Local Court New South Wales Medium Neutral Citation: Young v Vidler [2023] NSWLC 7 Hearing dates: 13 September 2023 Decision date: 19 September 2023 Jurisdiction: Civil Before: Brender LCM Decision: Orders for examination made Catchwords: CIVIL PROCEDURE CIVIL PROCEDURE — Subpoenas — To give evidence Cases Cited: Hexiva Pty Ltd v Lederer [2006] NSWSC 561 Moustache Pty Ltd v Takchi [2015] NSWSC 2077 Pyoja Pty Ltd v 284 Bronte Road Developments Pty Ltd & Ors [2006] NSWSC 831 Quach v Vu [2009] NSWSC 131 Stocovaz v Fung [2007] NSWCA 199 Category: Procedural rulings Parties: Annette Young Virginia Vidler Representation: Defendant/Applicant on Motion: Mr J Gruzman Parties affected by Motion: Mr Parrish File Number(s): 2023/00013315 JUDGMENT 1. This motion relates to a motor vehicle accident claim in the General Division claiming repairs of $23,323 and hire car costs of $6,376. There are defences including asserting that the amounts claimed are not fair and reasonable. 2. The defendant has issued subpoenas to the Proper Officer of DCD Smash Repairs Pty Ltd ('DCD') and the Proper Officer of Byzantine Investments Pty Ltd t/a Crashclaim ('Crashclaim') seeking documents in multiple categories relating to matters such as the ordering of any parts for the repair of the relevant vehicle and as to the hiring of the motor vehicle claimed in the proceedings. Nobody has moved to set aside the subpoenas. There is no dispute at present about who is the 'Proper Officer' in each case. 3. The defendant is dissatisfied with production. She has sought an explanation as to why more documents haven't been produced and has not received a satisfactory reply. Accordingly, she has moved on a motion that the Proper Officers attend court to be examined in respect of the subpoenas. Two other such motions in Small Claims matters were also argued based on similar evidence. The plaintiffs did not participate in the motions. The motions were defended by counsel for the proper officers. Facts and Issues 1. The evidence in support of the motion includes correspondence between the plaintiff and the defendant in which the plaintiff said that the main contact for the repairing of the plaintiff's vehicle was Crashclaim, and that the vehicle was repaired by DCD employees at the DCD panel shop on a particular date. It was alleged by the plaintiff that the work recorded in the written invoice was in fact performed and took 29 days. In answer to the question of whether the parts specified in the tax invoice were purchased and paid for by DCD and installed on the vehicle as per the repair invoice, the answer was that it was a question that should be directed to DCD. There is evidence that the two companies are third party payers under insurance arrangements. 2. This court has many claims of this type. A potential issue in many proceedings is whether the repairs referred to in a foundational 'invoice', demand before action and then in the Statement of Claim were actually made and are an "actual cost of repair". If so, the plaintiff may use that document and amount as a benchmark or starting point for her damages on the basis that it represents a measure of the reasonable cost of repairs (Stocovaz v Fung [2007] NSWCA 199). If not, and if the document is, for example, properly described only as a claim preceding litigation by a person representing the plaintiff, it probably has no such significance. 3. In this court often a single expert is appointed. They may be briefed to opine on the reasonable costs of repair. It would often be important to know if they should be briefed with the claim document and what ought to be its status. 4. Thus, for at least that reason, the defendant has an interest in knowing whether the repairs claimed in the invoice were made. Even if the repairs claimed were done, it could still well be relevant to investigate the reasonableness of the charges. Relevance in any event is effectively conceded by the fact that there is no application to set aside the subpoenas. 5. DCD has not produced any documents relating to the parts in the claim and has produced only an assessment, a repair invoice and assessment images. Nor has Crashclaim produced any documents recording the repair parts. There are many other categories where there has been no production. Those are also potentially germane to matters that could be relevant including whether the repairs were on credit, and as to the reasonableness of the hire car charges sought both as to rate and duration. Requests for explanation as to the lack of production are left in a state where there is no explanation offered to the defendant or to the court as part of the opposition to the motion. 6. The defendant has led evidence from a loss assessor that repairers are required to keep registers and other records, as to the usual practice of repair companies and how parts are usually ordered, paid for and recorded. He said that he has attended the office of DCD, and it appears to be a real company with employees and computers. 7. There is also evidence from Crashclaim's Facebook page which shows staff sitting at a desk behind computers. 8. The recipients of the subpoena relied upon an affidavit of an employee of Crashclaim. He said that it carries on a car hire business, and he also assists DCD in processing and responding to subpoenas. It carries on a smash repair business. He reports to or communicates with the proper officers of both companies. He said that in various proceedings there have been 77 subpoenas issued to produce to Byzantine and 26 subpoenas to produce to DCD. It takes him 2-3 hours to respond to each subpoena. Sometimes conduct money is not provided. He looks at the subpoenas and searches the data management systems for documents. He says their records are stored in folders on a computer. He believes he has complied with the subpoenas. He doesn't go into any detail as to why there are none of the documents which prima facie should exist if the information provided by the defendant is true and if the companies keep what I assume would be proper business records for tax and other purposes. 