Court of Appeal Supreme Court New South Wales Medium Neutral Citation: KSMC Holdings Pty Ltd t/as Hubba Bubba Childcare on Haig v Bowden (No 2) [2020] NSWCA 131 Hearing dates: On the papers Date of orders: 2 July 2020 Decision date: 02 July 2020 Before: Payne JA Decision: (1) set aside paragraphs 2 and 3 of the subpoena dated 30 March 2020; (2) set aside paragraphs 1 and 2 of the notice to produce dated 30 March 2020; (3) set aside paragraphs 3 and 4 of the notice to produce dated 18 June 2020; (4) the appellants to pay the costs of the respondents of and incidental to the notice of motion dated 26 June 2020. Catchwords: DEFAMATION – application for third party costs order – extensive requests PROCEDURE – subpoena – application to set aside PROCEDURE – notice to produce – application to set aside Legislation Cited: Civil Procedure Act 2005 (NSW), ss 56, 98 Evidence Act 1995 (NSW), ss 118, 119 Uniform Civil Procedure Rules 2005 (NSW), r 34.2(1) Cases Cited: KSMC Holdings Pty Ltd t/as Hubba Bubba Childcare on Haig v Bowden [2020] NSWCA 28 Category: Procedural and other rulings Parties: KSMC Holdings Pty Ltd t/as Hubba Bubba Childcare on Haig (First Appellant) Karen Suzanne Marion Chapman (Second Appellant) Matthew Bowden (First Respondent) Annette Bowden (Second Respondent) Thomas Robinson Bowden (Third Respondent) Representation: Counsel: R H Armitage (Appellants) G McGrath (Respondents) Solicitors: Willis & Bowring (Appellants) Carneys Lawyers (Respondents) File Number(s): 2019/136023 Publication restriction: Nil. Decision under appeal Court or tribunal: District Court of New South Wales Jurisdiction: Civil Citation: [2019] NSWDC 98 Date of Decision: 4 April 2019 Before: Levy SC DCJ File Number(s): 2017/100260 [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Judgment 1. PAYNE JA: On 3 March 2020, this Court set aside a judgment awarding damages to the first respondent for defamation: KSMC Holdings Pty Ltd t/as Hubba Bubba Childcare on Haig v Bowden [2020] NSWCA 28. The following orders were made: 1. Appeal allowed; 2. Set aside the orders of the primary judge and in lieu thereof order: 1. Statement of claim dismissed; 2. Plaintiff to pay the costs of the defendants. 1. Respondent to pay the costs of the appellants of the appeal. 1. On 17 March 2020, the successful appellants (KSMC and Ms Chapman) made an application for an order under s 98 of the Civil Procedure Act 2005 (NSW) against the first respondent's parents, Annette and Thomas Bowden, who had not been a party to the trial or the appeal. 2. In support of that application a subpoena dated 30 March 2020 was issued at the request of KSMC and Ms Chapman. This subpoena was directed to the solicitors for the appellants. Two notices to produce, dated 30 March 2020 and 18 June 2020, were served on the three respondents. 3. The application for a third party costs order under s 98 of the Civil Procedure Act has been allocated to me to determine, sitting alone. Following a communication from the Registry to the parties about the application under s 98 of the Civil Procedure Act, orders were made by consent as follows: 1. The Appellants to file and serve a Statement of Claim by 6 May 2020. 2. The Respondents to file and serve a Defence by 27 May 2020. 3. The Appellants to serve any further evidence they rely upon by 10 June 2020. 4. The Respondents to serve any evidence they rely upon by 24 June 2020. 5. Standover the Subpoena and Notice to Produce until 29 June 2020. 6. List matter for mention on 29 June 2020. 1. A great deal of material has been filed: 1. a statement of claim filed for the appellants on 7 May 2020; 2. a defence, filed for the respondents, on 26 May 2020; 3. an affidavit of Donald Rae Wright, the solicitor for the appellants, sworn 17 March 2020. Mr Wright's affidavit and annexures comprises 30 pages; 4. an affidavit of Matthew Bowden, the first respondent, sworn 23 June 2020. This affidavit, including annexures, comprises 124 pages; 5. an affidavit of Annette Bowden, the second respondent, sworn 23 June 2020. This affidavit, including annexures, comprises 29 pages; 6. an affidavit of Thomas Robinson Bowden, the third respondent, sworn 23 June 2020; and 7. an affidavit of Stephen John Titus, the solicitor for the respondents, sworn 24 June 2020. This affidavit, including annexures, comprises 126 pages. 1. Some but not all of the material sought by the subpoena and the notices to produce was included in the evidence filed by the respondents referred to above. 