Industrial Relations Commission of New South Wales in Court Session CITATION : Morell v Sydney Organising Committee for the Olympic Games [2000] NSWIRComm 182 PARTIES : Sophie Morrell v Sydney Organising Committee for the Olympic Games FILE NUMBER: IRC1768 of of 2000 CORAM: Marks J CATCHWORDS : Notice to produce for inspection - Subject matter not in compliance with r 161- Whether privileged documents - Whether relevant to a fact in issue - Terms of settlement not privileged under s 131 of the Evidence Act LEGISLATION CITED : Industrial Relations Act 1996 s106 rr160 161 162 163 209 Evidence Act 1995 s118 s131 CASES CITED : State Rail Authority of NSW v Smith (unrep 18/12/98 CA 40,060/98 NSWSC 697) Canizales v Microsoft Corporation & ors (unrep 01/09/00 IRC1829 of 2000) HEARING DATES: 09/05/2000 DATE OF JUDGMENT: 10/05/2000 APPLICANT SOLICITORS KPMG Legal, SYDNEY LEGAL REPRESENTATIVES: RESPONDENT SOLICITORS Blake Dawson Waldron, SYDNEY JUDGMENT: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: MARKS J Thursday, 5 October 2000 Matter No IRC1768 of 2000 SOPHIE MORELL v SYDNEY ORGANISING COMMITTEE FOR THE OLYMPIC GAMES Summons for relief under s 106 of the Industrial Relations Act 1996. INTERLOCUTORY JUDGMENT 1 In these proceedings the applicant Sophie Morell seeks certain relief under s 106 of the Industrial Relations Act 1996 ("the Act") against the respondent Sydney Organising Committee for the Olympic Games. The summons indicates that the proceedings arose out of the relationship between the applicant and respondent of employee and employer and certain alleged conduct on the part of officers of the respondent. There is no explicit allegation contained within the summons to the effect that the applicant's employment by the respondent has been terminated. 2 On 15 August 2000 the applicant's solicitors prepared two documents entitled "Notice to Produce". Only one of those notices to produce is now relevant for the purpose of these proceedings. It was addressed to the respondent and is in the following terms: "The applicant requires you to produce at KPMG Centre, 45 Clarence Street, Sydney at 9am on 29 August 2000, the following documents for the purpose of evidence: All files, papers, electronic communications, facsimiles, notes, memoranda or similar documents relating to the settlement between Karen Webb and the respondent in matter no. 3404 of 2000 before the Industrial Relations Commission of New South Wales in Court Session." 3 The notice was signed by the applicant's solicitor. The notice purported to be in the form of "Form 46" of the Rules of this Commission. 4 By letter dated 22 August 2000 the respondent's solicitors wrote to the applicant's solicitor stating that the documents sought in the notice could not be relevant to any fact in issue in the proceedings and, even if they were relevant, were privileged documents "within the definition in r 160 of the Industrial Relations Commission Rules and Pt 3.10 of the Evidence Act 1995." 5 The applicant's solicitor replied by letter dated 23 August 2000 asserting that the subject matter of the notice was relevant to the preparation of his client's case. He also said "you have not asserted a specific privilege under Pt 3.10 of the Evidence Act. Should you wish to maintain your objection please specify exactly what privilege it is that you assert and in respect of which documents." The letter referred to subs (g), (h) and (i) of s 131(2) of the Evidence Act all of which were said to address matters in respect of the notice to produce "which are highly relevant to our client's claim and which specifically allow evidence of such matters to be adduced into evidence." The respondent's solicitors replied by letter dated 25 August 2000, again referring to r 161 and seeking the basis upon which the documents fell within that rule. That letter also denied the applicability of s 131 of the Evidence Act, and asserted legal professional privilege under s 118 of that Act. 6 By letter dated 28 August 2000 the applicant's solicitor asserted that there was no onus on his client to specify to the respondent's solicitors satisfaction why the documents sought in the notice to produce were relevant to the proceedings. That letter also stated that there was an onus on the respondent to specify the documents with respect to which legal professional privilege or other privilege was claimed. 7 The respondent filed a notice of motion in this Court on 30 August 2000 seeking inter alia that the notice to produce be set aside "and that any obligation on the respondent said to arise under r 161 be discharged." 