting affidavit were file at 4.52pm. The application was listed for an urgent inter-partes hearing on 8 June 2022. That hearing commenced at 6.25pm.

(19)    On 9 June 2022, another article was published on The West website at 1.45pm. It largely reported on the outcome of the initial hearing of the application for an interim injunction and non-publication orders. On 10 June 2022, The West published that article in its printed newspaper.

(20)    After the hearing on 1 June 2022, the lawyers for MRL and Mr Ellison and the lawyers for Mr Pigozzo exchanged a good deal of email correspondence. Most of these communications are of no relevance.

198    Mr Pigozzo made submissions to the effect that because MRL had provided responses to Mr Pigozzo’s media release of 1 June 2022 to The West and the AFR it had laid open the communications pleaded in paras 28 and 35 to scrutiny. That is, through the act of commenting on the allegations without, in the case of the AFR, objecting to publication on the grounds of confidentiality and privilege, Mr Pigozzo submitted that MRL had acted inconsistently with maintaining the confidentiality and privilege. At one point Mr Pigozzo also appeared to submit that MRL’s failure to apply for an injunction to restrain the AFR from publishing the article was also inconsistent with maintaining the confidentiality and privilege of the communications. There is no merit in any of Mr Pigozzo’s submissions in regard to 'waiver'.

199    Mr Pigozzo disclosed communications which, accepting the pleaded facts to be true, are prima facie confidential and privileged. That is, on the face of Mr Pigozzo’s pleading it is founded on a prima facie misuse of confidential information and breach of a duty of confidentiality. The statements attributed to MRL in the AFR article are that MRL had said ‘many of the unsubstantiated and highly defamatory comments by Mr Pigozzo in his statement of claim are entirely baseless’ and MRL would make an immediate application to strike out many parts of the statement of claim. By those statements MRL has not disclosed any confidential communications nor has it sought to rely on them for any purpose. The statement does not identify which of the statements are ‘baseless’, but, in any event, in substance, it is a denial of the allegations. A denial does not ‘lay open’ communications. The statements attributed to MRL as a whole convey an intention to contest the allegations and to challenge the statement of claim. There is no ‘engagement’ with substance of the allegations, commentary upon them or disclosure of MRL’s version of events. Indeed, MRL is reported to have said that ‘it would be inappropriate to comment further’ while the proceedings were pending. The statements attributed to MRL and reported in the AFR article are not inconsistent with maintaining confidentiality and privilege of the communications pleaded in the statement of claim.

200    Otherwise, the conduct of MRL is consistent, not inconsistent, with maintaining the confidentiality and privilege of the pleaded communications. Within two hours of MRL’s media consultant receiving a copy of the media release, an application was made to the Court for the purpose of preventing disclosure and publication of the statement of claim. Before the hearing of that application, a communication was sent to at least one journalist asserting, amongst other things, that the material in the statement of claim was privileged. An application to strike out the statement of claim because, amongst other reasons, it pleaded privileged communications was foreshadowed at the hearing on 1 June 2022. Within a week, that application was made on that ground and an application for an interim injunction and non-publication order was made.

201    Putting to one side the absence of any conduct on the part of MRL that is inconsistent with maintaining the confidentiality and privilege of the pleaded communications, none of the so-called inconsistent conduct is attributed to CSI. As noted earlier in these reasons, prima facie CSI was the client and holder of the privilege. It is only CSI that could ‘waive’ the privilege. It is not submitted that CSI has done so and there was no evidence to the effect that CSI had taken any steps to ‘waive’ the privilege. Above all else, that is fatal to Mr Pigozzo’s submissions.

202    The evidence does not establish that CSI (or MRL or Mr Ellison) acted inconsistently with and ‘waived’ any legal professional privilege or client legal privilege that attached to any communications of the nature of those pleaded in paras 28 and 35 of the statement of claim.

Paragraphs 26 - 29, 35 and 102 struck out

203    It follows from the above that, while paras 28, 35 and 102 are to be struck out on other grounds, these paragraphs should also be struck out under r 16.21(1)(b) (frivolous or vexatious) and r 16.21(1)(f) (abuse of process). Further, although the written and oral submissions of MRL and Mr Ellison were not directed to paras 26, 27 and 29, for the reasons set out above, the communications pleaded in these paragraphs form part of the communications that are prima facie confidential and privileged and should also be struck out as vexatious and an abuse of process on that ground.

Does the administration of justice require restraint, suppression or non-publication?

