Introduction

The High Court of Australia sitting as the Court of Disputed Returns in Re Day [No 2] [2017] HCA 14 has found that Robert John Day, a former senator, had an indirect pecuniary interest in a lease agreement with the Public Service of the Commonwealth because he was the owner of the bank account nominated as the recipient of the rental moneys payable under the lease and that, accordingly, s 44(v) of the Commonwealth Constitution operated to disqualify him from sitting as a senator on and from the date on which the direction for the payment of rent to him was given.

Section 44(v)

Section 44(v) of the Constitution relevantly provides that any person who:

“(v) has any direct or indirect pecuniary interest in any agreement with the Public Service of the Commonwealth otherwise than as a member and in common with the other members of an incorporated company consisting of more than twenty-five persons;

shall be incapable of being chosen or of sitting as a senator or a member of the House of Representatives.”

Background

Mr Day had been elected to the Senate representing the State of South Australia following the 2013 federal election.

Prior to the commencement of his term as a senator on 1 July 2014:

• Certain property (“Property”) had been owned by B & B Day Pty Ltd (“B & B Day“) as trustee of the Day Family Trust. Mr Day and his wife, amongst others, were beneficiaries of the trust and Mr Day was then the sole director and shareholder of B & B Day. A bank had granted a loan facility to B & B Day which was secured by, amongst other things, a guarantee and indemnity given by Mr Day and his wife in respect of the obligations of B & B Day under the loan facility.
• The Property had then been sold to Fullarton Investments Pty Ltd (“Fullarton Investments”) as the trustee of another discretionary trust of which the Day Family Trust was a beneficiary. No moneys, however, exchanged hands. Rather, B & B Day was said to have provided vendor finance to Fullarton Investments. The sole director of Fullarton Investments at the time was the wife of Mr Day’s business associate.

On 1 December 2015, the Commonwealth took a lease of the Property from Fullarton Investments, with a commencement date of 1 July 2015. The purpose of the lease was to provide Mr Day with an electorate office to which he was entitled as a senator.

Under the terms of the lease, Fullarton Investments was entitled to direct the Commonwealth to pay rent to any person. On 26 February 2016, Fullarton Investments nominated “Fullarton Nominees” and directed payment to a bank account. Fullarton Nominees was in fact a business name owned by Mr Day and the bank account was Mr Day’s bank account.

The payment of the rent by the Commonwealth would facilitate repayment by Fullarton Investments of the moneys which it owed to B & B Day for the purchase of the Property which, in turn, would facilitate repayment by B & B Day of the moneys owing to the bank under its loan facility and so reduce Mr Day’s contingent liability under the guarantee and indemnity.

Following the 2016 federal election, Mr Day was again declared elected to the Senate. After concerns had been expressed that Mr Day continued to have a financial interest in the Property, the Commonwealth gave notice of rescission of the lease. Mr Day later resigned from the Senate.

Court’s decision

The matter was dealt with by the Full Court (Kiefel CJ, Bell, Gageler, Keane, Nettle, Gordon and Edelman JJ). The Court:

• unanimously held that s 44(v) of the Constitution operated to disqualify Mr Day from sitting as a senator because he had an indirect pecuniary interest in the lease;
• by majority, held that Mr Day was incapable of sitting as a senator on and after 26 February 2016, being the date on which the direction for the payment of rent to Mr Day was given.

As a result, a vacancy arose in the representation of South Australia in the Senate which was to be filled by a special count of the ballot papers.

Joint judgment of Kiefel CJ, Bell and Edelman JJ

A joint judgment of Kiefel CJ, Bell and Edelman JJ made a number of key points in relation to the meaning and application of s 44(v). These included the following. References to the cases have generally been omitted.

