Hobson v BWL Pty Ltd Trading as INVision Investigations, Consulting and Training Solutions (No. 4)
[2013] FMCA 20
•22 January 2013
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| HOBSON v BWL PTY LTD TRADING AS INVISION INVESTIGATIONS, CONSULTING AND TRAINING SOLUTIONS & ORS (NO. 4) | [2013] FMCA 20 |
| PRACTICE AND PROCEDURE – Application to set aside subpoenas – request to inspect subpoenaed documents in relation to costs under the Fair Work Act 2009 (Cth) after discontinuance of proceedings. |
| INDUSTRIAL LAW – Where proceedings under the Fair Work Act 2009 (Cth) discontinued – request to inspect subpoenaed documents in relation to costs application – application to set aside subpoenas. |
| WORDS AND PHRASES – “on the cards”. |
| Fair Work Act 2009 (Cth), ss.340, 570(2) Federal Magistrates Court Rules 2001 (Cth), rr.13.01, 13.02(1) |
| Australian and International Pilots Association v Qantas Airways Ltd (No. 3) (2007) 162 FCR 392; [2007] FCA 879 Australian Investment Commission v Aust-Home Investments Limited & Ors (1993) 116 ALR 523 Construction, Forestry, Mining and Energy Union & Ors v Clarke (2008) 170 FCR 574; [2008] FCAFC 143 Fried & Ors v National Australia Bank Ltd & Ors (2000) 175 ALR 194; [2000] FCA 911 Hobson v BWL Pty Ltd Trading as INVision Investigations, Consulting and Training Solutions & Ors (No. 3) (2012) 263 FLR 76; [2012] FMCA 439 Mandic v Phillis (2005) 225 ALR 760; [2005] FCA 1279 Plastec Australia Pty Ltd ACN 093 513 467 v Plumbing Solutions and Services Pty Ltd (No. 2) ACN 128 873 629 [2010] FCA 670 Rentuza v Westside Auto Wholesale (2009) 190 IR 207; [2009] FMCA 1022 Tamawood Limited (ACN 010 954 499) v Habitare Developments Pty Ltd (ACN 122 935 497) [2009] FCA 364 Wingecarribee Shire Council v Lehman Brothers Australia Ltd (No. 4) [2010] FCA 1128 |
| R Allen, Allen’s Dictionary of English Phrases (London: Penguin, 2006), page 131 C. Sappideen, et. al. Macken’s Law of Employment (Seventh Edn) (Sydney: Lawbook Co, 2011) |
| Applicant: | NINA HOBSON |
| First Respondent: | BWL PTY LTD TRADING AS INVISION INVESTIGATIONS, CONSULTING AND TRAINING SOLUTIONS |
| Second Respondent: | JANE ELIZABETH WYLLIE |
| Third Respondent: | REINHARD ANTON LANGMAIR |
| File Number: | PEG 69 of 2010 |
| Judgment of: | Lucev FM |
| Hearing date: | 10 July 2012 |
| Date of Last Submission: | 10 July 2012 |
| Delivered at: | Perth |
| Delivered on: | 22 January 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr S Ellis |
| Solicitors for the Applicant: | Tottle Partner Lawyers |
| Counsel for the Respondents: | Mr A P Hershowitz |
| Solicitors for the Respondents: | CS Legal |
ORDERS
That the applicant’s objection to the inspection of documents produced under the subpoenas issued to the Australian & New Zealand Banking Group Ltd and Gemini Medical Services on 9 February 2011 be dismissed.
That the respondents be at liberty to inspect the documents produced under the subpoenas issued to the Australian & New Zealand Banking Group Ltd and Gemini Medical Services within 21 days.
The question of costs be listed for hearing at 10.15am on 11 March 2013, with an outline of submissions to be filed:
(a)by the respondents by 26 February 2013; and
(b)by the applicant by 5 March 2013.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PERTH |
PEG 69 of 2010
| NINA HOBSON |
Applicant
And
| BWL PTY LTD TRADING AS INVISION INVESTIGATIONS, CONSULTING AND TRAINING SOLUTIONS |
First Respondent
| JANE ELIZABETH WYLLIE |
Second Respondent
| REINHARD ANTON LANGMAIR |
Third Respondent
REASONS FOR JUDGMENT
Introduction and background
The applicant, Nina Hobson,[1] was formerly employed by the first respondent, BWL Pty Ltd trading as INVision Investigations, Consultants and Training Solutions[2] under a “Fixed Term Contract of Employment” which was entered into on or about 3 February 2010.
[1] “Ms Hobson”.
[2] “INVision Investigations”.
Ms Hobson’s employment with INVision Investigations was terminated effective 1 March 2010.
Ms Hobson commenced proceedings under the Fair Work Act 2009 (Cth)[3] seeking declarations for alleged contraventions of s.340 of the FW Act, the imposition of a pecuniary penalty and an award of compensation, and damages for an alleged breach of contract. The respondents have denied Ms Hobson’s claims. The respondents included a claim for costs in their response, relying on s.570(2) of the FW Act.
