Cohen v Morgans

1. [1]

   HER HONOUR: Before me for hearing on 16 May 2019 in the Applications List was an application by the defendant (Nada Morgans), by notice of motion filed 28 March 2019, seeking orders setting aside both a subpoena to produce issued by the plaintiff (Andrew Cohen) addressed to her solicitors (Somerville Legal) and a notice to produce issued by him and addressed to Ms Morgans and to her solicitors.

2. [2]

   Mr Cohen is a solicitor who formerly acted for Ms Morgans over a period of some eleven years in relation to a range of litigious and other matters. The underlying dispute between them relates to a claim by Mr Cohen for outstanding legal fees. Mr Cohen maintains that a binding agreement was reached for the settlement of that dispute and has commenced proceedings seeking, in effect, to enforce that agreement. In the course of these proceedings, Mr Cohen has invoked the compulsory processes of the Court by issuing the subpoena and notice to produce, which are the subject of the present application.

3. [3]

   The documents sought by both the subpoena and the notice to produce (which I set out in more detail later in these reasons) relate, in essence, to a handwritten file note believed by Mr Cohen to have been created by a solicitor then in the employ of Somerville Legal (Mr Matthew Gradidge) of the telephone conversation with Mr Cohen on 21 August 2018 in which Mr Cohen contends the binding settlement agreement as to his costs was reached; and the whereabouts (or, if it no longer exists, circumstances in which it came to be misplaced, lost or destroyed) of that file note.

4. [4]

   Prior to the hearing of the notice of motion, Ms Morgans was advised that par 5 of the subpoena would not be pressed and, during the course of the hearing of the notice of motion, Counsel for Mr Cohen (quite sensibly) indicated that a number of the other paragraphs of the subpoena would no longer be pressed (pars 3 and 4) and indicated that Mr Cohen would be amenable to some reading down of the remaining paragraphs (pars 1 and 2). Ms Morgans, however, sought that both the subpoena and notice to produce be set aside in their entirety.

5. [5]

   At the conclusion of the hearing of the notice of motion, I made orders setting aside both the subpoena and the notice to produce. At the same time, in the interests of the just, quick and cheap resolution of the real issues in dispute, I made certain directions requiring the production of a limited class of documents (see below at [81]; [83]) that would in my view fall within the permissible scope of a subpoena or notice to produce issued at this stage of the proceedings. I ordered Mr Cohen to bear Ms Morgans’ costs of the notice of motion on an indemnity basis, in circumstances where I considered that the breadth of the compulsory processes that had been initiated by Mr Cohen at this stage of the proceedings was extraordinary and that it had the tendency to subvert the practice note on disclosure applicable in this division of the Court (Practice Note SC Eq 11 (the Practice Note)). I indicated that I would publish my reasons for the making of those orders as soon as practicable. These are those reasons.

Background

1. [6]

   As adverted to above, the dispute between the parties arose out of a dispute as to payment of legal costs. Mr Cohen acted for Ms Morgans as her solicitor for some years in relation to what was described by Pembroke J in an ex tempore judgment (14 December 2018) as a complex series of issues arising out of the incapacity, and later death, of Ms Morgans’ husband.

2. [7]

   On 27 May 2018, Mr Cohen issued a tax invoice to Ms Morgans in the sum of $109,975.00, relating to legal services provided from 2016 (the 2018 Tax Invoice). There was apparently some dispute between the parties as to the 2018 Tax Invoice.

3. [8]

   On 9 August 2018, Mr Cohen, by email to Somerville Legal, sent two letters (each dated 9 August 2018 and headed “without prejudice except as to costs”) (Exhibit A) offering to settle the dispute as to his legal costs. The two letters tendered as Exhibit A seem to be in identical terms (and I suspect that there has been an error in that the tender comprises two copies of the same letter but nothing relevantly turns on that for present purposes). The letters which have been admitted as Exhibit A each set out the following conditions of the proposal for the settlement of the costs dispute:

4. [9]

   The letters went on to state that, in consideration of this, Mr Cohen was prepared to reduce his claim by “two major aspects”: the first, being $50 an hour on his $350 an hour claim (to an amount of $14,091.50) and the second being to waive his disbursements (amounting to $1,900.00). Thus, the letters stated, this was a total compromise of $15,991.50 of Mr Cohen’s $110,404.00 claim.

5. [10]

   The letters went on to state (and, as I apprehend it, this is regarded by Mr Cohen as an alternative settlement proposal):

6. [11]

   On 21 August 2018, Mr Cohen and Mr Gradidge had a telephone conversation. The communications the subject of this telephone conversation, and their legal effect (whether with or without taking into account certain conduct after that telephone conversation), are the crux of the present dispute.

