New South Wales Supreme Court CITATION : Azzi & Ors v Volvo [2006] NSWSC 283 HEARING DATE(S) : 7 March 2006 JUDGMENT DATE : 7 March 2006 JUDGMENT OF : Brereton J EX TEMPORE JUDGMENT DATE : 03/07/2006 DECISION : Order that the notice to produce dated 28 February 2006, as amended on 7 March 2006, be set aside. Order the plaintiffs to pay the defendant's costs of the motions insofar as they relate to setting aside the notice to produce. CATCHWORDS : PROCEDURE – EVIDENCE – Subpoenas and Notices to Produce – setting aside – oppressive – interrelationship of burden and apparent relevance – late service of extensive notice shortly before trial – effect of limitation of discovery to classes on rule that subpoena should not be used to seek further discovery. LEGISLATION CITED : Uniform Civil Procedure Rules, r 21.2 Bailey v Beagle Management Pty Ltd (2001) 105 FCR 136 Bidald Consulting Pty Ltd v Miles Special Builders Pty Ltd [2005] NSWSC 977 Botany Bay Instrumentation Pty Limited v Stewart (1984) 3 NSWLR 98 Budden v Wilkinson [1893] 2 QB 432 Commissioner for Railways v Small (1938) 38 SR (NSW) 564 Compagnie Financier et Commerciale du Pacifique v Peruvian Guano Company (1882) 11 QBD 55 Finnie v Dalglish [1982] 1 NSWLR 400 Fruehauf Finance Corporation Pty Ltd v Zurich Australian Insurance Ltd (1990) 20 NSWLR 359 Gardner v Irvin (1878) 4 Ex D 49 Hall v Truman, Hanbury & Co (1885) 29 CLD 307 Hastings Corporation v Ivall (1873) LR 8 Ch App 1017 CASES CITED : Hatton v Attorney-General (2000) 158 FLR 31 Highfields Preparatory and Kindergarten School Pty Ltd v Simpson (NSWSC, Master Greenwood, 22 August 1985, unreported) Ishoe v David Sevities Pty Ltd (NSWSC, Young J, 13 December 1991, unreported) Jones v Monte Video Gas Co (1880) 5 QBD 556 Mogul Steamship Co v McGregor, Gow & Co (1886) 2 TLR 752 Mulley v Manifold (1959) 103 CLR 341 National Employers' Mutual General Insurance Association Ltd v Waind [1978] 1 NSWLR 372 Portal Software Pty Ltd v Bodsworth [2005] NSWSC 1115 Ritz Hotel Ltd v Charles of the Ritz Ltd (No 17) (NSWSC McLelland J, 11 February 1988, unreported) Senior v Holdsworth; Ex parte Independent Television News Ltd [1976] QB 23 Southern Pacific Hotel Services Inc v Southern Pacific Hotel Corp Ltd [1984] 1 NSWLR 710 Trade Practices Commission v Arnotts Ltd (1989) 21 FCR 306 Tony Azzi (Automobiles) Pty Limited (ACN 069 526 281) (First Plaintiff) Harissa Pty Limited (ACN 620 694 61905) (Second Plaintiff) PARTIES : Antonio Azzi (Third Plaintiff) Asialink Pty Limited (ACN 003 908 898) (Fourth Plaintiff) Volvo Car Australia Pty Limited (ACN 004 830 611) (Defendant) FILE NUMBER(S) : SC 50146/03 COUNSEL : JL Trew QC & JE O'Sullivan (P) JN West QC & AR Moses (D) SOLICITORS : McClellands Lawyers (P) Letherbarrow Lawyers (D) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST BRERETON J Tuesday 7 March 2006 50146/03 Tony Azzi (Automobiles) Pty Limited & 3 ors v Volvo Car Australia Pty Limited JUDGMENT (ex tempore) 1 HIS HONOUR: On Wednesday 28 February 2006, at 4.24pm, the solicitors for Volvo received by facsimile from the plaintiffs' solicitors a notice to produce which required the production, at the commencement of the hearing on Monday 6 March 2006, of documents described as follows: All documents or records of information ("Documents") including: (a) anything on which there is writing; or (b) anything on which there are marks, figures, symbols or perforations having a meaning for persons qualified to interpret them; or (c) anything from which sounds, images or writings can be reproduced with or without the aid of anything else; or (d) a map, plan, drawing or photograph including: (a) any part of the Document; or (b) any copy, reproduction or duplicate of the Document or of any part of the Document; or (c) any part of such a copy, reproduction or duplicate; which record or evidence, with respect to S40, V40 and S80 Volvo car models built or sold during the period January 2000 to November 2001: (a) product or part recalls; (b) reports or summaries of warranty claims including but not limited to claims for radio, locks, clutch, differential, gearbox and suspension failures or faults arising whilst still under warranty; (c) premature brake wear; (d) design, engineering or manufacturing flaws or defects and their rectification; (e) the "major program of technical repair and upgrade to resolve product quality issues" with the S80 to which Tanya Lister refers at paragraph 80 of her affidavit of 25 May 2005; (f) the "teething problems" with the S80 to which Jan Ericksson refers at paragraph 17 of his affidavit of 4 May 2005; and (g) all other "programs of technical repair and upgrade to resolve product quality issues" with the S40, V40 and S80." 