[3] “FW Act”.
The primary basis for the application was said to be that shortly before Ms Hobson was dismissed she suffered from anxiety and depression and was absent from work as a consequence of bullying and intimidation by the third respondent, Reinhard Anton Langmair,[4] a director of the first respondent.[5]
[4] “Mr Langmair”.
[5] “INVision Investigations”.
On 9 February 2011, and on the application by the respondents,[6] the Court issued two subpoenas ordering the Australian and New Zealand Banking Group Ltd[7] and Gemini Medical Services,[8] to produce documents by 25 February 2011.[9] Gemini Medical Services is the medical centre where Ms Hobson’s GP is employed. The ANZ is the bank that holds the mortgage over Ms Hobson and her husband’s property at 25 Darley Circle, Bull Creek, Western Australia.[10] The documents subpoenaed were produced to the Court.
[6] “INVision Investigations”, “Ms Wyllie” and “Mr Langmair” respectively.
[7] “ANZ Subpoena”.
[8] “Gemini Medical Services Subpoena”.
[9] “Subpoenas”.
[10] “Property”.
At the time of the issue of the Subpoenas the application had been set down for hearing from 14-16 March 2011. On 22 February 2011 Ms Hobson filed a Notice of Discontinuance, which discontinued all of her claims in these proceedings.
Following the filing of the Notice of Discontinuance the respondents requested to inspect documents produced in compliance with the Subpoenas in relation to the respondents’ costs application.
Objections to the inspection of documents produced pursuant to the Subpoenas were lodged by Ms Hobson on 24 February 2011.[11]
[11] “Objections”
The Court delivered its Reasons for Judgment concerning the issue of whether the respondents could inspect documents produced under the Subpoenas issued at the respondents request prior to the filing of a Notice of Discontinuance, in circumstances where inspection of the documents is sought to support their argument as to costs.[12] In Hobson (No. 3) the Court held that it had the express power to permit the respondents to inspect the subpoenaed documents notwithstanding the filing of the Notice of Discontinuance by Ms Hobson. It was further held that before the subpoenaed documents could be inspected, the Court must deal with the Objections.
[12] Hobson v BWL Pty Ltd Trading as INVision Investigations, Consulting and Training Solutions & Ors (No. 3) (2012) 263 FLR 76; [2012] FMCA 439 (“Hobson (No. 3)”).
Basis for Objections
Ms Hobson contends that the Subpoenas should be set aside and production, inspection and copying of the subpoenaed documents should be refused because:
a)in light of the discontinuance of the substantive proceedings, there is no longer any real prospect that the documents the subject of the Subpoenas will materially assist the respondents’ case;
b)the primary purpose of the Subpoenas is to obtain material relevant to the credit of Ms Hobson;
c)the Subpoenas are speculative in nature; and
d)the Subpoenas are oppressive.
The relevance of the Subpoenas
Ms Hobson’s submissions
Ms Hobson submits that:
a)the Subpoenas are no longer relevant, or sufficiently relevant, to any matters in issue between the parties because the proceedings have been wholly discontinued by Ms Hobson under r.13.01 of the Federal Magistrates Court Rules 2001 (Cth);[13]
b)the respondents may still apply for an order for the payment of costs pursuant to r.13.02(1) of the FMC Rules, but that does not give rise to substantive matters in dispute between the parties. The power of the Court to award costs is governed by s.570(2)(a) and (b) of the FW Act which allows a party to recover costs only if the Court is satisfied that the other party instituted the proceedings vexatiously or without reasonable cause, or if the Court is satisfied that the other party’s unreasonable act or omission caused the party to incur the costs;
c)in exercising its discretion to make an order for costs pursuant to r.13.02(1) of the FMC Rules and s.570(2)(a) and (b) of the FW Act, the Court should not embark upon a hypothetical trial of the action;[14] and
d)the prospect that any of the documents produced in answer to the Subpoenas will materially assist the respondents is reduced by the discontinuance of the substantive proceedings, so that it is no longer “on the cards” that the subpoenaed documents will assist.
[13] “FMC Rules”.
[14] Citing Australian Investment Commission v Aust-Home Investments Limited & Ors (1993) 116 ALR 523 at 530 per Hill J.