7. [12]

   Mr Cohen maintains that in that telephone conversation, agreement was reached (binding both parties) to the effect that all disputes would be settled for $80,000; or alternatively that such a binding agreement was comprised by what was said in the telephone conversation coupled with his subsequent execution and sending of a deed of settlement.

8. [13]

   It is not disputed that there was a telephone conversation between Mr Gradidge and Mr Cohen on that afternoon. Both Mr Gradidge and Mr Cohen have deposed to their account of what was said in that conversation as to the settlement of the costs dispute. In submissions on the present application it was submitted for Ms Morgans that the two accounts of that conversation are in substance the same. For Mr Cohen, it is said that there is a significant difference in the versions of the conversation. The relevant difference between the parties, as I understand it, goes to whether it was a condition of the offer that the parties execute a deed of settlement (such that, absent an executed deed of settlement, there was no binding agreement). Mr Cohen, as I understand it, contends that the alternative version of the offer did not include such a term (which is relevant to how one construes the counter-offer made by Ms Morgans’ solicitor and accepted by Mr Cohen in that conversation). I set out the different versions of the conversation below. At this stage, however, the question as to which of those versions is correct does not arise for determination (that being the subject of the substantive hearing in these proceedings which has now been fixed for hearing in July this year).

9. [14]

   After the 21 August 2018 conversation, draft deeds were exchanged between the parties. On 10 September 2018, Mr Cohen executed a version of the deed (said to have been the third and last drawn up and proffered by Somerville Legal to him) (see Mr Cohen’s submissions at [3]). That document was not executed by Ms Morgans.

10. [15]

    Ms Morgans then, through Somerville Legal, applied to have Mr Cohen’s claimed costs for the period from October 2006 to March 2016 assessed. On or about 18 October 2018, a costs assessor was appointed. On 27 November 2018, the cost assessor directed Mr Cohen to provide a taxable bill and his files relating to his work for Ms Morgans (over an 11 year period) by no later than 31 January 2019.

11. [16]

    That led to the commencement of the present proceedings by summons filed on 14 December 2018. Mr Cohen sought urgent injunctive relief, in effect, to stay the costs assessment. That application came before Pembroke J on an ex parte basis in the duty list on the last day of the law term last year. His Honour granted the interlocutory relief sought. Mr Cohen here places some weight on the following observation made in his Honour’s ex tempore judgment, namely that:

12. [17]

    It is clear, however, from his Honour’s reasons that his Honour was making no finding as to the factual matters in dispute between the parties, nor would it have been appropriate for him in that context to do so.

13. [18]

    The summons filed by Mr Cohen on 14 December 2018 seeks the following relief:

14. [19]

    In support of the summons, Mr Cohen filed an affidavit sworn 14 December 2018 (not read on the present application). (The written submissions filed on behalf of Ms Morgans on the present application include an extract of what Mr Cohen is said to have deposed to in that affidavit as to the conversation on 21 August 2018. As the affidavit has not been formally read by Mr Cohen on the present application I do not here reproduce that passage.) In response to that affidavit, an affidavit sworn 6 February 2019 by Mr Gradidge was filed in which Mr Gradidge sets out his account of that telephone conversation. (That affidavit was also not read on the current application.)

15. [20]

    As I understand it, neither Mr Cohen nor Mr Gradidge in their respective affidavits made any reference to a file note of the telephone conversation (see T 4.24ff).

16. [21]

    It appears that what then transpired was that Mr Cohen made enquiries as to the existence of any file note held by Somerville Legal of that conversation. By letter dated 18 February 2019, for example, he wrote to Somerville Legal inviting:

17. [22]

    The response from Somerville Legal, by email on 21 February 2019, among other things confirmed that “we have not been able to locate a file note of your conversation with Mr Gradidge on 21 August 2018”. By that time, Mr Gradidge had left the employment of Somerville Legal (but that firm is apparently now acting for Mr Gradidge in relation to a subpoena subsequently served on him).

18. [23]

    Mr Cohen then contacted Mr Gradidge directly (before he was advised that Somerville Legal was acting for him) as to the issue of the existence of any such file note. Mr Cohen has deposed (in his affidavit of 9 March 2019, which was read on the current application) to a conversation with Mr Gradidge on 26 February 2019 in words to the following effect:

19. [24]

    Mr Cohen deposes that Mr Gradidge informed him that he did not have any documents to produce.

