Glad Corporate Services v Demet Taskin

[2016] NSWSC 1532

Supreme Court

New South Wales

Medium Neutral Citation:	Glad Corporate Services v Demet Taskin [2016] NSWSC 1532
Hearing dates:	30 September 2016
Date of orders:	31 October 2016
Decision date:	31 October 2016
Jurisdiction:	Equity
Before:	Slattery J
Decision:	Access to the documents sought on the seven subpoenas granted to both parties. Defendants/cross-claimants given first access to all documents. Directions made in the event of argument about costs.
Catchwords:	SUBPOENAS – defendants/cross-claimants apply to set aside seven subpoenas issued to third parties by the plaintiffs/cross-defendants – no objection taken by the recipients of the subpoenas to the production of the documents requested - whether access to the documents sought will serve a legitimate forensic purpose in the proceedings.
Legislation Cited:	Corporations Act 2001 (Cth) Evidence Act 1995 (NSW), Part 3.6 Uniform Civil Procedure Rules 2005 (NSW), r 42.1 (“UCPR”)
Cases Cited:	Alister v R (1984) 154 CLR 404 Attorney-General for the State of New South Wales v Dylan Chidgey [2008] NSWCCA 65 R v Saleam [1999] NSWCCA 86 Waind v Hill and National Employers’ Mutual General Insurance Association Ltd (1978) 1 NSWLR 372
Category:	Principal judgment
Parties:	First Plaintiff: Glad Corporate Services Pty Ltd Second Plaintiff: Glad Group Pty Ltd Third Plaintiff: Natajle Iloski First Defendant: Demet Taskin Second Defendant: Tanem Taskin
Representation:	Counsel: Plaintiffs: K. Nomchong SC and A.Britt Defendants: J. Williams   Solicitors: Plaintiffs: L. Pozniak, Landerer & Company Defendants: D. Amentas, Clyde & Co
File Number(s):	2015/302209
Publication restriction:	No

Judgment

1. In these high-stakes proceedings the parties make and contest many serious allegations against each other, including allegations of criminal conduct. The parties are now preparing themselves for a final hearing next year.

2. The Plaintiffs/Cross-defendants (called “the Glad parties” in these reasons) formerly employed both Defendants/Cross-Claimants (called “the Taskin parties” in these reasons). The Glad parties have issued seven subpoenas to various third parties. The Glad parties say the subpoenaed documents are likely to assist their case.

3. All subpoena recipients have produced the documents sought and the documents lie in the Court’s Registry. The Glad parties now seek access to them. But the Taskin parties have moved under Uniform Civil Procedure Rules, r 33.4(1) (“UCPR”) to set aside the subpoenas. The Taskin parties say that the subpoenaed materials are irrelevant and cannot be used for any legitimate forensic purpose in these proceedings.

4. The Plaintiffs/Cross-defendants’ motion was argued on 30 September 2016. Ms K. Nomchong SC and Mr A Britt appeared for the Plaintiffs/Cross-defendants instructed by Landerer & Company and Ms J. Williams appeared for Defendants/Cross-claimants instructed by Clyde & Co.

5. The present contest springs out of the parties’ complicated mutual employment history. Some of their pleaded history needs to be retold in order to decide this motion.

6. These reasons do not decide whether any of the plaintiffs’ claims or any of the defendants’ defences have substance. But the principal allegations on each side are recorded here so that the issues anticipated to be in contest at the final hearing can be better understood.

The Glad Group and Temet and Tanem Taskin

7. The first and second plaintiffs, Glad Corporate Services Pty Limited (“Services”) and the Glad Group Pty Limited (“Group”) are part of a group of related companies that are together known as “the Glad group”, a corporate group that carries on the business of industrial and retail cleaning, security and maintenance. The third plaintiff, Mr Natajle “Nick” Iloski, is the sole director of the first plaintiff, Services. He is also a director of some of the other companies in the Glad group and the managing director of the Glad group.