• The object of s 44(v) is to ensure not only that the Public Service of the Commonwealth is not in a position to exercise undue influence over parliamentarians through the medium of agreements but also to ensure that parliamentarians will not seek to benefit by such agreements or to put themselves in a position where their duty to the people they represent and their own personal interests may conflict (at [48]; see also [39]). Accordingly, s 44(v) has a wider purpose than that given to it in In re Webster [1975] HCA 22; (1975) 132 CLR 270. That decision proceeded upon a wrong view of the place of s 44(v) in the Constitution and of the purpose of s 44(v), and did not give effect to its terms, and so should not be followed (at [51]).
• In considering the terms of s 44(v) and the extent of its operation, consistently with its wider object, s 44(v) can be seen to apply according to its terms (at [53]).
• A “pecuniary interest” is an interest sounding in money or money’s worth. The interest referred to in s 44(v) is clearly not a legal interest. An indirect pecuniary interest looks to the practical effect of the agreement on a person’s pecuniary interests (at [54]).
• The mischief addressed by s 44(v) cannot be avoided by using devices such as the interposition of a company or other entity between a parliamentarian who stands to gain, or lose, from the agreement and the Commonwealth. The words “indirect pecuniary interest in [an] agreement” were selected with that potential for avoidance in mind (at [61]). Thus, beneficiaries of a discretionary trust, which benefits from, or via its trustee is party to, an agreement to which s 44(v) refers, may be considered to have an indirect pecuniary interest in an agreement (at [62]).
• While a person does not need to be a party to an agreement to have an interest in it, the requirement that the interest be “in” an agreement implies some personal connection to it, albeit indirect. The mischief addressed by s 44(v) has this connotation because it looks to the personal financial circumstances of a parliamentarian and the possibility of a conflict of duty and interest. Thus, for example, where a husband who is a parliamentarian and his wife are jointly liable for mortgage repayments on their home and the wife works for the Commonwealth Public Service, the husband will benefit in a financial sense from her salary being applied to repayment of the mortgage. However, this will not give rise to an indirect pecuniary interest of the husband in the wife’s employment agreement because there is not the requisite personal connection between the interest and the agreement (at [65]-[66]).
• It may be unremarkable that the Commonwealth leases premises from their owner for the purpose of providing office accommodation to a senator, but the payment of rent, by direction, to that senator is not unremarkable (at [70]).
• Although s 46 of the Constitution provides for the payment of a penalty where a person sits when disqualified, this does not mean that s 44(v) should be given a limited operation. To do this, when it is accepted that it is intended to operate more widely, would be to deny its true purpose. Furthermore, there is much to be said for the view that s 44(v) has a special status because it is protective of matters which are fundamental to the Constitution, i.e. representative and responsible government in a democracy. So understood there is no reason to limit its operation because of the consequences which might follow for a person who is disqualified (at [71]-[72]).
• Nor does the fact that there are a suite of provisions in the Constitution which prescribe the qualifications of a Commonwealth parliamentarian and the consequences of sitting when disqualified provide any reason for preferring a narrow construction of the disqualification provisions of s 44 (at [73]-[74]).
• No narrow view of the operation of s 44(v) can be said to be warranted by its terms, read consistently with its purpose (at [75]).

Accordingly, the joint judgment concluded at [76] that, on and from 26 February 2016, being the date on which the direction for the payment of rent to Mr Day was given, s 44(v) operated to disqualify Mr Day from sitting as a senator because he had an interest of a pecuniary nature in the lease and that, as a result, a vacancy arose in the representation of South Australia in the Senate.

Other judges

Keane J agreed that the disqualification operated from the date when the direction for the payment of rent to Mr Day was given.

Gageler J considered that there were other ways in which Mr Day had an indirect pecuniary interest in the lease in addition to the direction that the rent under the lease be paid to him, namely, the way in which the rental moneys were to be applied, and the potential distributions which Mr Day as a beneficiary of the Day Family Trust might receive. In his Honour’s view, the date from which Mr Day became incapable of sitting as a senator should have been 1 December 2015, being the date when the Commonwealth entered into the lease (at [87]-[93]). Nettle and Gordon JJ in their joint reasons also considered that the disqualification operated from 1 December 2015, having regard to the various steps and transactions that had taken place in relation to the Property, and to the purpose of the whole arrangement which had been to enable Mr Day to avail himself of the rental allowance provided by the Commonwealth (at [277]-[290]).