20. [25]

    On 26 February 2019, Mr Cohen caused a subpoena to be issued to Somerville Legal Pty Limited seeking production of the following documents:

21. [26]

    On the same day, Mr Cohen issued a notice to produce addressed both to Ms Morgans and to her solicitors seeking the production of three categories of documents (mirroring the documents sought at paragraphs 1, 3 and 4 of the subpoena):

22. [27]

    There was subsequent correspondence between Mr Cohen and Somerville Legal, including a letter dated 27 February 2018 in which, among other things, it was said by Somerville Legal that:

23. [28]

    In that letter, Somerville Legal set out various grounds on which complaint was made as to the subpoena and notice to produce, and asserted that they were deficient and liable to be set aside, including complaints made as to: relevance; the fact that par 5 of the subpoena sought production as to the entire legal file in relation to the dispute; that the subpoena did not specify with sufficient particularity the documents required to be produced and appeared to have been used as a means of discovery; and that the documents and communications sought related to matters between the firm and Ms Morgans and were subject to legal professional privilege. Mr Cohen was invited to withdraw the subpoena and notice to produce. Mr Cohen did not accede to that invitation.

24. [29]

    Ms Morgans then filed her notice of motion seeking to set aside the subpoena and notice to produce. On 14 March 2019, the subpoena and notice to produce were returnable in court and Ms Morgans was ordered to serve an affidavit setting out knowledge of the “file note” in question attaching all correspondence in relation to searches of the file note by 19 March 2019. In an affidavit affirmed 19 March 2019, Ms Morgans’ solicitor (Mr Benjamin Hemsworth) has deposed, among other things, that (at [6]):

25. [30]

    It is against this background that Ms Morgans’ application to set aside the subpoena and notice to produce came before me. Before turning to the substance of that application, it is relevant to set out the ambit of the dispute as to what was said in the relevant conversation.

26. [31]

    In his affidavit sworn 9 March 2019, Mr Cohen deposes that what he said was words to the effect:

27. [32]

    Relevantly, Mr Cohen “unequivocally” denies that Mr Gradidge said the words “subject to a deed of settlement agreed between the parties” (see Mr Cohen’s affidavit sworn 9 March 2019 at [5]).

28. [33]

    Mr Cohen maintains that the notice to produce and the subpoena are appropriate in that they seek production of documents that could throw light on issues raised in the proceedings, including the contents of the discussion between Mr Cohen and Mr Gradidge on 21 August 2018 and whether an agreement had been reached to settle the matter. As noted, however, Mr Cohen indicated before the hearing of the application that he did not press for the documents at par 5 of the subpoena and, after debate on the present application, did not press for the documents at pars 3 and 4 of the subpoena.

29. [34]

    Ms Morgans submits that the notice to produce and subpoena should be set aside on the grounds of: relevance; impermissible fishing; and that they are being used to obtain discovery.

30. [35]

    As to relevance, Ms Morgans notes: that a subpoena (or notice to produce to court) may be set aside if the issuing party cannot, on reasonable grounds, show that there is a reasonable possibility that the documents sought will assist in resolving a matter in dispute in the proceedings (citing In the matter of One.Tel Ltd (in liq) - SingTel Optus Pty Ltd v Weston [2010] NSWSC 1491 (One.Tel) at [23]); that, for a notice to produce to have a legitimate forensic purpose (see Nicholas J in ICAP Pty Ltd v Moebes [2009] NSWSC 306 (ICAP Pty Ltd v Moebes) at [30]), “it must be shown that it is likely that documentation will materially assist on an identified issue, or there is reasonable basis beyond speculation that it is likely that the documentation will”; and that the notice to produce and subpoena seek documents that relate to the existence or non-existence of a file note based on speculation by Mr Cohen that Somerville Legal may have destroyed or otherwise tampered with the file note.

31. [36]

    It is submitted that this speculation has been challenged by Somerville Legal with two solicitors (Mr Gradidge and Mr Hemsworth) swearing affidavits to the effect that the file note does not exist; and, thus, that Mr Cohen is unable to identify a legitimate forensic purpose for the subpoena or the notice to produce, or that the documents sought would materially assist an identified issue in the proceedings.

32. [37]

    As to the complaint that this amounts to impermissible fishing, reference is made by Ms Morgans to the recognition in One.Tel that one of the common grounds for setting aside a subpoena (namely that it constitutes impermissible fishing) is a concern to ensure that the issuance of a subpoena is not improperly used as a “substitute for discovery” (at [32]); and to Director General, Dept of Community Services v D (2006) 66 NSWLR 582; [2006] NSWSC 827 at [49] where Brereton J, as his Honour then was, states (citing Owen J in Associated Dominions Assurance Society Pty Ltd v John Fairfax & Sons Pty Ltd (1952) 72 WN (NSW) 250 at 254 (Associated Dominions v Fairfax)):

33. [38]

    It is submitted that Mr Cohen is “hoping that by obtaining every document associated or referring to the telephone conversation on 21 August 2018 he will come across documents that may be relevant to the credit” of Ms Morgans’ witness(es) and solicitors in the proceedings; that this “casts a wide net” in an attempt to obtain additional information Mr Cohen may use against Ms Morgans’ witness(es) in the substantive proceedings; and that it amounts to impermissible fishing and should be set aside.