8. The First Defendant, Ms Demet Taskin, is the mother of the Second defendant, Ms Tanem Taskin. The mother, Demet Taskin, became a senior executive of the Glad group under a contract of employment with Services on 26 September 2014. It is alleged that at all material times she provided her services to the whole of the Glad group and owed the other entities in the Glad group contractual obligations under her employment agreement with Services. She was employed as the General Manager of Human Resources and Senior Advisor to the Directors and (from 1 December 2014) the CEO of the Glad group.

9. The daughter, the Second defendant, Tanem Taskin initially worked for the Glad group pursuant to a short secondment agreement, commencing on 25 November 2014 and concluding about 7 December 2014. When she commenced work with the Glad group the second defendant was a junior solicitor employed by a firm of solicitors, FCB lawyers, who were retained from time to time by the Glad group.

10. Tanem Taskin resigned from her employment at FCB Lawyers and commenced permanent employment with Group on 8 December 2014 as Legal Counsel to the Glad group. In June 2015 Tanem Taskin’s job title was altered to “Head of Legal and Strategic Lead”.

11. Both the first and second defendants had written contracts of employment. The detail of these need not be reproduced but the express or implied terms of the contracts are said to include terms of fidelity and good faith to all entities in the Glad group, obligations to keep information confidential, obligations not to act in conflict with the interests of the Glad group without full disclosure and obligations to comply with relevant Glad group policies applicable to them as employees. In addition to being employees of the Glad group, Demet and Tanem Taskin were both said to qualify as “officers” of the companies in the Glad group under Corporations Act 2001 (Cth).

12. Both Demet and Tanem Taskin left the Glad group on 13 October 2015, amidst allegations of misconduct and impropriety that are explained further below. The Statement of Claim in these proceedings alleges various breaches of Demet and Tanem Taskin’s obligations of employment and breaches of their statutory duties under the Corporations Act as officers of Services and Group. The breaches need only be described for present purposes at a high level of generality.

13. The allegations in the Statement of Claim and the Defence are in summary the following. The Glad parties in their Amended Statement of Claim (“ASOC”), allege that the defendants (Debbie Taskin and her daughter, Tanem Taskin), acting fraudulently, dishonestly and in conflict of interest:

1. Breached their contracts of employment;

2. Breached ss 180-182 of the Corporations Act;

3. Misappropriated monies;

4. Breached their fiduciary duties to the Glad group companies; and

5. In respect of Demet Taskin, breached a contract for maintenance work on a house owned by her mother.

14. The Glad parties allege that these breaches occurred by, amongst other things, the Taskin parties:

1. Acting in their own interests, in conflict with the interest of their employer and the Glad group, for example:

1. By appointing and promoting Tanem Taskin to a position well above her experience and skills (ASOC at [24]); and

2. Encouraging an employee to make a sexual harassment claim against a Glad group company and then advising the Third Plaintiff, Mr Iloksi to settle rather than contest that claim (ASOC at [32]-[36]);

2. Making misrepresentations to Mr Iloski as Managing Director of the Glad group including as to:

1. The content of documents to be executed by the Managing Director, including letters authorizing salary increases and bonus payments for the Taskin parties as well as, other formal contractual documents that assisted the Taskin parties to misappropriate monies from companies in the Glad group;

2. A fraudulent scheme whereby Demet Taskin made fraudulent misrepresentations to Mr Iloski and, on the basis of those fraudulent misrepresentations induced Services and Group to pay to her the $450,000 (ASOC at [55]-[63]); and

3. The existence of trumped-up sexual harassment claims and then effecting resolution of those claims allegedly against the interest of the Plaintiffs in paying out these groundless claims in the sum of $150,000 in cash and then misappropriating that cash for herself (ASOC at [43]-[50]);

3. Giving themselves salary increases (ASOC at [71]-[85]), bonuses (ASOC at [64]-[70]) and improved terms and conditions of employment fraudulently and/or without the knowledge of the Managing Director Mr Iloski, such as for example an unapproved $200,000 bonus payment to Demet Taskin only 4 months after she commenced employment (ASOC at [37]-[42]);

4. Forging signatures on documents or, in the alternative, misrepresenting the nature of the content of the documents to be signed to Mr Iloski and to his wife, and

5. Attempting to blackmail the plaintiffs by demanding $500,000 to “leave quietly” and when that was not paid, engaging in a campaign of making detrimental and untrue statements about the liquidity of the company to third parties (ASOC at [97]-[98]).