204    Courts act on evidence, not on assertions: e.g., Amalgamated Television Services Pty Ltd v Marsden [2002] NSWCA 419 at [1406]; Aquatic Air Pty Limited v Siewert (No 3) [2018] NSWSC 624 at [13]. Material facts and particulars alleged in a pleading are mere assertion. While there is a certificate of a lawyer, the facts contained in pleadings before the Court are not verified by oath or affirmation. The facts and particulars pleaded are not admissions: e.g., Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 at 85-86, 98; Berry v CCL Secure Pty Ltd [2017] FCA 1546 at [200].

205    As noted earlier in these reasons, there is no affidavit evidence before the Court from which findings could be made that the communications pleaded in paras 26 – 29, 35 and 102 took place and, if so, that these communications were confidential and subject to legal professional privilege or without prejudice privilege. Therefore, there is no evidence from which findings of fact could be made that would support the Court granting injunctive relief to restrain an actual or threatened breach of confidence. Accordingly, the order for the interim injunction restraining Mr Pigozzo from disclosing the substance, purport or contents of the communications pleaded in paras 28, 35 and 102 granted on 8 June 2022 and varied on 13 June 2022 will be dissolved. Likewise, the order prohibiting the disclosure or publication of the substance, purport or contents of the communications pleaded in paras 28, 35 and 102 granted on 13 June 2022 will be dissolved.

206    Nonetheless, paras 26 – 29, 35 and 102 will be struck out as an abuse of the process of the court. As noted earlier in these reasons, accepting the pleaded facts as true, the statement of claim is founded on misuse of confidential information that is subject to legal professional privilege and without prejudice privilege. To permit such a pleading to stand, and prima facie confidential and privileged communications to be published, reported and widely distributed risks undermining the public interest in the administration of justice that underpins the common law right of legal professional privilege and the rationale of without prejudice privilege.

207    Further, the paragraphs contain assertions of serious impropriety that are pleaded at such a level of generality and ambiguity that the allegations may properly be regarded as containing scandalous material. As a matter of fairness and due process, a party should not be obliged to defend any legal proceedings, for any period, involving unspecified causes of action based on generalised allegations of dishonesty or impropriety: Oldfield at [41]. In White Industries (Qld) Pty Ltd v Flower and Hart (a Firm) [1998] FCA 806; (1998) 156 ALR 169, in the context of a submission that a legal firm should pay costs because it delivered a statement of claim alleging fraud in circumstances where there was no factual foundation for making that allegation, Goldberg J made the following observations (at 241-242) concerning the making of allegations of fraud which are equally applicable to any allegation of serious misconduct:

… The principle of law upon which this [submission] is based is rooted in the serious consequences of an allegation of fraud which should not be made lightly. The relevant obligation cast upon legal practitioners in pleading fraud was identified by the New South Wales Court of Appeal in Minister Administering the Crown Lands (Consolidation) Act and Western Lands Act v Tweed Byron Aboriginal Land Council (1990) 71 LGRA 201 in the following terms (at 203-4):

In the pleading of fraud, some requirements of the law are clear beyond argument. These requirements are not only rules of pleading and practice established by decisions of the courts. They are rules of ethical conduct binding on members of the legal profession. It is a serious matter to allege fraud against a party in pleadings to which attach the privileges incidental to court proceedings. Reports of such allegations may be recounted in the community and through the public media. They may do great harm to a party before a word of evidence has been offered and submitted to the searching scrutiny of cross-examination or to rebuttal. It is for this reason, among others, that legal practitioners must take care to have specific instructions and an appropriate evidentiary foundation, direct or inferred, for alleging and pleading fraud. We say inferred, because it will sometimes be impossible to prove fraud by direct evidence. The tribunal of fact may be invited to draw an irresistible inference of fraud from the facts proved. Of its nature, fraud is often perpetrated covertly. The perpetrators of fraud will often take pains to cover their tracks.

The Court went on to say:

Professional discipline may follow if allegations of fraud are made where the foregoing conditions are not satisfied. By such means, courts protect their process from the abuse which would follow from the too ready assertion of fraud against a party, in circumstances where it could not be proved to the high standard required of such allegations: cf Briginshaw v Briginshaw (1938) 60 CLR 336 at 362 and Panama and South Pacific Telegraph Co v India Rubber, Gutta Percha and Telegraph Works Co (1875) 10 Ch App 515 at 530.