34. [39]

    It is submitted that the sole purpose of the entirety of the paragraphs of the subpoena and the notice to produce is to seek production of documents in Somerville Legal’s file that Mr Cohen hopes (without, it is said, basis) will assist him in proving matters of credit against Ms Morgans’ witness(es) and should be set aside.

35. [40]

    As to the complaint as to the insufficient particularity with which the documents here sought have been specified, reference is made by Ms Morgans to Patonga Beach Holdings Pty Ltd v Lyons [2009] NSWSC 869 (Patonga Beach) where Barrett J (as his Honour then was) distinguished between a notice to produce under r 21.1 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) and a notice to produce to court under r 34.1 of the UCPR and said from [12]:

36. [41]

    It is submitted that, by requesting all documents “recording, referring to or evidencing”: the telephone conversation (par 1 of the notice to produce and subpoena); the loss or destruction of the file note (par 2 of the subpoena); the provision of evidence by Mr Gradidge in the proceedings (par 3 of the subpoena; par 2 of the notice to produce); and communications between Ms Morgans and her solicitor reporting on the contents of discussions and/or correspondence between Mr Cohen and Mr Gradidge (par 4 of the subpoena; par 3 of the notice to produce); Mr Cohen has failed to specify with reasonable particularity the documents that are required to be produced.

37. [42]

    Ms Morgans points to the breadth of the terms used in the subpoena noting that, in Patonga Beach, Barrett J stated at [20] that:

38. [43]

    It is submitted that the words, “recording, referring to or evidencing” read together have an extremely wide range; and that under the ambit of the subpoena and notice to produce this could include a multitude of documents which would essentially cover the whole file.

39. [44]

    Ms Morgans submits that, given that, on Mr Cohen’s case the issue in dispute in the proceeding is as a direct result of the telephone conversation, which is referred to in his summons, everything from: the pleadings filed; all communications and correspondence with Mr Cohen; all communications and correspondence between Somerville Legal and Ms Morgans; all evidence prepared; all documents relating to evidence prepared; all documents relating to the occurrence and preparation of a mediation which took place on 25 March 2019; and all communications in relation to the subpoena, may either record, mention, allude to or show evidence of either the telephone conversation, the existence or non-existence of the file note, the provision of evidence of Mr Gradidge or communications with Ms Morgans.

40. [45]

    Hence, it is submitted that Mr Cohen has failed properly to specify with reasonable particularity the documents that are required to be produced.

41. [46]

    Ms Morgans further says that, by asking for all documents “recording, referring to or evidencing”, Mr Cohen is requiring Somerville Legal to produce all documents in its possession relating to a particular subject matter and is akin to discovery and that a subpoena should not be improperly used as a substitute for discovery and the subpoena and notice to produce should be set aside on that basis, referring to One.Tel, where, at [45], I said:

42. [47]

    It is said that, in order to comply with the subpoena and notice to produce, Somerville Legal would have to examine its whole file and make a judgment as to whether a document records, refers to or evidences the classes of documents referred to in each paragraph of the subpoena and notice to produce, namely, the telephone conversation; the loss, misplacement, destruction, amendment, deletion, disappearance, removal and/or existence or nonexistence of any document which is caught by par 1; the provision of evidence of Mr Gradidge; and communications between Ms Morgans and her solicitors reporting on contents of communications with Mr Cohen.

43. [48]

    Ms Morgans notes that Jordan CJ in Commissioner for Railways v Small (1938) 38 SR (NSW) 564 at 573; (1938) 55 WN (NSW) 215 (Small) said that it is impermissible that a recipient of a subpoena should be required to search for or produce all documents that he or she may have in his or her possession or power relating to a particular subject matter. It is submitted that these paragraphs amount to categories of discovery and have not been issued for a legitimate forensic purpose.

44. [49]

    Ms Morgans further submits that, whilst Mr Cohen does not press par 5 of the subpoena, the effect of pars 1 to 4 is essentially seeking production of the entire legal file containing the documents concerning the dispute between the parties regarding Mr Cohen’s legal costs.

