DeltaPak Pty Ltd v A and RT Systems Pty Ltd
[2018] VCC 535
•26 April 2018
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Unrestricted Suitable for Publication |
EXPEDITED LIST
Case No. CI-16-04343
| DELTAPAK PTY LTD (ACN 104 483 329) | Plaintiff (Defendant by Counterclaim) |
| V | |
| A & RT SYSTEMS PTY LTD (ACN 132 606 798) (and others according to the Schedule attached) | Defendants (Plaintiff by Counterclaim) |
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JUDGE: | HER HONOUR JUDGE A RYAN | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 19 April 2018 | |
DATE OF RULING: | 26 April 2018 | |
CASE MAY BE CITED AS: | DeltaPak Pty Ltd v A & RT Systems Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2018] VCC 535 | |
REASONS FOR RULING
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Subject: PRACTICE AND PROCEDURE
Catchwords: Application to set aside subpoenas to non-parties before trial– whether legitimate forensic purpose test satisfied – whether documents replicate plaintiff’s discovery – subpoenas not set aside.
Legislation Cited: County Court Civil Procedure Rules 2008, r42.04
Cases Cited:Bannon v Nauru Phosphate Royalties Trust (Subpoena Objection) [2017] VSC 213; Volunteer Fire Brigades Victoria v Country Fire Authority (2016) VSC 573; Webb v Wheatley [2015] VSC 153
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr C P Thompson | Nevile & Co |
| For the Defendants | Mr A Schlicht | Vadarlis & Associates |
HER HONOUR:
1 The plaintiff seeks to set aside two subpoenas issued by the defendants addressed to Aldi Pty Ltd (“Aldi”) and Coles Supermarket Australia Pty Ltd (“Coles”). The plaintiff’s application was made orally at a directions hearing on 19 April 2018 and is brought under Rule 42.04 of the County Court Civil Procedure Rules 2008. The plaintiff relied upon two affidavits dated 12 April 2018 in support of its application. The first is from the plaintiff’s solicitor, Mr David Dudderidge and the second from Mr Simon Bartter, the sole director of the plaintiff.
2 The Coles subpoena is dated 23 March 2018. It called for production of the following documents by 13 April 2018:
“(1)All documents passing between you and DeltaPak Pty Ltd, including in relation to:
(a) the Coles Comfy Bots Baby Wipes product with a perforated seal;
(b) the Coles Comfy Bots Baby Wipes product with choking hazard seal;
(c) (has been left blank in the schedule);
(d) the use of:
(i)the tuck flap box; and/or
(ii)the rectangular slotted carton (RSC) boxes,
to package Coles Comfy Bots Baby Wipes (also called Big Pack Value).”
3 Counsel for the defendants, Mr Schlicht informed the Court that Coles had complied with the subpoena and had produced documents to the Registry. His clients wish to inspect those documents, subject to the outcome of this application.
4 The Aldi subpoena is also dated 23 March 2018 and required production of documents by 13 April 2018. The categories of documents sought from Aldi were slightly different and are as follows:
“(1)All documents passing between you and DeltaPak Pty Ltd, in relation to any change in packaging of the Mamia Baby Wipes and the Mamia Bulk Wipes products (“Products”) in the calendar years of 2015 and 2016 (“Years”) and the use of:
(i) the tuck flap box, and/or
(ii) the rectangular slotted carton (RSC) boxes,
to package the products (also known as Mamia Bulk Value Pack).
(2)All documents relating to any changes in the Products during the Years from having a perforated seal to having the choking hazard”.
5 Mr Vadarlis, solicitor for the defendants, swore an affidavit on 19 April 2018 in opposition to the application. He exhibited a letter from Aldi informing Vadarlis & Associates that the name of the Aldi entity on the subpoena was incorrect. (Exhibit “EV-2”). The author of the letter said that if the defendants were desirous of re-issuing the subpoena, the appropriate name was ALDI Stores (A Limited Partnership) and it was expected Aldi’s reasonable expenses to comply with the subpoena would be $2,000.
6 Neither Coles nor Aldi have raised any objection to answering the subpoenas. Coles has complied with its subpoena and it appears Aldi will comply, subject to the subpoena being re-issued in the name of the correct Aldi entity. But the fact that those parties did not object does not prevent the plaintiff from doing so.
7 A party has standing to bring an application to set aside a subpoena pursuant to Rule 42.04. Rule 42.04 provides as follows:
“42.04 Setting aside or other relief
(1) The Court may, of its own motion or on the application of a party or of any person having a sufficient interest, set aside a subpoena in whole or in part, or grant other relief in respect of it.