The New South Wales Court of Appeal in Fitz Jersey Pty Ltd v Atlas Construction Group Pty Ltd [2017] NSWCA 53 has found that a claimant enforcing a determination by an adjudicator of a payment claim under the Building and Construction Industry Security of Payment Act 1999 (NSW) (“S of P Act”) was not required to notify the respondent that a judgment had been obtained before taking steps to enforce the judgment. The Court of Appeal further found that the claimant, when applying ex parte for a garnishee order with respect to the judgment debt, was not required to notify the court that the respondent had commenced its own proceedings to review the underlying adjudication determination.

The background to the case was that a builder had been engaged by a property developer to design and construct a major development project. The builder had served a final payment claim on the developer pursuant to the S of P Act but the developer had served a payment schedule asserting that no money was owing to the builder. The dispute went to adjudication and the adjudicator determined that the builder was entitled to be paid the payment claim in full.

The developer did not pay the adjudicated amount within the time required by the S of P Act but instead commenced proceedings in the Supreme Court of New South Wales in its supervisory jurisdiction under s 69 of the Supreme Court Act 1970 (NSW) seeking to challenge the legal validity of the determination.  A copy of the s 69 summons was sent electronically to the builder on the same day that the summons was filed in the Court. The developer, however, did not seek an undertaking from the builder not to take steps to enforce its rights under the determination nor did it seek interlocutory relief by way of a stay.

A few days later, the builder relied on the developer’s failure to pay the adjudicated amount to obtain an adjudication certificate under s 24 of the S & P Act. Then, pursuant to s 25(1) of the S & P Act, the builder filed the certificate in the Supreme Court of New South Wales together with an affidavit affirming that the adjudicated amount had not been paid. The result was a judgment for the adjudicated amount. The builder also applied ex parte for a garnishee order, the application being supported by an affidavit recording that the judgment had not been stayed. The garnishee order was subsequently issued and served on the developer’s bank which paid the judgment debt from the developer’s account.

The developer became aware of the payment from its bank account on the return date of the s 69 summons and applied to the Supreme Court for orders that the garnishee order be set aside and the money repaid. The application was dismissed and the developer appealed to the Court of Appeal.

The Court of Appeal (Beazley ACJ, Basten JA and Leeming JA) unanimously dismissed the appeal.

Was notification needed to be given to the developer that judgment had been obtained?

The developer submitted that the builder was required to notify the developer that a judgment had been obtained before taking any steps to enforce the judgment (including by way of garnishee order). The submission relied on the terms of s 25(4) of the S of P Act which, amongst other things, provides that, if the respondent commences proceedings to have a judgment based on an adjudication certificate set aside, the respondent must pay into court the unpaid portion of the adjudicated amount pending the final determination of the proceedings. The developer argued that reasonable notice of the judgment would have allowed it to apply to have the judgment set aside and to pay the adjudicated amount into court and so obtain a “statutory stay” by reason of s 25(4).  Accordingly, it was said that the failure to give the notice effectively deprived the developer of the benefit of this right.

Basten JA rejected this submission. His Honour’s reasoning was, in summary, as follows:

• The proposition that a judgment could not be enforced without serving a copy of it on the party affected or otherwise bringing it to the attention of the party affected and providing a reasonable opportunity for the party affected to take steps to set the judgment aside or seek a stay of execution had no support in authority, or as a matter of principle (at [38]).
• Section 25(4) of the S of P Act did not put a respondent in any better position than an unsuccessful respondent against whom a judgment debt had been obtained in civil proceedings in a court (at [40]).
• The scheme for judgments under the S & P Act did not differ from judgments generally. To suggest that the scheme required notice of the existence of a judgment was not consistent with authority, the context in which s 25(1) appeared, the objects of the S of P Act or anything in the legislative history of the S & P Act (at [45]).

Leeming JA agreed with Basten JA’s reasons but went into further detail as to why there was no substance to the developer’s submission (at [89]-[98]). Beazley JA agreed with the reasoning of both Basten and Leeming JJA (at [2]).

Was notification needed to be given to the court of the developer’s proceedings?

The developer also submitted, in substance, that, when applying ex parte for a garnishee order with respect to the judgment debt, the builder was subject to a duty of candour which required it to notify the court that the developer had commenced its own proceedings to review the underlying adjudication determination.