45. [50]

    Ms Morgans, thus, submits that: the subpoena and notice to produce lack sufficient particularity; are speculative; do not seek documents that are adjectively relevant; are akin to discovery and are being used for no more than a pursuit against Somerville Legal and Ms Morgans’ witness(es)’ credit; and that they amount to an abuse of process and should be set aside with costs.

46. [51]

    It is noted by Mr Cohen that: a notice to produce issued under r 34.1 of the UCPR plays the same role in relation to a party that is played under r 33 by a subpoena in relation to a non-party (referring to Patonga Beach at [12]); courts historically have been more liberal in their treatment of subpoenas to parties and notices to produce than subpoenas to strangers (citing Portal Software International Ply Ltd v Bodsworth [2005] NSWSC 1115 (Portal Software) at [26]); it is sufficient that the category of documents sought could “possibly throw light” on the issues in the substantive proceedings, or that it appears to be “on the cards” that it will do so and that the question is not whether the documents would be admissible in evidence or will “definitely advance the case” of the issuing party (citing Portal Software at [24]-[25]); it is sufficient if a notice to produce issued pursuant to r 34.1 and a subpoena describe the document or category of documents sought by some description or specification (citing Patonga Beach at [12]-[13]); and that what the issues are in the substantive proceedings will appear from the pleadings (where there are pleadings), the affidavits, and the legal principles which govern the claims for relief in the substantive proceedings (citing Portal Software at [25]).

47. [52]

    Mr Cohen submits that the issue of relevance is satisfied in circumstances where the content of the conversation between he and Mr Gradidge on 21 August 2018 will be a “key issue at the final hearing of the matter”. Mr Cohen emphasises that, in his affidavit sworn 6 February 2019, Mr Gradidge does not make any reference to having prepared a file note of that conversation; that on 21 February 2019, Somerville Legal informed him that “we have not been able to locate a file note of your conversation with Mr Gradidge on 21 August 2019”; that, during a conversation with him on 26 February 2019, Mr Gradidge stated that he had prepared a file note of the conversation on 21 August 2018, but it had been lost; that in correspondence sent on 27 February 2019, Somerville Legal maintained that no such file note “exists”; and that on the same day, Somerville Legal informed him that they act for Mr Gradidge.

48. [53]

    Mr Cohen rejects the suggestion that he is engaging in speculation as to the existence of a file note; noting the evidence to the effect that Mr Gradidge did prepare a file note “which apparently was lost”. Mr Cohen says that Mr Hemsworth’s affidavit affirmed on 19 March 2019 at [6] is “confined” in that it refers to a search of Somerville’s file “in this matter”. Mr Cohen says that it seems that Mr Hemsworth “has limited his search to the file in these proceedings and [has] not conducted a search of any other file (eg one that might relate to the costs dispute between Mr Cohen and Mrs Morgans)”. Mr Cohen says that Mr Hemsworth “is careful not to say that a file note had been prepared previously”.

49. [54]

    It is submitted that, in that context, it is appropriate to seek the documents sought in pars 1 and 3 of the notice to produce and pars 1 and 4 of the subpoena; that the contents of any file note, or other record of the conversation between Mr Cohen and Mr Gradidge on 21 August 2018 will clearly “throw light on the issues” in the proceedings; and that Ms Morgans and Somerville Legal should not limit their search for such a file note (or any document which records the contents of the conversation on 21 August 2018) to only the file relating to these proceedings.

50. [55]

    It is submitted that par 2 of the notice to produce and par 3 of the subpoena are also appropriate given that Mr Gradidge’s affidavit “says nothing about the file note that he prepared and the fact that he has since stated that a file note had been prepared”. Mr Cohen maintains that he “is entitled to know whether earlier drafts of his affidavit, or (for example) correspondence concerning his evidence, referred to such a file note and/or the contents of it or how it came to be lost or whether or not it had been found has since been destroyed deliberately or accidentally given that it is now pressed that it does “not exist””, noting that it is likely that Mr Gradidge’s credit will be in issue at the final hearing.

51. [56]

    Mr Cohen also justifies par 2 of the subpoena on the basis that there is ambiguity concerning what has happened to the file note and whether it continues to exist. It is said that Mr Cohen is entitled to seek production of documents which shed light on what has happened to the file note and/or the contents of it and the location of the file note; noting that it is permissible to seek production of such document for the purposes of using them to impeach the credit of Ms Morgans’ witness(es).

52. [57]

    As to the submission by Ms Morgans that this amounts to impermissible fishing, Mr Cohen says that the notice to produce and the subpoena are not simply directed to documents that go to the credit of the Ms Morgans’ witnesses; rather, they seek production of documents which might throw light on the contents of such any file note and the content of the conversation on 21 August 2018.

