Supreme Court New South Wales Medium Neutral Citation: Tony Hassan Noun v Margaret Pavey [2014] NSWSC 429 Hearing dates: 7 April 2014 Decision date: 07 April 2014 Jurisdiction: Equity Division Before: Darke J Decision: Notice to Produce and subpoenas are set aside. Order made for parties to mediate once all affidavit evidence has been served. Catchwords: PROCEDURE - civil - notice to produce - UCPR rule 21.10 - whether documents "referred to" in affidavits or pleadings - whether "specific documents" clearly identified in notice - notice to produce set aside PROCEDURE - civil - notice to produce -substitute for discovery - tendency to subvert object of Equity Practice Note No. 11 - notice to produce set aside PROCEDURE - civil - subpoenas - abuse of process - subpoenas capture large numbers of documents not shown to be relevant - subpoenas set aside PROCEDURE - civil - parties - court ordered mediation - dispute as to when mediation should occur - mediation ordered to take place once all affidavit evidence served and before applications for discovery Legislation Cited: Civil Procedure Act 2005 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Blair v Curran [1939] HCA 23; (1939) 62 CLR 464 ICAP Australia Pty Ltd v BGC Partners (Australia) Pty Ltd [2009] NSWCA 307 Kuligowski v Metrobus (2004) 220 CLR 363; [2004] HCA 34 Noun v Pavey [2013] NSWSC 846 Patonga Beach Holdings Pty Ltd v Lyons [2009] NSWSC 869 The Owners Strata Plan SP 69567 v Baseline Constructions Pty Ltd [2012] NSWSC 502 Welker v Rinehart [2012] NSWSC 588 Category: Principal judgment Parties: Tony Hassan Noun (first plaintiff) THN Pty Ltd (second plaintiff) Margaret Pavey (first defendant) Alexander McIntyre Stewart Kennedy (second defendant) Mark Melbourne (third defendant) Representation: Counsel: Mr C J Bevan (plaintiffs) Mr S A Lawrance (defendants) Solicitors: Turner Freeman (plaintiffs) Banki Haddock Fiora (defendants) File Number(s): 2012/93374 Publication restriction: Nil Judgment - Ex tempore (revised) 1By Notice of Motion filed on 3 March 2014, the defendants seek various orders including the setting aside of a Notice to Produce and nine subpoenas. Affidavits affirmed by Leanne Norman on 6 March 2014 and 17 March 2014 were read in support of the Notice of Motion. The plaintiffs read an affidavit sworn by Simon Hanley-Jones on 3 April 2014. 2It is not necessary to go into the detail of the issues in these proceedings, save to note that the plaintiffs seek final injunctive relief against the defendants to restrain alleged breaches of confidence. The plaintiffs have served their evidence-in-chief and the defendants have served evidence in response. The plaintiffs were ordered to serve their evidence in reply, except for evidence from the first plaintiff, by 28 March 2014. I have been informed that the evidence in reply, apart from an affidavit of the first plaintiff, has now been served. 3The Notice to Produce, which was issued pursuant to Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") r 21.10, was served on 25 February 2014. It consists of 150 paragraphs. The plaintiffs do not press for production in respect of three paragraphs, namely, paragraphs 1, 47 and 139. The defendants, for their part, agreed to produce the documents which fall within another 15 of the paragraphs. Those paragraphs are identified in the written submissions of Mr Lawrance of counsel, who appears for the defendants, as paragraphs 31, 43, 48, 56, 58, 60, 61, 70, 77, 79, 82, 91, 97, 107 and 124. In the course of argument, Mr Lawrance indicated that any documents which fall within a further five paragraphs will also be produced by the defendants. Those are paragraphs 15, 30, 45, 80 and 126. Accordingly, the controversy concerns the 127 paragraphs which remain. 4Viewed broadly, those paragraphs essentially fall into one or other of two categories. The first category consists of paragraphs which seek production of documents which are said to be referred to (either directly or indirectly) in affidavits served by the defendants or the first cross-claim filed in the proceedings. The second category consists of paragraphs which seek production of computers or telephones. The computers sought are described as having been used in the sending or receipt of emails or other electronic information, or the amending of certain documents. In one case, production is sought of a personal laptop computer referred to in an affidavit. The telephones sought are described as phones referred to in the defendants' affidavits or used to make certain calls or send or receive certain electronic information. UCPR r 21.10 provides: (1)Party A may, by notice served on party B, require party B to produce for inspection by party A: (a)any document or thing that is referred to in any originating process, pleading, affidavit or witness statement filed or served by party B, and (b)any other specific document or thing that is clearly identified in the notice and is relevant to a fact in issue. (2)A notice to produce may specify a time for production of all or any of the documents or things required to be produced. 