(2) An application under paragraph (1) shall be made on notice to the issuing party.
(3) The Court may order that the applicant give notice of the application to any other party or to any other person having a sufficient interest.”
8 Counsel for the plaintiff, Mr Thompson referred to Bannon v Nauru Phosphate Royalties Trust (Subpoena Objection) [2017] VSC 213 and the summary of applicable principles adopted from an earlier decision of Derham AsJ in Webb v Wheatley [2015] VSC 153.
9 The plaintiff also referred to paragraph [15] in Bannon’s case where her Honour, Ierodiaconou AsJ noted that documents more properly the subject of discovery should not be subpoenaed. This was in the context of a subpoena served upon a non-party, being the wife of the plaintiff. The plaintiff, Mr Bannon, had provided discovery. The Nauru Trust had subpoenaed Mr Bannon’s wife to produce joint various bank and credit card statements. Ms Bannon and her husband objected to that subpoena. The Court stated in paragraph [15] that Ms Bannon should not be required to produce documents that had already been discovered by her husband.
10 In Volunteer Fire Brigades Victoria v Country Fire Authority (2016) VSC 573, J Forrest J referred to the principles in relation to the adequacy of a subpoena to produce documents at paragraph [55]. His Honour noted the requirement for a legitimate forensic purpose to be identified by the issuing party. The court must also be satisfied that it “is on the cards” or that there is a “reasonable possibility” that the documents sought will “materially assist the defence”. Relevance alone will not satisfy the legitimate forensic purpose test. At [61], His Honour further noted that a court must be satisfied the documents sought to be produced must be potentially relevant in the sense of s55 of the Evidence Act 2008 (Vic), in that the evidence could, if accepted, rationally affect (directly or indirectly) the assessment of the probability of the existence of fact in issue. Whilst His Honour found there was a prospect of overlap between documents produced pursuant to subpoenas and discovery by CFA, this did not constitute an abuse of process. His Honour saw nothing untoward in requiring CFA board members and executives to answer subpoenas concurrently with the discovery process by CFA. The position here is somewhat further removed in that production is sought from third parties unconnected with the plaintiff.
11 The plaintiff noted in its written submissions that the central issue in dispute on liability was whether certain robotic machinery supplied by the first defendant to the plaintiff for the packing and palletising of baby wipes met its contractual specification and was fit for purpose. The specific purpose for the machinery was being suitable for use on the end of a continuous assembly line.
12 The plaintiff said the first defendant contends that the problems experienced by the machinery in packing the baby wipes were attributable to the wipes and their cartons being outside contractual specifications. The defendants’ case is that the addition of choking hazard stickers had the effect that the baby wipes did not conform to their specification.
13 The plaintiff does not dispute that choking hazard stickers were introduced for the Coles products or when this occurred. As deposed to by Mr Bartter, the plaintiff has already given discovery of all documents evidencing the transition to choking hazard stickers. Additionally, Mr Bartter observes the plaintiff has discovered an email trail between representatives of the plaintiff and Coles concerning Coles’ sticker initiative, finished goods master data forms evidencing the date the choking hazard label was added to the bills of material for the relevant baby wipes and production request forms from 7 January 2016, evidencing the first production run with those stickers.
14 Mr Bartter also deposes that none of the Mamia products, being the Aldi products, had a choking hazard sticker affixed to them during the relevant period in which the first defendant was attempting to commission robotic machinery, the subject of this proceeding. The plaintiff argues then it is not apparent on what basis the first defendant asserts the introduction of choking hazard stickers for the Mamia products is relevant or serves any legitimate forensic purpose.
15 The plaintiff submits that evidence is corroborated by Mr Dudderidge in his affidavit sworn 12 April 2018. Mr Dudderidge also noted the relevant documents concerning the transition to choking hazard stickers were provided to the defendants’ then solicitors on 29 May 2017.
16 As for the request regarding documents relating to changes made to packaging cartons, the plaintiff submits it is not apparent that this request would serve a legitimate forensic purpose. As Mr Dudderidge attests, the changes were made to the cartons not at the request of either Coles or Aldi but at the suggestion of the manufacturer, being Visy, to better function with the automated equipment.