15. These actions are alleged to have occurred in the course of their employment by the plaintiffs and are alleged to involve dishonesty and misrepresentation.

16. The Tasking parties have denied all allegations of fraud, dishonesty, misrepresentation and acting in conflict of interest made against them.

17. The allegations in the Statement of Claim and the Defence are in summary the following.

18. The Taskin parties cross-claimed alleging that the Glad parties engaged in inappropriate and improper conduct by, for example, trading whilst insolvent and directing payments in cash to sub-contractors (Cross Claim at [16-[32], [33]-[42] and [43]-45]). The Taskin parties allege that the Glad parties repudiated their contracts of employment. The Taskin parties are each claiming loss of income during a period of “reasonable notice” upon termination of their employment, including all entitlements, superannuation and employment benefits (Cross Claim at [77]-[78]).

19. At the time that argument on the motion was heard the Plaintiffs/Cross-Defendants, the Glad parties, had served their evidence in chief in the proceedings. But the Taskin parties, the Defendants/Cross-Claimants, had not yet served either their evidence in reply to the Plaintiffs’ case, or in support of their Cross-claim.

20. The subpoenas under challenge on the motion were issued to the following third parties: Hitachi Australia Ltd, Actelion Pharmaceuticals Australia Pty Limited, Geoff Whytcross Consulting, Toll Global Express Ltd, FCB Lawyers, Norton Rose Fulbright Australia and the Law Society of New South Wales. To the extent that it is not evident from the narrative so far, the relationship between these various third parties and the Plaintiffs and the Defendants will be examined as each subpoena is dealt with below.

Applicable Legal Principles

21. The applicable legal principles may be shortly stated. Although the parties tended to emphasise different parts of statements of applicable authority, the underlying principles are not in contest.

22. The parties accepted that the Court was presently dealing with the second of the three major steps in the process of having a third party bring documents into Court pursuant to subpoena and then to have those documents used in Court.

23. Authority identifies the three steps. In Waind v Hill and National Employers’ Mutual General Insurance Association Ltd (1978) 1 NSWLR 372, at 376 (“Waind”) the Court of Appeal explained the first step involves the third party’s obedience to the subpoena and the determination by the Court of any objections by the third party as to the production of documents to the Court.

24. The first step has been passed in this case. The seven recipients of the subpoenas have all produced documents to the Court without objection on their part. As inspection of these documents by the parties has not so far taken place, it is not as yet possible to determine whether each of these subpoena recipients has given full production of documents in conformity with the subpoena issued to each.

25. The second step is the Court making a decision as to the preliminary use of the documents. The Court of Appeal in Waind explained that once the documents are within the control of the Court after production pursuant to a valid subpoena, the Court must decide whether or not to allow inspection of the documents. Usually the only limitation upon the grant of access to the parties is that the documents, or some part of them, have apparent relevance to the issues being litigated.

26. The nature of the apparent relevance required in order to justify an applicant having access to documents subpoenaed has been variously described as: (1) that it is “on the cards” that the documents will materially assist the case of the applicant or the resolution of the issues in the proceedings; or, (2) that the applicant must “identify a legitimate forensic purpose for which access is sought” – see Alister v R (1984) 154 CLR 404; Attorney-General for the State of New South Wales v Dylan Chidgey [2008] NSWCCA 65 at [64], applying R v Saleam [1999] NSWCCA 86 at [11]. This is the stage that consideration of the documents produced has now reached in these proceedings.

27. The third step is the forensic use of the documents. This step is enabled once an applicant has been granted access to the documents and seeks to use them at the hearing. This may involve their admission into evidence. It may involve deploying them in cross examination without tender. The documents may even be used to secure admissions from the other side on relevant matters without the need for cross examination. But one of these legitimate forensic purposes will ordinarily need to be identified at stage two, in anticipation of the use of the documents in stage three.