53. [58]

    It is submitted further, and in any event, that the fact that aspects of the notice to produce and subpoena (namely, par 2 of the notice to produce and pars 2 and 3 of the subpoena) extend to documents which can be relied on to impeach the credit of Ms Morgans’ witness(es) is not of itself reason to set aside those paragraphs (referring to Brand v Digi-Tech (Australia) Ltd [2001] NSWSC 425 per Hunter J at [36]; Fried v National Australia Bank Ltd [2000] FCA 911; (2000) 175 ALR 194 per Weinberg J at [24]; and Liristis v Gadelrabb [2009] NSWSC 441 per Brereton J (as his Honour then was) at [4]).

54. [59]

    It is submitted that in these proceedings, it is highly likely that the credit of Mr Gradidge (and possibly the credit of Mr Hemsworth) will be in issue and, hence, that the subpoena does not amount to an impermissible fishing expedition.

55. [60]

    As to the complaint that there is not sufficient particularity of the documents sought, Mr Cohen says that: it is sufficient to identify the document or category of documents sought by some description or specification (Patonga Beach at [12]-[13]); a description of the subject matter of a category of documents which requires that the documents “referring” to something will be sufficient (Patonga Beach at [14]); Lane v Registrar of Supreme Court of New South Wales (1981) 148 CLR 245 at 259; [1981] HCA 35); that there is no evidence to support the assertions by Ms Morgans that the documents sought in the notice to produce and subpoena could include “a multitude of documents which could essentially cover the whole file” (it being said that this is speculative and ambiguous; and not a proper basis for objection in the absence of any evidence that could establish oppression); that the notice to produce and subpoena do not seek production of “all evidence prepared”, or documents relating to the mediation; and that, to the extent that the notice to produce and subpoena capture documents already provided to Mr Cohen (such as correspondence), he does not seek production of such documents.

56. [61]

    As to the objection that this is akin to discovery, it is submitted that: it is permissible to seek production of documents that “refer to” a particular subject matter; that the assertion in Ms Morgans’ submissions at [30] cannot be sustained since the notice to produce and subpoena seek production of documents created or prepared after 1 July 2018 and Somerville Legal commenced acting for Mrs Morgans before that date and noting that there is no evidence to support that assertion that this is akin to discovery nor any evidence put forward that could support a claim of oppression.

57. [62]

    Further, it is submitted that the fact that aspects of the notice to produce and subpoena extend to documents which can be relied on to impeach the credit of Ms Morgans’ witness(es) is not of itself a proper basis for objection. It is submitted that the notice to produce and subpoena seek production of documents that could throw light on a key issue in the proceedings and are not speculative.

Determination

1. [63]

   I note at the outset that, in considering what is a legitimate forensic purpose for the issue of compulsory process of this kind (subpoenas or, as considered in some of the cases, notices to produce), the Court of Appeal in ICAP Australia Pty Ltd v BGC Partners (Australia) Pty Ltd [2009] NSWCA 307, held that the primary judge had not erred by stating that, for a notice to produce to have a legitimate forensic purpose:

2. [64]

   It is necessary, when determining whether there is a legitimate forensic purpose, to have reference to the particular case, or identified issue, that the documentation sought is reasonably expected to be likely to assist (see Nicholas J in ICAP Pty Ltd v Moebes (at [33])); and the description of the relevant test in Portal Software, (there considering whether to set aside the notice to produce) as whether the documents sought have “a sufficient apparent connection to justify their production or inspection” (see at [24], his Honour there citing White v Tulloch (1995) 127 FLR 105; (1995) 19 Fam LR 696). His Honour said that the test of adjectival relevance (i.e., as distinct from substantive relevance) will be satisfied if the material has apparent relevance and is established if the documents called for “could possibly throw light on the issues in the main case” (at [24], citing Trade Practices Commission v Arnotts Ltd (No 2) (1989) 21 FCR 306; [1989] FCA 340).

3. [65]

   As I observed in Rinehart v Rinehart [2018] NSWSC 1102 (at [47]):

4. [66]

   I also noted at [48] that, where there is no legitimate forensic purpose, in the above sense, for the issue of a subpoena then it may readily be seen to be a fishing expedition; setting out the meaning given to the expression “fishing expedition” in Associated Dominions v Fairfax at 254 (as extracted above at [37]).

