Michael Wilson & Partners Ltd v Nicholls (No 5)
[2022] ACTCA 39
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
COURT OF APPEAL
Case Title: | Michael Wilson & Partners Ltd v Nicholls (No 5) |
Citation: | [2022] ACTCA 39 |
Hearing Date: | 3 May 2022, 21 July 2022 |
DecisionDate: | 21 July 2022 |
ReasonsDate: | 26 July 2022 |
Before: | Loukas-Karlsson J |
Decision: | See [51]-[52] |
Catchwords: | APPEAL – APPEAL FROM SUPREME COURT – CIVIL – application for security for costs – notice to produce – whether notice should be set aside – whether notice correctly addressed – whether notice oppressive – whether notice directed at irrelevant documents |
Legislation Cited: | Court Procedures Act 2004 (ACT) s 5A |
Cases Cited: | Atarashii Stone Pty Ltd v Granite Transformations Pty Ltd (No 4) [2017] ACTSC 230 |
Parties: | Michael Wilson & Partners Ltd (Applicant) Robert Colin Nicholls (First Respondent) David Ross Slater (Second Respondent) Temujin Services Ltd (Third Respondent) Temujin International Ltd (Fourth Respondent) Temujin International FZE (Fifth Respondent) John Forster Emmott (Sixth Respondent) Effective Funds Management Pty Ltd (Seventh Respondent) |
Representation: | Counsel M Wilson (Applicant) J Baird (Sixth Respondent) B Glare (Seventh Respondent) |
| Solicitors Michael Wilson & Partners (Applicant) Duggan Legal (Sixth Respondent) Rothwell Lawyers (Seventh Respondent) | |
File Number: | ACTCA 36 of 2021 |
Decision under appeal: | Court/Tribunal: ACT Supreme Court Before: McWilliam AsJ Date of Decision: 30 June 2021 Case Title: Michael Wilson & Partners Ltd v Nicholls & Ors Citation: [2021] ACTSC 128 |
LOUKAS-KARLSSON J:
Introduction
At the hearing of two applications that were before me sitting as the Court of Appeal as a single judge pursuant to s 37J of the Supreme Court Act 1933 (ACT), an issue arose in relation to a notice to produce dated 11 May 2022 (the notice to produce) and served on the sixth and seventh respondent by the applicant at or around that date.
This is the second notice to produce served by the applicant in relation to the sixth respondent’s application for security for costs. On 3 May 2022, I made orders setting aside the first notice to produce as that notice had not been served the requisite 14 days prior to the hearing: Michael Wilson & Partners Ltd v Nicholls (No 4) [2022] ACTCA 23 (Wilson (No 4)).
These reasons outline why I made an order on 21 July 2022 setting aside the notice to produce.
Background
At the hearing on 21 July 2022 the applicant called on the notice to produce. A copy of that notice was annexed to the fifth affidavit of Michael Wilson filed on 11 July 2022.
By the notice to produce, the applicant sought seven categories of documents. I will consider the categories in more detail later in these reasons.
The sixth respondent indicated that documents tendered earlier during the hearing comprised all relevant documents in categories 1, 2 and 3 of the notice to produce.
The seventh respondent indicated that it had no documents to produce in relation to categories 1, 2, 3, 5, 6 or 7 and that all relevant documents in relation to category 4 had already been produced to the applicant in the proceeding before the primary judge.
Having produced those documents, the sixth and seventh respondents advanced what was, in effect, an oral application to set aside the notice to produce.
It is appropriate for me to deal with the application in relation to the notice to produce for the following reasons. First, the applicant indicated that in relation to the sixth respondent he sought further documents that he submitted fell into categories 1, 2 and 3. In the result, there is at least a question raised by the applicant as to whether all documents have been produced. Accordingly, it is necessary to consider whether those parts of the notice should be set aside before considering whether some other documents ought to have been produced.
Second, in relation to the seventh respondent, it is not entirely clear whether documents previously produced in a lower court are exempt from the requirements of r 6748.