5The defendants submit that the Notice to Produce should be set aside on a number of grounds. It is submitted that what is sought does not fall within UCPR r 21.10, whether as documents or things referred to in the defendants' affidavits or pleadings, or as specific documents or things (not merely classes of documents) that are clearly identified in the notice and are relevant to a fact in issue in the proceedings. A number of examples are given in the written submissions which, it is said, illustrate the point. It is further submitted that the Notice to Produce impermissibly seeks discovery from the defendants and, if permitted, would subvert the operation of Equity Practice Note No. 11. Reference in that regard was made to the decision of Stevenson J in The Owners Strata Plan SP 69567 v Baseline Constructions Pty Ltd [2012] NSWSC 502 at [21]-[28]. Finally, the defendants submit that the notice is oppressive in that many of the documents sought have little or no apparent relevance to the issues in the proceedings. 6The plaintiffs, for whom Mr Bevan of counsel appears, submitted in writing that the defendants' complaints are not able to be made because an earlier decision in this litigation (the decision of Rein J in Noun v Pavey [2013] NSWSC 846) created relevant issue estoppels on the issues now before the Court. In that regard, reference was made to his Honour's judgment at [19]-[21] and at [32]-[35]. It was submitted that the principle thus enunciated is that the operation of UCPR r 21.10(1)(a) is not limited to situations where there are direct references to documents or things, but extends to situations where there are indirect references to documents or things that could potentially exist. Similarly, it was submitted that an earlier decision made in these proceedings by Assistant Registrar Musgrave requiring the plaintiffs to produce a computer gives rise to an issue estoppel which precludes the defendants from resisting production of the computers, and, further, that the computers (and the phone records sought) are required in order to test the veracity of the defendants' evidence. 7It was further submitted in relation to one of the examples put forward by the defendants that it was appropriate to seek documents evidencing the termination of the employment of the first defendant as it cannot be said that the reason for the termination is not an issue. The plaintiffs seek the documents in order to ascertain whether certain conduct was instrumental in the termination. 8The plaintiffs also submitted that the documents sought by the Notice to Produce are required in order for Mr Noun to complete his affidavit in reply. 9In oral submissions, Mr Bevan made it clear that he did not intend to submit that there was any binding issue estoppel, but, rather, that the steps taken by the plaintiffs, in issuing the Notice to Produce and the subpoenas, should be understood as having occurred on the basis of what had earlier been decided, and that such an approach was an appropriate one for the Court to take with the Notice to Produce and the subpoenas which are now before it. 10I should state that it is clear that no issue estoppels preclude the defendants from maintaining their arguments that the Notice to Produce or the subpoenas should be set aside. In that regard, Mr Lawrance referred me to the decision of the High Court in Kuligowski v Metrobus (2004) 220 CLR 363; [2004] HCA 34, and specifically to the requirement that the judicial decision said to create an issue estoppel must be a final decision on the merits (see at [21] and [25]). 11It is also clear from Blair v Curran [1939] HCA 23; (1939) 62 CLR 464, especially at 510 and 531- 532, that such an estoppel covers only those matters which the prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion, and that nothing but what is legally indispensable to the conclusion is thus finally closed or preluded. At p 532 Dixon J (as his Honour then was) stated: "In matters of fact the issue estoppel is confined to those ultimate facts which form the ingredients in the cause of action, that is, the title to the right established. Where the conclusion is against the existence of a right or claim which in point of law depends upon a number of ingredients or ultimate facts the absence of any one of which would be enough to defeat the claim, the estoppel covers only the actual ground on which the existence of the right was negatived. But in neither case is the estoppel confined to the final legal conclusion expressed in the judgment, decree or order. In the phraseology of Coleridge J in R v Inhabitants of the Township of Hartington Middle Quarter, the judicial determination concludes, not merely as to the point actually decided, but as to a matter which it was necessary to decide and which was actually decided as the groundwork of the decision itself, though not then directly the point at issue. Matters cardinal to the latter claim or contention cannot be raised if to raise them is necessarily to assert that the former decision was erroneous." 