Respondents’ submissions
The respondents’ submit that:
a)it is uncontroverted that the respondents require the subpoenaed documents to be inspected for the purpose of the determination of the application for costs following the notice of discontinuance and in particular the application for costs pursuant to s.570(2)(a) and (b) of the FW Act;
b)the issue of whether a party has acted unreasonably or its omission resulted in costs being incurred was considered in Rentuza v Westside Auto Wholesale;[15]
[15] (2009) 190 IR 207 at 213 per Lucev FM; [2009] FMCA 1022 at paras.26-28 per Lucev FM.
c)whether a party has engaged in “an unreasonable act or omission” depends upon the particular circumstances of the case;[16]
[16] Australian and International Pilots Association v Qantas Airways Ltd (No. 3) (2007) 162 FCR 392; [2007] FCA 879.
d)insofar as Ms Hobson contends that there is no longer any real prospect that the documents the subject of the Subpoenas will materially assist the respondents’ case, the Court has already dealt with this matter in Hobson (No. 3) and held that:
i)the issues arising under s.570(2)(a) and (b) of the FW Act are essentially factual questions which in a costs hearing might ordinarily be determinable on the basis of materials either to be filed, already filed or already subpoenaed and in the possession of the Court;[17]
[17] Hobson (No. 3) FLR at 96 per Lucev FM; FMCA at para.65 per Lucev FM.
ii)a subpoenaed document, if it is admissible in evidence, might independently assist in the establishment of whether or not, a particular act or omission is unreasonable or not; and
iii)in determining whether an unreasonable act or omission occurred it might be necessary to consider affidavits in the proceedings, and the Court should be able to consider evidence in a subpoenaed document which supports or contradicts what is in the affidavits;[18]
[18] Hobson (No. 3) FLR at 97 per Lucev FM; FMCA at para.67 per Lucev FM.
e)the finding that the subpoenaed documents might go to issues which are relevant to the application for costs, and might possibly be relevant to the issues to be determined under s.570(2)(a) and (b) of the FW Act,[19] directly meets the submission that there is no longer any real prospect that the documents will materially assist the respondents’ case. It is not to the point that the documents will necessarily materially assist the respondents’ case. It is sufficient if the documents are relevant and may assist the respondents’ case;
[19] Hobson (No. 3) FLR at 97 per Lucev FM; FMCA at para.68 per Lucev FM.
f)the submission that the Subpoenas are no longer relevant or sufficiently relevant to any matters in issue between the parties[20] has already been determined by the Court in Hobson (No. 3), where it was held that the documents may be relevant to the determination of the issues at hand;[21]
g)the law is clear that a subpoena cannot issue to facilitate “fishing by a party”.[22] “Fishing” in that sense means an endeavour by a party, not to obtain evidence to support its case, but to obtain evidence to enable it to decide whether it has a case at all. A subpoena or part of it was set aside on that basis in Mandic v Phillis;[23]
h)in this application it could not be said that the Subpoenas were an endeavour by the respondents to enable them to decide whether they have a case at all in respect of the costs application argument. The Subpoenas are meant to ascertain whether there is further evidence to support their case or in fact Ms Hobson’s opposition in respect of the application for costs following the Notice of Discontinuance. The respondents have a case to argue in respect of costs following the discontinuance independent of the subpoenaed documents and accordingly the question of “fishing” does not arise. As already found, those subpoenaed documents may assist the determination of the costs issue;
i)the relevant enquiry to be undertaken insofar as the documents sought to be inspected under the Subpoenas are concerned has been described as follows:
... Whether a subpoena has a legitimate forensic purpose is to be ascertained by reference to an assessment as to whether the Court is satisfied that it is "on the cards" (to use the expression of Gibbs J in Alister v The Queen (1984) 154 CLR 404 at 414) that the documents would materially assist the subpoenaing party in relation to the proceedings: see also R v Saleam (1989) 16 NSWLR 14 at 18A-F per Hunt J with whom Carruthers and Grove JJ agreed. This filter prevents the use of the subpoena as a mere "fishing expedition".
j)if it is found that the documents subpoenaed have a legitimate forensic purpose it could not be said that the respondents are fishing;
k)there is no evidence to suggest that the respondents are seeking to inspect the documents for any purpose other than the costs argument following the Notice of Discontinuance. No other purpose is advanced by Ms Hobson; and
l)it is not said by Ms Hobson that the issuing of the Subpoenas was not for a legitimate forensic purpose. All that is put by Ms Hobson is that the prospect that the documents will materially assist the respondents is no longer “on the cards”. Given that the proceedings were discontinued three days prior to the date for compliance with the Subpoenas, and just three weeks before the hearing proper, the irresistible inference to be drawn is that it is “on the cards” that the documents would likely assist.
[20] Applicant’s submissions, para.10.
[21] Hobson (No. 3) FLR at 97 per Lucev FM; FMCA at para.68 per Lucev FM.
[22] Tamawood Limited (ACN 010 954 499) v Habitare Developments Pty Ltd (ACN 122 935 497) [2009] FCA 364 at para.30 per Collier J.
[23] (2005) 225 ALR 760 at 778 per Conti J; [2005] FCA 1279 at para.51 per Conti J.
Consideration
The “on the cards” test does not require that the documents “must” materially assist the subpoenaing party, as “on the cards” means “possible or likely to happen”, and was originally, and chiefly, a reference to what was on the tarot cards used in fortune telling.[25] Thus, all that is required is that the Court considers that it be possible that the subpoenaed documents would materially assist the subpoenaing party.