Third, the question of whether the notice to produce should be set aside in its entirety is certainly an issue that may be relevant to costs.
As I outlined in Wilson (No 4), notices to produce are governed by r 6748 of the Court Procedures Rules 2006 (ACT) (Court Procedures Rules), which provides:
6748Notice to produce
(1)A party to a proceeding may serve a notice on another party to the proceeding requiring the other party to produce to the court at the hearing of the proceeding a document or thing mentioned in the notice for the purpose of evidence in the proceeding.
NoteSee approved form 6.20 (Notice to produce) AF2008-121.
(2)The notice must be served on the other party not later than 14 days before the date set for the hearing of the proceeding unless the court otherwise orders.
(3)The other party must produce the document or thing mentioned in the notice to the court at the hearing if––
(a)the notice is served on the party in accordance with subrule (2); and
(b)the document or thing is in the party’s possession.
(4)If the party required to produce the document or thing does not produce the document or thing to the court in accordance with the notice, the party requesting the production may—
(a)give secondary evidence of the contents or nature of the document or thing; or
(b)apply to the court for an order—
(i)that the other party produce the document or thing; or
(ii)adjourning the hearing.
(5)The court may order the other party to pay any costs caused by the party’s failure to comply with the notice.
(6)The court may order the party requesting the production of the document or thing to pay any costs caused by the other party’s compliance with the notice, if the court considers the production of the document or thing to be unnecessary.
Threshold Issues
In contrast to the first notice to produce to produce, there is no issue that this notice to produce was not served with the requisite 14 days notice.
There are however two different potential threshold issues which the sixth respondent raised at the hearing. The first is that the notice to produce was called on after evidence had closed to which the sixth respondent advanced an objection on procedural grounds. As I have decided that the notice to produce should be set aside on other bases, there is no need to consider the question of whether there is a procedural bar to calling on a notice to produce after submissions have commenced.
As a general comment, however, it seems to me that in circumstances where the applicant had clearly foreshadowed at the commencement of his submissions that he would be calling on the notice to produce and there is no apparent prejudice that the sixth or seventh respondent would suffer from the course, to the extent required, leave would have been granted.
The second threshold issue relating to the notice to is in relation to which parties the notice to produce is actually addressed. The notice is addressed to “the Respondents”. The respondents are defined in the notice to produce with the following language: “The First and Second Respondent are hereinafter referred to as the “Respondents””.
As outlined above, the applicant is seeking documents from the sixth and seventh respondents.
In the cover sheet to the notice to produce, the parties are not referred to in the same manner as they are listed on the Court file, rather the sixth respondent is identified as “Respondent/First Joined Party …” and the seventh respondent is referred to as the “Respondent/Second Joined Party”. The first and second respondents (as recorded on the Court file) are referred to as the “First Judgment Debtor” and the “Second Judgment Debtor” respectively.
It follows that the notice to produce does not identity any party as either the “First Respondent” or the “Second Respondent” and the notice does not, in fact, seek documents from the first or second respondent as recorded on the Court file.
A notice to produce operates in a similar manner to a subpoena, it imposes strict obligations on parties, requiring them to produce documents in their control within a fixed time. Critically, issuing a notice to produce does not require a court order. As such, it is essential that parties correctly identify the addressee of a notice to produce and clearly identify the documents they are seeking by way of the notice.
Such identification is necessary to ensure, amongst other things, that the Court can take appropriate action where its rules are not complied with and to ensure that parties are aware of what documents they are required to produce and by when.
There are two relevant matters that may differentiate this case from other cases where a notice to produce has been served, but the notice is not correctly addressed. First, it is apparent that the sixth and seventh respondents were aware of the first notice to produce. Indeed, arguments were advanced before me on 3 May 2022 regarding that notice.
Second, it is apparent that the notice has been served on the sixth and seventh respondent and there is no evidence before me indicating either of those respondents raised any issue regarding confusion as to whom the notice was directed to prior to the hearing on 21 July 2022.
