Diploma Construction (WA) Pty Ltd v Cimc Modular Building Systems (Australia) Pty Ltd

[2015] WASC 384

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   DIPLOMA CONSTRUCTION (WA) PTY LTD -v- CIMC MODULAR BUILDING SYSTEMS (AUSTRALIA) PTY LTD [2015] WASC 384

CORAM:   ALLANSON J

HEARD:   ON THE PAPERS

DELIVERED          :   13 OCTOBER 2015

FILE NO/S:   CIV 2394 of 2014

BETWEEN:   DIPLOMA CONSTRUCTION (WA) PTY LTD

Plaintiff

AND

CIMC MODULAR BUILDING SYSTEMS (AUSTRALIA) PTY LTD
Defendant
 

Catchwords:

Practice and procedure - Subpoena of documents - Inspection of documents - Objection to inspection of unredacted document as commercially sensitive and irrelevant - Turns on own facts

Legislation:

Nil

Result:

Objection to inspection dismissed

Category:    B

Representation:

Counsel:

Plaintiff:     No appearance

Defendant:     No appearance

Objector:     No appearance

Solicitors:

Plaintiff:     Momentum Legal

Defendant:     Clayton Utz

Objector:     DLA Piper

Case(s) referred to in judgment(s):

Boase v Axis International Management Pty Ltd [No 3] [2012] WASC 498

Commonwealth of Australia v Albany Port Authority [2006] WASCA 185

ICAP Australia v Forrest Moebes [2010] NSWSC 738

Stanley v Layne Christensen Co [2004] WASCA 50

1. ALLANSON J:  By writ filed 7 October 2014, Diploma Construction (WA) Pty Ltd commenced this action, claiming damages and an indemnity for its loss, damage and expenses from the defendant.  The indorsement of claim sets out causes of action in breach of contract, and breach of duties owed by the defendant at common law.

2. The plaintiff filed a statement of claim in November 2014, amended in June 2015.  The defendant filed a defence and counterclaim, amended in July 2015. 

3. Central to the plaintiff's claim is the plea of an agreement between the parties, entered on or about 17 January 2013, and varied in November 2013 (Varied Agreement).  Under that Varied Agreement the plaintiff was to design, fabricate and fit out modular accommodation and ancillary units for a project at Wickham:  amended statement of claim, par 9.  The plaintiff pleads that cl 13.1 of the Varied Agreement obliged the defendant to insure the units for the replacement value against loss or damage resulting from a storm event incurred during a relevant period, and to ensure that the plaintiffs rights, interests and liabilities were covered by the insurance:  par 9(ee) and (ff).  The plaintiff pleads that certain defects were caused by a storm event and, in breach of cl 13.1 of the Varied Agreement, the defendant failed to arrange, effect, procure and maintain the insurance:  pars 84B, 84C.  As a consequence, the plaintiff has suffered loss and damage in that it cannot seek or recover indemnity under the insurance for the costs of replacing the units, alternatively for the costs, loss and damage it incurred or suffered:  par 84D.  

4. The defendant denies that it failed to effect and maintain insurance as required by cl 13.1, and that such insurance would have allowed the plaintiff to recover the costs which it claims:  amended defence, par 79B.  Further and in the alternative, the defendant pleads that if it failed to effect and maintain insurance as required by cl 13.1 and as a result the plaintiff cannot seek or recover indemnity:

   the plaintiff is under an obligation to mitigate loss or damage resulting therefrom including an obligation to claim the replacement of or repair costs to the Units under the policy or policies of insurance effected and maintained by Hamersley Iron Pty Limited as required under general condition 11(a)(i) of [the contract] between Hamersley Iron Pty Limited and the plaintiff [79F].

   In breach of that obligation to mitigate its damages, the plaintiff has failed to claim under the insurances effected and maintained by Hamersley Iron which would cover the claimed damage to the units:  par 79G.

5. By a subpoena issued on 9 July 2015, Hamersley Iron was obliged to produce all policies of insurance, including but not limited to all policies schedules and policy wording, effected and maintained by Hamersley Iron as required under general condition 11(a)(i).

6. Hamersley Iron produced one policy in response to the subpoena.  It provided a full copy of the document, together with a copy with some parts obscured.  Hamersley Iron objects to the parties inspecting and copying the policy, but does not object to inspection of the redacted copy.

7. The masking has been done so as to enable a reader of the redacted copy to see what categories of information have been deleted - in particular, the headings of those sections have not been deleted.  I have examined the full unedited document.

The objection

1. While objecting to inspection of the full document, Hamersley Iron did not seek a hearing, but asked to have the matter dealt with on the papers.  It has not chosen to file submissions or evidence to support the objection.  In correspondence, however, Hamersley Iron has stated that its objection is based on the information that has been obscured being commercially sensitive and irrelevant.

Principles governing inspection of subpoenaed documents

1. In Boase v Axis International Management Pty Ltd [No 3] [2012] WASC 498 [10] ‑ [21], Beech J set out a summary of the principles to be applied in determining this type of application, and I respectfully adopt that statement:

   10The first question is whether the documents, or the passages to which objection is taken, have apparent relevance to the litigation.