5. [67]

   Part of the present complaint is that the invocation of the Court’s compulsory processes is being used as a substitute for discovery (which it is recognised may be an abuse of process – see Associated Dominions v Fairfax; Small; National Employers’ Mutual General Association Ltd v Waind [1978] 1 NSWLR 372 at 382 (Moffitt P, with whom Hutley and Glass JJA agreed)).

6. [68]

   The above observations also need to take into account that there is now a practice note dealing with disclosure in this division (and see in this context what was said in Tyco Australia Pty Ltd v Leighton Contractors Pty Ltd (2005) 142 FCR 428; [2005] FCAFC 115 (Tyco) by Hill J (at [34]) and in Yes Family Pty Ltd v Sphere Healthcare Pty Ltd [2016] NSWSC 393 by Slattery J (at [28]). It has been said that a subpoena will be an abuse of process where it is used as a means of obtaining disclosure of documents which, in accordance with par 4 of the Practice Note, could only be obtained before the service of evidence in exceptional circumstances necessitating disclosure (see New Price Retail Services Pty Ltd v Hanna; Australian Pharmaceutical Industries v Hanna [2012] NSWSC 422 (Hanna) at [19] (per McDougall J); considered by Ball J in The Owners - Strata Plan No 76902 v Roads and Maritime Services [2017] NSWSC 528 at [20]).

7. [69]

   The substantive requirements of the Practice Note require that: disclosure not occur before evidence has been served; and that disclosure only occur if it is necessary (in the sense of what is reasonably required for a fair trial) for the resolution of the real issues in dispute in the proceedings (see In the matter of Gerard Cassegrain & Co Pty Ltd [2011] NSWSC 241 at [20]ff). Relevantly, the Practice Note, which was issued in March 2012, provides that:

8. [70]

   While the Practice Note does not apply in terms to subpoenas, it has been recognised that “very similar considerations” attend the issuing of subpoenas (see Hanna at [19] (McDougall J); In the matter of North Coast Transit Pty Limited [2013] NSWSC 1912 at [56] (Black J); and In the matter of Force Corp Pty Ltd (Recs and Mgrs Apptd (in liq) [2018] NSWSC 896at [49] (Gleeson JA)).

9. [71]

   In Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd [2012] NSWSC 393 Bergin CJ in Eq made clear (at [64]-[66]) that the purpose of the Practice Note is to ensure that disclosure is “confined to the real issues between the parties as defined by not only the pleadings, but also the evidence”.

10. [72]

    While pars 3-5 of the subpoena (and, the corresponding par 3 of the notice to produce) were, at least by the end of the hearing, no longer pressed, it will be relevant to consider the scope of the notice to produce and subpoena as initially issued (and as pressed up to the hearing of the application) when I come to consider costs of the applications.

11. [73]

    Turning first, however, to the paragraphs that were still pressed, they can be summarised as going to:

12. [74]

    Clearly, what Mr Cohen is seeking is evidence of the file note of the relevant telephone conversation (that, on his evidence, Mr Gradidge told him had been made) and, if it no longer exists, what has happened to it. There is no doubt that such a file note would be relevant given that a central issue in the proceeding is what was said during the course of the 21 August 2018 telephone conversation. However, the terms in which the subpoena and notice to produce seeking production of such a document are couched are extremely broad.

13. [75]

    The words “referring to or evidencing” would encompass any documents brought into existence after the dispute arose in the context of and relating to the present proceedings (such as instructions given by Mr Gradidge as to his recollection of the conversation or steps taken in the context of the present litigation). The words “referring to” would not confine the documents sought to those in which there was an express reference to the content of the telephone conversation but would include, for example, a time entry recording the fact that there was a telephone conversation (something submitted by Ms Morgans – see T 7.13). Moreover, the word “evidencing” gives rise to the difficulty that it calls for a subjective judgment to be formed as to whether a particular document (that may not in terms refer to the telephone conversation) can be said to “evidence” that telephone conversation.

14. [76]

    The time frame specified in the subpoena is also very broad – for some inexplicable reason it commences over a month before the telephone conversation in question; but more relevantly it has no end period. Thus, it would extend to documents created well after the event and during the period in which this litigation has been on foot. It is not to the point that Ms Morgans may not have raised an objection on the basis of oppression. I am being called upon to set the subpoena and notice to produce aside. A relevant factor in that exercise is whether the subpoena extends beyond what could be said to amount to a legitimate forensic purpose. There can be no legitimate forensic purpose in seeking documents created for the purposes of the present litigation, yet, as presently framed, the subpoena and notice to produce would do so.

15. [77]

    Furthermore, it seems to me that there is force in the objection that at least some of the documents that would fall within the subpoena and notice to produce would be subject to legal professional privilege.