Despite these differentiating factors, given the obligations imposed by a notice of this type and the importance of correctly addressing the notice, in my view, the failure to properly address the notice to produce would prevent the applicant from calling on the notice in regard to the sixth and seventh respondent as at the date of the hearing.
I note that, in my view, it is also relevant that the applicant, while arguably a self-represented party, is a lawyer admitted in multiple jurisdictions including Australia and with many decades of experience in practice. This is not a situation where a self-represented party is being punished for a technical rule breach due to inexperience or inadvertence.
For the reasons that follow, however, I decided to make an order setting aside the notice, rather than an order noting that it could not be called upon. That approach was preferable in my view given that this was the second notice to produce served in relation to the application for security for costs and because it was preferable to rule on the substantive merits of the notice itself.
Such a course, in my view, best accords with the overarching purpose contained in s 5A of the Court Procedures Act 2004 (ACT) as it provides certainty to the applicant and prevents a further issue relating to, in effect, an identical or similar notice to produce arising later in the proceedings.
Should the Notice to Produce be set aside?
The oral application to set aside the notice to produce was advanced on three bases. First, that the documents sought were not relevant, second that the documents sought were privileged, and third, that the notice was oppressive (T39.11-14).
I note that there are few Supreme Court judgments dealing with the requirements of r 6748, doubtless because issues concerning notices to produce are generally dealt with intra-parties, without the need to involve the Court.
I further note that the text of r 6748 does not clearly outline the bases on which a notice to produce may be set aside by the Court. Nor is there, as there is in the case of a subpoena a defined process by which an application to set aside a notice to produce must be brought.
While it would certainly be desirable for the rules to outline the process for a party to seek to set aside a notice to produce and to provide guidance on the bases on which such an application could be brought, there was appropriately no suggestion advanced by the applicant that this Court could not make an order setting aside a notice to produce, nor was there any suggestion that the applicant has in any way been prejudiced by that course being taken by way of an oral application.
Notices to produce have previously been set aside by the Court. For example, in Atarashii Stone Pty Ltd v Granite Transformations Pty Ltd (No 4) [2017] ACTSC 230, Mossop J dealt with an application in proceeding seeking to set aside parts of a notice to produce. In that judgment, Mossop J made the following observations:
(a) What is required by a notice to produce is to produce all documents outlined in the notice, there is no limitation within r 6748 limiting the rule to relevant documents. Where a notice seeks irrelevant documents, the remedy is to seek to have the notice set aside: at [12];
(b) “There is no implied qualification of relevance or admissibility that would allow an unacceptably broad item to be read down so as to limit it to a reasonable scope”: at [12];
In that judgment, Mossop J also indicated that a notice could be set aside where it was oppressive or impractical (at [23], [27]). His Honour also set aside parts of the notice where the breadth of the material sought was too broad (at [12], [23]).
In my view, it is apparent that a notice to produce can be set aside by the Court on the bases identified by Mossop J. Were it otherwise, parties could on the face of r 6748 seek privileged or irrelevant material with no remedy available to the opposing party to object.
Drawing on the reasons of Mossop J, without seeking to provide an exhaustive list, in my view, the following factors are relevant to the question of whether the notice should be set aside:
(a) Whether the notice sought material that was relevant;
(b) Whether the notice is oppressive;
(c) Whether compliance with the notice is impractical; and
(d) Whether the notice is an abuse of process.
I similarly endorse the observations of Mossop J that categories of documents are not to be read down or limited in some way by the Court to imply some standard of reasonableness. The documents sought in the notice are the documents described in each of the categories. Parties must provide all documents that fall within the categories unless they bring an application to have the notice (or parts of the notice) set aside by the Court.
It is then for the Court to determine whether any category of documents should be set aside.
