Lesvos Pty Ltd & 1 ors v Penrith Whitewater Stadium Ltd

[2006] NSWSC 820

CITATION:	Lesvos Pty Ltd & 1 ors v Penrith Whitewater Stadium Ltd [2006] NSWSC 820
HEARING DATE(S):	23/6/06
JUDGMENT DATE :	17 August 2006
JUDGMENT OF:	Bell J at 1
DECISION:	1. Set aside the subpoena addressed to Penrith Whitewater Stadium Limited issued on 9 November 2005 returnable on 29 November 2005.
CATCHWORDS:	Application to set aside subpoena
CASES CITED:	Commissioner for Railways v Small (1938) 38 SR 564 NSW Commissioner of Police v Tuxford [2002] NSWCA 139
PARTIES:	Lesvos Pty Ltd (ACN 078 840 338) (1st Plaintiff) Koffee Pty Limited (ACN 056 318 882) (2nd Plaintiff) Penrith Whitewater Stadium Ltd (ACN 083 662 140) (1st Defendant) Penrith City Council (2nd Defendant)
FILE NUMBER(S):	SC 20147/02
COUNSEL:	A. Street SC / D. Baran (1st and 2nd Plaintiff) M. Jacobs QC / P.J. Bambagiotti (1st and 2nd Defendant)
SOLICITORS:	Andresakis & Associates (1st and 2nd Plaintiff) Gadens (1st and 2nd Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

BELL J

Thursday 17 August 2006

20147/02 Lesvos Pty Ltd (ACN 078 840 338) & 1 ors v Penrith Whitewater Stadium Ltd (ACN 083 662 140)

JUDGMENT

1 BELL J: By notice of motion filed on 28 November 2005 the first defendant, Penrith Whitewater Stadium Limited (PWS), applied for orders including that the subpoena dated 9 November 2005 directed to Penrith Whitewater Stadium Ltd (the subpoena), or such part or parts thereof as the Court thinks fit, be set aside.

2 Mr Jacobs QC, who with Mr Bambagiotti appeared on behalf of PWS, read the affidavit of Kate Elizabeth Godhard, sworn 31 January 2006, and the affidavit of Peter Flowers, sworn 9 March 2006 in support of the motion. The plaintiffs led no evidence in support of the subpoena. An affidavit by the plaintiffs’ solicitor, Angelo Andresakis, sworn on 5 December 2005, was tendered in PWS’s case, together with a copy of the report of Chris Katehos, an accountant with Furzer Crestani Services (the Katehos report), which has been served by the plaintiffs in the proceedings.

3 The subpoena requires production of the following documents or things:

1. Copies of the Penrith Whitewater Stadium’s weekly café update sheet or data in respect to the number of visitors i.e. rafters and tour groups from the date the facility opened until 31 August 2004.
2. Copies of the data, reservation books, memorandum, notes, correspondence, record books which set out details of the number of visitors or bookings for people or groups of people to use to Penrith Whitewater facility.
3. Notes, correspondence, memorandum booking sheets, schedules etc of all major events including estimates or actual figures of the number of visitors attending each event from the date the Penrith Whitewater opened for business until 31 August 2004.
Without limiting the generality of the meaning of the word “documents”, where that word appears in this notice it includes letters, correspondence, electronic mails, facsimile transmissions, file notes, memoranda, accounting records, statements, order forms, invoices, receipts, drawings, plans and specifications, minutes of meetings and notes of meetings, deeds, dealings, authorities and consents.

4 PWS’s solicitors wrote to Mr Andresakis on 21 November 2005, contending that the subpoena was an abuse of process in that it was a fishing exercise and had not been served for the bona fide purpose of obtaining relevant evidence. Complaint was also made that the subpoena was being employed as a substitute for discovery, and that discovery had not yet been ordered. The width of the description of the documents was challenged and it was said that it imposed an unduly onerous obligation on PWS.

5 Peter Flowers is a Manager in the employ of PWS. He details the arrangements made by PWS for the storage of documents after they are no longer required for daily use. Financial documents of various types; risk agreements, booking forms and documents relating to particular PWS events are stored off-site in a shipping container. On 9 March 2006 Mr Flowers counted the number of boxes stored by PWS at this facility. There were 92 boxes containing documents falling within the range of dates specified in the schedule to the subpoena. Mr Flowers calculates that there are approximately 282,348 pages of documents contained within these boxes. Each document would have to be examined in order to determine whether it was required in answer to the subpoena.

6 Mr Flowers states that PWS has nine full time employees. He considers that it would be necessary to employ casual staff to carry out the inspection of the documents subject to the supervision of a senior member of staff. He estimates that the costs of carrying out this exercise, without making provision for the cost of supervision, would be of the order of $54,102.94.