Basten JA said that there could be no doubt that an ex parte applicant was required to inform the judicial officer of circumstances which would disentitle it from the relief sought and gave examples as follows:

• the fact that the applicant was a company which had been deregistered and that there was a stay in place precluding enforcement of a judgment;
• even if some interlocutory relief in the nature of a stay was not in place, the fact that it had been sought and the motion not determined; and
• the fact that there had been discussions between the parties although no agreement had been reached, at least where an undertaking not to enforce had been sought, though not given, and an application for a stay had been foreshadowed (at [55]- [57]).

His Honour further said that the rules applicable to garnishee orders were quite detailed but that, nevertheless, there were circumstances in which a garnishee order should not issue for reasons which were not expressly identified in the rules and that these circumstances could form the basis for a discretionary refusal to make a garnishee order or could engage the power to set aside a garnishee order (at [70]-[72]).

However, his Honour indicated that the circumstances of the case did not warrant disclosure for reasons which, in substance, were as follows:

• The requirement for disclosure was not consistent with the scheme of the S & P Act.
• The developer had failed to take the steps available to it, namely, to seek an undertaking from the builder not to take steps to enforce its entitlements under the determination, or to seek interim relief by way of a stay.
• If a mere application for judicial review was a “material fact” relevant to making a garnishee order, then a judicial officer would be required to, in effect, grant a stay in circumstances where no stay had been sought and where the developer had not proved its entitlement to a stay. This was an unattractive basis on which to set aside the garnishee order (at [75]-[82]).

His Honour went on to say that, in any event, it was not necessary to dispose of the case on the basis that there was no duty to disclose the existence of the judicial review proceedings because the above considerations were relevant to the exercise of the discretionary power to grant the equitable relief being sought by the developer and the approach taken by the judge at first instance had, in that respect, been correct (at [83]). The judge at first instance had dealt with the application by refusing relief on discretionary grounds, those grounds being that the developer had failed to seek an undertaking or interlocutory relief and had provided no evidence of the builder’s inability to repay the money, if called upon to do so.

Basten JA said that the conclusion of the judge at first instance was supported by a further consideration that the relief now sought by the developer assumed that a stay would have been granted, in circumstances where the developer had not presented the evidential basis for obtaining a stay or demonstrated why it should have been granted if sought by a timely application (at [85]). His Honour further said that, assuming that there were grounds to set the order aside, the Court had not been referred to any authority which involved a grant of equitable relief to mandate repayment of a sum acquired pursuant to an executed garnishee order (at [86]). Accordingly, his Honour concluded that no error of principle had been identified which warranted interference with the refusal by the judge at first instance to exercise a discretionary power on equitable grounds.

Leeming JA generally agreed with Basten JA (at [105]) but also gave further detailed reasons for rejecting the submission (at [107]-[126]). In particular, Leeming JA traced the history of the rules applicable to garnishee orders and said that the rules, as they now stood, contained no provisions dealing with a contested hearing in which the onus lay on the judgment creditor to justify execution or requiring the notification of the judgment debtor.

Beazley ACJ generally agreed with the reasons of both Basten and Leeming JJA (at [2]-[3]).

Final note

The developer’s proceedings continue. The developer claims that the adjudicator’s determination was void because the adjudicator lacked the jurisdiction to make the determination and that, accordingly, the judgment based on the adjudication certificate should be set aside and the amount paid out to the builder repaid to the developer (see Fitz Jersey v Atlas Construction Group [2017] NSWSC 340).

The High Court of Australia in Kendirjian v Lepore [2017] HCA 13 has refused to distinguish the reasoning of the majority in Attwells v Jackson Lalic Lawyers Pty Limited [2016] HCA 16; (2016) 331 ALR 1 (“Attwells”) in a case of alleged negligent advice to reject an offer of  settlement which resulted in the matter proceeding to a judgment which was less favourable than the offer, with the result that such advice was not subject to the advocate’s immunity from suit. The High Court also refused to reopen part of the decision in Attwells.

The client had brought proceedings in the District Court of New South Wales seeking damages for personal injuries he had sustained in a motor vehicle accident. The defendant had admitted liability so the only matter in issue was the assessment of the damages. On the first day of the hearing, the defendant made an offer of settlement which was rejected. The hearing proceeded and the judge awarded damages to the client in an amount which was substantially less than the amount of the settlement offer. In assessing the damages, the judge considered that the client had exaggerated or misstated the extent of his disability. An appeal by the client to the Court of Appeal was dismissed.

