Queensland Judgments
Authorised Reports & Unreported Judgments
Exit Distraction Free Reading Mode

Quinlan v ERM Power Ltd & Ors

Unreported Citation:

[2021] QSC 35


In this strike out application relating to proceedings brought under the whistleblower protection provisions in Part 9.4AAA of the Corporations Act 2001 (Cth), Bowskill J considered the proper construction of the requirement in s 1317AA of the Corporations Act 2001 (Cth) that a whistleblower has “reasonable grounds to suspect that the information” disclosed concerns particular specified matters about the conduct of the corporation in question in order to come within the scope of Pt 9.4AAA. Her Honour held that only matters within the knowledge of the discloser at the time of the disclosures are relevant to an assessment of whether the discloser had “reasonable grounds”.

Bowskill J

26 February 2021

Part 9.4AAA of the Corporations Act 2001 (Cth) establishes a regime for the protection of whistleblowers. [7]. Section 1317AA of the Corporations Act 2001 (Cth) defines the disclosures that qualify for protection under Pt 9.4AAA. [8]. Relevantly, ss 1317AA(4) and 1317AA(5) (s 1317AA(1)(d) prior to amendments made in 2019) require that a discloser “has reasonable grounds to suspect that the information” disclosed concerns particular specified matters about the conduct of the corporation in question. [9]–[10].

The plaintiff in this matter was a former employee of the first defendant, ERM. He claims that he made disclosures to directors and officers of ERM that qualify for protection under Pt 9.4AAA, and he alleges that details of these disclosures were improperly disclosed by various of the 13 defendants without his consent. He also alleges that he was subject to victimisation for seven years, leading to loss of pay rises and other benefits and culminating in the loss of his employment. In this proceeding, the plaintiff sought compensation for the loss, damage and injury he claims he suffered as a result of the detrimental conduct alleged. [1].

A number of the defendants brought applications to strike out parts of the plaintiff’s pleading. [3]

Construction of the “reasonable grounds” requirement in s 1317AA

Among several issues raised by the first defendant’s strike out application was one relating to whether it was “relevant for the purposes of s 1317AA to plead, and eventually prove, what is alleged to be the actual (mis)conduct or state of affairs the subject of the information disclosed”. The plaintiff argued that the requirement to demonstrate “reasonable grounds” required one “to have regard to what (is alleged to have) actually occurred, even if those matters were not known to the discloser, to determine whether they had reasonable grounds for suspecting”. [16].

Justice Bowskill rejected the plaintiff’s construction of s 1317AA. [17]. Drawing upon case law relating to arrest and search warrants – and the one decided case relating to s 1317AA, The Environmental Group Ltd v Bowd (2019) 137 ACSR 352 – her Honour held that assessment of whether a discloser “has reasonable grounds to suspect” was limited in scope to consideration of what the discloser knew at the time of disclosure. [22]–[35]. Accordingly:

“as a matter of the proper construction of s 1317AA(1)(d) (before the 2019 amendment) and s 1317AA(4) and (5) (after the 2019 amendment), matters not within the knowledge of the plaintiff at the time of the disclosures are not relevant to the question of whether those disclosures qualify for protection; and allegations of the purport or effect of what is said to have actually occurred, divorced from what was in the mind of the plaintiff, are not relevant.” [37].

Requirements of rr 150(1)(k) and 150(2) Uniform Civil Procedure Rules 1999 (“UCPR”) in pleading motive, intention or other condition of mind

A challenge was also made to parts of the pleading dealing with aspects of the alleged victimisation, that pleaded knowledge, motive and awareness on the part of one of the defendants. The defendants complained that no material facts were pleaded “in support of [these] allegations … in respect of each natural person defendant; and to the extent that … [these] may be said to be inferred from other facts, either those facts are not specifically pleaded, or if they are pleaded elsewhere in the statement of claim, the fact that they are relied upon as the basis for the inference is not specifically identified”. [63].

Justice Bowskill upheld this complaint, and struck out the relevant paragraphs, with leave to re-plead. [68]. Her Honour observed that “[i]t is not sufficient … simply to plead facts somewhere in the statement of claim” and then later plead “in a conclusory way” that a party “had a particular motive, intention or other state of mind”. Instead, rr 150(1)(k) and 150(2) UCPR require “explicit linking” of facts to inferences … and a party is required to ‘spell out in the statement of claim’ the precise manner in which underlying facts are to be deployed so as to establish a matter alleged to be available as a matter of inference from those facts”. Furthermore, her Honour emphasised that “it is for the party making the allegations to identify the case which it seeks to make and to do that clearly and distinctly” and “[t]his is all the more essential where the allegations are of fraudulent or serious misconduct, in respect of which more precision is required than in other cases”. [65].


In the result, the parties were ordered to bring in draft minutes of order reflecting the outcome, with the parties to be heard as to costs. [82].

S Walpole


Require Technical Assistance?

Message sent!

Thanks for reaching out! Someone from our team will get back to you soon.

Message not sent!

Something went wrong. Please try again.