8 An affidavit in support sworn by Jennifer Mansfield, the respondent's solicitor indicated in part that she had also had the carriage of the proceedings between Ms Webb and the respondent. Ms Mansfield said in her affidavit that the position held by Ms Webb with the respondent was a more senior position than that occupied by the applicant in these proceedings, Ms Webb's position was made redundant in June 2000 due to a restructuring of the respondent's media unit, Ms Webb had not been the subject of any performance counselling or warnings by the respondent during her employment and that agreement was reached in those proceedings on a without prejudice basis during a private conference and in the course of conciliation being conducted before this Court. She said that the terms of settlement which were agreed between the parties were confidential and did not appear on the court record. THE STATUTORY BACKGROUND 9 It was common ground between the parties that notwithstanding the form of the notice, it was intended to be given and accepted as having been given pursuant to r 161 of the Commission Rules. 10 Rules 160 and 161 are as follows 160. In this Part: (a) "document" includes any part of a document; (b) "excluded documents" means in relation to proceedings, subject to any order of the Commission to the contrary: (i) any document filed in the proceedings and any copy thereof; (ii) any document served on party A (as described in Rule 162(1)) after the commencement of the proceedings and any copy thereof; (iii) any document which wholly came into existence after the commencement of the proceedings; (iv) any additional copy of a document included in a list of documents under Rule 162(5), which contains no mark deletion or other matter, relevant to a fact in issue, not present in the document so included; and (v) any document comprising an original written communication sent by party B prior to the date of commencement of the proceedings of which a copy is included in a list of documents under Rule 162(5). (c) "privileged document" means in relation to proceedings: (i) a document of which evidence could not be adduced in the proceedings over the objection of any person, by virtue of the operation of Part 3.10 of the Evidence Act 1995; (ii) a document that relates to matters of state within the meaning of section 130 of the Evidence Act 1995, unless and until the Commission directs that it cease to be a privileged document; (iii) where a claim is made against a party for the recovery of a statutory penalty or for the enforcement of a forfeiture, a document which is or has been in the possession, custody or power of that party which is: (A) relevant to a fact in issue on that claim; and (B) not relevant to a fact in issue on any claim made in the proceedings other than for the recovery of a statutory penalty or for the enforcement of a forfeiture; (d) a document or matter is to be taken to be relevant to a fact in issue of it could, or contains material which could, rationally affect the assessment of the probability of the existence of that fact (otherwise than by relating solely to the credibility of a witness), regardless of whether the document or matter would be admissible in evidence. Notice to produce for inspection 161. (1) A party (party A) may by notice served on another party (party B) require party B to produce for the inspection of party A: (a) any document (other than a privileged document) referred to in any originating process, pleading, affidavit or witness statement filed or served by party B; (b) any other specific document (other than a privileged document) clearly identified in the notice, relevant to a fact in issue. (2) The maximum number of documents which party A may require party B to produce in reliance on subrule (1)(b), whether by one or more notices, is 50. (3) Party B, upon being served with a notice under subrule (1), shall within a reasonable time: (a) produce for the inspection of party A such of the documents as are in the possession, custody or power of party B; (b) in respect of any document which is not produced, serve on party A a notice stating in whose possession the document is, to the best of the knowledge, information and belief of party B, or that party B has no knowledge, information or belief as to that matter. (4) A notice under subrule (1) may specify a time for production of all or any of the documents required to be produced. If the time specified is 14 days or longer after service of the notice it is to be taken to be a reasonable time for the purpose of subrule (3) unless the contrary is shown. If the time specified is less than 14 days after service of the notice it is to be taken to be less than a reasonable time unless the contrary is shown. 11 It will be noted that there is reference to Pt 3.10 of the Evidence Act 1995. The relevant section for the purpose of these interlocutory proceedings is s 131 which is the following terms: 131 Exclusion of evidence of settlement negotiations (1) Evidence is not to be adduced of: (a) 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, or (b) a document (whether delivered or not) that has been prepared in connection with an attempt to negotiate a settlement of a dispute. (2) Subsection (1) does not apply if: (a) the persons in dispute consent to the evidence being adduced in the proceeding concerned or, if any of those persons has tendered the communication or document in evidence in another Australian or overseas proceeding, all the other persons so consent, or (b) the substance of the evidence has been disclosed with the express