7 In his affidavit of 5 December 2005 Mr Andresakis states that on or about 28 October 2005 he had a conversation with Chris Katehos in relation to an expert’s report and that in this conversation he was informed that the documents set out in the schedule to the subpoena would be material that would assist him in preparing his economic loss report. The Katehos Report is dated 22 June 2006 and contains an assessment of the plaintiffs’ alleged damages. Mr Katehos states therein (at [3.3]):

In assessing the plaintiffs’ claims and allegations, the following information may have been of assistance:
(a) From the plaintiffs, a copy of the plaintiffs’ income tax returns and detailed profit and loss statements for the years ended 30 June 1998 to 2002; and
(b) from the defendants, a copy of detailed financial statements including profit and loss statements and balance sheets for the Whitewater Terrace Café from 1 July 2000 to date, summarised on a financial year basis.

8 Mr Jacobs’ grounds for challenging the subpoena were that it is an abuse of process in that it is without legitimate forensic purpose and that it is oppressive.

9 Mr Street SC, who with Mr Baran appeared on behalf of the plaintiffs, submitted that Mr Flower’s affidavit was expressed in terms of considerable generality and did not identify how many of the documents in the storage facility related to the number of visitors to the Stadium. He pointed out that the subpoena was addressed to a party and that no order for discovery had been made. It was his submission that it was not unreasonable for the plaintiffs to seek to obtain material in support of their case by means of subpoena or notice to produce as an alternative to “open-ended discovery”.

10 Dealing with Mr Street’s first submission, as I read Mr Flowers’ affidavit, it is not possible to identify the number of documents containing details of visitors to the Stadium without inspecting the contents of all the boxes. Mr Flowers’ evidence was not the subject of challenge.

11 In NSW Commissioner of Police v Tuxford [2002] NSWCA 139 Brownie AJA (with whose judgment Spigelman CJ and Ipp JA agreed) observed at [19] that it was “plain beyond argument that a subpoena cannot be used as a substitute for discovery”, citing Commissioner for Railways v Small (1938) 38 SR 564 at 574.

12 In PWS’s submission the plaintiffs have not identified a legitimate forensic purpose for their subpoena. Mr Jacobs submitted that the numbers of people using the facilities at the Penrith Whitewater Stadium falls short of admitting an inference as to the number of persons who may use the kiosk. In his submission the subpeona is merely fishing: Commissioner for Railways v Small at 575, “a party is no more entitled to use a subpoena duces tecum than he is a summons for interrogatories, for the purpose of “fishing”, i.e., endeavouring, not to obtain evidence to support his case, but to discover whether he has a case at all”.

13 The plaintiffs did not identify the forensic purpose for the subpoena. The only submission in this respect was:

It is not unreasonable to seek to obtain material that may assist the plaintiff to seek to make out part of its case on a very narrow area, and in our submission number of attendance at a particular venue over a period of time are purely potential fact (sic). It’s for the plaintiffs quantifying its loss (T 23/06/06 62.8-13).

14 The onus is upon the plaintiffs to identify the forensic purpose for its subpoena. The assertion that documents identifying the number of visitors to the facility may assist in quantifying their loss is insufficient. In any event, the terms of the schedule are of such breadth that many documents may be caught that do not fall within the identified purpose: documents (as defined) relating to “all major events” (whatever that may mean) are caught even if they do not contain estimates, or the figures, of the number of visitors

15 In Tuxford Brownie AJA said (at [12]):

Even read down in this way, the subpoena calls for “all” documents, and it refers explicitly to “originals or copies” held by or for the person named, or in the offices named, and it is neither right to say that a person served with a subpoena can read it down in this manner, nor that a party who requests the issue of the subpoena can say to the recipient that the subpoena should or even might be read down in this way. In the ordinary course of events, a subpoena is a peremptory order of the court, to be obeyed unless the court makes an order to the contrary. It should be framed in terms of sufficient precision and certainty, to enable the recipient to know what he or she must produce, and to enable the court to give a just ruling, if there is to be a suggestion that the recipient should be punished for failing to produce all of the documents called for.

16 I consider that the schedule to the subpoena is drafted in terms that lack precision. In any attempt to comply with it PWS would be required to sort through a mass of documents for the purpose of endeavouring to determine whether any of them are relevant; Commissioner for Railways v Small at 574 and Tuxford at [13]. It is, as PWS submitted and as it seemed to me the plaintiffs acknowledged, being employed as a substitute for discovery.

17 PWS has made good its challenge to the subpoena on each of the grounds that it advanced.

18 In written submissions PWS sought an opportunity to address written submissions in support of an application for a special order for costs. I propose to allow the PWS 14 days in which to file and serve written submissions on the question of costs and to allow the plaintiffs seven days thereafter to file their submissions.

19 For these reasons I make the following orders.

ORDER

1. Set aside the subpoena addressed to Penrith Whitewater Stadium Limited issued on 9 November 2005 returnable on 29 November 2005.

2. The first defendant has 14 days from to-day’s date in which to file and serve submissions relating to the costs of the motion.

3. The plaintiffs have seven days thereafter to file and serve submissions relating to the costs of the motion.

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