28. The Court can act on a number of other related principles that follow from the reasoning in Waind. Access to documents is not to be restricted to enabling a party to have a document tendered in evidence. A party does not need to undertake to tender documents to which access is granted. The Court can give access to documents that are not themselves capable of being tendered in evidence, provided their use is justified by other legitimate forensic purposes.

The Subpoenas

29. The subpoenas to the following seven parties will now be dealt with in turn: Hitachi Australia Ltd, Actelion Pharmaceuticals Australia Pty Limited, Toll Global Express Ltd, Geoff Whytcross Consulting, FCB Lawyers, Norton Rose Fulbright Australia and the Law Society of New South Wales. It is convenient to deal with the first three of them together.

30. Subpoenas to Hitachi Australia Ltd (“Hitachi”) to Actelion Pharmaceuticals Australia Pty Limited (“Pharmaceuticals”) and to Toll Global Express Ltd (“Toll”). The Glad group contends that the subpoenas it has issued to Hitachi, Pharmaceuticals and Toll have been issued to assist in testing the accuracy of the resume that the First Defendant, Demet Taskin, submitted to a corporate recruitment agency, Geoff Whytcross Consulting (“Whytcross”), to inform prospective employers (including ultimately the Glad group itself) about her qualifications, employment history and former positions held before she was employed by the Glad group. The Glad group points to affidavit evidence that it contends shows that Demet Taskin’s resume and candidate report provided to Services in her application for employment contained inaccurate information about these three companies.

31. The Glad parties contend that Demet Taskin’s employment history, set out in the resume that she gave to Geoff Whytcross Consulting was wrong at least as to the identity of one past employer, and wrong as to several periods of employment with each nominated former employer. Without going into further detail the available evidence on the motion at least suggests to the level of raising a contestable issue that despite what her resume appears to say, Demet Taskin was either unemployed or employed by some entity the identity of which she does not wish to disclose, for a significant period before commencing her employment with the Glad group.

32. The material already available on the motion is sufficient to provide at least a contestable inference that Demet Taskin may have misrepresented where she worked and whether she worked in consecutive periods of employment with three companies, Hitachi, Pharmaceuticals, and Toll.

33. Ms Nomchong SC has explained the purposes of the subpoenas to Hitachi, Pharmaceuticals and Toll as being related to challenging the accuracy of the resume that Demet Taskin provided to Whytcross for the purposes of submission to employers such as the Glad group. The resume that Demet Taskin provided appears to set out not just a list of periods of employment of employers but it also lists achievements in respect of periods of employment and claims decades of experience in human resources.

34. Ms Williams on behalf of the Taskin parties foreshadowed that their case will be that representatives of the Glad group never even read this resume and did not rely upon it and that its accuracy is therefore irrelevant to the issues in contest in these proceedings.

35. But in my view testing the accuracy of this resume can serve a number of legitimate forensic purposes in these proceedings, even if it was not read by the Glad group before Ms Taskin was employed. One can leave to one side the possibility that reliance upon it could perhaps be inferred because it may have been assumed by Glad group executives that Whytcross had checked the accuracy of the resume, so the Glad group did not have to do so again itself.

36. Challenging the resume is relevant to at least four matters in my view. First, to the extent that the resume is said to constitute Demet Taskin’s actual employment history, challenges to her actual employment history are relevant: to issues of reasonable notice of termination an issue on the cross claim; and to mitigation of damage, an issue on the claim.

37. Second, challenges to the resume are relevant to whether the Glad group would have employed Demet Taskin and then Tanem Taskin had a true resume been provided to the Glad group before their employment; if Demet Taskin’s true past employment history was sufficiently different from the resume and the Taskin parties’ employment was unlikely, then the Glad group may contend that many of the alleged losses associated with the decision to employ the Taskin parties might have been avoided.