2 On 6 March 2006, at the commencement of the hearing, the defendant was granted leave to file in court a motion to set aside that notice to produce. That motion was supported by an affidavit of the defendant's solicitor, Ms Allen, who said that she was instructed by the defendant's product technical manager that the defendant could not produce the documents by 6 March for reasons which were explained and that, to do so, would require a review of warranty and claims records of its entire dealership network across Australia which would take the services of two employees a period of two to four weeks. In response to that material, the plaintiff revised the notice to produce and served an amended notice to produce on 7 March 2006, which required production of the following documents: All documents or records of information ("Documents") including: (a) anything on which there is writing; or (b) anything on which there are marks, figures, symbols or perforations having a meaning for persons qualified to interpret them; or (c) anything from which sounds, images or writings can be reproduced with or without the aid of anything else; or (d) a map, plan, drawing or photograph including: (a) any part of the Document; or (b) any copy, reproduction, or duplicate of the Document or of any part of the Document; or (c) any part of such a copy, reproduction or duplicate; which comprise, with respect to S40, V40 and S80 Volvo car models built or sold during the period January 2000 to November 2001 reports that summarise or collate information concerning: (a) product or part recalls; (b) warranty claims made by customers; (c) design, engineering or manufacturing flaws or defects and their rectification; (d) premature brake wear; (e) the "major program of technical repair and upgrade to resolve product quality issues" with the S80 to which Tanya Lister refers at paragraph 80 of her affidavit of 25 May 2005; (f) the "teething problems" with the S80 to which Jan Ericksson refers at paragraph 17 of his affidavit of 4 May 2005; and (g) all other "programs of technical repair and upgrade to resolve product quality issues" with the S40, V40 and S80." 3 The defendants maintain their application to have the amended notice to produce set aside. 4 It is now established that a notice to produce of this type may be set aside in circumstances and on grounds equivalent to those applicable to the setting aside of subpoenas [Bailey v Beagle Management Pty Ltd (2001) 105 FCR 136, Highfields Preparatory and Kindergarten School Pty Ltd v Simpson (NSWSC, Master Greenwood, 22 August 1985, unreported); Portal Software Pty Ltd v Bodsworth [2005] NSWSC 1115, [10]]. Those grounds include, relevantly that the subpoena seeks discovery or further discovery from a party [Commissioner for Railways v Small (1938) 38 SR (NSW) 564; National Employers' Mutual General Insurance Association Ltd v Waind [1978] 1 NSWLR 372; Finnie v Dalglish [1982] 1 NSWLR 400]; that the subpoena is oppressive [Commissioner for Railways v Small; Senior v Holdsworth; Ex parte Independent Television News Ltd [1976] QB 23; Finnie v Dalglish], or that the subpoena calls for production of documents which have no apparent relevance to the issues in the proceedings [Trade Practices Commission v Arnotts Ltd (1989) 21 FCR 306; Hatton v Attorney-General (2000) 158 FLR 31; Portal v Bodsworth [20]-[21]]. The grounds which I have stated are far from exclusive, and are all but instances of the court's power to control its process, the power to set aside a subpoena being an instance of the court's inherent jurisdiction to control its process in the case of an abuse of process. The traditional categories of cases in which subpoenas might be set aside are not the only cases in which the court will intervene, but particular examples of a broad class of case in which the court will set aside a subpoena as an abuse of process [Botany Bay Instrumentation Pty Limited v Stewart (1984) 3 NSWLR 98, 100 – 101]. 5 In this case, the grounds of oppression, attempts to obtain discovery, and, irrelevance, at least to some extent, overlap. 6 The exercise of deciding whether a subpoena is or is not oppressive is a multifactorial balancing one. Where the documents called for have a high degree of apparent relevance to issues in the proceedings, the court will not shrink from requiring third parties to undertake considerable burdens to search for and produce such documents. On the other hand, where the documents are of slight or little apparent relevance, the extent of the burden cast on the party called to produce documents will weigh much more heavily against allowing the subpoena to stand [Southern Pacific Hotel Services Inc v Southern Pacific Hotel Corp Ltd [1984] 1 NSWLR 710]. 7 On its face, even in its amended form, the notice to produce casts a considerable burden on the defendant. Mr O'Sullivan, who argued the application for the plaintiffs, fairly points out that where a subpoena, and by parity of reasoning a notice to produce, is given to a party (as distinct from to a third party), a more liberal view may be taken; but, nonetheless, the requirements which this notice to produce would impose on the defendants at very short notice before the commencement of the hearing cannot be said to be other than burdensome. They may be less so than was first contemplated by Ms Allen's evidence, but I am informed from the Bar table and accept that it would nonetheless remain a considerable exercise for the defendant to assemble the relevant documents. 8 It has often been held that to serve a notice to produce, shortly before a trial, which imposes a considerable obligation and thus disruption on parties and practitioners already deeply immersed in the preparation for and conduct of the trial, may be unreasonable and vexatious [Ritz Hotel Ltd v Charles of the Ritz Ltd (No 17) NSWSC McClellan J, 11 February 1988 unreported; Ishoe v David Sevities Pty Ltd NSWSC, Young J, 13 December 1991, unreported; cf Bidald Consulting Pty Ltd v Miles Special Builders Pty Ltd [2005] NSWSC 977]. This notice to produce is in that category. While that of itself might not be sufficient ground to set aside the subpoena, if the documents were of considerable apparent relevance, and were they documents which it was not reasonable to seek at an earlier stage it weighs in the balance when one comes to examine the question of relevance. 