12Those principles do not operate to preclude the defendants here. The earlier decisions made in this litigation in relation to other Notices to Produce were, obviously enough, based upon facts which are different to those which attend the Notice to Produce and subpoenas recently served by the plaintiffs. It does not seem to me that any of the matters which were determined on those earlier occasions, and were legally indispensable to the decisions to order production, preclude the defendants from asserting that the Notice to Produce and subpoenas recently issued by the plaintiffs should, in the circumstances which now exist, be set aside. 13In considering the defendants' arguments, it is convenient to commence with the question of the scope of operation of UCPR r 21.10. The rule has been considered in a number of cases, some of which were cited to me in submissions. As to UCPR r 21.10(1)(a), it has been held that although a document or thing may be sufficiently "referred to" if it is described in a general manner or as part of an identified class of documents, the reference must involve a direct allusion to the document or thing itself, as distinct from its effect or the information it contains (see Welker v Rinehart [2012] NSWSC 588 at [3]-[4] and [14]-[17] per Brereton J). That is so even if it can be seen that there is a high probability that a particular document, in fact, exists. 14As to UCPR r 21.10(1)(b), it seems that the requirement of "specific documents" that are clearly identified and are relevant to a fact in issue is not met by classes of documents, no matter how specifically those classes are described (see the judgment of Barrett J, as his Honour then was, in Patonga Beach Holdings Pty Ltd v Lyons [2009] NSWSC 869 at [7] - [11] and The Owners Strata Plan SP 69567 (supra) at [4]-[7]). 15There is nothing to indicate that these authorities were cited to Rein J when he dealt with the Notices to Produce in 2013. His Honour did not refer to them or the principles they stand for in his reasons for judgment. 16Applying the principles enunciated in those cases to the documents sought by the plaintiffs' Notice to Produce, it is clear that very few of the paragraphs call for documents in accordance with UCPR r 21.10. That is to say, very few of the paragraphs call for either a document "referred to" in an affidavit or pleading, or a "specific document" that is clearly identified and is relevant to a fact in issue, for the purposes of UCPR r 21.10. Paragraphs 2-5, for example, do not call for documents which are referred to in the first defendant's affidavit. Neither, in my view, do they call for specific documents within the meaning of UCPR r 21.10(1)(b) of the rule. Whilst the terms of those paragraphs suggest that particular documents are being called for, in substance what is called for are documents falling within a class, albeit one which is narrowly defined. In any event, I do not think that it is established that the documents are (as opposed to may be) relevant to a fact in issue. In reality the requests are in the nature of requests for discovery. 17Other paragraphs suffer from the same difficulties and the terms of many of these paragraphs do not even suggest that particular documents are being called for. Paragraphs 6, 7, 11 and 12 may be cited as examples. That list is far from being exhaustive. 18The numerous paragraphs which call for phone records which evidence certain telephone calls also fail to call for specific documents in accordance with UCPR r 21.10(1)(b). Again, classes of documents are called for. The same point can be made about the numerous paragraphs which call for the computer or computers used in the sending or receipt of certain emails or other electronic information, or in one case the amending of certain documents. 19There are some paragraphs which appear to call for documents or things that are referred to in affidavits or may be specific documents or things within the meaning of UCPR r 21.10(1)(b). Paragraphs 15, 16, 30, 37, 45, 80, 119 and 126 seem to do so. As mentioned earlier, the defendants are content to produce the documents referred to in five of those paragraphs. Of the remaining three paragraphs, namely paragraphs 16, 37 and 119, I do not think that the defendants should be required to produce the mobile phones the subject of those paragraphs. It has not been established, in my view, that they are (as opposed to may be) relevant to a fact in issue. 20When the Notice to Produce is viewed overall, it is apparent, in my view, that the plaintiffs are essentially seeking discovery from the defendants. In the light of Equity Practice Note No. 11 concerning disclosure, I do not think that it is appropriate for discovery to be sought in the fashion now employed by the plaintiffs. The Practice Note makes it plain that, save in exceptional circumstances, the Court will not make an order for disclosure of documents until the parties have served their evidence. Moreover, an application for an order must be supported by evidence which sets out, inter alia, the reason why disclosure is necessary for the resolution of the real issues in the dispute. In this context I should state that it has not been shown, in my view, why production of any of the documents sought by the Notice to Produce is necessary in order to for Mr Noun to complete his affidavit in reply. 