16. [78]

    As to the second of those categories of documents, a further problem arises insofar as Mr Cohen seems effectively to be seeking to undertake a process of investigation (or, perhaps, a process akin to interrogation) as to the circumstances in which (assuming, as Mr Gradidge apparently believes, that his file note was “lost”) any file note that did once exist is no longer in existence or available for production. It is by no means clear what Mr Cohen is contemplating in this regard – is he seeking copies of any document retention policy or the like in general in the offices of Somerville Legal; or is he seeking some form of document that might expressly refer to the destruction or deletion of the file note; or some form of metadata in the event that (contrary to Mr Gradidge’s statement to Mr Cohen) the file note was in fact a computer generated document? It seems to me that there is a high degree of speculation insofar as the subpoena calls for documents relating to the destruction (or the like) of any file note that was created by Mr Gradidge during or after the relevant telephone conversation and recording what was said in that telephone conversation; and to that extent the subpoena is no more than a fishing expedition in the sense considered above.

17. [79]

    In the course of debate as to the present applications, there was discussion as to the category of documents comprising any communications of the contents of the telephone conversation at or around the time of the telephone conversation (as opposed to communications after the dispute arose that has given rise to the current application). So, for example, the possibility that Mr Gradidge may have communicated to the client or to someone else at Somerville Legal the content of the telephone conversation at about the time that it occurred. Any documents in which such communications were made would fall within par 4 of the subpoena and para 3 of the notice to produce (but also within par 1 of each of those). Although still speculative, I considered that it would be permissible for such documents to be sought given the central relevance of what was said during the telephone conversation (hence the direction I ultimately made for the production of such documents).

18. [80]

    The more general difficulty I see with the process invoked by Mr Cohen by the issue of the subpoena and the notice to produce is that the breadth of the documents sought makes it clear that this has the tendency (even if not designed to do so) to subvert the Practice Note in relation to the disclosure of documents in this division. There has been no attempt to comply with the Practice Note in this regard.

19. [81]

    Accordingly, I considered that the whole of the subpoena and notice to produce should be set aside but that, in order to progress the matter in accordance with the statutory mandate for the just, quick and cheap resolution of the real issues in dispute I would make directions for the production of that limited category of documents that I considered could legitimately have been sought at this stage. I also made clear that I expected the search for those documents not to be limited to a particular file or files.

20. [82]

    Finally, as to costs, I formed the view that costs of the motion should be borne by Mr Cohen; and that this should be on an indemnity basis. As to the making of an order for costs, Ms Morgans has been successful in obtaining the relief sought by the notice of motion (notwithstanding that I have also made an order for the production of a limited category of documents). The reason for my decision to award costs on an indemnity basis was that it was made clear to Mr Cohen, in the correspondence leading up to the present hearing, the complaints made about the subpoena and notice to produce; yet he insisted on pursuing the bulk of the subpoena and notice to produce (i.e., other than para 5 of the subpoena) up to the commencement of the hearing. The extraordinary (in my view) breadth of the subpoena and notice to produce (including as to the suggestion of destruction of documents by the solicitors, implicit in par 2 of the subpoena) and the failure to take any apparent note of the Practice Note on disclosure, warranted, in my opinion, an order for indemnity costs; on the basis that what has here occurred was an abuse of the Court’s process.

Orders

1. [83]

   For the above reasons on 16 May 2019 I made the following orders:

   1. (1)

      The subpoena to produce issued by the plaintiff addressed to Somerville Legal filed 26 February 2019 and returnable 29 March 2019 be set aside.

   2. (2)

      The notice to produce issued by the plaintiff addressed to the defendant and Somerville Legal returnable 29 March 2019 be set aside.

   3. (3)

      Direct the defendant to produce to the plaintiff within fourteen days any document contemporaneously recording the contents of the telephone conversation between Mr Matthew Gradidge and Mr Cohen at approximately 4pm on 21 August 2018.

   4. (4)

      Note that the limitation by the word “contemporaneously” in O 3 is intended such that the requirement to produce any such document is limited to any document created on 21 August 2018 or in the period between 21 August 2018 and 19 September 2018.

   5. (5)

      Direct the defendant to produce to the plaintiff within fourteen days any document created on 21 August 2018 or between 21 August 2018 and 19 September 2018 communicating the contents of the telephone conversation referred to in O 3 above.

   6. (6)

      Note that the directions made in O 3 and O 5 for the production of the document(s) referred to therein is without prejudice to any claim by the defendant as to any legal professional privilege in those communications.

   7. (7)

      Order the plaintiff to pay the defendant’s costs of the notice of motion filed 28 March 2019, including the costs of this hearing, on an indemnity basis.