Harding-Smith v AMA Group Solutions Pty Ltd
[2022] FedCFamC2G 821
Federal Circuit and Family Court of Australia
(DIVISION 2)
Harding-Smith v AMA Group Solutions Pty Ltd [2022] FedCFamC2G 821
File number(s): SYG 623 of 2021 Judgment of: JUDGE HUMPHREYS Date of judgment: 6 October 2022 Catchwords: INDUSTRIAL LAW – Practice and procedure – application to set aside Notice to Produce – whether documents relevant – whether documents oppressive. Legislation: Federal Circuit and Family Court of Australia (Division 2) (General Federal Law Rules) 2021 (Cth) rules 14.1, 16.16 Cases cited: Commissioner of Police (NSW) v Ritson [2020] FCCA 1083
Self Care Corporation Pty Ltd v Green Forest International Pty Ltd (No 10) [2022] FedCFamC2G 78
Division: Division 2 General Federal Law Number of paragraphs: 24 Date of last submission/s: 27 September 2022 Date of hearing: 27 September 2022 Place: Parramatta Counsel for the Applicant: Ms Steele SC Counsel for the Respondent: Ms Epstein ORDERS
SYG 623 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: STEPHEN HARDING-SMITH
Applicant
AND: AMA GROUP SOLUTIONS PTY LTD (ACN 124 094 739)
Respondent
order made by:
JUDGE HUMPHREYS
DATE OF ORDER:
6 October 2022
THE COURT ORDERS THAT:
1.Categories 8, 9 and 10 of the applicant’s Notice to Produce dated 22 April 2022 be set aside.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE HUMPHREYS
Introduction
Stephen James Harding-Smith (‘the applicant’) has commenced proceedings in the Court’s Fair Work Division alleging that he was dismissed from his employment with AMA Group Solutions Pty Ltd (‘the Respondent’) in contravention of a general protection under the Fair Work Act 2009 (Cth) (‘the Act’). This judgement concerns objections taken to Notices to Produce issued by each party to the proceedings.
Background to the Proceedings
The applicant was employed as the Chief Financial Officer (CFO) of the respondent. On 10 February 2021, the applicant purported to resign from his employment by giving 12 months’ notice. On the same day, the respondent summarily dismissed the applicant from his employment on the ground of serious misconduct.
The background to the resignation/dismissal occurred after investigation by an independent forensic investigator into allegations of misconduct by the former Chief Executive Officer of the respondent, Mr Andrew Hopkins. In the course of that investigation, the forensic investigator concluded that the applicant had (improperly) facilitated or was involved in the purchase of three motor vehicles, totalling $256,151.40, by the respondent for the personal benefit and use of Mr Hopkins and his immediate family. Further, the forensic investigator identified that the applicant had approved two further payments of $40,157.26 and $99,000.00, that it is alleged were not for proper business purposes.
The Applicant’s Notice to Produce
On 22 April 2022, the applicant filed and served a Notice to Produce addressed to the respondent. Objection is taken to the following categories of documents listed in that Notice to Produce (listed below by reference to the paragraph number contained within the original Notice to Produce):
6(c). (As) listed in paragraph 3.2.1 of the investigation report, namely bank statements of the NAB account held in the name of Gemini Accident Repair Centres Pty Ltd (A/c numbers listed but not reproduced) for the period 11 April 2015 to 30 June 2020;
8. Email and hard drive data of relevant parties provided by AMA Group as referred to in paragraph 3.2.2 of the investigation report concerning or related to the applicant;
9. (As) listed in appendix C of the investigation report insofar as those documents concern or related to the applicant/the employment;
10. Refund from Willis Australia Limited (ACN 000 321 237) for the transactions identified in paragraph 5.4.1 of the investigation report;
11. Audit and risk Committee minutes of the respondent and all its associated entities for the relevant period.
After the Interlocutory Hearing concluded and judgment was reserved, the parties advised the Court that the objections in relation to category 11 of the applicants’s Notice to Produce had been resolved and orders were made by consent. The Court is only required to decide on categories 6(c), 8, 9 and 10.
The Respondent’s Notice to Produce
On 20 April 2022, the respondent filed and served a Notice to Produce. Counsel for the respondent, in written submissions, noted that the applicant had agreed to provide the respondent with all of the documents necessary for the respondent to prove what income the respondent earnt, namely or payslips issue to the applicant, all invoices issued by the applicant or by any third party for the performance of work by the applicant in the period 10 February 2021 to date and all income tax assessments submitted by the applicant.
The applicant had also agreed to produce all job applications and letters of offer, contracts for services and contracts of employment (a compromise a narrowing of category six relevant documents).
After the Interlocutory Hearing concluded and judgment was reserved, the parties advised the Court that the objections in relation to the respondent’s Notice to Produce had been resolved and orders were made by consent. The Court is no longer required to make a decision in relation to the respondent’s notice to produce.
The Law
Notices to Produce are covered by rule 16.16 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law Rules) 2021 (Cth) (‘the Rules’). It states as follows:
16.16 Notice to Produce
(1) A party may, by notice in writing, require another party to produce, at the hearing of the proceeding, a specified document that is in the possession, custody or control of the other party.
(2) Unless the court otherwise orders, the party given notice to produce must produce the document at the hearing.
Rule 14.10 of the Rules provides as follows:
14.10 Documents referred to in document or affidavit
(1) If a document or affidavit filed by a party refers to another document, and other party may request the party in writing for copy of the document or to produce it for inspection.