or implied consent of all the persons in dispute, or (c) the substance of the evidence has been partly disclosed with the express or implied consent of the persons in dispute, and full disclosure of the evidence is reasonably necessary to enable a proper understanding of the other evidence that has already been adduced, or (d) the communication or document included a statement to the effect that it was not to be treated as confidential, or (e) the evidence tends to contradict or to qualify evidence that has already been admitted about the course of an attempt to settle the dispute, or (f) the proceeding in which it is sought to adduce the evidence is a proceeding to enforce an agreement between the persons in dispute to settle the dispute, or a proceeding in which the making of such an agreement is in issue, or (g) evidence that has been adduced in the proceeding, or an inference from evidence that has been adduced in the proceeding, is likely to mislead the court unless evidence of the communication or document is adduced to contradict or to qualify that evidence, or (h) the communication or document is relevant to determining liability for costs, or (i) making the communication, or preparing the document, affects a right of a person, or (j) the communication was made, or the document was prepared, 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, or (k) one of the persons in dispute, or an employee or agent of such a person, knew or ought reasonably to have known that the communication was made, or the document was prepared, in furtherance of a deliberate abuse of a power. (3) For the purposes of subsection (2) (j), if commission of the fraud, offence or act is a fact in issue and there are reasonable grounds for finding that: (a) the fraud, offence or act was committed, and (b) a communication was made or document prepared in furtherance of the commission of the fraud, offence or act, the court may find that the communication was so made or the document so prepared. (4) For the purposes of subsection (2) (k), if: (a) the abuse of power is a fact in issue, and (b) there are reasonable grounds for finding that a communication was made or document prepared in furtherance of the abuse of power, the court may find that the communication was so made or the document was so prepared. (5) In this section: (a) a reference to a dispute is a reference to a dispute of a kind in respect of which relief may be given in an Australian or overseas proceeding, and (b) a reference to an attempt to negotiate the settlement of a dispute does not include a reference to an attempt to negotiate the settlement of a criminal proceeding or an anticipated criminal proceeding, and (c) a reference to a communication made by a person in dispute includes a reference to a communication made by an employee or agent of such a person, and (d) a reference to the consent of a person in dispute includes a reference to the consent of an employee or agent of such a person, being an employee or agent who is authorised so to consent, and (e) a reference to commission of an act includes a reference to a failure to act. (6) In this section: power means a power conferred by or under an Australian law. Division 4 General 12 Reference was made in correspondence between the solicitors to s 118 of the Evidence Act. That section is also within Pt 3.10 and is in the following terms: 118 Legal advice 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 2 or more lawyers acting for the client, or (c) the contents of a confidential document (whether delivered or not) prepared by the client or a lawyer, for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client. CONSIDERATION 13 It is first necessary to ascertain whether the notice given complies with the provisions of r 161(1). 14 Mr Klepac, solicitor who appeared for the applicant to resist the notice of motion was unable to identify any document which fell within para (a) of r 161(1). Accordingly, it was necessary to identify a document or documents which fell within the description of para (b). 15 The first requirement of r 161(1)(b) is that the notice require the production for inspection of a "specific" document which is "clearly identified in the notice". In my opinion the manner in which this part of para (b) is drafted requires that the notice refer to a document with some particularity. 16 The wording used in para (b) may be contrasted, for example, with the relevant provisions of r 162 which provides for orders for discovery. Rule 162 provides in part: Order for discovery 162. (1) The Commission may, on the application of a party or of its own motion, order that any party (party B) give discovery to any other party (party A) or parties (each of which is included in the expression "party A") of: (a) documents within a class or classes specified in the order; (b) one or more samples (selected in such manner as the Commission may specify) of documents within such a class. (2) A class of documents shall not be specified in more general terms than the Commission considers to be justified in the circumstances. (3) Subject to subrule (2), a class of documents may be specified: (a) by relevance to one or more facts in issue; (b) by description of the nature of the documents and the period within which they were brought into existence; (c) in such other manner as the Commission considers appropriate in the circumstances. 