Edt Global Pty Ltd v Entire Building Solutions Pty Ltd

[2017] NSWDC 51

District Court

New South Wales

Medium Neutral Citation:

EDT Global Pty Ltd & Anor v Entire Building Solutions Pty Ltd & Anor [2017] NSWDC 51

Hearing dates:

24 February 2017

Date of orders:

24 February 2017

Decision date:

24 February 2017

Jurisdiction:

Civil

Before:

Neilson DCJ

Decision:

The notices to produce served upon each of the plaintiffs and filed on 11 November 2016 are set aside

 Order the defendants to pay the plaintiffs' costs

Catchwords:

PRACTICE AND PROCEDURE

 

Where discovery has been given, it is improper to seek further discovery by way of a notice to produce or a subpoena

  Lawyers for one party are not required to give legal advice to the lawyers for another party

Cases Cited:

Azzi & Ors v Volvo [2006] NSWSC 283

Category:

Procedural and other rulings

Parties:

EDT Global Pty Ltd t/as EDT Global Pty Ltd (First Plaintiff)
EDT Networks Pty Ltd (Second Plaintiff)
Entire Building Solutions Pty Ltd t/as Entire Building Solutions Pty Ltd (First Defendant)
Peter Burke (Second Defendant)

Representation:

Counsel:
Mr TE O’Brien (Plaintiff)
Mr B Narula (Defendant)

  Solicitors:
Marque Lawyers (Plaintiff)
Michael Atkinson & Associates (Defendant)

File Number(s):

2015/274254

Judgment

1. HIS HONOUR: By notice of motion filed on 25 November 2016, the plaintiffs move to set aside a notice to produce served upon each of them. Each of the notices to produce is dated 9 November 2016. To understand the argument, it is necessary to go back a little.

2. The first plaintiff, EDT Global Pty Ltd, and the second plaintiff, EDT Networks Pty Ltd, are obviously related proprietary companies. The first defendant, Entire Buildings Solutions Pty Ltd [EDS], has as its sole director the second defendant, Mr Peter Burke. Relevantly, the second defendant Mr Burke was a guarantor of the obligations of EDS. The plaintiffs claim $251,982.69 together with interest. There are alternative claims for relief in the amended statement of claim but what I have described is sufficient to indicate the background case.

3. Paragraph 4 of the amended statement of claim is this:

“On or around 16 September 2014, EDTG [the first plaintiff] and EDS entered into a services agreement in respect of the provision by EDTG of its services relating to recruitment, labour hire and consultancy (Services Agreement).”

The next paragraph in the amended statement of claim is this:

“It was a term of the Services Agreement that EDTG supplied EDS with the personnel to perform services described in the Work Schedule attached as Exhibit A to the Services Agreement.”

In par 11 of the amended statement of claim, it is alleged that on 17 September 2014, EDTG provided personnel to EDS to perform services in accordance with the terms of the Services Agreement. Paragraph 12 recites a large number of invoices issued by EDTG to EDS. Paragraph 13 of the statement of claim alleges that EDS failed to pay any of the invoices. There are then alleged a number of breaches of the agreement previously pleaded between the EDTG and EDS. There are clearly some refinements to that general scheme because of the need to join the second plaintiff and because some of the work done must have been done on behalf of the second plaintiff rather than the first plaintiff.

4. On 9 November 2016, the defendant filed a defence to the amended statement of claim. Commencing at par 12, there are recited a number of agreements in writing that EDTG agreed to supply to EDS properly qualified certified licensed competent and experienced personnel. As I understand it, the defendant argues that the personnel supplied by the plaintiff companies did not answer the description of being “properly qualified, certified, licensed competent and experienced.” Each of the notices to produce is the same save that the persons in respect of which each of the plaintiffs is required to produce documents are different. The notice to produce addressed to the first plaintiff nominates seven persons whilst the notice to produce addressed to the second plaintiff nominates three other persons.

5. The following documents are requested in respect of each of those persons. I was taken to the list of documents in the notice to produce addressed to the first plaintiff. The notice to produce addressed to the second plaintiff contains an unnecessary duplication which throws out the enumeration of the categories of documents. The categories of documents are these:

“1. The current and past sponsorship approval documents including but not limited to standard business sponsorship or on - hire labour agreements issued by the Department of Immigration and Boarder [sic] Protection (‘DIPB’).

