Industrial Relations Commission of New South Wales in Court Session CITATION : Wiltshire v Direct Home Loan Corporation Pty Limited and Others [2003] NSWIRComm 463 JOHN WILTSHIRE Applicant DIRECT HOME LOAN CORPORATION PTY LIMITED (ACN 073 143 469) PARTIES : First Respondent BRIAN COPPIN Second Respondent MARK HOSKING Third Respondent FILE NUMBER: IRC 4579 of 2001 CORAM: Schmidt J CATCHWORDS : Unfair contract - notice of motion - respondents seeking to set aside two summonses for production - whether production sought is a "fishing exercise" - documents sought relevant - summonses not to be set aside - motion dismissed - respondents to bear applicant's costs of the motion, as agreed or assessed LEGISLATION CITED : Industrial Relations Act 1996 Brown v Rezitis (1970) 127 CLR 157 CASES CITED : Lakatoi Universal Pty Limited & Ors v Walker & Ors [1998] NSWSC 470 (31 July 1998) The Commissioner for Railways v Small (1938) 38 SR (NSW) 564 HEARING DATES: 12/12/2003 DATE OF JUDGMENT: 12/16/2003 APPLICANT: Mr GT Thiele, solicitor SOLICITORS: Rockliffs LEGAL REPRESENTATIVES: RESPONDENTS: Mr DD Knoll of counsel SOLICITORS: Nash O'Neill Tomko JUDGMENT: - 4 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: Schmidt J DATE: 16 December 2003 MATTER NUMBER IRC 4579 OF 2001 JOHN WILTSHIRE v DIRECT HOME LOAN CORPORATION PTY LIMITED AND OTHERS Application under section 106 of the Industrial Relations Act 1996 JUDGMENT 1 This judgment concerns a motion filed by the respondents, seeking to have set aside two summonses directed to the second and third respondents, on the basis that the documents sought amounted to a fishing exercise. 2 The applicant's summons, brought under s106 of the Industrial Relations Act ('the Act'), alleges that the first respondent did not make payments due to him and that representations made by the other respondents, that he would receive a shareholding in the first respondent, were not made good. The applicant's further amended summons claims that the second and third respondents were directors of the first, who materially benefited from the failure to make payments due to the applicant and that they each benefited from the failure to make good the promised shareholding. The second and third respondents also each apparently have an interest in the first respondent, through other corporate entities. 3 The applicant has put on his affidavits in chief. There, reference is made to failures to pay he and other employees at all or on time, some payments made in cash, failure to provide or keep proper records and seeming high cash expenditure, by the personal respondents, at the same time as payments due to the applicant and other employees was not made by the first respondent, or was made late. 4 The High Court has made clear in Brown v Rezitis (1970) 127 CLR 157 that the Court has power to make orders against persons not party to the contract in question, who have benefited from the unfairness of the contract in question, or who have been causally connected with that unfairness. 5 The applicant plainly has a suspicion that the respondents have personally had the benefit of the first respondent's money at a time when it was not meeting its obligations to the applicant and others. This is a claim made in the summons. The applicant also claims that the personal respondents have benefited from their failure to make good the shareholding promised to him. The applicant seeks to pursue the proof of those allegations through the documents which have been subpoenaed from the second and third respondents. They include tax returns, bank records, superannuation payments, credit card accounts and real estate transactions. 6 The parties agreed that if production were required, that access should only be granted to the applicant's legal representatives, until further order of the Court. 7 Mr Knoll of counsel argued for the respondents that mere suspicion is not a proper basis for the pursuit of these documents. In the words of Jordan CJ in The Commissioner for Railways v Small (1938) 38 SR (NSW) 564, this was an endeavour to establish whether the applicant had any case at all against the respondents. There was nothing beyond mere speculation relied upon. Upon that basis, the summonses must be set aside. He also argued that various of the categories of documents sought were irrelevant. 8 Mr Thiele, solicitor, argued for the applicant that the personal benefits received by the second and third respondents from the unfairness complained of was in issue in the proceedings. There was no onerous obligation imposed by the production and the documents sought were necessary to fairly dispose of the proceedings. There was no fishing involved. The documents went to establish a key plank in the case, that these respondents had derived a personal benefit from the applicant's exertions. Consideration 9 I am satisfied that the summonses should not be set aside. I cannot see that it can here properly be concluded that the summonses are merely speculative, or that they will not bring forth material relevant to the case. 10 At issue between the parties is that the second and third respondents derived a personal benefit from the unfairness complained of. The basis of the claim being made is explained in the further amended summons and the affidavit material. The applicant seeks the production of documents to assist in the proof of the allegations. 11 The information sought is plainly exclusive to the respondents. As Rolfe J observed in Lakatoi Universal Pty Limited & Ors v Walker & Ors [1998] NSWSC 470 (31 July 1998), parties are entitled to build up a mosaic of evidence. The documents in question are obviously relevant to any cross examination of these respondents on these issues. I am not satisfied that the circumstances are such that it can properly be concluded that the documents are sought by the applicant to ascertain whether he has a case at all. 12 It is relevant to this conclusion that these are not documents sought from third parties. They are sought from the respondents, who were apparently not only working directors in the business, but also each had an interest in it, albeit through other corporate entities. It needs to be recollected that one of the purposes of the section is to unravel subterfuge, including that which results from the use of corporate vehicles to run businesses which employ people, in circumstances where the contracts which they enter are proven to be unfair. In those circumstances, it may readily be seen how persons in the position of these respondents, may derive a benefit from a corporate respondent's failure to make payments due to an applicant which it employed. At the least, the corporate respondent would have had the use of that money, while ever it remained unpaid. This can lead to a variety of benefits for those who ultimately own the corporation as well as those who hold directorships. The same can be said in relation to a failure to deliver a promised shareholding. 13 Those, however, are not questions which need to be determined at this stage of the proceedings. It is sufficient that I am unable to conclude, either that any of the documents sought are clearly irrelevant to the issues lying between the parties, or that the exercise is one of mere fishing. Orders 14 For all of the reasons given, I order that the respondents' motion be dismissed and that they bear the applicant's costs of the motion, as agreed, or assessed. 15 Access to the documents is granted on the basis agreed. ------------------------ 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.