[25] R Allen, Allen’s Dictionary of English Phrases (London: Penguin, 2006), page 131.
In Hobson (No. 3) this Court said as follows:
65. On the hearing of a costs application, unless there is some specific exclusion with respect to the FMC Rules, the rules and procedure which apply must be those which ordinarily apply to a costs hearing in this Court. However, in respect of FW Act proceedings that is qualified by the fact that relevant material in the hearing must relate to the basis for the application for costs, in this case s.570(2)(a) and (b) of the FW Act, and not go to the merits of the substantive matter per se. Rather, the Court will have to determine whether:
a) the proceedings were instituted vexatiously or without reasonable cause; or
b) there was an unreasonable act or omission which resulted in the incurring of costs.
Those are essentially factual questions which ordinarily in a costs hearing might be determinable on the basis of materials either to be filed, already filed, or already subpoenaed and in the possession of the Court. There may be some difficulty in distinguishing between matters relevant to costs, particularly for the purposes of s.570(2) of the FW Act, and those relevant to the merits of the substantive matter, but that is an issue for the Court at any costs hearing.
66. By way of example it might be that certain documents having been subpoenaed, and their contents being known to the applicant, that the applicant seeks to discontinue before those documents can be inspected, because they are known to be detrimental both in the substantive matter, and in relation to any application for costs under s.570 of the FW Act. One example might be an action alleging contravention of the right under s.352 of the FW Act not to be dismissed because of a temporary absence from work because of illness or injury. It is not to suggest that anything like this has happened in this matter, but what if a doctor agrees to provide an applicant with a medical certificate which says that an applicant is unfit for work by reason of illness or injury, when in fact the applicant is not ill or injured, and that fact is known to the doctor, and revealed in the applicant’s patient notes kept by the doctor? If those notes had been subpoenaed, and were in the possession of the Court, but had not yet been able to be inspected by a respondent, who had a suspicion that the applicant was not ill or injured on the relevant day or days, could it really be suggested that the notes could not be inspected merely because a notice of discontinuance had been filed? The notes would be arguably relevant to an application for costs on the basis that:
a) the proceedings had been instituted without reasonable cause; or
b) that the applicant’s unreasonable act in relying upon a medical certificate containing information which the applicant knew to be false had caused the other party to incur costs.
67. To determine if an unreasonable act or omission has occurred it might be necessary for the Court to look to an affidavit which has been read in the proceedings. Why then ought the Court be denied the opportunity to have put in evidence before it a subpoenaed document which either supports what is in the affidavit, or which might contradict what is in the affidavit? Alternatively, a subpoenaed document, if it is admissible in evidence, might independently assist in the establishment of whether or not, for example, a particular act or omission is unreasonable or not.
68. The most that can however presently be said in this matter is that the subpoenaed documents might go to issues which are relevant to the application for costs.
69. The Court cannot, therefore, preclude the possibility that the subpoenaed documents may be relevant to issues to be determined under s.570(2)(a) and (b) of the FW Act.[26]
[26] Hobson (No. 3) FLR at 96-97 per Lucev FM; FMCA at paras.65-69 per Lucev FM.
The Court went on to observe that its usual procedures could be used to determine the issues remaining in contest concerning the subpoenaed documents, including these Objections, and that subject to the Court dealing with the Objections inspection of the subpoenaed documents could occur utilising the usual powers and processes of the Court.[27]
[27] Hobson (No. 3) FLR at 97 per Lucev FM; FMCA at paras.70-71 per Lucev FM.
The Objections now made include this Objection on the basis of relevance.
The Court is not engaging in a hypothetical trial of the action, but rather, as outlined in the above quote from Hobson (No. 3), a determination of whether costs ought to be awarded under the qualified costs regime in s.570(2) of the FW Act. Having regard to the Court’s observations in Hobson (No. 3) quoted above, it is evident that the Court is already of the view that the subpoenaed documents may be relevant to the costs application. The costs of these proceedings remain a matter in issue, as they have been throughout the proceedings, having been put in issue in the respondents’ Response. The reasons set out in Hobson (No. 3) make it apparent that it may be possible that the documents subpoenaed under the Gemini Medical Services Subpoena will assist the respondents in their argument under s.570(2)(a) and (b) of the FW Act as to whether the proceedings have been instituted vexatiously or without reasonable cause, or that there has been an unreasonable act or omission resulting in the incurring of costs.
As Ms Hobson’s income earned during the period after her termination by INVision Investigations is in issue the ANZ Subpoena is relevant because it may go to show that she had income, or the potential to earn income to mitigate losses, such that no relief in damages (as sought) for breach of contract, or an award of compensation under the FW Act, might have been likely to be awarded even if the breach of contract and alleged contravention of the FW Act had been made out.[28] If that was, or ought to have been, apparent at the time the proceedings were instituted, issues of vexatiousness, or more likely, unreasonableness, in relation to the institution of the proceedings might arise. It is, therefore, possible that the documents subpoenaed under the ANZ Subpoena will assist the respondents in their costs argument under s.570(2)(a) and (b) of the FW Act.