38. Thirdly, and especially in the case of Hitachi, where it is said that Demet Taskin is alleged to have been involved in a prior fraud and with respect to Pharmaceuticals where the overlapping employment history is alleged to have been substantively manufactured, and where that alleged conduct is in turn followed by the Taskin parties’ allegedly fraudulent or dishonest conduct at the Glad group, the Glad group has at least some prospect of getting Demet Taskin’s conduct with prior employers into evidence as tendency and coincidence evidence under Evidence Act, Part 3.6. Whilst it is clearly too early to tell whether such material would qualify for admission, the Hitachi material in particular, which is said to involve allegations of misuse of Demet Taskin’s position at that company to obtain fraudulent financial advantage for herself and family members, appears to be an arguable candidate for admission into evidence on this basis.

39. Fourthly, the advancing of a false resume would be a discreditable act. The subpoenas to Hitachi, Pharmaceuticals and Toll are also relevant to Demet Taskin’s credit. If the Glad group shows that she has deliberately advanced misleading material concerning her employment history, her overall credibility may be substantially effected such that cross-examination on the resume will be permitted under Evidence Act, s 103.

40. Finally, a review of the material subpoenaed from Hitachi, Pharmaceuticals and Toll in my view shows that it goes no further than is reasonably necessary to challenge the accuracy of Demet Taskin’s employment history supplied to the Glad group. These subpoenas ask, for example, for employment applications, the terms of employment, personnel files and records of ceasing employment, which would well relate to such a challenge.

29. Subpoena to Geoff Whytcross Consulting. Perhaps no issue will be taken at trial that Demet Taskin supplied information to the recruitment agency, Geoff Whytcross Consulting. But to the extent that the subpoenas to Hitachi, Pharmaceuticals and Toll are justifiable, in my view the subpoena to Whytcross is also justifiable.

30. In my view, the subpoena to Whytcross pursues a legitimate forensic purpose associated with the Glad group’s conduct of these proceedings. The Whytcross subpoena seeks all documents that Demet Taskin gave to Whytcross in relation to her qualifications, experience and employment and all documents associated with her tasking Whytcross to assist her in finding employment, including her past employment records, file notes of conversations and checks and investigations done on her employment history. The subpoena in my view is reasonably calculated to ascertain what kind of investigation Whytcross did of Demet Taskin’s employment history and what documents were given to them by Demet Taskin about her employment history.

31. All of the material requested is justifiable in my view on the same grounds as the subpoenas to Hitachi, Pharmaceuticals and Toll identified above. Moreover, although it appears to be in contest in the proceedings whether Whytcross was an agent for Demet Taskin or for the Glad group, exactly what enquiries Whytcross made of Demet Taskin and what Whytcross told the Glad group about those enquiries, if anything, is arguably quite relevant to the extent to which the Glad group can say that it relied upon the resumes that Demet Taskin provided to Whytcross. It is not enough for the Taskin parties to say the Glad group did not read the resumes and therefore this material must be irrelevant. The question of reliance is more subtle than that.

32. Subpoena to FCB Lawyers. FCB Lawyers employed Tanem Taskin as a lawyer before she was employed by the Glad group. The proceedings included allegations that Demet Taskin conferred unauthorised benefits including bonuses, salary increases and annual leave increments on her daughter Tanem, when Demet was in a position of conflict of interest because these benefits were not conferred at arm’s length. I accept Ms Nomchong SC’s submission that to make out such a conflict of interest case it would be necessary to show among other things that a decision maker such as Demet Taskin either knew or had the means of knowing: Tanem’s actual employment history with her prior employer, FCB Lawyers; what her objectively assessed legal experience was; and, what her market remuneration was at her previous position with FCB Lawyers, compared to the benefits that her mother was allegedly conferring upon her.

33. Getting such basic information from the previous employer, FCB Lawyers, as the subpoena to FCB seeks to do, is at least one step in the process of attempting to prove a conflict of interest. In my view, the FCB Lawyers subpoena represents a legitimate forensic purpose. The full personnel file, which is sought in the FCB Lawyers subpoena, is also justified by this legitimate forensic purpose.