21To permit the plaintiffs' Notice to Produce to stand would, in my view, subvert the intended operation of the Practice Note. The Court has, on earlier occasions, warned that it will not permit the clear object of the Practice Note to be thwarted by the service of Notices to Produce, rather than the making of an application in accordance with the Practice Note (see The Owners Strata Plan SP 69567 (supra) at [21]-[28]). 22For those reasons the Notice to Produce served by the plaintiffs on 25 February 2014 will, apart from the following paragraphs, be set aside. Those paragraphs are: 15, 30, 31, 43, 45, 48, 56, 58, 60, 61, 70, 77, 79, 80, 82, 91, 97, 107, 124 and 126. It is not necessary in these circumstances to consider the defendants' submission that the Notice to Produce should be set aside on the basis that it is oppressive. 23I turn now to consider the nine subpoenas which have been issued by the plaintiffs. Eight of the nine subpoenas are directed to the employers or former employers of one or other of the defendants. The other subpoena is directed to Google Australia Pty Limited. Three of the recipients have provided an answer. 24Google Australia Pty Limited indicated that it has nothing to produce and has also indicated that it is not the correct party for the production of the documents sought. 25RCL Law Pty Limited has produced some documents. I am informed that those documents are only produced in respect of paragraph 13 of the subpoena addressed to it. The defendants accept that a subpoena restricted to that paragraph 13 would be valid and would make no objection to such a subpoena. 26Corrs Chambers Westgarth has also produced some documents. It is not clear which of the paragraphs of the Notice to Produce it has responded to in its production. 27The subpoenas addressed to the employers each seek a wide range of documents. These include requests for the entire personnel files of the defendants, documents showing the reasons for termination of the employment of the defendants, and entire files in respect of work done for certain entities, including MS Cognosis Pty Limited (the company at the centre of the disputes between the parties) and Mr Noun himself. 28The defendants have pointed to some of the paragraphs in those subpoenas to demonstrate, so it is said, an unjustified intrusion into the private affairs of the defendants. Paragraphs 1, 2 and 13 in relation to the subpoena addressed to Dib Lawyers were cited as examples. 29The defendants submit that save for the one aspect of the subpoena to RCL Law Pty Ltd, to which I have already referred, the subpoenas should be set aside as an abuse of the Court's process as they lack a legitimate forensic purpose, seek documents with no apparent relevance, and constitute a fishing expedition. It is put that the plaintiffs have failed to show that the documents will materially assist on any identified issues, or that there is a reasonable basis beyond speculation that it is likely that the documents sought will so assist. In that respect I was referred to the decision of the Court of Appeal in ICAP Australia Pty Ltd v BGC Partners (Australia) Pty Ltd [2009] NSWCA 307 at [9] and [14]. 30The plaintiffs submitted in writing that the subpoenas seek specific categories of documents in specific periods referable to the defendants' affidavits, and that Mr Noun is unable to complete his evidence in reply without access to the documents sought. However, in oral submissions Mr Bevan was not able, except in the most general of terms, to identify how any of the documents sought by the subpoenas may be relevant to the issues or would be likely to materially assist in relation to any identified issues. Neither was he able to show how any particular documents were required in order for Mr Noun to complete his evidence in reply. This is understandable in the absence of any evidence going to either of those matters. 31It seems to me, having regard to the wide terms in which each of the subpoenas are expressed, the likelihood that vast numbers of documents would be caught by each of the subpoenas which would not be relevant to the issues in the proceedings and, at least in some cases, would likely include irrelevant personal information concerning the defendants, the subpoenas ought be set aside. That is to say, the subpoenas, apart from the subpoena to RCL Law Ltd, should be set aside, and the subpoena to RCL Law Pty Ltd should stand only to the extent of paragraph 13 to which a response has already been given. In relation to the subpoena to Corrs Chambers Westgarth to which some answer has been given, I will order that those documents be returned forthwith. 