[28] As to the obligation to mitigate losses for breach of contract and in statutory contravention cases, see C Sappideen, et. al. Macken’s Law of Employment (Seventh Edn) (Sydney: Lawbook Co, 2011) pp.427-429 (and cases there cited).
In the circumstances, the Objection on the basis of relevance is not made out.
Whether the Subpoenas seek material going to credit
Ms Hobson’s submissions
Ms Hobson submits that:
a)the Court should conclude that, when originally issued, the Subpoenas were directed primarily to obtaining material going to Ms Hobson’s credit. While there is authority that a subpoena may be issued for this purpose, such Subpoenas should be carefully scrutinised;[29]
[29] Fried & Ors v National Australia Bank Ltd & Ors (2000) 125 ALR 194 at 200 per Weinberg J; [2000] FCA 911 at para.27 per Weinberg J (“Fried”).
b)the affidavits filed on behalf of the respondents contained many allegations that were not directly relevant to the matters in issue between the parties but may, perhaps, have been intended to form the basis of an attack on the credit of Ms Hobson.[30] These allegations include allegations about Ms Hobson’s medical history;
[30] See the affidavit of Mr Langmair, sworn 24 January 2011, paras.72-74, 97-100, 106, 107 and 258-266 (“Mr Langmair’s January 2011 Affidavit”); affidavit of Ms Wyllie sworn 7 February 2011 at paras.37-39, 70, 261-264, 269-278, 282-295, 298 and 299 (“Ms Wyllie’s February 2010 Affidavit”).
c)Ms Hobson has disputed, on oath, many of the assertions made by the second and third respondents, Ms Wyllie and Mr Langmair respectively;[31]
d)the subpoena issued to Gemini Medical Services is directed towards Ms Hobson’s medical history the subject of the Credit Allegations;
e)the subpoena directed to the ANZ Bank seeks documents provided by employers, prospective employers and former employers (which would include INVision Investigations) to the ANZ Bank in connection with the mortgage of the Property;
f)Ms Hobson accepts that, prior to discontinuance of the proceedings, one of the issues in dispute between the parties was how much income she earned during the period from her termination by INVision Investigations on 1 March 2010 until the date on which her employment with INVision Investigations would have otherwise come to an end in any event;[32]
g)the subpoena issued to the ANZ Bank is not directed to obtaining information directly relevant to the Income Issue, such as bank statements or correspondence between Ms Hobson and the bank. The subpoena is directed to obtaining information from Ms Hobson’s employers, prospective employers and former employers;
h)discovery of documents in relation to the Income Issue was given, including discovery on oath. Ms Hobson also gave evidence which touched on the Income Issue.[33] The respondents’ application for further and better discovery of documents dated 12 October 2010 did not seek discovery of documents falling within the scope of the subpoena to the ANZ Bank;
i)the Income Issue has been the subject of several applications for and affidavits of discovery, the subpoena issued to B2B Film Production[34] on 17 November 2010, and significant material in the parties’ witness statements. The respondents have not shown that Ms Hobson earned income from anyone other than INVision Investigations and, to a limited extent, B2B during the relevant period. Therefore, to seek documents from “prospective employers” is purely speculative;
j)the purchase of the Property is dealt with in Ms Wyllie’s February 2011 Affidavit.[35] The issue which Ms Wyllie appears to raise concerns statements made by Ms Hobson to Ms Agar. These matters go primarily to credit. Seeking documents going to credit is not an appropriate basis for a subpoena in the present circumstances, and the claim for compensation under the FW Act is no longer pursued;
k)the dealings between Ms Hobson and the respondents about a reference to assist Ms Hobson to obtain finance are dealt with in Mr Langmair’s January 2011 Affidavit.[36] The dealings between the parties about this document were peripherally relevant to the construction of the contract entered into between the parties. The documents actually provided to the ANZ Bank appear never to have been relevant to the issues between the parties; and
l)the respondents have already obtained evidence from Ms Nella relating to the employment with B2B. The need for possible additional documentation from the ANZ Bank is not clear.
[31] Affidavit of Ms Hobson, sworn 11 February 2011 (“Ms Hobson’s February 2011 Affidavit”).
[32] “Income Issue”.
[33] See affidavits of Ms Hobson, sworn 15 October 2010 and 28 October 2010 (Ms Hobson’s 15 October 2010 Affidavit” and “Ms Hobson’s 28 October 2010 Affidavit” respectively).
[34] “B2B”.
[35] Ms Wyllie’s February 2011 Affidavit, paras.295-300.
[36] Mr Langmair’s January 2011 Affidavit, paras.132-144, and in Ms Wyllie’s February 2011 Affidavit, paras.148-164.