17 Mr Bartter deposes that the plaintiff has discovered an email trail from about January 2016 between the plaintiff and Visy about potential changes to a carton for a Coles product and a communication from the plaintiff to the first defendant on 31 March 2016 advising that rectangular slotted carton boxes would be implemented. Mr Bartter says that to the extent documents are sought from Coles and Aldi relating to the boxes and cartons in which products were packaged, these have already been discovered by the plaintiff or are irrelevant. Mr Dudderidge deposes that the documents relating to changes to the packaging cartons were provided to the first defendant’s then solicitors on 16 March 2016.
18 The principal argument put forward by the plaintiff was that the subpoenas should be set aside because the plaintiff has provided discovery of documents relating to the choking hazard for Coles and the documents sought were not relevant for Aldi because it was outside the applicable period. The change to the cartons were made at the instigation of the manufacturer and not by the subpoenaed non-parties. Essentially, the plaintiff says that because it has made adequate discovery, the defendants are not entitled to issue a subpoena to Coles or Aldi. The plaintiff also submits that the requests for documents are in the nature of broad discovery requests which is impermissible.
19 The application was opposed. Mr Schlicht said it was difficult for the plaintiff to argue successfully that the documents sought under the subpoenas were irrelevant, being of the same type as those already discovered.
20 Mr Schlicht referred to paragraph 9 of Mr Bartter’s affidavit and also the amended defence at paragraph 38. In paragraph 9, Mr Bartter says no documents have been discovered by the plaintiff concerning the change to a choking hazard for sticker for the Mamia products as this was outside the relevant period during which the first defendant was attempting to commission the robotic machinery. Paragraph 38 of the amended defence sets out in some detail the problems which are said to have arisen following the introduction of choking hazard stickers. The addition of the stickers caused the packages to have trapped air making them puffy which in turn resulted in the cartons being overfilled and led to the conveyor breaking down. Counsel said the effect of the stickers being put on the products rendered them being outside specification and therefore outside tolerance. The defendants submit it is important to know when the stickers were put on.
21 Mr Schlicht referred to Exhibit “SB-3” to Mr Bartter’s affidavit which exhibits copies of production request forms discovered by the plaintiff. There is a reference on page 4 to a production run with a choking hazard label on 6 January 2016. This is said to be the first time the label is introduced and the defendants wish to test that assertion by seeking production of Coles’ documents.
22 Counsel for the defendants disputed the assertion that the carton boxes were made by Visy and said they came from China. He said the box sizes changed as well which in turn affected the ability of the machinery to operate within specification.
Conclusion
23 It appears to me to be a legitimate forensic purpose for the defendants to seek production of documents from Coles or Aldi concerning any alterations concerning choking hazard seals and/or carton boxes with a view to assessing or testing the accuracy of matters alleged by the plaintiff. A key issue at trial will be whether anything done by the plaintiff, such as introducing the choking hazard seals and altering the size of the cartons caused the robotic machinery supplied by the defendant to malfunction. On their face, the documents sought would appear to be relevant to the issues in dispute and may well may have evidentiary value at trial. Whilst the request to Coles does seem a bit broad with no date span given, Coles has obviously had no difficulty in answering the subpoena. The subpoena to Aldi does have a date span and does not in my view, amount to a general request for discovery as submitted by the plaintiff.
24 The fact that the plaintiff says it has discovered all relevant material is not enough, in the circumstances of this case, to warrant an order setting aside the subpoenas. This case is quite different to the position in Bannon. Consequently, I am satisfied the subpoenas should be answered.
25 Given the plaintiff has been unsuccessful in its application to have the subpoenas set aside and Mr Thompson agreed costs should follow the event, I will make orders that:
(1)The plaintiff’s application to set aside subpoenas dated 23 March 2018 addressed to Coles and Aldi respectively is dismissed;
(2)The defendants have leave to amend the subpoena addressed to Aldi by substituting the name ALDI Pty Ltd for ALDI Stores (A Limited Partnership) and to issue any amended subpoena under O42A by 4pm on 4 May 2018;
(3)The plaintiff pay the defendants’ costs of and incidental to the directions hearing of 19 April 2018.
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Certificate
I certify that these 8 pages are a true copy of the Reasons for Judgment of Her Honour Judge A Ryan delivered on 26 April 2018.
Dated: 26 April 2018
Elisabeth Buchan
Associate to Her Honour Judge A Ryan
Schedule
CI-16-04343
DeltaPak Pty Ltd (ACN 104 483 329) Plaintiff
(Defendant by Counterclaim)
and
A & RT Systems Pty Ltd (ACN 132 606 798) First Defendant
(First Plaintiff by Counterclaim)
and
Dale Leslie Collinson Second Defendant
(Second Plaintiff by Counterclaim)
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