Lara-Benjamin Pty Ltd v Ampol Road Pantry Pty Ltd
[1997] FCA 466
•29 May 1997
IN THE FEDERAL COURT OF AUSTRALIA No QG 35 of 1996
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
BETWEEN:LARA-BENJAMIN PTY LTD
(ACN 060 040 520)
First Applicant
AND:RONALD NOEL GORMAN and
SUZANNE ELIZABETH GORMAN
Second Applicants
AND:NOEL ARTHUR GORMAN and
NOLA KATHLEEN GORMAN
Third Applicants
AND:AMPOL ROAD PANTRY PTY LTD
(ACN 008 543 360)
Respondent
BY CROSS CLAIM:
BETWEEN:AMPOL ROAD PANTRY PTY LTD
(ACN 008 543 360)
Cross-claimant
AND:LARA-BENJAMIN PTY LTD
(ACN 060 040 520)
First Cross-Respondent
AND:RONALD NOEL GORMAN and
SUZANNE ELIZABETH GORMAN
Second Cross-Respondent
AND:NOEL ARTHUR GORMAN and
NOLA KATHLEEN GORMAN
Third Cross-Respondent
CORAM: Drummond J
DATE: 29 May 1997
PLACE: Brisbane
MINUTES OF ORDERS
THE COURT ORDERS THAT:
The notice of motion be dismissed.
The respondent pay each of Australian Franchise Association Ltd and AFA Facilitation Pty Ltd’s costs of and incidental to their notice of motion.
The respondent pay to each of Australian Franchise Association Ltd and AFA Facilitation Pty Ltd an amount to compensate it for such expense or loss as is reasonably incurred or lost by it in complying with the subpoena.
NOTE:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA No QG 35 of 1996
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
BETWEEN:LARA-BENJAMIN PTY LTD
(ACN 060 040 520)
First Applicant
AND:RONALD NOEL GORMAN and
SUZANNE ELIZABETH GORMAN
Second Applicants
AND:NOEL ARTHUR GORMAN and
NOLA KATHLEEN GORMAN
Third Applicants
AND:AMPOL ROAD PANTRY PTY LTD
(ACN 008 543 360)
Respondent
BY CROSS CLAIM:
BETWEEN:AMPOL ROAD PANTRY PTY LTD
(ACN 008 543 360)
Cross-claimant
AND:LARA-BENJAMIN PTY LTD
(ACN 060 040 520)
First Cross-Respondent
AND:RONALD NOEL GORMAN and
SUZANNE ELIZABETH GORMAN
Second Cross-Respondent
AND:NOEL ARTHUR GORMAN and
NOLA KATHLEEN GORMAN
Third Cross-Respondent
CORAM:Drummond J
DATE:29 May 1997
PLACE:Brisbane
REASONS FOR JUDGMENT
I have before me a notice of motion by two non-parties, Australian Franchise Association Ltd and AFA Facilitation Pty Ltd, to set aside two subpoenas issued in the action. The subpoenas have been made returnable well in advance of the hearing of the suit, no hearing date having yet been set, and the matter still being at a stage when interlocutory steps have not been completed.
It is obvious, and there is no attempt to suggest otherwise by the respondent, that the subpoenas have been issued, at least in part, for the purpose of obtaining information to enable it to prepare its case. The subpoenas are couched in what I regard as wide terms. They require the recipients of the subpoenas to embark upon an extensive search of their documents and to make numerous judgments as to whether particular documents that they may locate in their files are within the terms of the subpoena. For example, each subpoena requires the production of a large number of classes of documents and finishes up with a demand for production "of any other documents of any nature whatsoever … in relation to, or in connection with" six named entities, viz, all the parties on the record in the action, being documents that are also "in relation to, or in connection with" a series of particular transactions.