Respondents’ submissions
The respondents submit that:
a)it is significant to note that Ms Hobson accepts there is authority that a subpoena may be issued for the purpose of obtaining material going to Ms Hobson’s credit;[37]
b)at the time the Subpoenas were originally issued the credit of Ms Hobson was highly relevant given the issues arising in the application, and the issue of credit remains highly relevant to the costs determination;
c)the question of Ms Hobson’s medical history and her alleged medical condition arising out of bullying and harassment was one of the central issues arising in the application. Accordingly, the Gemini Medical Services Subpoena was and is directly relevant to Ms Hobson’s medical history arising in these proceedings and remains relevant to any costs determination;
d)the ANZ Subpoena is directly relevant to the costs determination to determine whether the proceedings were instituted without reasonable cause and whether there were any unreasonable acts or omissions resulting in the incurring of costs;
e)Ms Hobson accepts that prior to the discontinuance of the proceedings one of the issues arising was the extent of the income earned by her during the period after her termination by INVision Investigations on 1 March 2010;
f)the ANZ Subpoena may well reveal matters going to the issues arising on the costs argument and going to matters dealt with by Ms Hobson in her affidavits concerning financial matters. This will in turn assist the determination of the issue of whether or not a particular act or omission was unreasonable or not or whether the proceedings were vexatious;
g)the submission by Ms Hobson that the seeking of documents going to credit is not an appropriate basis for a subpoena in the present circumstances is ill-founded. Questions of instituting proceedings vexatiously or without reasonable cause and unreasonable acts or omissions under s.570(2)(a) and (b) of the FW Act expressly concern matters of credit;
h)the courts have repeatedly held that courts ought to be very careful in the exercise of the discretion provided by s.570(2) of the FW Act, and should not do so other than in a clear case.[38] Accordingly, all available material relevant to the determination of the costs issues should be available to the Court to consider the question. It may transpire that the documents the subject of the Subpoenas assist the Court to find that costs should not be awarded under s.570 of the FW Act. The Court should however, have regard to those documents as they are likely to have a bearing on the issues to be decided; and
i)whether or not discovery has been given and further and better discovery has been sought and given is not an answer to whether the subpoenaed documents are likely to assist in determining the costs issues.
[37] Fried ALR at 200 per Weinberg J; FCA at paras.28-29 per Weinberg J.
[38] Construction, Forestry, Mining and Energy Union & Ors v Clarke (2008) 170 FCR 574 at 582 per Tamberlin, Gyles and Gilmour JJ; [2008] FCAFC 143 at para.29 per Tamberlin, Gyles and Gilmour JJ.
Consideration
The fact that the Subpoenas might see the production of documents going to credit does not preclude their issuance.[39]
[39] Fried ALR at 200 per Weinberg J; FCA at paras.28-29 per Weinberg J.
In a case such as this, where the assessment of costs turns on whether:
a)proceedings were instituted vexatiously or without reasonable cause; or
b)there has been an unreasonable act or omission causing the other party to incur costs,[40]
issues of credit might be critical, particularly to an objective determination of vexatiousness or unreasonableness. Merely because credit issues might arise does not therefore found a sound basis for objection in a case where costs are assessed under the criteria in s.570(2)(a) and (b) of the FW Act.
[40] FW Act, s.570(2)(a) and (b).
The objective assessment of vexatiousness and unreasonableness under s.570(2)(a) and (b) of the FW Act may require an examination of a party’s reasons for instituting the proceedings, and to a party’s acts or omissions during the course of the proceedings, which include the filing of a Notice of Discontinuance.
The fact that the Income Issue has been the subject of other processes prior to the Notice of Discontinuance being filed does not prevent the issuance of the ANZ Subpoena, especially when, for reasons set out above,[41] it may be relevant to the proper assessment of issues of vexatiousness and unreasonableness for the purposes of s.570(2)(a) and (b) of the FW Act. Further, it is not speculative to seek documents from prospective employers under the ANZ Subpoena where there are issues of mitigation of loss in relation to damages and compensation which arise, as they do in these proceedings.
[41] See paras.13-19 above.
The Gemini Medical Services Subpoena is relevant for the reasons set out in Hobson (No. 3), as set out above,[42] in relation to the possibility of, for example, a doctor’s medical notes containing information which might undermine the substantive temporary illness claim, and thereby give rise to an arguable foundation that a claim under s.352 of the FW Act was, for example, vexatiously instituted. The fact that such documents might impinge upon an applicant’s credit is therefore irrelevant.
[42] See paras.13-19 above.
It is also worth observing that, in the final analysis, whether the subpoenaed documents may assist the Court by indicating that no issues of vexatiousness or unreasonableness arise in relation to the institution and conduct of the proceedings by Ms Hobson does not assist the Court because the “on the cards” test requires that the documents might be of assistance to the subpoenaing party, not the non-subpoenaing party.
In the circumstances, the Objection on the basis of credit issues is not made out.
