Aibi Holdings Pty Ltd v Virtual Technology Services Pty Ltd (Notice to Produce)

[2022] FCA 298

FEDERAL COURT OF AUSTRALIA

AIBI Holdings Pty Ltd v Virtual Technology Services Pty Ltd (Notice to Produce) [2022] FCA 298

File number:

NSD 177 of 2021

Judgment of:

PERRAM J

Date of judgment:

24 March 2022

Date of publication of reasons:

28 March 2022

Catchwords:

PRACTICE AND PROCEDURE – application to set aside notice to produce – where contracts the subject of the notice allegedly standard form contracts – whether notice to admit more efficient – whether interrogatory more efficient

Legislation:

Competition and Consumer Act 2010 (Cth) Sch 2 ss 2, 23, 27

Federal Court Rules 2011 (Cth) r 1.34

Division:

General Division

Registry:

New South Wales

National Practice Area:

Commercial and Corporations

Sub-area:

Regulator and Consumer Protection

Number of paragraphs:

10

Date of hearing:

24 March 2022

Counsel for the Applicant:

Mr W Soon

Solicitor for the Applicant:

Avantro

Counsel for the Respondent:

Mr J O’Sullivan

Solicitor for the Respondent:

Quest Legal Pty Ltd

ORDERS

NSD 177 of 2021

BETWEEN:

AIBI HOLDINGS PTY LTD ACN 619 923 125

Applicant

AND:

VIRTUAL TECHNOLOGY SERVICES PTY LTD  ACN 141 194 470

Respondent

ORDER MADE BY:	PERRAM J
DATE OF ORDER:	24 MARCH 2022

THE COURT ORDERS THAT:

1.The interlocutory application be dismissed.

2.The Respondent pay the Applicant’s costs of the interlocutory application.

3.

The notice to produce dated 25 February 2022 be returnable before the Registrar at

9.30 am on Wednesday, 30 March 2022.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT
(REVISED FROM TRANSCRIPT)

PERRAM J:

1. By an interlocutory application filed on 23 March 2022, the Respondent applies for orders pursuant to r 1.34 of the Federal Court Rules 2011 (Cth), setting aside a notice to produce issued by the Applicant to the Respondent, dated 25 February 2022. On the application, two affidavits were read by the Respondent. These were the affidavit of Ms Lindsay, dated 19 July 2021, and a second affidavit of Ms Lindsay, dated 22 March 2022. Relevant to the disposition of the Respondent’s application is the concept of a ‘standard form contract’ under the Australian Consumer Law (‘the ACL’), being Sch 2 to the Competition and Consumer Act 2010 (Cth). That expression is defined in s 2 to have a meaning which is effected by s 27.

2. Section 23 of the ACL provides as follows:

   (1)A term of a consumer contract or small business contract is void if:

   (a)the term is unfair; and

   (b)the contract is a standard form contract.

   …

3. Section 27 of the ACL, subsection (1) provides as follows:

   27Standard form contracts

   (1) If a party to a proceeding alleges that a contract is a standard form contract, it is presumed to be a standard form contract unless another party to the proceeding proves otherwise.

4. The relevance of these provisions of the ACL arises from an allegation made at §13 of the Statement of Claim which is in the following terms:

   13.In the circumstances set out in paragraphs 8 to 12 above, the applicant pleads that the Agreement was a standard form contract within the meaning of sections 23 and 27 of the Australian Consumer Law.

5. Also relevant is the denial that has been put in response to that allegation at §13 of the Respondent’s Defence which is as follows:

   13.      The Respondent denies paragraph 13 of the Statement of Claim.

6. In Ms Lindsay’s first affidavit at §11, she said as follows:

   11. Exhibited to me and marked “SL-2” is a paginated bundle of agreements between VTS and clients of VTS other than AIBI. These agreements contain sensitive commercial information that is confidential to VTS and its clients. Accordingly, some information has been redacted from these agreements to preserve the confidentiality of them. VTS will provide a copy of “SL-2” to the solicitors and counsel for AIBI upon receipt of appropriate confidentiality undertakings from them.

7. Although I was provided with a copy of Exhibit SL-2, it is not necessary to refer to its contents. The point of §11 is to establish that contracts of the kind upon which the Applicant relies, were varied by the Respondent. The point of that evidence is to discharge the burden cast upon the Respondent by s 27(1) of the ACL. That is to say, by putting on this evidence, that provision is disengaged. In §9 of her second affidavit of 22 March 2022, Ms Lindsay refers to the fact that there are 53 contracts which would fall within the contracts called for by the notice to produce. The precise wording of §9 is as follows:

   9. Annexed to this affidavit marked “F” is a copy of an email dated 15 March 2022 from Evan Siu of Avantro Legal to James Bijen of Quest Legal. This offers to reduce the scope of documents for production to the period from 1 October 2018 to 1 October 2019. I estimate that this would require production of approximately 53 contracts. Each contract is approximately between 7 and up to 34 pages.

8. The notice to produce, itself, is in the following terms: 

   The Applicant requires you to produce the following documents or things before the Court:

   1.All agreements between VTS and clients of VTS other than AIBI (whether comprising exhibit SL-2 or not), which include but are not limited to:

   a.Any document titled “VTS Outsourcing Services Agreement Terms and Conditions” dated between the period of 1 November 2017 to 25 February 2022;

   b.Any document titled “Outsourcing Services Agreement Schedule to the VTS Outsourcing Services Agreement Terms and Conditions” dated between the period of 1 November 2017 to 25 February 2022; and

   c.Any other document annexed to, scheduled to, or referred to in any of the documents in paragraphs 1a or 1b above.

9. The submissions made on behalf of the Respondent were concise.  Mr O’Sullivan submitted that what was contained in the balance of the 47 contracts, which had not been included in §11 of Ms Lindsay’s first affidavit, were either going to confirm that the contract upon which the Applicant relies were in the same terms, or it was going to show that there were variations and there was no utility, on this view, in requiring the Respondent to go through the process of examining and producing the documents, and that it could be attended to more economically and efficiently by a carefully administered interrogatory. 

10. I do not accept this submission.  In my view, the Applicant is entitled to have access to these documents.  One of the reasons for this is because the question of whether any particular contract assists the Applicant in rebutting §11 of Ms Lindsay’s first affidavit, may turn, very precisely, on what is in each of the individual contracts.  If that matter were to be handled by means of an interrogatory, in my view, it is highly likely that the parties would end up looking at the contracts in any event, at the trial.  Under that circumstance, it seems to be to be more efficient that they be produced now.

I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Perram.

Associate:

Dated:       28 March 2022