2. Copies of the DIPB nomination approvals sponsored by EDT Global Pty Ltd (‘Global’).

3. Payroll and overtime reports from Global.

4. Employment agreements with Global.

5. Agreements or details for arrangements in relation to the payment of or refund of costs and expenses associated with their employment and/or visa sponsorship by Global.

6. Documents to confirm compliance with the ongoing training obligations associated with sponsorship approval.

7. Documents relating to the assessment or skills.”

6. The nationality, place of origin or place of residence of any of the persons supplied by the plaintiffs to the defendant is not a relevant issue. Therefore, par 1 is irrelevant. Likewise, par 2 is irrelevant and I would set it aside in any event because, despite valiant attempts by counsel for the defendants, I do not understand what it means. Paragraph 5 partly suffers from the vice of implying that the labour supplied by the plaintiffs to the defendant was foreign labour that required a visa to enter this country. As I said, the origin of the labour supplied by the plaintiffs to the defendants is irrelevant. The same vice appears in par 6.

7. However, there is a more fundamental flaw in each of the notices to produce. On 12 April 2006, a consent order was made permitting the giving of discovery. The first three orders were these:

“1. The parties to notify categories of documents for discovery by 29 April 2016.

2. The parties to agree to the categories of documents for discovery by 6 May 2016.

3. The parties to provide verified discovery by 27 May 2016.”

There are a number of further orders made and in particular there was one providing for what should occur if the parties were unable to agree as the categories of documents required for discovery. I have been told that the parties reached agreement as to what categories of documents were to be produced. By letter of 29 April 2016, the defendants’ solicitors wrote to the plaintiffs’ solicitors attaching a copy of the proposed categories of documents for discovery. That document is divided into two parts, the first is documents to be produced by EDT Global Pty Ltd and the second is documents to be produced by EDT Networks Pty Ltd. Relevantly, each are the same. Clause 2(iii) is this:

“Each letter, note, correspondence, email or facsimile comprising a spreadsheet setting out the particular certificates, licences and/or permits then held by the candidates referred to (ii) above during the period from 3 July 2013 to date.”

Clause 2(v) is this:

“Copies of each document, letter, note, correspondence, email, facsimile and contracts issued by Global to EDS for each of the personnel identified in attachment A and if on more than one occasion, on each occasion, being the personnel the subject of the contract between Global and EDS for the period from 3 July 2013 to date.”

Category 2(vi) requires all documentation inter alia relevant to the certificates, licences or permits for workers to “work at height”.

8. As I understand it, discovery has been given. It is clear to me that the notices to produce, in effect subpoenas addressed to the other parties in the proceedings, require further discovery. In Azzi & Ors v Volvo [2006] NSWSC 283, Brereton J had to deal with a case in which discovery had been given and subsequently notices to produce were served. Commencing at [9], his Honour dealt with the law prior to the adoption of the UCPR and pointing out the difference between the UCPR provisions relating to discovery and the former practice of giving general discovery. His Honour then pointed out that that change did not affect the substantive law. His Honour said this:

“9. Formerly, an affidavit of discovery was, save for limited exceptions, conclusive [Mulley v Manifold [1959] HCA 23; (1959) 103 CLR 341; Fruehauf Finance Corporation Pty Ltd v Zurich Australian Insurance Ltd (1990) 20 NSWLR 359], including as to the whether the deponent had any relevant documents other than those listed in his or her possession, custody or power [Gardner v Irvin (1878) 4 Ex D 49 (CA); Jones v Monte Video Gas Co (1880) 5 QBD 556 (CA); Compagnie Financier et Commerciale du Pacifique v Peruvian Guano Company (1882) 11 QBD 55 (CA); Hall v Truman, Hanbury & Co (1885) 29 CLD 307, 319] and as to the relevance of such documents for the purposes of discovery [Budden v Wilkinson [1893] 2 QB 432 (CA); Mogul Steamship Co v McGregor, Gow & Co (1886) 2 TLR 752; Hastings Corporation v Ivall (1873) LR 8 Ch App 1017]. It was, therefore, not permissible to go behind an affidavit of discovery by issuing a subpoena for production of documents which ought to have been the subject of discovery, on the basis that the affidavit of discovery was incomplete; to issue a subpoena in those circumstances was one of the classic cases of use of a subpoena as an abuse of process [Commissioner for Railways v Small, 574]. The proper remedy for an inadequate affidavit of documents was a motion for further and better discovery or, when the rules provided for it, a motion for particular discovery.