The client subsequently brought negligence proceedings in the District Court of New South Wales against the solicitor and barrister who had represented him in the personal injury proceedings. His allegations included that, while he had been advised by the lawyers that a settlement offer had been made, he had not been advised of the amount of the offer, and that the lawyers had rejected the offer as too low without his express instructions. The client sought damages which were apparently calculated by subtracting the amount awarded in the personal injury proceedings from the settlement offer plus costs. The lawyers applied for summary judgment and the District Court granted this on the basis that the lawyers were immune from liability in negligence. This decision was upheld by the Court of Appeal. The client sought special leave to appeal to the High Court which was later granted. In the meantime, the High Court decided Attwells and clarified the scope of the doctrine of the advocate’s immunity from suit.  Following the decision in Attwells, the solicitor consented to orders in the High Court which included allowing the client’s appeal insofar as it related to him and remitting the balance of the matter to the District Court. However, the barrister submitted that the reasoning in Attwells could be distinguished or, alternatively, that part of the decision in Attwells should be reopened.

The High Court (Kiefel CJ, Bell, Gageler, Keane, Nettle, Gordon and Edelman JJ) unanimously allowed the appeal in relation to the barrister and remitted the balance of the matter to the District Court.

Development of the doctrine of the advocate’s immunity

At [28]-[32], Edelman J summarised the development of the doctrine of the advocate’s immunity in the following terms:

• In a passage in Giannarelli v Wraith [1988] HCA 52; (1988) 165 CLR 543 (“Giannarelli”), Mason CJ explained the boundaries of the advocate’s immunity by saying that preparation of a case out of court and presentation in court were inextricably interwoven so that the immunity extended to “work done out of court which leads to a decision affecting the conduct of the case in court” but that (agreeing with and quoting McCarthy P in Rees v Sinclair [1974] 1 NZLR 180 at 187) the protection existed only where the particular work was so intimately connected with the conduct of the cause in court that it could fairly be said to be a preliminary decision “affecting the way that cause is to be conducted when it comes to a hearing”.
• In D’Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1 (“D’Orta”), a majority of the High Court saw no reason to depart from the test described in Giannarelli and summarised that test as work done in court or, quoting from part of the passage from Mason CJ, “work done out of court which leads to a decision affecting the conduct of the case in court”, or work intimately connected with work in a court.
• In Attwells, a majority of the High Court refused to extend the immunity to acts or advice of an advocate which did not move litigation towards a judicial determination, repeated the comments from D’Orta that there was no reason to depart from the test described in Giannarelli, and quoted the whole of the passage from Mason CJ in Giannarelli. The majority explained that, since it was the participation of the advocate as a court officer in the quelling of controversies by the exercise of judicial power which attracted the immunity, it followed that the immunity did not extend to advice that led to a settlement agreed between the parties. Advice resulting in a settlement of a dispute could not lead to the possibility of a collateral attack upon a non-existent exercise of judicial power to quell controversies. Therefore, the test concerning “work done out of court which leads to a decision affecting the conduct of the case in court”, or which was intimately connected with work in court, was not satisfied merely because there was a plausible historical connection between an advocate’s work and a client’s loss – it required that there be a functional connection between the advocate’s work and the determination of the case by the court.
• The majority in Attwells rejected a submission that an anomaly would arise if the immunity did not cover negligent advice which led to a settlement of the proceeding, but did cover negligent advice not to settle a proceeding which led to a judicial decision. The majority said that the assumption underlying this submission was that the immunity would extend to negligent advice not to settle a proceeding because that advice was intimately connected with the ensuing judicial determination. The majority rejected the assumption on the basis that negligent advice not to settle a proceeding only gave rise to an historical connection between the negligent advice and the continuation of the litigation. The majority then concluded that the giving of advice either to continue or to cease litigating did not itself affect the judicial determination of a case.

Could Attwells be distinguished?

The barrister sought to distinguish Attwells on the basis that the negligence proceedings could involve departing from the reasoning of the courts in the personal injury proceedings because the lawyers could seek to use the adverse findings about the client’s credibility to explain why the judgment awarded was much lower than the settlement offer.

