Graham Evans Pty Ltd v Stencraft Pty Ltd

[1996] FCA 917

IN THE FEDERAL COURT OF AUSTRALIA )
QUEENSLAND DISTRICT REGISTRY     )    No. NG 62 of 1995
GENERAL DIVISION                   )

BETWEEN:    GRAHAM EVANS PTY LTD

Applicant

AND:    STENCRAFT PTY LTD

Respondent

CORAM:    Spender J
PLACE:    Brisbane
DATE:     26 September 1996

MINUTES OF ORDER

THE COURT ORDERS THAT:

1. The subpoena to produce filed 24 July 1996 directed to F A Pidgeon & Son Pty Ltd ("Pidgeon") be set aside on terms that:

(a)within 7 days, Pidgeon make available to the Court all documents outlined in paragraph 3 of the affidavit of Frederic Brands filed 9 September 1996; and

(b)inspection of such material by both parties is to occur within the following 7 days; and

(c)each party may photocopy the produced documents.

1. Costs of today's notice of motion and of compliance with the subpoena to produce be fixed at $1,000.00 and that the applicant pay Pidgeon that sum and that sum be the applicant's costs in the principal proceedings. 

Note:     Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA )
QUEENSLAND DISTRICT REGISTRY     )    No. NG 62 of 1995
GENERAL DIVISION                   )

BETWEEN:    GRAHAM EVANS PTY LTD

Applicant

AND:    STENCRAFT PTY LTD

Respondent

CORAM:    Spender J
PLACE:    Brisbane
DATE:     26 September 1996

REASONS FOR JUDGMENT

This is a notice of motion filed on 23 August 1996 which seeks, amongst other things, that a subpoena to produce dated 24 July 1996 directed to F.A. Pidgeon and Sons Pty Limited ("Pidgeon") be set aside.

The principal proceedings involves acrimonious litigation between Graham Evans Pty Limited ("Evans") and Stencraft Pty Limited ("Stencraft").  The person to whom the subpoena was directed, Pidgeon, is a stranger to that litigation but Pidgeon has a close association with Stencraft through common directors and previous joint ventures.   So at the outset it should be understood that this is not the normal type of litigation involving subpoenas to produce directed to strangers, and, it seems to me, part of the acrimony of the principal litigation has infected the present motion.   In short, in my opinion, both parties to the motion have been somewhat precious, and would rather fight than behave in a commercially sensible way concerning the documents that are genuinely relevant to the principal litigation.

The applicant in the principal proceedings, Evans, claims damages against Stencraft on the basis that it either had a contract or was misled into believing that it had been awarded a contract by Stencraft to construct a building known as Dockside Stage Three.   Evans claims damages on the basis of its foregone profit from the Dockside project.   Pidgeon was awarded the contract.

In previous litigation before me, between the parties in the principal proceedings, it is made plain that the claim by Evans for loss of profit foregone is based on a range of 3.5% to 8.14% gross profit margin, being the profit range on five flagship projects constructed by Evans.   This matter is crucial to the resolution of the question of the relevance or the width of the subpoena, particularly in the category of documents referred to in category number 5 of the schedule to the subpoena to produce.

Mr Lee, the solicitor for Evans, has argued that the documents relating to the profitability of the project for Pidgeon are relevant to the proceedings betweens Evans and Stencraft, and therefore Pidgeon should produce those documents to Evans under the subpoena presently in question.   The fact of the matter is that on the pleadings what profit, if any, Pidgeon made on the project is not relevant to the issues between Evans and Stencraft.  Mr Lee says that the statement of claim might in the future be amended to make it relevant.   If so, so be it.   Litigation has to be conducted on the basis of issues that are the subject of pleadings and not on some theoretical or hypothetical issue.  

On the pleadings at the moment, Evans has said that its loss is to be calculated by saying that the project price was "X" and that the profit that it would have made out of the project is to be calculated by reference to other projects that Evans constructed.   Evans's claim is not based upon the profit, if any, earned by Pidgeon on the project.  It follows that the documents sought in category 5 are not relevant to the principal proceedings.    For this reason the subpoena is too wide and, for that reason alone, should be set aside.