10. Since the amendments to the rules, not only the recent Uniform Civil Procedure Rules but also the more recent versions of the Supreme Court Rules, the right to general discovery has been limited, and the rules have provided for discovery by reference to classes. The relevant rule is now to be found in UCPR rule 21.2, which provides that the court may order that one party give discovery to the other of documents within a class or classes specified in the order. The purpose of adopting this approach to discovery was to reduce the burdens of unlimited general discovery, by confining its scope through requiring that the classes of documents of which discovery would be required be identified by the parties and agreed by them and, if not, then determined by the court.

11. However, in my opinion, this does not affect the previous rule that a subpoena which seeks documents which could have been the subject of discovery is an abuse of process. The fundamental purpose of the amendments to the rules which limit discovery to classes was to avoid parties having excessively burdensome discovery obligations imposed on them, by excluding from discovery those documents which were outside the classes which were agreed or determined to be appropriate for discovery. If it remained open to a party to subpoena classes of documents which had been excluded from discovery, that would completely defeat the purpose of the rules in limiting discovery to specified classes. It would amount to using a subpoena to obtain discovery.

12. In this case, orders were made for discovery on several occasions, and classes for discovery were identified. So far as I can tell at this stage, the plaintiff specified classes of documents of which it sought discovery. Either the documents now sought fall within those classes and, if they exist, ought to have been discovered, or they fall outside the specified classes.

13. If the plaintiff contends that documents falling within one of the classes which it specified and in respect of which an order for discovery was made have not in fact been discovered, the only proper remedy is for it to seek further and better discovery, upon proof that there has been a failure to give proper discovery in that class. The defendant, of course, should be alert that if it transpires that it has not given proper discovery of documents in classes which were identified for discovery, then that will have been a serious default on its part. I do not suggest for a moment that that is in fact the case, but in view of the debate which has taken place and in view of the arguments which have been advanced about the subpoena, it should not be assumed that a conclusion that it was not permissible to subpoena these documents involves any conclusion as to whether or not there has been sufficient compliance with the order for discovery in the first place.

14. If, on the other hand, the plaintiff contends that it now seeks documents which were not covered by the order for discovery, then the proper approach would have been to make an application for further discovery by adding a further class to the documents for discovery. It seems to me that 28 February, a couple of days before the commencement of the trial, is rather too late to take that course, at least in the absence of a compelling explanation as to why it could not have been or was not taken earlier [cf Small, 574].”

9. It matters not who complains about the discovery, whether it be the plaintiff or the defendant. It matters not whether the document served was a notice to produce or a subpoena. A notice to produce has the same effect as a subpoena which is served upon another party in the litigation. It appears to me that the only proper documents the defendant could seek from the plaintiffs are covered by the discovery previously granted or, if not, then the appropriate procedure is to seek further discovery as his Honour set out in [14] of his reasons in Azzi.

10. For those reasons, the notices to produce served upon each of the plaintiffs and filed on 11 November 2016 are set aside. I order the defendants to pay the plaintiff’s costs.

11. NARULA: In respect of that, I note that there was no affidavit attached to the notice of motion. Of course it’s not necessary but I was not aware, the defendants weren’t aware these three points would be taken. And of course if they had been, correspondence - it may well have been - my submission is that either costs be in the cause or reserved. It’s not - if of course the plaintiff had raised these issues, it may have been resolved prior to having this date.

12. HIS HONOUR: What you’re saying is, “It’s up to them to tell us what the law is.” I’m afraid you and those instructing you are lawyers and you should know what it’s all about. Application to vary the costs order is refused.

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Decision last updated: 20 March 2017