17 Here there is reference to a class of documents which may be specified by way of relevance to facts in issue or the description or nature of the documents and the period within which they were brought into existence or in any other manner considered appropriate. It might be thought that the subject matter of the notice given in these proceedings as described fits more appropriately within the documentation contemplated to be the subject of an application made under r 162. 18 In my opinion the notice as given does not comply with this requirement of para (b) in that it fails to specify any document and to clearly identify any such document in the notice. 19 The second requirement of para (b) is that the document not be a privileged document. This expression is defined in r 160(c). The provisions of para (i) are the only relevant provisions for the purpose of these interlocutory proceedings. 20 The reference in sub cl (i) to Pt 3.10 of the Evidence Act is, for present purposes, confined to an examination of s 118 and s 131 of the Evidence Act. 21 Mr Klepac conceded during the course of submissions that any document which fell within s 118 of the Evidence Act would be a privileged document and the respondent would not be compelled to produce it. 22 Mr Klepac also conceded that many of the documents described in the notice would also fall within s 131 of the Evidence Act because those documents would amount to communications made between persons in dispute in connection with an attempt to negotiate a settlement of the dispute or a document prepared in connection with an attempt to negotiate a settlement of the dispute. 23 However Mr Klepac sought to rely on the provisions of paras (g), (h) and (i) of s 131 (2). 24 Dealing firstly with para (g), it seems to me that one could not determine whether that paragraph could operate so as to displace the prohibition on the adducing of evidence referred to in s 131(1) until evidence had been adduced in the substantive proceedings. It is only at this stage that one could determine whether there was a likelihood that this Court in these proceedings would be likely to be misled. Accordingly, the exception to the general rule created by s 131(1) cannot operate until that stage and on this basis any such documents falling within s 131(1) would remain privileged documents for the purpose of r 160(c). 25 I do not understand how the provisions of para (h) become relevant. There seems to be no question of the determination of any liability for costs in these substantive proceedings which can be affected by settlement negotiations between Ms Webb and the respondent to these proceedings. Presumably para (h) is designed to deal with liability for costs between the parties who were in dispute and were attempting to negotiate a settlement of the dispute. 26 Mr Klepac did not address any particular submissions as to application of para (i). The Third Edition of Ogders on Uniform Evidence Law sets out a number of examples of the making of a communication or preparation of a document which are capable of affecting a right of a person. The learned author refers to matters such as defamatory utterances, acts of bankruptcy, threats which constitute a tort or a crime, misleading or deceptive conduct, etc. There is simply no basis upon which I can make any assessment as to whether the provisions of this sub paragraph would apply. 27 There is, however, potentially one document which may not fall within the description of a privileged document. This arises out of a decision of the New South Wales Court of Appeal in State Rail Authority of New South Wales v Smith (unrep. Priestley, Handley and Beazley JJA 18 December 1998 CA 40,060/98 (1998) NSWSC 697). 28 The decision of the Court dealt briefly with the application of s 131 of the Evidence Act to a "settlement document". The judgment of the Court was given by Beazley JA with whom Priestley and Handley JJA agreed. Her Honour said: " Section 131 of the Evidence act is directed solely at communications between the parties in an attempt to settle. It is not concerned with the settlement document itself." 29 This led Mr Klepac to concede that the only document which he could seek to have produced was the settlement document itself. 30 The third requirement of para (b) is that the document be relevant to a fact in issue. This necessitates reference back to para (d) of r 160. This requires a determination as to whether the settlement document could or does contain material which could rationally affect the assessment of the probability of the existence of a fact which is in issue in these proceedings. The relevance relied upon by Mr Klepac in connection with the settlement document in the Webb proceedings was that his client sought to make an assessment of comparative treatment given by the respondent to other employees. 