The court also observed that behind the principle relating to the need to plead fraud specifically and not as a general allegation was the policy relating to the protection against the risk of abuse of court process…

(Emphasis added)

208    The potential to do great harm to a party before a word of evidence has been offered and submitted to the scrutiny of cross-examination through dissemination of the allegations of impropriety in the community and public media is pertinent. Here, there is evidence that Mr Pigozzo published a media statement and provided a copy of the statement of claim to journalists at the AFR and The West and, thereby, armed the public media with the ability to disseminate general, unclear and ambiguous allegations of serious impropriety on the part of MRL, Mr Ellison, Bennett & Co and other non-parties mentioned in the pleading. The public attention Mr Pigozzo deliberately courted has rendered the risk of reputational harm from untested allegations real; not theoretical. The contemporary propensity of some parties to utilise social and public media as part of ‘litigation strategy’ is all the more reason to require them to plead allegations of serious misconduct clearly, completely and with particularity. Otherwise, the public nature of pleadings in this Court may undermine the proper administration of justice and become instruments of injustice, unfairness and oppression.

209    In these circumstances and taking into account the primary objective of the administration of justice is to safeguard the public interest in the open justice, I am satisfied that it is necessary to prevent prejudice to the proper administration of justice to make a non-publication order in respect of paras 26 – 29, 35 and 102 of the statement of claim and references to prima facie confidential communication in other parts of the statement of claim. Those include paras 105(a), 105(b), 116 and 132(i). I am not satisfied that it is necessary with respect to the other parts of the statement of claim that will be struck out. I am also not satisfied that a suppression order is necessary as there is no evidence before the Court of any actual or threated disclosure of information that is confidential and privileged. That is, there is no evidence from which a finding could be made that the communications of the nature and in the circumstances of those pleaded in the statement of claim took place. I also take into account that there has already been a degree of disclosure and publication of the contents of these paragraphs of the statement of claim. A non-publication order will prevent or contain wider or further publication and dissemination of the allegations.

210    An order will be made directing Mr Pigozzo to file a redacted version of the statement of claim in which paras 26 – 29, 35, 102, 105(a), 105(b), 116 and 133(i) are removed from the pleading. A person who is not a party will be able to inspect the redacted statement of claim, after it has been filed, under r 2.32(2). The statement of claim as it was filed (unredacted) will continue, until further order, to be treated as a document a non-party is not entitled to inspect under r 2.32(2), but a non-party may apply to inspect it under r 2.32(4). That is, there will be a continuation and no dissolution or variation of paras 1 and 2 of the orders of 1 June 2022 as varied by paras 1 and 2 of the orders of 13 June 2022. Otherwise, an interlocutory non-publication order will be made (until further order and subject to dissolution or variation upon application and notice) under s 37AI of the FCA Act, on the ground set out in s 37AG(1)(a) (to prevent prejudice to the proper administration of justice), to the effect that the contents of paras 26 – 29, 35 and 102 of the statement of claim is not to be published other than to the Court, the parties and their legal representatives.

OTHER OBJECTIONS

Directors duties

211    In paras 143, 144, 153(l), 153(m), 155(c) and 155(d) of the statement of claim it is alleged that Mr Ellison and Mr Gavranich contravened the directors’ duties provisions of ss 180 – 182 of the Corporations Act. Mr Pigozzo accepted that these allegations failed to disclose any reasonable cause of action. As a consequence, these paragraphs will be struck-out. Mr Pigozzo will not be permitted to amend the statement of claim to re-plead those allegations.

Balance of objections

212    Numerous other objections were taken to the statement of claim. A summary of the paragraphs to which objection is taken, the ground of the objection, the response to the ground of objection and my ruling on the objection is set out in the Schedule to these reasons. In the consideration and determination of those objections I have applied the principles referred to earlier in these reasons. For the reasons set out in summary form in the Schedule, paras 105, 106, 111-113, 116, 127, 146-152, 153(b), 153(c), 155(a), will also be struck out, but Mr Pigozzo may apply to amend and re-plead the allegations in those paragraphs.

CONCLUSION

213    Paragraphs 24-36, 55-60, 102, 103 (the word ‘falsely’), 104(a)-(c), 105-109, 111-113, 116, 127, 130(e), 131(a)-(d), 132(k), 133(i)-(ii), 135(a)-(b), 137(iv)-(v), 143, 144, 146-152, 153(b)-(c) 153(e), 153(l)-(m), 155(a), 155(c)-(d) of the statement of claim will be struck-out.

214    I will hear the parties on the form of any order by which Mr Pigozzo may apply to amend and re-plead those parts of the statement of claim that have been struck out.

215    Orders will also be made to maintain the confidentiality and non-publication of paras 26-29, 35 and 102 of the statement of claim.

Associate:

Dated:    29 September 2022

SCHEDULE OF PARTIES

SCHEDULE TO REASONS