The question, however, of to what extent it might be saved by blue pencilling some of the categories is a matter that is, in the circumstances, unnecessary to consider. 

The facts of the matter are that Mr Brands has deposed that all documents relevant to the matters in issue between the respondent, Stencraft, and the applicant, Evans, which were formerly within the possession of Pidgeon were delivered to the solicitors for Stencraft for the purpose of enabling Stencraft to make full and proper discovery in these proceedings.   He says that Pidgeon therefore no longer holds any such documents.   It seems to me plain that the documents are Pidgeon's documents and are able to be recovered at little cost from the solicitors for Stencraft. 

Mr Brands says in paragraph 5 of his affidavit which was filed on 9 September 1996 that the only documents referred to in the schedule to the subpoena for production which are relevant to the matters in issue in these proceedings are the documents Pidgeon has previously supplied to the solicitors for the respondent.   In my opinion, it is no answer to a subpoena to produce for a party to say that "I have put my documents which are relevant to the subpoena to produce into the possession of a third party".  Whether Stencraft has, in fact, made full and proper discovery of all those documents which Mr Brands has sworn are relevant to the issues in the principal proceedings is truly a red herring.   The fact that they may or may not have done that does not permit the solicitor for Evans to be confident that documents which are relevant to the issues have been discussed.  

Realistically, what is required is for Pidgeon to make available to the solicitor for Evans the three Arch Lever files which comprehend all documents "relevant to the matters in issue between the Respondent and the Applicant", being the words of Mr Brands in his affidavit filed 9 September 1996.

In trying to solve this in a just but rather broad  brush way, what I propose to do is to set aside the subpoena on terms.   It is clearly too wide.   It covers documents which are not relevant to the issues as pleaded between the parties in the principal proceedings, but, if I set it aside on terms that, within seven days Pidgeon make available to the solicitor for Evans all documents referred to in paragraph 3 of the affidavit of Frederic Brands filed 9 September 1996, that will bring to a head the whole question of the documents which Mr Brands says are relevant, and if in fact there has been a failure by Stencraft to make discovery of relevant documents, that will become apparent and, as a factual matter, remedied by the inspection of the three Arch Lever file documents which Mr Brands says he supplied to the solicitors for Stencraft.

The question of costs of this application, and of the costs of complying with the subpoena, present some difficulties.   It is clear, in my opinion, that the solicitor for Evans has adopted a wrong view as to whether the profitability documents could be the subject of a subpoena.   On the other hand, it seems to me that there has been a bit of nit-picking on the part of Pidgeon in relation to the documents which it admits are clearly relevant to the principal proceedings.  It seems to me to be a totally inadequate response to say, "Well, we've given them to the solicitors for Stencraft and they should have discovered what they think are relevant to Evans."

What I am minded to do is fix a figure to reflect the fact that it would have been necessary to come to court to argue the question of the production of the documents relating to the profitability of the project.   I shall fix the costs of the motion at a very low figure, $1000.00, and simply order that the subpoena be set aside on terms that within seven days Pidgeon produce to the Court for the inspection of both parties all documents referred to in paragraph 3 of the affidavit of Frederic Brands filed 9 September 1996, and that inspection of those documents take place within the following seven days, and each party be permitted to take copies of any document they wish to copy at each respective party's costs.

In relation to the costs of the motion which I have set aside and the costs of complying with the subpoena, I fix all of those costs in the sum of $1000.00 and order Evans to pay to Pidgeon that sum by way of costs, and I further order that that sum be Evans's costs in the principal proceedings.

I certify that this and the preceding five (5) pages are a true copy of the reasons for judgment herein of the Honourable Justice Spender.

Associate
  Date:  26 September 1996

Counsel for F P Pidgeon
     & Sons Pty Ltd           :      Mr P D T Applegarth
instructed by                  :      Minter Ellison

Solicitors for the applicant

(Graham Evans Pty Ltd)    :      Terence Lockyer Lee & Associates

Date of Hearing                :      26 September 1996