Edelman J rejected this submission at [34] on the basis that, while the client was relying on the decision in the personal injury proceedings to prove his alleged loss, issues concerning the reasonableness of advice given by the lawyers would be determined at the time the advice was given and not at the time of the judgment in the personal injury proceedings and would not involve any consideration of whether the judgment in the personal injury proceedings was right or wrong, whether in relation to credibility or otherwise.

Edelman J also said at [35] that, should the lawyers challenge the credibility of the client concerning what the client had said to them about his disability, this challenge, being in separate proceedings and based on separate evidence, would be independent of the different credibility findings made in the personal injury proceedings and would not call into question any of those findings.

Accordingly, his Honour concluded that the reasoning of the majority in Attwells required that the appeal be allowed.

Should Attwells be reopened?

The alternative submission by the barrister was that the part of the decision in Attwells where the majority had approved the remarks of Mason CJ in Giannarelli which had relied upon Rees v Sinclair, should be reopened. It was submitted that that part of the quotation from Mason CJ had not been approved by D’Orta and that, accordingly, the scope of the immunity extended to “work done out of court which leads to a decision affecting the conduct of the case in court” but not to work done “affecting the way that cause is to be conducted when it comes to a hearing”.

Edelman J described this distinction at [38] as “illusory”, saying that, in relation to work done out of court, there was no real distinction between work done which led to a decision affecting the conduct of the case in court and work done affecting the way that case was to be conducted at a hearing and that a decision affecting the way that a case was conducted was the principal, or possibly only, method by which an advocate affected the conduct of a case in court.  His Honour went on to say at [39] that, in any event, such a distinction was not evident in D’Orta.

Accordingly, his Honour rejected the submission that Attwells should be reopened.

Other judges

Kiefel CJ and Bell, Gageler and Keane JJ agreed with Edelman J.

Nettle J (at [5]-[9]) and Gordon J (at [10]-[16]) agreed with Edelman J that, in light of the majority’s reasoning in Attwells, the appeal had to be allowed but did not agree that the client’s negligence proceedings did not give rise to a possibility of a challenge to the findings in the personal injury proceedings, for reasons which were largely consistent with the views expressed by these judges in Attwells.

For a detailed summary of Attwells, see K Ottesen, “Attwells v Jackson Lalic Lawyers Pty Limited – High Court retains advocate’s immunity from suit but holds that out of court settlements are outside its scope”, 18 May 2016.

The Full Court of the Federal Court of Australia in Grant v BHP Coal Pty Ltd [2017] FCAFC 42 has found that the dismissal of an employee who refused to undergo a medical examination to confirm his capacity to return to his normal work duties was not harsh, unjust or unreasonable under the Fair Work Act 2009 (Cth).

The employee had been working as a boilermaker at a coal mine when he injured his right shoulder in the course of his work duties. After re-injuring his shoulder on a number of occasions, both during and outside work hours, the employee went on extended sick leave during which time he underwent surgery on the shoulder. While he was on sick leave, he and the employer had very little contact. After an absence from work of some 8 months, the employee sought to return to work relying on medical certificates from his general practitioner and treating orthopaedic surgeon that he was fit to return to normal duties. The mine supervisor, however, directed the employee to attend a medical appointment with a medical specialist chosen by the employer so as to understand any limitations with respect to his fitness for work and how his condition might impact on his ability to perform his work as a boilermaker at the mine. The employee made it clear that he was dissatisfied with this direction and did not attend two scheduled medical appointments with the specialist. He then refused to answer any questions at a workplace investigation interview intended to inquire into his failure to attend the medical appointments unless the questions were put in writing. The employee was provided with a notice requiring him to show cause why his employment should not be terminated for refusing to follow lawful and reasonable directions contrary to his obligations as an employee and, subsequently, his employment was terminated.

The employee applied to the Fair Work Commission (“FWC”) for remedies for unfair dismissal pursuant to s 394(1) of the Fair Work Act 2009.  The application was unsuccessful, as was an appeal to the Full Bench of the FWC. Both the FWC at first instance and the Full Bench found that the directions to the employee to undergo the medical examination were authorised by the Coal Mining Safety and Health Act 1999 (Qld) (“CMSH Act”) and that, accordingly, there was a valid reason for the dismissal related to the employee’s capacity or conduct for the purposes of s 387(a) of the Fair Work Act 2009.