Whether the Subpoenas are speculative in nature
Ms Hobson’s submissions
Ms Hobson submits that:
a)she has provided substantive evidence as to her medical condition and as to the extent of her earnings;
b)as to the medical records she has:
i)given that evidence by way of her affidavit filed on 19 November 2010;
ii)provided informal discovery of, and produced as annexures to her affidavit filed 19 November 2010, all of the medical certificates relevant to her anxiety and depression; and
iii)tendered an affidavit affirmed 8 November 2010 and an expert’s report dated 10 May 2010 from Dr Raymond Wu,[43] attesting to the fact that her stress was to a significant degree contributed to by her employment;
c)as to her earnings, an application for further and better discovery dated 12 October 2010 was made by the respondents. Ms Hobson’s 15 October 2010 Affidavit was sworn in relation to that application, and subsequently she swore an affidavit of discovery, being Ms Hobson’s 28 October 2010 Affidavit. Further, on 17 November 2010 the respondents issued a subpoena to B2B seeking documents relevant to Ms Hobson’s employment by B2B; and
d)in pursuing the Subpoenas, the respondents are simply hoping that something will turn up which might contradict the above material. That is not an appropriate basis on which to allow inspection of the Subpoenas at this stage of the proceedings.
[43] “Dr Wu’s Affidavit” and “Dr Wu’s Report” respectively.
Respondents’ submissions
The respondents submit that:
a)the submission that Ms Hobson has provided “substantive evidence” as to her medical condition is ultimately a matter for the Court, and it is not for Ms Hobson to say what is substantive or not;
b)Ms Hobson’s subjective views as to what is substantive medical evidence are irrelevant and the general practitioner’s contemporaneous notes and records could only assist to throw light on what her medical condition was at the relevant time;
c)medical notes and documents are likely to assist in the determination of whether Ms Hobson’s claim was vexatious insofar as it is asserted that the stress was to a significant degree contributed to by her employment, and demonstrates why the Subpoenas are not speculative in nature. If the medical records support Dr Wu’s opinion that Ms Hobson’s stress was contributed to by her employment that will assist Ms Hobson in opposing the costs orders to be sought by the respondents;
d)the respondents are not “simply hoping” that something will turn up. Undoubtedly medical records will assist Ms Hobson or the respondents in the costs determination; and
e)as to the financial documents, they too will assist in the determination of the costs issue and the Court and the parties should be able to have regard to all the material that will assist the inquiry.
Consideration
For the reasons set out above in relation to relevance and credit the Court does not consider that the Subpoenas can be said to be speculative. In the circumstances, the Objection on the basis that the Subpoenas are speculative is not made out.
Whether the Subpoenas are oppressive
Ms Hobson’s submissions
Ms Hobson submits that the Subpoenas are oppressive, as they seek documents containing highly personal medical records and records in relation to the financial affairs of Ms Hobson and her husband in circumstances where the only matter in issue between the parties is whether a costs order should be made in favour of the respondents.[44] The subpoena directed to Gemini Medical Services is particularly oppressive in light of the apparent antagonism between the parties.[45]
[44] Mr Langmair’s 24 January 2011 Affidavit, paras.72-76, and Ms Hobson’s February 2011 Affidavit, paras.16-18.
[45] Affidavit of Ms Hobson, sworn on 13 August 2010, paras.9-24.
Respondents’ submissions
The respondents submit that:
a)a subpoena will be set aside if it is oppressive to the addressee. Neither the ANZ Bank nor Gemini Medical Services has made an application to set aside the Subpoenas on the basis that they are oppressive;
b)it is not open to Ms Hobson to seek to set aside the Subpoenas on the basis that they are oppressive;
c)in any event, the question of whether a subpoena is oppressive involves two questions, namely:
i)does the material sought have an apparent relevance to the issues in the proceedings; and
ii)is the subpoena seriously and unfairly burdensome and prejudicial from the perspective of the addressee?[46]
d)the Court has not heard from the ANZ Bank or Gemini Medical Services and can therefore accept that the Subpoenas are not burdensome and are not prejudicial to the addressees;
e)it is an irrelevant consideration that the subpoena was directed at Gemini Medical Services in light of the apparent antagonism between the parties;
f)a subpoena will not be set aside on the basis that the documents sought to be inspected are medical records and records in relation to financial affairs of the parties pertaining to a costs order;
g)it is not suggested in any way that any of the medical records are subject to privilege or confidentiality. Medical records are always highly personal; and
h)no case has been made out that the Subpoenas are oppressive.
[46] Plastec Australia Pty Ltd ACN 093 513 467 v Plumbing Solutions and Services Pty Ltd ACN 128 873 629 (No. 2) [2010] FCA 670 at para.35 per Greenwood J.
Consideration
In the Court’s view the Subpoenas are not oppressive because the documents sought to be produced are relevant, even on a costs application, for reasons set out above,[47] and have not been objected to as oppressive by the persons to whom they are addressed, namely, the ANZ Bank and Gemini Medical Services. From the point of view of the persons required to comply with the Subpoenas there is nothing to indicate that they were oppressive.
