P A Putney Finance Australia Pty Ltd v Aalders

HIS HONOUR: By their amended statement of claim, the plaintiffs sue the defendants for damages for breach of the terms of a commercial agreement. The background to the dispute is both old and involved. In essence, it derives from what was in effect the dissolution of a partnership between two brothers and the division of its assets and goodwill. The original business provided leasing finance for various types of equipment. The agreement sought to divide up that business and in so doing to draw a distinction between the types of business that the brothers could write following their separation. The details of the commercial undertakings in question are far more complex than that description suggests. However, a more detailed elucidation of the precise nature of the competing contentions in the litigation is unnecessary for the purposes of the matter before me.

The plaintiff issued two subpoenas directed to each of Westpac Banking Corporation and St George Bank Ltd. Neither entity is a party to the present litigation. These entities have produced the documents sought by the subpoenas. No complaint was made by the Banks that the terms of the subpoenas were too wide or that compliance with them was oppressive. It is, however, the defendants’ concern that the subpoenas have been issued for the production of documents that can have no legitimate forensic purpose and that they have in contrast been issued for the illegitimate collateral purpose of discovering documents that might support further breaches by the defendants and spawn an application by the plaintiffs further to amend their pleadings.

On 6 June 2019, Registrar Bradford set the subpoenas aside on a number of bases. The plaintiffs have now by notice of motion filed on 3 July 2019 sought orders pursuant to UCPR r 49.19 setting aside the orders made by the Registrar. They seek an associated but strictly unnecessary order dismissing the defendants’ original notice of motion filed on 17 April 2019.

UCPR r 49.19(1) provides as follows:

The principles that govern a review under this rule are well established: see, for example, UTSG Pty Ltd v Gwynvill Properties Pty Ltd [2017] NSWSC 558 and Noble Earth Technologies Pty Ltd v Hampic Pty Ltd trading as Cyndan Chemicals [2012] NSWSC 935 at [39]. I have applied those principles in the determination of this application.

Part of the evidence upon which the plaintiffs relied in support of the application was an affidavit of Paul Anthony Aalders sworn 1 August 2019. Paragraph 30 of that affidavit is as follows:

Mr Aalders was not cross examined on his affidavit. It has not been suggested to me, and I am not otherwise in a position independently to conclude, that Mr Aalders’ opinion that the documents “are directly relevant to known breaches of the Undertaking Term” cannot possibly be correct.

Assessment of whether a legitimate forensic purpose attaching to subpoenaed documents can be identified in a particular case and the question of the admissibility of such material raise distinct but related concepts. In the present case, the documents that are the subject of the subpoenas have been produced without complaint. The time has not yet arrived when either party has sought to tender them for any purpose. The defendants’ original application to set aside the subpoenas was in practical terms an application to prevent the plaintiffs from having access to the documents.

The documents appear to me to have at least the legitimate forensic purpose identified by Mr Aalders. There may be others. The question of whether or not the documents are relevant or otherwise admissible in the proceedings is ultimately a question that the trial judge will have to decide. Having regard to the evidence of Mr Aalders concerning additional alleged infringements of the agreement, it may be in due course that the plaintiffs will wish to contend that such alleged conduct is relevant to proof of the probability that the defendants committed the breaches that are currently pleaded. The question of tendency notices did not arise in the course of the hearing before me but the prospect that the subpoenaed material might be used for this purpose is not remote and cannot be said to be unarguable: see, for example, Aristocrat Technologies Australia Pty Ltd v Global Gaming Supplied Pty Ltd & Allam (2013) 297 ALR 406; [2013] HCA 21.

In my opinion, orders 1 and 2 made by Registrar Bradford on 6 June 2019 should be set aside. The costs of the application before me should be the costs in the proceedings.