32The defendants also seek an order that the proceedings be referred to mediation once the totality of the plaintiffs' evidence in reply has been served. This order is opposed by the plaintiffs. Mr Lawrance accepted that compelling mediation in such circumstances is unusual, although less so than it was once. He pointed out that the parties had late last year agreed to mediate once the evidence in reply was completed and served, and that the Court had noted such agreement. He stated further that the parties had agreed on a mediator, namely Mr Michael McHugh, AC QC, a former Justice of the High Court of Australia. 33Mr Lawrance submitted that the mediation ought to take place prior to any discovery application which may be made by the plaintiffs which, he submitted, would likely be an exercise involving considerable expense. 34He further stated that the proceedings do not involve any claim for monetary relief but are confined to applications for final injunctive relief, and in that context noted that the defendants, by paragraph 58 of their defence, have made open offers which include undertakings in relation to certain confidential information. It was submitted that this, in itself, provides some hope of an agreement being reached at a mediation. Mr Lawrance also noted, in relation to the plaintiffs' claim for specific performance of what is described as Mr Noun's resignation agreement, that the agreement concerned the affairs of MS Cognosis Pty Ltd, a company which was wound up on 15 July 2013. It was submitted that specific performance was thus no longer possible. Finally, Mr Lawrance stated that the only monetary relief being sought in the proceedings was by way of the cross-claim filed by the second defendants, which was a claim for damages which did not exceed $50,000. 35Mr Bevan, in his submissions on this question, put that the plaintiff wanted to know exactly what the defendants' case against it was before attending any mediation. He submitted that whilst the plaintiffs were keen to resolve the matter, they should not be forced to mediate at this stage because of a likelihood that the defendants, in advance of any discovery being given, will assert that the plaintiffs simply have no case against the first and second defendants. Mr Bevan emphasised that a mediation should really be viewed (as he put it) as "one shot in the locker" and that the opportunity to mediate should not be taken at this point because the prospects of its success are much less than it would be if the plaintiffs had full information, including discovery and documents produced on subpoena, in relation to the defendants and their conduct. 36The Court has a broad discretion concerning the making of orders for the parties to mediate. Plainly enough, the overriding purpose referred to in section 56 of the Civil Procedure Act 2005 (NSW) is a matter of significance in the exercise of that discretion. The parties have, no doubt, already expended vast sums of money on this litigation which, whilst clearly being of importance to the parties and whilst clearly raising significant issues, does not involve significant amounts of money. An exercise involving the obtaining orders for discovery, and then taking steps on the basis of the discovery (which has been foreshadowed would likely involve an examination of computers, quite apart from a great number of documents) is likely to be very expensive indeed. 37I can understand the plaintiffs' position in wanting to have full information available to it before embarking upon a mediation. However, I consider that once the affidavit evidence has been completed, that is, once all of the plaintiffs' evidence in reply has been served, the parties will know the nature of the cases that each wishes to bring in the proceedings sufficiently to enable sensible discussion concerning the resolution of the litigation. 38Moreover, if a mediation is held, the defendants will have obligations to mediate in good faith, just as the plaintiffs will. The scope, therefore, for the defendants to simply take a position that there is no evidence supporting a case against the first and second plaintiffs is one which is unlikely to be able to be maintained in circumstances where the plaintiffs can respond by asserting that orders for discovery in that respect are going to be sought if no settlement is reached. 39Whilst the matter is somewhat finely balanced in my opinion, I have come to the conclusion, having regard to all of the above factors and the desirability of the parties attempting to resolve this matter before any further substantial legal costs are incurred, that it is appropriate for the parties to attend a mediation as soon as the evidence in reply has been served. The Court will make an order to that effect. 40That then leaves the question of how long Mr Noun requires to complete his affidavit in reply. I shall hear submissions from the parties on that question. [Discussion with Counsel] 41I will also make an order directing that any affidavit in reply from Mr Noun be served by 19 May 2014. 42As the defendants have been substantially successful on their Notice of Motion, the appropriate order for costs is that the plaintiffs pay the defendants' costs of the motion. 43I direct the parties to bring in Short Minutes of Order to give effect to these reasons. ********** 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: 14 April 2014