The categories of documents sought by the notice to produce are in the following terms:
1. all Costs/Fee Disclosure Agreements, and all related documents and correspondence as to the engagement by the Respondents of all … [list of individuals’ names] and others, howsoever relating to these proceedings, and also the proceedings below, whether directly or indirectly, from 22 May 2015 to date;
2. all documents and correspondence as to all any [sic] understandings, agreements and arrangements as to the liability for, financing and funding of these proceedings, and also the proceedings below, whether directly or indirectly, from 22 May 2015 to date;
3. all documents and correspondence as to all and any alleged liability for and the funding and payment of all fees, disbursements, out-of-pocket and third-party costs, howsoever relating to these proceedings, and also the proceedings below, whether directly or indirectly, from 22 May 2015 to date;
4. all documents and correspondence as to the alleged loan agreements and purported funding by the Second Respondent, of both the Second Judgment Debtor, the First Respondent, as well as the Temujin Partnership (without limitation those from 11 June 2012 onwards in Australia, and also of 13 June 2015 onwards in the UK;
5. all records of all WIP (work-in-progress), pending time, fees, costs, disbursements, third-party and out-of-pocket costs and expenses, accrued due and accruing, howsoever relating to these proceedings, and also the proceedings below, whether directly or indirectly, from 22 May 2015 to date;
6. all invoices, bills, fee notes and statements of account, to be issued, issued and paid (whether in whole or in part, and from whatever sources or origin) howsoever relating to these proceedings, and also the proceedings below, whether directly or indirectly, from 22 May 2015 to date;
7. all documents and correspondence passing between the Respondents … [list of individuals’ names] … Duggan Legal … [list of individuals’ names] on the one hand and [list of individuals’ names] SV Partners, Revive Financial, Mills Oakley [list of individuals’ names] against MWP howsoever in relation to NSD 428 of 2020 and NSD 767 of 2021, and the purported rental, marketing and sale of the Canberra Property, not copied to MWP.
As I outlined above, the respondents sought an order setting aside the notice to produce as the documents were not relevant, the documents sought were privileged or the notice was oppressive.
The applicant claimed that the documents were relevant to the question of what costs the sixth respondent was actually incurring and suggested that the documents sought were relevant to the question of whether the sixth respondent was incurring costs or had any financing agreements or otherwise.
The following points can be made about each of the categories.
(a) The documents sought in category one include all costs/fee agreements and related correspondence howsoever relating to these proceedings and the proceedings below. This part of the notice to produce will be set aside on the basis that the category is not defined appropriately, and the category is overbroad and oppressive. In particular, I note that the category calls for all documents from 2015 to date and outlines a number of (I presume) lawyers who are not on record in the Court of Appeal proceeding. Only documents relating to what occurred proximately to or after the filing of the application for leave to appeal could be relevant to the issue of security for costs before me. Similarly, only costs incurred in relation to counsel/solicitors on record in the Court of Appeal proceeding could be relevant. I also note that it is likely that many documents captured by the category would be privileged.
(b) The documents sought in category two relate to understandings, agreements and arrangements relating to the funding of the proceeding. This part of the notice to produce will be set aside on the basis that the documents are not relevant and the category is overbroad and oppressive. I again note that only documents relating to what occurred proximately to or after the filing of the application for leave to appeal could be relevant to the issue of security for costs before me.
(c) The third category of documents covers a similar scope to category two. It will also be set aside on the basis that the documents are not relevant and the category is overbroad and oppressive. I again note that only documents relating to what occurred proximately to or after the filing of the application for leave to appeal could be relevant to the issue of security for costs before me.
(d) The fourth category of documents again relates to loan agreements and funding arrangements purportedly made by the second respondent [the seventh respondent]. Again, such arrangements are not relevant to the security for costs application or to the question of whether the primary judge erred. I further note that the fourth category relates to documents from 11 June 2012 in Australia and 13 June 2015 in the United Kingdom. Some of the documents sought in this category therefore predate the filing of the original application in this jurisdiction. This part of the notice will be set aside on the basis that that the documents are not relevant, and the category is overbroad and oppressive.
(e) The fifth category appears to relate to fees incurred in the proceedings on appeal and before the primary judge. To the extent it relates to fees before the primary judge, the documents are not relevant to any issue on the security for costs application or the appeal. Further, the category will be set aside on the basis that that the category is oppressive, it calls for far more documents than necessary to the security for costs application.