The employee then brought an application in the Federal Court of Australia seeking certiorari, mandamus and various declarations. The trial judge, however, found that the employee had failed to establish error, jurisdictional or otherwise, in the decisions of the FWC at first instance or of the Full Bench and dismissed the application. The employee then appealed to the Full Federal Court.

The Full Federal Court (Dowsett, Barker and Rangiah JJ) dismissed the appeal, agreeing that the CMSH Act provided authority for the employer to direct the employee to attend and undergo the medical examination. The Full Court noted that the objects of the CMSH Act included protecting the health and safety of persons at coal mines and requiring that the risk of injury or illness resulting from coal mining operations be at an acceptable level. The Full Court further noted that the CMSH Act contained provisions dealing with the safety and health obligations of persons at coal mines. In particular, the Full Court referred to the following provisions of the CMSH Act:

• s 38, which provided that, where there was no regulation or recognised standard which prescribed a way to discharge the person’s safety and health obligation in relation to a risk, the person could choose an appropriate way to discharge the person’s safety and health obligation in relation to the risk;
• s 39(1)(c), which required a “coal mine worker” (which included the employee and the mine supervisor), to take (in addition to certain specified obligations) any other reasonable and necessary course of action to ensure anyone was not exposed to an unacceptable level of risk; and
• s 39(2)(d), which created an obligation on a coal mine worker to comply with instructions given for safety and health of persons by, amongst others, a supervisor at the mine.

The Full Court said at [89] that, while ss 39(1)(c) and (2)(d) of the CMSH Act did not declare in express terms that a coal mine worker could be required to undergo a medical examination, the language, objects and the statutory scheme made it clear that the legislature intended that a coal mine worker could be required to undergo a medical examination if it was reasonable and necessary to ensure that anyone was not exposed to an unacceptable level of risk.

The Full Court further said at [90] that it was satisfied that there was a legislative intention underlying ss 39(1)(c) and (2)(d) of the CMSH Act to curtail the right to personal liberty to the extent that coal mine workers (and others described in those provisions) might be required to attend medical examinations if the circumstances set out in those provisions were met.

The Full Court considered that the circumstances set out in those provisions had been met. The mine supervisor had identified a risk arising from the employee’s return to work, namely, potential harm to the safety and health of the employee and others because of the employee’s injury and so had then become obliged under s 39(1)(c) to take any reasonable and necessary course of action to ensure that no-one was exposed to an unacceptable level of risk. There was no regulation or recognised standard which prescribed a way of achieving an acceptable level of risk in relation to this particular risk. Therefore, s 38 required the mine supervisor to choose an appropriate way to discharge his safety and health obligation in relation to the risk. The way he had chosen was to direct the employee to attend the specialist for medical examination (see [84]).

The employee had argued that he had not been obliged to answer the questions at the workplace investigation interview because he was protected by privilege against self-incrimination. The Full Court rejected this argument for a number of reasons (see [109]–[112]) including the following:

• In considering whether the privilege applied, the traditional test was whether the person claiming the privilege genuinely and reasonably apprehended a danger from being compelled to answer the question objected to. However, the employee had not raised the issue of the privilege before the FWC at first instance and so there had been no attempt to identify and make findings upon all the relevant factual circumstances. The Full Court was not able to determine the question of whether the privilege applied in such a vacuum of facts.
• In any event, the employee had not made the claim of privilege at the interview but had merely declined to answer questions unless they were put in writing.

The Victorian Court of Appeal in Spralja v Bullards [2017] VSCA 32 has set aside a decision of a judge of the County Court granting summary dismissal of proceedings brought against a firm of solicitors and two barristers for negligent advice because the judge had applied the common law doctrine of the advocate’s immunity in a way which has since been shown to be in error by the High Court of Australia in Attwells v Jackson Lalic Lawyers Pty Limited [2016] HCA 16; (2016) 331 ALR 1 (“Attwells”).