   11Apparent relevance is a low threshold.  It is not a question of whether it appears that the party issuing the subpoena could, or could probably, tender the document in evidence.  It is enough to establish apparent relevance if a document or class of documents gives rise to a line of enquiry relevant to the issues before the trier of fact, including for the purpose of meeting the opposing case by way of cross-examination:  Apache Northwest Pty Ltd v Western Power Corporation (1998) 19 WAR 350, 374; Stanley v Layne Christensen Co [2004] WASCA 50 [9]; Commonwealth of Australia v Albany Port Authority [2006] WASCA 185 [18].

   12In advance of trial, the determination of whether a document is relevant is a difficult one:  National Employers' Mutual General Association Ltd v Waind [1978] 1 NSWLR 372, 385; Apache Northwest Pty Ltd (373).

   13In determining relevance, the difficulty of assessing relevance prior to trial must be taken into account.  The necessity for having a document in order to fairly dispose of the issues at trial might well not become apparent before trial:  Apache Northwest Pty Ltd (374, 376, 379); Stanley v Layne Christensen Co [9]; Commonwealth of Australia v Albany Port Authority [18].

   14Ultimately the relevance of the documents produced will be a question for determination at the trial.  It is not appropriate for the court to embark on a detailed preliminary enquiry involving evidence from the party seeking to issue the subpoenas and the recipient of the subpoenas:  Apache Northwest Pty Ltd (379).

   15Documents can be inspected whether or not they are in an admissible form:  Waind (385); Apache Northwest Pty Ltd (372).

   16One object of the rule permitting early return of subpoenas is to appraise the parties of the strengths and weaknesses of their case at an early stage in proceedings.  Accordingly, a narrow view should not be taken as to the legitimate purposes of a subpoena of apparent relevance:  Stanley v Layne Christensen Co [9]; Commonwealth of Australia v Albany Port Authority [18].

   17The determination of whether inspection should be permitted of documents produced on subpoena is separate from the question of whether to grant leave to issue the subpoena:  Waind (381); Apache Northwest Pty Ltd (371); Stanley v Layne Christensen Co [11] ‑ [13].

   18Further, the question of inspection is distinct from the question of whether a document may be tendered at trial:  Waind (381); Apache Northwest Pty Ltd (371).  The tests are very different.  Many documents might meet the apparent relevance threshold for inspection, but fall well short of being sufficiently relevant to be admissible at trial.

   19If a document is apparently relevant, inspection will usually be permitted, even though it is not admissible as it stands and the party seeking the document has not undertaken to tender it or use it in cross-examination:  Waind (385); Apache Northwest Pty Ltd (373 - 374).

   20Confidentiality is not of itself a ground to refuse inspection of an apparently relevant document.  In the end, the public interest in the administration of justice prevails over the interest in confidentiality of the information:  Apache Northwest Pty Ltd (379); Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] VicRp 54; [1996] 2 VR 34, 38. However, confidentiality can be taken into account, together with any assessment of the extent of the document's apparent relevance, in the exercise of discretion whether to permit inspection: Apache Northwest Pty Ltd (380 ‑ 381).

   21The principles of case flow management and the objects in O 1 r 4(b) of the Rules of the Supreme Court 1971 (WA) must be kept in mind in the exercise of discretion whether to permit inspection: Wookey v Quigley [No 5] [2011] WASC 275 [35].

Consideration

1. The first question is apparent relevance.  There is no question that, on the pleadings, the policy is relevant and the plaintiff has a legitimate forensic purpose in seeking its production:  see Stanley v Layne Christensen Co [2004] WASCA 50 [9]; Commonwealth of Australia v Albany Port Authority [2006] WASCA 185 [17] ‑ [18], [68]. The defendant has directly made the policy relevant by the plea in par 79F and 79G.

2. There are occasions, particularly in discovery, where a document is relevant only in part and may be edited to exclude parts of it from discovery.  I will assume that is the case also on return of a subpoena.

3. Where the document produced pursuant to the subpoena is relevant, the party objecting to inspection needs to put something forward to show why inspection should be refused.  Generally, a party who seeks protection additional to that given by the implied undertaking bears the onus of establishing why the court should impose that additional protection:  see ICAP Australia v Forrest Moebes [2010] NSWSC 738 [8] and the cases there cited. The edited information relates to the identity of one of the parties, and the terms of a commercial agreement. There is no evidence to suggest that Hamersley Iron is a trade rival of either party to the action, or of any prejudice that would flow to Hamersley Iron if inspection were permitted. Hamersley Iron has not advanced any reason beyond the general claim that the masked content is commercially sensitive. That, in my opinion, is not enough.

4. I will dismiss the objection to inspection and order that the parties are entitled to inspect the unedited version of the policy.

5. The plaintiff has also asked for an order that Hamersley Iron pay its costs of and incidental to the objection.  I am not sure on what basis the court would award costs.  Hamersley Iron is not a party to the proceedings.  It produced the document pursuant to the subpoena, accompanied by a letter setting out its objection to inspection, but leaving the matter to the court to resolve.  It made no submissions and filed no evidence.   In my opinion, this is a procedure where there should be no order as to costs.