BOC v MDL

HIS HONOUR:

The matter came before the Court on 14 March 2019. The defendant consented to the orders sought being made. Accordingly, the above orders were made on that date with reasons to follow. This judgment sets out those reasons.

The proceedings transferred to the Supreme Court were defamation proceedings. The background to those proceedings is set out in the affidavit of Douglas James Bishop, sworn 12 December 2018, (Bishop).

The plaintiff in the defamation proceedings was formerly employed by the Commonwealth of Australia (the employer) in a senior position. The plaintiff occupied that position in 2016 and 2017.

In October 2017 the employer’s Fraud Control and Investigation Branch (FCIB) commenced an investigation into whether in the course of her work the plaintiff had breached the Australian Public Service Code of Conduct (Code of Conduct).

The defendant was interviewed by the FCIB in the course of the investigation. The FCIB ultimately determined that the plaintiff had breached the Code of Conduct and her employment with the employer was terminated in September 2018.

By a Statement of Claim filed in October 2018 the plaintiff commenced defamation proceedings against the defendant in the District Court. The plaintiff’s claim in defamation arose from the statements made by the defendant in relation to the FCIB investigation.

By letter dated 24 October 2018 the defendant through her solicitors informed the plaintiff that disclosures made by her concerning the plaintiff were “public interest disclosures” for the purpose of the Public Interest Disclosure Act 2013 (Cth) (PID). The defendant stated in substance that pursuant to s 10 of the PID Act, she was not subject to any civil liability for making the relevant disclosures and had absolute privilege in the defamation proceedings in respect of those disclosures.

In the course of further correspondence between the parties’ solicitors, the plaintiff stated that in her view the defendant had knowingly made statements to the FCIB that were “false or misleading”, such that, in accordance with s 11 of the PID Act, the defendant was not entitled to the protection and immunity afforded by s 10 of that Act.

The parties are therefore in dispute as to whether the relevant disclosures made by the defendant that form the basis of the defamation proceedings were “public interest disclosures” for the purposes of the PID Act and accordingly, whether the immunity from civil liability under s 10 of the Act applies as a complete answer to the plaintiff’s claim for defamation.

The relevant sections of the PID Act are:

It follows from the above that s 23 of the PID Act provides, relevantly, that where a person who is a party to civil proceedings (defined in the section as the “primary proceedings”) makes a claim that, because of s 10, the person is not subject to any civil liability for making a public interest disclosure:

The defendant has made a “claim” for the purposes of s 10 of the PID Act, that because of that section she is not subject to any civil liability of the kind alleged in the defamation proceedings. This claim is contained in the defendant’s letter dated 24 October 2018 and a further letter dated 22 November 2018.

The defendant seeks by the present application to transfer the defamation proceedings to the Supreme Court. She then intends, in accordance with the procedure contemplated in s 23 of the PID Act, to commence “separate proceedings” in the Supreme Court in which she will seek to have determined her claim for protection under s 10 of the PID Act. In those separate, secondary proceedings she will seek declaratory relief to the effect that the statements which form the basis of the civil lability alleged in the defamation proceedings were “public interest disclosures” for the purposes of the PID Act. She will seek a further declaration that by virtue of s 10 of the PID Act she is not subject to civil liability as alleged in the defamation proceedings.

This proposed approach is consistent with s 23 of the PID Act, which contemplates that there will be two separate proceedings conducted within the same court - namely, the primary proceedings and the secondary proceedings as to the application of s 10 of the PID Act. The defendant submitted that it was therefore necessary for the primary proceedings to be transferred to the Supreme Court so that an application might properly be made in the Supreme Court by the defendant to give rise to the secondary proceedings, leading to a determination by the Supreme Court about the application of s 10 of the PID Act.

The defendant submitted that in accordance with that procedure, the defamation proceedings should be transferred to the Supreme Court pursuant to s 140 of the Civil Procedure Act 2005 (NSW) because:

In exercising the discretion conferred by s 140 of the Civil Procedure Act, it is necessary for the Court to consider all relevant facts and circumstances (Sanderson Motors Pty Ltd v Kirby [2000] NSWSC 924 at [4], Bryson J; Harbourside Catering Pty Ltd v TMG Developments Pty Ltd [2006] NSWSC 631, Campbell J).

The applicant for transfer bears the onus of satisfying the Court that there is “sufficient cause”, “sound ground” or “good reason” to transfer the proceedings so that justice is best served between the parties: Sanderson Motors at [3]-[4]; Parry v WGE Engineering Pty Ltd [2003] NSWSC 337 at [3].