2. On 26 June 2020, an application to set aside various paragraphs of the subpoena and notices to produce was filed. 3. On 29 June 2020, the matter came before me for directions. Orders were made for the exchange of written submissions and the hearing of the s 98 costs application was fixed for Monday 13 July 2020. 4. On the notice of motion filed on 26 June 2020 the following material was filed: 1. a further affidavit of Stephen Titus, sworn 26 June 2020. This affidavit and its annexures comprise 28 pages; 2. written submissions for the respondents, filed 30 June 2020; 3. written submissions for the appellants, filed 30 June 2020; and 4. a 32 page "attachment" to the appellant's submissions. 1. In an application such as the present the dictates of s 56 of the Civil Procedure Act loom large. It will be recalled that this matter concerned 4 lines in a lengthy email about staff issues sent to 35 parents at a childcare centre. Remarkably, the defamation proceedings in relation to this email stretched over 11 days of trial in the District Court and led to a successful appeal in this Court. No doubt the legal costs were very significant on all sides. 2. This is now a further piece of litigation arising from the email. The respondents have each filed lengthy affidavits, as has their solicitor. The issues between the parties revealed on the pleading are not significant. Principally, what the Court will be called on to determine is the legal consequence under s 98 of the Civil Procedure Act, if any, of the conduct of the parents in funding the litigation conducted by their son. As I have said, a considerable volume of documents addressing the limited issues between the parties has been filed and will be before me on the hearing of the claim. Notice to produce dated 30 March 2020 1. The respondents have sought to set aside paragraphs 1 and 2 in the schedule of the notice to produce dated 30 March 2020. In relation to paragraph 6 of the notice of motion, the appellants press for production of invoices in respect of counsel's fees. Whilst I do not regard invoices in respect of counsel's fees as potentially shedding any light on the issues between the parties, in the absence of any challenge by the respondents to paragraph 6, if counsel's fees fall within the terms of paragraph 6, being "received" from the respondents' solicitors, they should be produced. 2. Paragraph 1 of the notice to produce seeks the first respondent's bank statements from 30 March 2017 to 30 March 2020. The respondents submit that the first respondent's bank statements for the relevant period have already been provided in answer to an examination notice. The appellants say that some only of the relevant bank statements have been provided. The appellants submit that the remaining documents are relevant to determining "the timing and the quantum of any payments made by the first respondent for the litigation". I am not satisfied that the "timing and the quantum of any payments made by the first respondent for the litigation" is, of itself, a relevant issue in the proceedings. 3. Paragraph 2 of that notice to produce seeks the bank statements of the second and third respondents, with some redactions, for the same period. The appellants submit that these documents are relevant to determining "the timing and the quantum of monies paid by either or both of the Second and Third Respondents to their lawyers for the litigation". I am not satisfied that the "timing and the quantum" of any payments made by the second or third respondents for the litigation is, of itself, a relevant issue in the proceedings. 4. This is a clear case where the Court should "order otherwise" in relation to the obligation to produce: Uniform Civil Procedure Rules 2005 (NSW), r 34.2(1). The affidavit evidence of the respondents filed before me discloses in detail how the hearing in the District Court and the Court of Appeal was funded. That evidence is actually consistent with the appellants' case on the pleadings. In light of that clear evidence which addresses the only issue on the pleadings, to which these documents might be relevant, the source of funding of the litigation, to require production under paragraphs 1 and 2 of the notice to produce would be oppressive and inconsistent with the dictates of s 56 of the Civil Procedure Act. 5. Paragraphs 1 and 2 of the notice to produce dated 30 March 2020 are set aside. Subpoena dated 30 March 2020 1. The respondents have sought to set aside paragraphs 2 and 3 in the schedule to the subpoena. 