9 Formerly, an affidavit of discovery was, save for limited exceptions, conclusive [Mulley v Manifold (1959) 103 CLR 341; Fruehauf Finance Corporation Pty Ltd v Zurich Australian Insurance Ltd (1990) 20 NSWLR 359], including as to the whether the deponent had any relevant documents other than those listed in his or her possession, custody or power [Gardner v Irvin (1878) 4 Ex D 49 (CA); Jones v Monte Video Gas Co (1880) 5 QBD 556 (CA); Compagnie Financier et Commerciale du Pacifique v Peruvian Guano Company (1882) 11 QBD 55 (CA); Hall v Truman, Hanbury & Co (1885) 29 CLD 307, 319] and as to the relevance of such documents for the purposes of discovery [Budden v Wilkinson [1893] 2 QB 432 (CA); Mogul Steamship Co v McGregor, Gow & Co (1886) 2 TLR 752; Hastings Corporation v Ivall (1873) LR 8 Ch App 1017]. It was, therefore, not permissible to go behind an affidavit of discovery by issuing a subpoena for production of documents which ought to have been the subject of discovery, on the basis that the affidavit of discovery was incomplete; to issue a subpoena in those circumstances was one of the classic cases of use of a subpoena as an abuse of process [Commissioner for Railways v Small, 574]. The proper remedy for an inadequate affidavit of documents was a motion for further and better discovery or, when the rules provided for it, a motion for particular discovery. 10 Since the amendments to the rules, not only the recent Uniform Civil Procedure Rules but also the more recent versions of the Supreme Court Rules, the right to general discovery has been limited, and the rules have provided for discovery by reference to classes. The relevant rule is now to be found in UCPR rule 21.2, which provides that the court may order that one party give discovery to the other of documents within a class or classes specified in the order. The purpose of adopting this approach to discovery was to reduce the burdens of unlimited general discovery, by confining its scope through requiring that the classes of documents of which discovery would be required be identified by the parties and agreed by them and, if not, then determined by the court. 11 However, in my opinion, this does not affect the previous rule that a subpoena which seeks documents which could have been the subject of discovery is an abuse of process. The fundamental purpose of the amendments to the rules which limit discovery to classes was to avoid parties having excessively burdensome discovery obligations imposed on them, by excluding from discovery those documents which were outside the classes which were agreed or determined to be appropriate for discovery. If it remained open to a party to subpoena classes of documents which had been excluded from discovery, that would completely defeat the purpose of the rules in limiting discovery to specified classes. It would amount to using a subpoena to obtain discovery. 12 In this case, orders were made for discovery on several occasions, and classes for discovery were identified. So far as I can tell at this stage, the plaintiff specified classes of documents of which it sought discovery. Either the documents now sought fall within those classes and, if they exist, ought to have been discovered, or they fall outside the specified classes. 13 If the plaintiff contends that documents falling within one of the classes which it specified and in respect of which an order for discovery was made have not in fact been discovered, the only proper remedy is for it to seek further and better discovery, upon proof that there has been a failure to give proper discovery in that class. The defendant, of course, should be alert that if it transpires that it has not given proper discovery of documents in classes which were identified for discovery, then that will have been a serious default on its part. I do not suggest for a moment that that is in fact the case, but in view of the debate which has taken place and in view of the arguments which have been advanced about the subpoena, it should not be assumed that a conclusion that it was not permissible to subpoena these documents involves any conclusion as to whether or not there has been sufficient compliance with the order for discovery in the first place. 14 If, on the other hand, the plaintiff contends that it now seeks documents which were not covered by the order for discovery, then the proper approach would have been to make an application for further discovery by adding a further class to the documents for discovery. It seems to me that 28 February, a couple of days before the commencement of the trial, is rather too late to take that course, at least in the absence of a compelling explanation as to why it could not have been or was not taken earlier [cf Small, 574]. 