The allegedly negligent advice given by the lawyers related to the settlement of proceedings for breach of a sale agreement. Although the client denied that he had agreed to the terms of settlement and asserted that they were invalid, the terms of settlement had been relied on by the other party to obtain judgment in the sale agreement proceedings. The client had then brought the negligence proceedings against the lawyers and the lawyers had sought summary dismissal of the proceedings. At the time of the hearing of the summary dismissal application, the High Court had not determined the appeal in Attwells although special leave to appeal had been granted. The judge initially decided to delay delivery of his judgment pending the High Court’s determination but later decided that it was appropriate to determine the application based on the current state of the law of the advocate’s immunity having regard to:

• authority which stated that primary decisions of courts should not be delayed pending the outcome of appellate decisions;
• the ill-health of one of the respondent lawyers; and
• the fact that any error could be corrected on appeal.

The judge ultimately found that the proceedings had no real prospect of success because the lawyers were entitled to the protection of the advocate’s immunity and so ordered summary dismissal of the proceedings.

On appeal, the Court of Appeal said at [46] that the High Court in Attwells had clarified the scope of the doctrine of the advocate’s immunity and indicated at [46]-[49] that the following principles could be derived from the plurality reasons in Attwells:

• The foundation of the immunity related to the exercise of judicial power. The protection provided by the immunity arose out of the connection between the advocate’s work and the judicial determination of a controversy for which a court was responsible. It did not extend to the compromise or settlement of proceedings, even where the settlement was recorded in consent orders by a court, because the substantive resolution of the dispute did not involve the exercise of judicial power by a court.
• The intimate connection required to attract the immunity was a functional connection between the advocate’s work and the judge’s decision. While the nexus identified in Giannarelli v Wraith [1988] HCA 52; (1988) 165 CLR 543 and D’Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1 whereby protection was provided to legal work connected with in-court conduct remained the authoritative test, the test was not satisfied where the advocate’s work led to an agreement between parties to litigation to settle their dispute.
• A consent order did not have the effect of bringing the actions undertaken as part of settlement negotiations within the scope of the immunity because the consent order had nothing to do with the substantive content of the rights and obligations established by the settlement agreement. This was because the substantive content of those rights and obligations was decided by the parties without any determination by the court. While the consent order may have facilitated the enforcement of the compromise, it was the agreement of the parties that settled its terms.

The Court of Appeal then said at [50] that the County Court judge did not have the benefit of the clarification given to the scope of the advocate’s immunity by the High Court in Attwells at the time of the summary dismissal application and that, as a result, the scope of the immunity had been treated as extending to legal work carried out in the course of advising upon, and reaching, the settlement of the sale agreement proceedings on the assumption that work relating to a settlement had, without more, a sufficient nexus to the conduct of a case in court. The Court of Appeal went on to say:

“This approach was the foundation of [the County Court judge’s] conclusion that the suit against the lawyers had no real prospect of success. The approach has now been shown to be in error by the High Court in Attwells. Viewed in the light of Attwells, [the County Court judge] was in error in his appreciation of the breadth, and foundation, of the immunity.”

The Court of Appeal noted that the immunity, being a common law doctrine, was subject to judicial clarification and reformulation over time even if the limits of the immunity had not always been clearly understood in the manner that now prevailed and, accordingly, concluded at [51] that, when the law as revealed by Attwells was applied, it could not be said that the negligence proceedings against the lawyers had no real prospect of success.

This was sufficient for the disposition of the appeal but it had also been claimed that, given that special leave had been granted in Attwells, the County Court judge should have delayed the delivery of his judgment until Attwells had been decided or otherwise should have adjourned the proceedings. However, the Court of Appeal considered that, in the circumstances of the case, the judge was not under an obligation to take either of these courses of action (see [56]-[63]).

The Court of Appeal noted that an application had been made to the High Court to reopen Attwells in Kendirjian v Lepore [2017] HCA Trans 17 and that judgment had been reserved in that matter but considered that it was appropriate to proceed to deliver its judgment in the case before it (see [71]).

For a detailed summary of Attwells, see K Ottesen, “Attwells v Jackson Lalic Lawyers Pty Limited – High Court retains advocate’s immunity from suit but holds that out of court settlements are outside its scope”, 18 May 2016.