I would myself have some reservation about accepting that subpoenas in these wide terms, which call on the non-parties to make the kind of search that will be necessary to comply with them and the kind of judgments necessary to comply with the subpoenas, are proper ones. I say that notwithstanding the comments made in Greyhound Australia v Deluxe Coach Lines Pty Limited (1986) 67 ALR 93. It seems to me that these subpoenas, given their width and the extent of judgments required to be made by the recipients, might be thought to fall into the category of oppressive subpoenas.
However, the non-parties' attitude is that, while they oppose these subpoenas and say that third party discovery orders would be the appropriate way for the respondent to seek access to these documents, partly out of concern to ensure that they have an avenue for recouping the no doubt significant costs to which they will be put in answering the subpoenas, they have indicated that, save with respect to two of the classes of documents named in the subpoena and a third class of document in respect of which legal professional privilege is claimed, their attitude is that they would be prepared to answer the subpoena.
It seems to me obvious that the non-parties should be entitled to be paid their reasonable costs of answering the subpoenas. The respondent does not consent to that, but indicates, quite fairly and properly, that it does not wish to make any submissions against such an order being made under O 27 r 4A the Federal Court Rules.
The classes of documents in paragraphs (x) and (xi) of the schedule to the subpoena and which the non-parties object to producing seek any agreements between the two non-parties on the one side and any of the Gormans and Lara-Benjamin Pty Ltd on the other side, as well as any documents relating to any payments of money to either of the non-parties by any of the Gormans or Lara-Benjamin. The only issue in the litigation to which it is suggested that such classes of documents may be relevant is that raised by the respondent in its cross-claim in paragraph 13(f) where it alleges that Lara-Benjamin, in breach of its obligations under the franchise agreement and lease with the respondent in the action, failed to pay from gross receipts into the respondent's operator's account two sums, one of $2,250 which is alleged was received by Lara-Benjamin on 14 February 1996, and a second sum of $3,000 which it is alleged was received by Lara-Benjamin on 18 February 1996.
Lara-Benjamin, in its reply to the cross-claim, admits that it has not paid these sums as required by the franchise agreement and lease. However, Lara-Benjamin pleads, in effect, an entitlement to set off those amounts in respect of the liability it says the respondent in the action is under an obligation to pay it for misleading and deceptive conduct.
It seems clear that the documents are not sought by the respondents for any legitimate purpose in preparing its answering case to the applicants in the action or for preparing its cross-claim, given the admission in the pleading by Lara-Benjamin in respect of these two sums. It is unrealistic not to acknowledge that the two non-parties to the litigation have been involved in extensive litigation arising out of the allegations that they have unlawfully maintained franchisees in running actions against franchisors. That is, that they have, as part of their own business activities, engaged in maintaining the sort of litigation that has been brought by the applicants against the respondent in the present proceedings. Given the tenuous link to the issues in the litigation that documents in classes (x) and (xi) of the subpoena have, it is, in my opinion, fair to infer that the real purpose that the respondent has in seeking access to these classes of documents is not for the purpose of assisting it in running the litigation, but rather for the purpose of fishing to see if it might have a basis for a claim against the two non-parties.
I would not therefore permit the respondent to use its subpoenas for the purpose of extracting, from the non-parties, documents in either of these two classes.
So far as privileged documents are concerned, the solicitor for the non-parties has described two documents which may possibly be the subject of claims of privilege by the applicants, although it is unclear as to whether a claim of privilege might not also be able to be maintained by the non-parties on their own account in respect of those documents, either in answer to the subpoena or in answer to a third party discovery application, if the respondent had proceeded that way.
It is accepted that it is not possible to reach any firm conclusion on whether or not the non-parties may be able to resist production of these two documents, a transcript and a letter, in reliance upon this claim for privilege. I will therefore give the non-parties an opportunity to file such material as they may be advised in support of a claim of privilege.
I certify that this and the preceding four pages are a true copy of the reasons
for judgment herein of the Honourable Justice Drummond.
Associate: Date: 29 May 1997
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