In Rinbac Pty Ltd v The Owners - Strata Plan No 64972 [2010] NSWSC 656; 77 NSWLR 601 Brereton J (as he then was) said at [11]:

There are three issues of particular complexity. First the proper construction and interactions of ss 10 and 11 of the PID Act is a matter of some complexity. Subsection 10(2)(a) provides that an individual who makes a public interest disclosure “has absolute privilege in proceedings for defamation” in respect of that disclosure. At common law, the defence of absolute privilege in defamation proceedings cannot be defeated by a finding of malice (Rajski v Carson (1986) 4 NSWLR 735 at 742 per Hunt J; Markisic v State of New South Wales & Ors (No 2) [2012] NSWSC 1353 at [101] per Price J). However, s 11 of the PID Act provides that s 10 “does not apply” to civil liability for “knowingly making a statement that is false or misleading”. The application of these sections to the present proceedings therefore raises a question as to whether the meaning of the phrase “absolute privilege” in s 10 of the PID Act is informed by common law principles, such that s 11, properly construed, is not capable of defeating the absolute privilege afforded to a discloser in defamation proceedings under s 10(2)(a).

Second, the question of whether a disclosure meets the definition of a “public interest disclosure” in s 26 of the PID Act requires a process of characterisation having regard to:

In circumstances where there is a dispute as to whether a disclosure is a “public interest disclosure” within the meaning of s 26, the matters referred to in paragraph [21] above would need to be the subject of evidence in the “separate proceedings” commenced pursuant to s 23 of the Act. Section 23(1)(e) provides that any admission or information given by the discloser in the separate proceedings is not admissible as “evidence against the individual except in proceedings in respect of the falsity of the admission, information or evidence”. Neither the precise operation of that provision nor the procedure more generally has been the subject of judicial consideration.

Third, the defamation proceedings may raise an issue as to whether, on the proper construction of s 23 of the PID Act, a person who is unsuccessful in establishing that their “claim” for immunity or protection under s 23 is thereby precluded from pleading or relying upon a defence of absolute privilege in the primary proceedings for defamation.

None of these three matters has been the subject of judicial determination. Accordingly, the novelty and complexity of these issues make it appropriate for them to be considered by a superior court of record. This is a factor which strongly favours the transferring the proceedings to the Supreme Court.

The defamation proceedings and the secondary proceedings that will arise as a result, raise issues of public importance. The objects of the PID Act, as set out in s 6 of that Act, are as follows:

The protection afforded by the PID Act serves to promote these important objectives. The practical working out of those protections, are to be resolved in the present matter by the secondary proceedings to be instituted by the defendant. This has significant implications for the efficacy of the regime for encouraging public interest disclosures created by the PID Act.

The following additional factors favour the transferring of the proceedings to the Supreme Court. In exercising the discretion conferred by s 140 of the Civil Procedure Act, the Court must have regard to the overriding purpose and related considerations in s 56 of that Act. (Cai v Guo [2014] NSWSC 380 at [14]-[15] (Fullerton J).)

In the present case, the following discretionary factors point strongly in favour of transferring the primary proceedings to the Supreme Court.

While it is not necessary to decide the issue on the current application, there is doubt as to whether the District Court has jurisdiction to grant declaratory relief of the nature that the defendant will seek in the “separate proceedings” to be commenced pursuant to s 23 of the PID Act. The District Court is vested with a limited jurisdiction in equity by s 134 of the District Court Act 1973 (NSW) (District Court Act).

Section 134(1)(h) of the District Court Act relevantly provides:

There is some authority to the effect that, when exercising jurisdiction pursuant to s 134(1)(h), the District Court can in certain circumstances make declarations (Kolavo v Pitsikas (t/as Comino and Pitsikas) & Anor [2003] NSWCA 59 at [12]). However, the primary proceedings being brought in defamation do not involve any “equitable claim or demand for recovery of money or damages” which could enliven the District Court’s jurisdiction under s 134(1)(h) of the District Court Act, nor do these proceedings entail any claim for relief which falls within any of the other subsections of s 134. As a result, there is doubt as to whether the District Court has jurisdiction to grant the relief which will be sought by the defendant for the purposes of resolving the question as to the application of s 10 of the PID Act.

Further support for the transfer of the primary proceedings to the Supreme Court is provided by s 144(2) of the Civil Procedure Act. This section provides relevantly:

Section 144(1) provides that the section applies to proceedings under subdivision 2 of Division 8 of Part 3 of the District Court Act, which includes s. 134. In Mahommed v Unicomb [2017] NSWCA 65 at [52]-[53], Ward JA (with whom Macfarlan JA and McDougall J agreed) set out the following principles regarding the operation of s 144 of the Civil Procedure Act:

From the above analysis it follows that even if the defendant had not brought the present application, it is likely that the District Court would eventually reach the view that there was sufficient doubt about whether that Court had jurisdiction to deal with the claims raised in the primary proceedings as to require the transfer of the proceedings to the Supreme Court pursuant to s 144. In line with the overriding objective of s 56 of the Civil Procedure Act, the most efficient course would be to transfer the proceedings at this early stage, rather than after the parties have expended time and resources in progressing the matter in the District Court.

Importantly, the primary proceedings remain at a preliminary stage in the District Court. The defendant is yet to file a Defence and the parties have not taken any other substantive steps. No interlocutory applications have been determined. No date has been set for the hearing. The transfer of the proceedings to the Supreme Court would not cause any material delay in the progress of the matter. There would be no duplication or incurring of unnecessary costs in relation to the work which has already been done.

It follows from the above that I had no difficulty in making the orders sought in the Summons as set out above and I make those orders.