2. For essentially the same reasons as in relation to paragraph 2 of the notice to produce dated 30 March 2020, paragraph 2 of the subpoena which seeks the trust account ledger of the respondents' solicitor must be set aside. The funding and payments in relation to proceedings in the District Court and the Court of Appeal have been addressed in sufficient detail in the affidavits of the respondents. To require production of the trust account ledger would be inconsistent with the dictates of s 56 of the Civil Procedure Act. 3. Paragraph 3 of the subpoena seeks the Matter Transaction Report maintained by the respondents' solicitor in respect of the hearing below and the appeal. This report contains time records maintained by the respondents' solicitors. A claim of client legal privilege has been foreshadowed in relation to this document. On the evidence before me I am satisfied that the document is likely to attract client legal privilege. More importantly, I am not satisfied that this paragraph of the subpoena is directed to any issue arising on the pleadings. No issue was specifically identified in the appellants' written submissions. 4. For these reasons, paragraphs 2 and 3 of the schedule to the subpoena are set aside. Notice to produce dated 18 June 2020 1. The respondents submit that they have complied with paragraphs 1 and 2 of the notice to produce. Whilst the appellants have said that they press for further production under paragraphs 1-2, I am not asked to determine any dispute about that matter. The notice of motion filed by the respondents seeks to set aside paragraphs 3 and 4 of the notice to produce. 2. Paragraph 3 of the notice to produce seeks production of correspondence about the "possibility" or fact of litigation against Karen Chapman. I regard that topic as so peripheral to the real issues between the parties that paragraph 3 must be set aside. 3. Paragraph 4 of the notice to produce seeks 42 items of correspondence from the first respondent's litigation file. Paragraph 9 of the appellants' statement of claim seeking an order under s 98 of the Civil Procedure Act identifies the factual bases on which the appellants rely. Paragraph 9(i) identifies ten documents or matters. Only one of the 42 documents identified in paragraph 4 of the notice to produce is referred to in the statement of claim. That document is document (vi) in paragraph 9(i) of the statement of claim and document 4x (also referred to as document 524) in the notice to produce. On the pleaded issues, paragraph 4 of the notice to produce is correctly described by the respondents as a fishing expedition. 4. Further, from the descriptions of the remaining documents I have concluded that all of the documents sought (including document (vi) in paragraph 9(i) of the statement of claim) are subject to advice privilege under s 118 of the Evidence Act 1995 (NSW) or litigation privilege under s 119 of the Evidence Act. Recognising this, the appellants submit that privilege has been waived by reason of the descriptions of each of the documents in the costs assessment process. I reject the appellants' submission. I will not deal with each of the 42 separate descriptions but suffice to say that, for example, document 18 which provides a document description including the words "legal options available" does not waive privilege in the underlying communication. The other descriptions in the documents which are sought are of a similar character. 5. Having regard to the dictates of s 56 of the Civil Procedure Act, I do not require the respondents to undertake the task of redacting these documents to produce any material not privileged. Having regard to the very limited issues between the parties on the pleadings, the excessive time and expense already involved in these proceedings and the interests of justice more generally, I would in any event set aside paragraph 4 as to require production of documents caught by paragraph 4 would be oppressive. 6. Paragraph 4 of the notice to produce is set aside. Orders 1. For the foregoing reasons I make the following orders on the respondents notice of motion dated 26 June 2020: 1. set aside paragraphs 2 and 3 of the subpoena dated 30 March 2020; 2. set aside paragraphs 1 and 2 of the notice to produce dated 30 March 2020; 3. set aside paragraphs 3 and 4 of the notice to produce dated 18 June 2020; 4. the appellants to pay the costs of the respondents of and incidental to of the notice of motion dated 26 June 2020. ********** 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. Decision last updated: 02 July 2020