31 Prima facie the submission made by Mr Klepac has only tenuous validity. Firstly the terms of settlement were arrived at pursuant to a conciliation process conducted within the jurisdiction of this Court. Accordingly, the terms of settlement could not conceivably reflect the conduct of the respondent towards other employees other than within a court process. This seems to me even given the interlocutory nature of these proceedings, to constitute a tenuous nexus. Secondly, great care always needs to be taken in comparing the circumstances of employees when endeavouring to make out allegations of unfair conduct. In Canizales v Microsoft Corporation (2000) NSWIRComm 118 Peterson J said, at paras 158 and 159: The applicant's case sought to compare his treatment with the more favourable treatment he alleged Microsoft afforded other transitional employees who were made redundant or terminated within Australia. Mr Kite's analysis distinguished a number as being not fairly comparable in status and as to others argued that no such employee received benefits equal to those sought now by the applicant. I consider the comparison with others does not provide a suitable approach either way in this case. What other employees may have received, or negotiated, in their own circumstances will not establish some standard of fairness of any assistance in the absence of a complete understanding of the relevant facts of each case. The fairness of the applicant's position is to be judged objectively in the light of his circumstances. In the absence of some demonstrably better treatment of others, which is the case here, the comparisons have no real weight. I have grave doubts as to whether the terms of settlement between Ms Webb and the respondent conducted within a conciliation process within the jurisdiction of this Court could satisfy the test of relevance contained within r 160(d) on the only basis put forward by Mr Klepac namely an assessment of comparative treatment by the respondent of other employees. It is not necessary in view of conclusions which I have reached with respect to other matters concerning the notice that I determine this issue. I indicate that if I were called upon to determine the substantive issue I would give serious consideration to utilising the provisions of r 163 to preclude the respondent from producing the terms of settlement in the Webb matter based on the sole aspect of relevance relied upon by the applicant in these proceedings. Rule 163 is in the following terms: Powers of Commission 163. The commission may, on the application of a party, or of its own motion: (a) by order discharge, vary or extend any of the obligations arising under Rules 161 and 162; (b) determine any question of privilege or other question arising form the operation of this part. (c) where a party does not comply with an obligation arising under Rules 161 and 162: (i) by order, dismiss or limit any claim made by that party; (ii) by order, strike out or amend any process filed by that party; (iii) strike out, disallow or reject any evidence which that party has adduced or seeks to adduce; (iv) require that party to pay the whole or part of the costs of another party of the proceedings; or (v) make such other order as the Commission considers appropriate in the circumstances. 32 I conclude that the notice does not comply with the provisions of r 161(1)(b) because of the lack of specificity with respect to a document clearly identified in the notice. For reasons given all of the documents other than the terms of settlement are not amenable to any notice because they would be privileged. There must be grave doubt as to whether the terms of settlement are relevant to a fact in issue. 33 For these reasons I propose to set aside the notice to produce. COSTS 34 It is also necessary to determine the question of costs. In normal circumstances the applicant would be required to pay the respondent's costs of these interlocutory proceedings. The basis upon which the notice to produce has been set aside relates to the manner in which it has been framed and to some misconception about the operation of relevant statutory provisions. Arguably the applicant should have proceeded in any event under r 162 rather than r 161. 35 I would prefer not to impose a costs order which may become payable by the applicant personally without giving the parties and their respective legal advisers an opportunity of considering where ultimate responsibility for costs lies. I refer the parties to the provisions of r 209 of the Commission Rules. Accordingly I propose to stand the matter of costs over and I grant liberty to apply in the event that some sensible accommodation cannot be reached between the parties and their legal practitioners. ORDERS 36 I make the following orders: 1. The notice to produce dated 15 August 2000 described earlier in these reasons for judgment is set aside. 2. Costs are reserved. 3. Liberty to apply in the case of costs. ________________ DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.