9. Where the terms of a subpoena are not objected to, the documents sought must be the subject of a thorough, diligent, and comprehensive response, so that all documents fully within its terms are located, extracted and produced. The Law 1. The defendant relied on the decision in Pyoja Pty Ltd v 284 Bronte Road Developments Pty Ltd & Ors [2006] NSWSC 831 in which Palmer J explained the jurisdiction as follows: "15 A party who has procured the issue by the Court of a valid subpoena to produce documents is entitled to be satisfied that the person served with the subpoena has properly answered it. The Court must also be satisfied that its order for production of documents, constituted by the subpoena, has been properly observed. Ascertaining whether or not a person has made proper answer to a subpoena to produce is part of the Court's function in administering its own process generally and, in particular, in administering UCPR 33.6(4). Such power as the law provides to ascertain whether proper answer has been made to a subpoena to produce is part of the Court's ancillary, or incidental, jurisdiction: see Glass "Seminars on Evidence" (1970) p.10 per Moffatt J, speaking extra judicially. It is also part of the Court's inherent jurisdiction. Accordingly, the Registrar has both the inherent and the incidental jurisdiction of a Judge of the Court for the purpose of ascertaining whether a subpoena to produce has been properly answered. 16 The means by which, and the extent to which, a litigant may test the sufficiency of an answer to a subpoena to produce documents are now fairly clear. The Court, which may be constituted by the Registrar, may in its discretion allow the person subpoenaed to be examined, on oath or unsworn, to the limited extent discussed by Jordan CJ in Commissioner for Railways v Small [1938] NSWStRp 29; (1938) 38 SR(NSW) 564, at 574, and by Beaumont J in Trade Practices Commission v Arnotts Limited (No 2) [1989] FCA 248; (1989) 21 FCR 306, at 312-315. 17 If it appears that a person subpoenaed to produce documents has, without lawful excuse, failed to make proper answer to the subpoena, a party to the proceedings may initiate proceedings for contempt of Court...". 1. Here, the defendant is dissatisfied with production. It submits that the court has a discretion to ask an individual questions to ascertain the sufficiency of compliance as explained in Pyoja. The process and rationale are further explained in Hexiva Pty Ltd v Lederer [2006] NSWSC 561, where Brereton J held: "13 Civil Procedure Act, s 68, provides that subject to rules of the court, the court may, by subpoena or otherwise, order any person to, inter alia, attend court to be examined as a witness. 14 The law relating to the procedure to be followed when a party who has issued and served a subpoena for production wishes to test the sufficiency of compliance with that subpoena was discussed by Beaumont J in Trade Practices Commission v Arnotts Limited (No 2) (1989) 21 FCR 306. His Honour referred to what had been written by Moffitt J in H H Glass, Seminars on Evidence (1970) (at 10-11). Moffitt J, in that extrajudicial writing, observed that there seemed no reason why the court should not have a discretion to ask of a person, who was required to produce documents on subpoena, questions to ascertain the sufficiency of compliance, either informally or on oath. He continued: In exercising such a discretion, the court would not infringe the privilege of a person not to incriminate himself, having regard to the fact that deliberate non compliance with a subpoena is a contempt of court with penal consequences ... Any such discretion could not extend as far as conducting a discovery process ... The precise limits of questions of a person subpoenaed to produce documents are debatable, but it seems that a judge could ask and possibly permit to be asked, questions informally or on oath to ensure that the party understood the terms of the subpoena and the documents referred to and his obligation thereunder, including his obligation regarding documents in his possession or power and relating to search ... It would seem, however, that questions could not extend to establishing proof that the person was in contempt of court, nor could they be of the search and inquiry type such as to the person's knowledge as to the location of documents not in his present possession or control, or as to the nature of other documents in his possession not within the scope of the subpoena, or as to his system of books or the like, so that this material could be used to search for other evidence or to enable a different subpoena to be framed. 15 In Arnotts, Beaumont J concluded that, an issue having arisen as to whether or not documents of the type called for by the subpoena in question existed, the appropriate method to be adopted for the determination of that adjectival issue was a matter of judicial discretion. His Honour concluded that the appropriate course in that case was that the witness who had been subpoenaed to produce documents should be sworn, not in the substantive proceedings but in the ancillary application for production of documents pursuant to the subpoena; that that witness should then be examined by counsel for the party calling on the subpoena (implicitly in chief, by non-leading questions, albeit that the witness was the proper officer of Mattingly, the opposing party in the litigation); that counsel for the party with whom the witness was aligned might then also examine the witness; and that those directions were without prejudice to any claim for privilege against self-incrimination which might be made in the course of the examination and also without prejudice to any claim of confidentiality, and on the basis that none of the evidence so given was to be evidence in the principal proceedings or in proceedings in which it might be alleged that there had been a failure to comply with the subpoena. In that way, his Honour sought to preserve a fair balance between permitting Arnotts, who had issued the subpoena, to pursue their inquiries as to the existence of the documents sought, without depriving Mattingly, on the other hand, of its rights to claim privilege in a proper case. His Honour observed that Arnotts may not be able to pursue their inquiries exhaustively, but, on the other hand, Mattingly would have to make out a proper foundation for any claim for privilege." 