[47] See paras.13-19 above.
The fact that the Gemini Medical Services Subpoena might result in the production of documents containing highly personal medical records cannot be a ground for objection when Ms Hobson has caused to be filed the affidavit of a psychiatrist, Dr Wu, together with Dr Wu’s Report, in which he has set out Ms Hobson’s medical history. That medical history includes Ms Hobson’s psychiatric history, details of major invasive surgery, and details of her private life, including details concerning her marriage and relationship with her husband and of family bereavements.[48]
[48] Dr Wu’s Report, page 4.
The fact that there is antagonism between the parties founds no basis to find that the Gemini Medical Services Subpoena is oppressive. Were antagonism between parties to be a basis for objecting to subpoenas the issuance of subpoenas might fall into disuse.
With respect to the ANZ Subpoena, and the prospect that Ms Hobson’s financial affairs, together with those of her husband, might be revealed, there is nothing out of the ordinary in relation to a person’s financial affairs, or the provision of documents by employers or prospective employers and the information contained therein, being revealed upon production of documents under subpoena in employment litigation cases. That is particularly so where awards of compensation or damages for breach of contract are sought, and there is an obligation upon an applicant to mitigate their loss.[49] Such documents are necessary to prove whether a loss has been suffered, and are relevant to whether or not opportunities to mitigate loss have arisen and been availed of.
[49] See fn.28 above.
There being no other basis upon which it is put, or on which it is apparent to the Court, that the Subpoenas are oppressive, the Court finds that the Objection on the basis that the Subpoenas are oppressive has not been made out.
Ms Hobson’s alternative submissions
Ms Hobson’s submissions
In the alternative to her principal submissions, Ms Hobson submits the scope of the Gemini Medical Services Subpoena, or the scope of permitted production, inspection and copying, should be limited to:
a)medical records dating from 22 February 2010 to 3 June 2010 (being the date that Ms Hobson first suffered physical symptoms as a result of bullying, and the date that Ms Hobson’s employment contract was due to expire); and
b)which deal with Ms Hobson’s complaints of depression, anxiety or stress as a result of the conduct of the respondents, or any of them.
Respondents’ submissions
The respondents submitted that there ought be no limitation as suggested by Ms Hobson in respect of the scope of the Gemini Medical Services Subpoena as it was not known when Ms Hobson commenced consulting with a general practitioner at Gemini Medical Services, or at what stage various issues may have manifested themselves.
Consideration
The existing medical evidence filed by Ms Hobson, namely Dr Wu’s Report, contains details of matters which precede the alleged time at which Ms Hobson allegedly first suffered physical symptoms as a result of alleged bullying by Mr Langmair. Specifically, Dr Wu refers to Ms Hobson indicating to him that prior to her beginning this period of employment with INVision Investigations she felt that the contract she entered into was one which she had “no option but to sign”.[50] Dr Wu’s Report also contains possible explanations, in the alternative, for Ms Hobson’s alleged stress, and, in particular, the loss of family members including her mother and brother and “relationship difficulties” between Ms Hobson and her husband.[51]
[50] Dr Wu’s Report, page 2.
[51] Dr Wu’s Report, pages 5 and 8.
The fact that Ms Hobson first felt the physical manifestations of the alleged bullying on or about 22 February 2010 does not preclude there being relevant material in the Gemini Medical Services Subpoena documents relating to her condition, and the possibility of it being a pre-existing condition, and thereby not related to her employment, and it being unreasonable to institute an action where the adverse action on the basis of workplace rights has its foundation, at least in part, under workplace laws including State occupational health, and workers compensation and injury management, legislation.
There is also sufficient to indicate to the Court that there may be arguments to be put in relation to the nature of Ms Hobson’s illness and her capacity for work following her termination by INVision Investigations which may affect arguments in relation to damages and compensation for breach of contract and contravention of the FW Act respectively. Those arguments might go to Ms Hobson’s capacity to work and mitigate her alleged losses, which may relate to the reasonableness of the relief sought by Ms Hobson.
In the above circumstances, the Court does not consider that Ms Hobson’s alternative submission has sufficient merit to warrant a restriction on the scope of the Gemini Medical Services Subpoena.
Conclusion and orders
The Court has concluded that Ms Hobson’s Objections to the Subpoenas, both issued on 9 February 2011, ought to be dismissed. There will be an order accordingly. There will also be an order providing for inspection of the documents produced under the Subpoenas within 21 days, and for the hearing of the costs application on 11 March 2013 with outlines of submissions to be filed beforehand.
I certify that the preceding forty-five (45) paragraphs are a true copy of the reasons for judgment of Lucev FM
Date: 22 January 2013
[24] Wingecarribee Shire Council v Lehman Brothers Australia Ltd (No. 4) [2010] FCA 1128 at para.20 per Rares J.
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