(2) The party requested to provide a copy of, or produce, a document must, within four days of the request, in writing to the party making the request:
(a) provide a copy of the document or point of time within seven days, and a place where, it may be inspected; or
(b) claim that the document is privileged from production and state the grounds; or
(c) state that the document is not in the possession, custody or control of the party to whom the request was made and state the parties acknowledge information or belief about its whereabouts.
The principles as to when a Notice to Produce may be set aside are the same in substance as to those applicable to setting aside a Subpoena. Thus, the right to request documents is not unqualified and is subject to limitations. When presented with a contested refusal to accede to a request made under rule 14.10 of the Rules, the Court would not compel production if to do so would serve no legitimate forensic purpose: Commissioner of Police (NSW) v Ritson [2020] FCCA 1083 at [32]. The documents sought must have “apparent relevance” or a “legitimate forensic purpose’: Self Care Corporation Pty Ltd v Green Forest International Pty Ltd (No 10) [2022] FedCFamC2G 78 at [68]-[74]. It must be “on the cards” that the document sought will materially assist the party at whose request a subpoena has been issued. The Court, however, will set aside a Notice to Produce where it amounts to impermissible fishing or constitutes a bare attempt at discovery.
Consideration: The Applicant’s Notice to Produce
Under item 6(c), the applicant seeks bank statements for a company for a five year period from April 2015 to June 2020. It is submitted that the documents are both relevant and significant for two reasons.
First, it is the applicant’s case is that there was a practice of him authorising payments in respect of car allowances, that the respondent knew of this practice and there was no basis to dismiss in for this reason. The documents sought will assist the applicant to prove this practice. It was submitted that the applicant cannot make good his case by cross-examination without access to the respondent’s documents which will demonstrate whether this was the case.
Second, the applicant requires the documents in order to be able to properly test the respondent’s expert conclusions. The expert does not expose his reasoning in reaching his conclusion that the payments were made for a non-business purpose. Without the bank accounts, it will not be possible for the applicant to effectively cross-examine the expert or test his conclusions.
During the course of the hearing, it was conceded that the relevant bank accounts are in electronic format and there would be no significant difficulty in providing them to the respondent, given that they were provided to the investigator in a similar manner.
The Court is satisfied in these circumstances that there is a legitimate forensic purpose in the provision of these bank statements. Whilst there may be a large amount of information, it is not onerous for the respondent to provide this information. The objection has no merit.
Item 8 constitutes “email and hard drive data of the relevant parties provided by AMA group” referred to in paragraph 3.2.2 of the investigation report. This material was apparently provided to the investigator and constitutes approximately just under 2 million documents.
The applicant states that he needs to conduct various searches, using keywords, in order to either replicate or substantiate the investigators conclusions. The Court is not satisfied that it is “on the cards”, given the extremely wide remit of the Notice to Produce and that it has not been in any way refined, that the provision of the document serves a legitimate forensic purpose. Rather, it constitutes a blatant fishing expedition or, in fact, would amount to discovery which this Court does not normally order. Further, the provision of 2 million documents, even in electronic form as was provided to the investigator, would be disproportionate. The objection to item 8 in its current form is upheld.
Item 9 consists of documents listed in Appendix C of the investigation report in so far as those documents concerned relate to the applicant/the employment. The applicant relies upon the same submissions as set out above. The respondents contended that the applicant must do much more than simply point to the fact investigators were given access to the documents and then providing a list of those documents in the investigation report despite no reliance been placed on many of the documents in the findings. It is contended that this is an insufficient basis to require production.
No indication is given as to the number of documents that might be involved. The applicant has not refined the claim and simply wishes access to all the documents, even those not necessarily used by the forensic investigator. In its current form, the Court is not satisfied that it is “on the cards” that the documents will serve a legitimate forensic purpose, and again, the Notice to Produce amounts to request for discovery.
Category 10 relates to documents relating to a refund from Willis Australia. In an Affidavit tended to the Court, the respondent’s solicitor, Mr Darren Perry, deposes that none of the four transactions with Willis Australia Pty Ltd relate to the three motor vehicles that were the subject of allegations against Mr Harding-Smith, and that these transactions do not form part of the respondent’s case. Mr Perry asserts that no material has been provided explaining why these transactions are materially relevant to the issues in dispute. The Court agrees. The objection is upheld.
The Hearing Dates
During the course of submissions in relation to this aspect of the hearing, Senior Counsel for the applicant indicated that she had only recently come into the matter. The matter had been listed for a five day period in mid-October, however it was necessary to reduce that period by a day due to the Court’s commitments. Senior Counsel for the applicant also indicated that she anticipated that the matter would take some six days in evidence, as it was likely she would need some considerable time to cross-examine the forensic expert called on behalf the respondents.
The loss of the days hearing time through no fault of the parties is a matter to be regretted, but cannot be overcome. It would be undesirable for the hearing to go part-heard in relation to evidence on a liability hearing, and that any likely additional hearing day would not be available until March or April 2023. Further, should the issue of liability be determined in favour of the applicant, there will need to be a further hearing, in order to assess relevant compensation and other aspects.
In proposed consent orders provided to the Court after this judgment had been reserved, the parties sought that the matter be listed for a six day hearing. The Court has listed the matter for a six day hearing in April 2023. The parties should be aware, however, that in the absence of extraordinary circumstances, the matter will not be vacated further and is to proceed on those days.
I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Humphreys. Deputy Associate:
Dated: 6 October 2022
0
2
0