15 So far as relevance is concerned, the plaintiff has sought to support the apparent relevance of the documents called for on a number of grounds. First, it is said that the amended defence alleges, by paragraph 94(d), that disagreements between Volvo and TAA about TAA's performance under the one-year dealer agreement and the failure to agree upon terms of the new agreement frustrated the bringing to fruition of a replacement agreement. The plaintiff submits that the documents for which the subpoena calls are relevant to the issue raised by that paragraph of the defence. 16 I am unable to agree. Paragraph 94(d) raises as a material fact the existence of disagreements about the performance of TAA under the one-year agreement, but not the truth or otherwise of any allegations about TAA's performance. The documents called for, which go to the existence and nature and contents of warranty claims made not only by customers of TAA but also by other Volvo dealers; product or part recalls similarly not limited to customers of TAA; design, engineering or manufacturing flaws, similarly not so limited; or premature brake wear, similarly not so limited; do not go to the facts raised by paragraph 94(d) of the amended defence. Even if some of those documents might, as presently framed the notice calls for documents which go so far beyond what might have apparent relevance to the issues raised by 94(d) to be excessively wide. 17 Next, it is said that the documents are relevant to determining the damages to which the plaintiffs may be entitled, and in particular to the profits which the plaintiffs might have made had there been a five-year agreement, and the lost opportunity of renewing the one-year agreement for a further five years. The plaintiff points to observations made in a recent report of Mr Ross, the defendant's expert, served as late as January this year, who refers to the defendant's "warranty customer service index report" in respect of the first plaintiff, and conclusions expressed by Mr Ross that the first plaintiff was not a "benchmark dealer". I am inclined to accept that, in the light of the time at which Mr Ross's report was served relative to when discovery was had and to the hearing of these proceedings, the plaintiffs might well be entitled further to explore some of the material on which Mr Ross relied, and documents in the possession of the defendant which would bear on that material. It may well be that the plaintiffs would be entitled, for example, to see warranty customer service indices for other dealers, so as to test the conclusion as to whether or not the first plaintiff was a benchmark dealer. There may also be other documents within the classes called for which would be permissible, but again, in calling for all the documents to which it refers, in respect of all dealers, at least across Australia, the notice requires production of documents which far beyond those which could potentially be relevant to testing and answering the issues raised by Mr Ross, and must include documents of no apparent relevance. The notice is therefore too wide in this respect also. 18 Specific reference is made in the notice to produce to "the major program of technical repair and upgrade to resolve product quality issues" referred to by Tania Lister in paragraph 80 of her affidavit of 25 May 2005. Although at first sight the fact that that program is raised in Ms Lister's affidavit would make the documents sought at least of sufficient apparent relevance, it is to be observed, first, that that affidavit was served as long ago as May 2005; and, secondly, that in fact what Ms Lister says in that paragraph is a response to paragraph 113(f) of Mr Azzi's own affidavit, in which he described a presentation which he made to Mr Snijders of Volvo as including "the various problems as I see it with VCA and their relationship with us, namely ... high warranty work ...". In that context it does not seem to me that a last-minute requirement to in effect discover all documents relating to the major program of technical repair and upgrade which Ms Lister mentioned in response to that is other than oppressive, and I am not satisfied that such documents would throw light on a significant issue in the case. 19 The notice also specifically calls for documents that summarise or collate information concerning "teething problems" with the Volvo S80, referred to by Jan Ericksson in paragraph 17 of his affidavit of 4 May 2005. Again, that affidavit was served many months ago. Again, the relevant paragraph in the affidavit responsed to an assertion made in one of Mr Azzi's affidavits and, further, the defendant has indicated that the paragraph in question will not be read. 20 Accordingly, taking together the substantial burden which this eleventh-hour notice will cast on the defendant, the fact that it in effect endeavours to go behind the discovery which the defendant has given and/or to seek further discovery, and that the documents for which it calls are so extensive that many must be of no relevance, even if a few might be relevant, so that it is too wide, I would set aside the notice to produce. In doing so, I do not exclude the possibility that it might be possible to frame a narrower notice which could legitimately be served. 21 I order that the notice to produce dated 28 February 2006, as amended on 7 March 2006, be set aside. I order the plaintiffs to pay the defendant's costs of the motions insofar as they relate to setting aside the notice to produce. ********** 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.