1. His Honour made similar observations in Quach v Vu [2009] NSWSC 131. 2. The subpoenas have not been set aside. In Moustache Pty Ltd v Takchi [2015] NSWSC 2077, His Honour referred to the requirement that there must be at least prima facie evidence of misunderstanding or failure to comply (at [8]). Consideration 1. In my view, in this case, there is a prima facie position that there has been some misunderstanding or failure to comply. No explanation has been offered. That justifies the making of an examination order. 2. Counsel for the recipients pointed out that the examination is not a cross-examination and cannot be directed to obtaining evidence for use in the proceedings, nor to seek to prove that there's been a contempt of court. He noted that there is no undertaking in relation to costs. He pointed out that the argument in relation to Crashclaim may be weaker in this case because of their different role in the arrangements concerning the repair of the vehicle. He submitted that I have a discretion, and although I could order the proposed process, I should not, given that there are potentially 77 examples of this process, and many of them are in the Small Claims Division, which generally does not allow cross examination at the hearing. 3. In the absence of any explanation at all as to why the parties said to have repaired or managed the repair of this vehicle have no documents whatsoever recording the parts used, it seems to me this is a case like Hexiva, in which it is in the interests of justice for the plaintiff to have the opportunity to examine the recipients' understanding of their obligations in respect of the subpoena. The company said to have been managing the process ought prima facie to have relevant documents about the process. The repairer ought to have documents about the work it did. There could well be either a misunderstanding of the role of the recipient to search for and produce documents, or a failure to comply. Of course, it is possible there has been misinformation from the plaintiff. 4. To the extent some of these claims are Small Claims, the need for the examination is heightened, because the evidence tendered by the plaintiffs will probably not be the subject of any cross examination at hearing and may end up not being able to be otherwise tested in the absence of proper production by third parties. 5. It will be up to the person controlling the examination to ensure it remains within permissible limits. The defendants are entitled to explore whether DCD and Crashclaim have any more relevant documents that have been sought, given their alleged roles. There is not to be cross examination, and there is not to be examination directed to seeking to demonstrate contempt or seeking to obtain evidence for use in the main proceedings. There would not be examination as to the existence of any particular document, unless that was incidental to seeking to examine whether the recipient understands his or her obligations. 6. The appropriate order is along the lines of that in the Hexiva case, namely that the proper officers attend court for the purpose of being examined on the subpoenas, that the order be made without prejudice to any claim for privilege against self-incrimination, and any claim for litigation privilege. However, none of the evidence is to be evidence in the principal proceedings nor admissible for use in proceedings relating to contravention of the subpoena. 7. In the first instance, the defendant is to pay the cost of attendance of the recipient. The plaintiff did not participate in the motion. The recipients appeared by counsel. The costs of this application are reserved as between the defendant and the recipients. 8. The two other cases argued simultaneously with this application are materially the same, and I will make the same orders. 9. If it becomes apparent after three sets of examinations that the process is futile or oppressive, the recipients of the subpoenas may be in a position to oppose further such applications. It may be contrary to the interests of justice for this procedure to become a standard part of small claims litigation in this Court. Orders 1. The orders will be: 1. Order that the Proper Officers of DCD and Crashclaim attend before the court at a time and place identified by the Registrar for the purpose of being examined in respect of the subpoenas for production issued to them. This order is made without prejudice to any claim for privilege against self-incrimination which may be made by the recipients and without prejudice to any claim for litigation privilege which may be made by the plaintiffs. 2. Order that none of the evidence given on such examination is to be accepted as evidence in the principal proceedings or in any proceedings for contravention or failure to comply with the subpoena. 3. Order that in the first instance, the defendant pay the costs of attendance and of the examination. Costs otherwise reserved. ********** Amendments 17 May 2024 - Amended the parties field on the cover letter. 17 May 2024 - Amended the legislation field in the cover sheet to be in alphabetical order. 08 July 2024 - Amended formatting. 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: 13 August 2024