(f) The sixth category of documents refers to “all invoices … from whatever source or origin …”. It is hard to imagine a broader category of documents. The category was said to be relevant by the applicant to the question of whether any bills were being issued by the sixth respondent’s representatives and whether any such bills were actually paid by the sixth respondent. If that is truly the purpose, then a far narrower set of documents could have been sought. That category will be set aside on the basis that the category is overbroad and oppressive, and compliance would not be practical. I also note that it is likely that many of the documents captured by the category would be privileged.
(g) The documents sought in category seven are all “documents and correspondence” that relate to what appears to be two federal court proceedings and a Canberra Property. The Canberra Property is not defined in the notice to produce. This part of the notice to produce will be set aside on the basis that the documents sought are not relevant to this proceeding, the category is not defined appropriately, and the category is overbroad and oppressive. I also note that it is likely that many of the documents captured (at least in relation to the Federal Court proceedings) by the category would be privileged.
The central argument advanced by the applicant as to the relevance of the documents sought by the notice to produce was that they are relevant to the question of the costs estimate underpinning the claim for $22,500 in security for costs. The notice to produce, however, is far broader than would be required to answer that question. The documents sought cover correspondence over a decade and which, on their face, have no relevance to this proceeding.
In particular, the notice to produce requires documents relating to this proceeding or the proceeding below dating back to 2015 (and in one case 2012). Those documents could not be sensibly said to be relevant either to the questions before the Court now, or the questions that will be before the Court at the hearing of the application for leave to appeal.
The categories of documents sought in the application are also extremely vague. Notices to produce impose onerous obligations on parties and require documents to be produced relatively quickly. Given those obligations, the Court expects that notices are carefully drafted to ensure they are directed to relevant and clearly defined categories such that parties can comply with their obligations and so that the Court can determine when a party has failed to comply with their obligations.
In relation to the question of privilege, I note that Mr Wilson advanced an argument that in addition to appearing for the applicant he was appearing qua a number of other individuals/entities (namely the first to fifth respondents). I understand that such a claim was advanced to counter the suggestion by the sixth respondent that some documents were privileged and could not be produced.
Without needing to decide whether Mr Wilson has acquired the rights that he claims or whether any such acquisition could ever defeat a claim for privilege (both propositions that appear doubtful to say the least), again the central issue with the applicant’s suggestion is the scope of documents that could be relevant to the issue before me or the issue that will be before the Court when hearing the substantive leave to appeal application.
Before me are questions relating to an application for security for costs. In general, the relevant factors (and therefore issues) are the list of matters outlined in rr 1901 and 1902 of the Court Procedures Rules.
This is because, if I am satisfied that one of the sub-rules in r 1901 is met, I may make an order awarding security for costs. Some of the factors relevant to that assessment are then outlined in r 1902.
The central challenge to Mr Wilson’s submission regarding privilege is that the documents that are relevant to the application before me are matters that have arisen after the application for leave to appeal has been filed: ie. what assets does the applicant have in the jurisdiction to satisfy a costs order, is the applicant currently resident in Australia, what costs will the sixth respondent incur in defending the proceedings.
Any claim that the applicant has somehow acquired rights from other parties to the proceeding and these may defeat some claim for privilege as he is purportedly standing as a member of the Temujin Partnership cannot defeat the sixth respondent’s claim for privilege in his personal capacity over the relevant legal documents, that is to say documents that have come into existence after the application for leave to appeal has been filed (ie. fee agreements with his current lawyers).
I confirm the order made on 21 July 2022, namely that: “the notice to produce dated 11 May 2022 is set aside”.
In relation to costs, at the hearing of the application for security for costs and the related application I reserved the question of costs and indicated that the parties would have leave to provide written submissions directed to the question of costs following the provision of my reasons. Those submissions should also address the question of costs incurred in relation to the notice to produce. The timetabling for those submissions and the length of those submissions will be addressed in the judgment concerning security for costs.
| I certify that the preceding fifty-two [52] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Justice Loukas-Karlsson Associate: Andrew Ray Date: 26 July 2022 |
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