34. Subpoena to Norton Rose Fulbright Australia. After leaving the Glad group Tanem Taskin obtained employment with Norton Rose Fulbright solicitors. Ms Williams on behalf of the Taskin parties says that the subpoena to Norton Rose Fulbright has been issued to harass Tanem Taskin in her current employment and that what it seeks could only be relevant to the issues in these proceedings.

35. This argument is not persuasive. On the issue of conflict of interest it is not irrelevant, in my view, what Tanem Taskin’s current level of salary is at Norton Rose Fulbright, compared to what she was being paid at the Glad group and before that at FCB Lawyers. But the Taskin parties have also claimed losses associated with their summary dismissal from the Glad group, measured by a period of reasonable notice. On issues of mitigation and loss the Glad parties are entitled to issue a subpoena to Norton Rose Fulbright for current salary and benefits and to ascertain the prospect of changes to that salary and benefits. I see nothing beyond a legitimate forensic purposes in the subpoena to Norton Rose Fulbright.

36. Subpoena to the Law Society of New South Wales. A broad subpoena has been issued to the Law Society seeking all files and documents in relation to Tanem Taskin. To the extent that this seeks information about her current practising certificate status, it is justifiable on the same grounds as the Norton Rose subpoena. If it turns up anything else, in the nature of a complaint for example, the use of such material would be in the discretion of the trial judge, as it may go to credibility issues.

Conclusions and Orders

49. For the reasons given, the Glad parties should be given access to the documents produced by the recipients of the seven subpoenas issued at the Glad parties’ instigation. The Court has found that there is no basis for withholding the documents produced from inspection by the parties. But first access to the documents will be granted to the Taskin parties, as that was accepted in the course of argument as the course that would be followed.

50. The Glad parties have been successful on this motion. According to Uniform Civil Procedure Rules r 42.1 (“UCPR”) the costs of the motion would ordinarily follow the event unless it appears to the Court that some other order should be made. There does not appear to be any obvious basis upon which the making of an order for costs of the motion should await the outcome of the final hearing. For example, even if only some of the documents are used at the final hearing of the proceedings that would not be a basis for saying that the Glad parties should not have attempted to exercise their rights of access to the documents that this judgment has recognised that they have. It is not uncommon in litigation that only a small portion of the material produced under subpoena is deployed in evidence.

51. But the Court has not yet heard submissions from the parties on the issue of costs, if they do want to advance submissions. One or other party may seek that the Court make some other order within UCPR, r 42.1, or may seek a special costs order.

52. The Court’s orders therefore are as follows:

1. Grant inspection access to all the parties to these proceedings to the material in the Registry produced in answer to the following subpoenas in these proceedings - Hitachi Australia Ltd, Actelion Pharmaceuticals Australia Pty Limited, Geoff Whytcross Consulting, Toll Global Express Ltd, FCB Lawyers, Norton Rose Fulbright Australia and the Law Society of New South Wales;

2. First access to the documents produced will be granted to the Defendants/Cross-Claimants;

3. The Court will reserve the question of costs;

4. Otherwise the proceedings are stood over for further directions to the Registrar’s list on 3 April 2017;

5. The matter is listed for hearing on costs at 9.30am on 25 November 2016, unless agreement is reached prior to that date, and terms provided to my Associate;

6. The Defendants shall answer the request for further and better particulars served by the Plaintiffs on 22 June 2016 by 4.00pm on 14 November 2016;

7. The Plaintiffs/Cross-Respondents shall serve affidavits in reply by 30 January 2017;

8. The parties shall engage in a mediation in relation to both the substantive claim and the cross claim by 31 March 2017;

9. (9)   Grant liberty to apply on 3 days’ notice;

10. (10)   Note that the Defendants shall provide to the Plaintiffs by 4pm on 14 November 2016, copies of all bank accounts held in the name of Seamless Purity Pty Limited, either in its own name or jointly with other persons or entities, for the period from December 2015 to date.

Decision last updated: 31 October 2016