Mineral Resources Limited v Destec Pty Ltd [No 2] - [2021] WASC 357

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   MINERAL RESOURCES LIMITED -v- DESTEC PTY LTD [No 2] [2021] WASC 357
CORAM:   ACTING REGISTRAR HOSKING
HEARD:   21 MAY 2021
DELIVERED          :   21 OCTOBER 2021
FILE NO/S:   CIV 1465 of 2020
BETWEEN:   MINERAL RESOURCES LIMITED
First Plaintiff
CRUSHING SERVICES INTERNATIONAL PTY LTD
Second Plaintiff
AND
DESTEC PTY LTD
First Defendant
STEPHEN LESLIE WYATT
Second Defendant

FILE NO/S: CIV 1466 of 2020
BETWEEN: CRUSHING SERVICES INTERNATIONAL PTY LTD
First Plaintiff
MINERAL RESOURCES LIMITED
Second Plaintiff
AND
STEPHEN LESLIE WYATT
Defendant

Catchwords:

Practice and procedure - Subpoenas to produce documents - Applications to set subpoenas aside - Whether subpoenas are an abuse of process - Whether subpoenas serve a legitimate forensic purpose - Turns on own facts

Legislation:

Corporations Act 2001 (Cth), s 183(1)
Rules of the Supreme Court 1971 (WA), O 26A r 4, O 36B r 8A(2)

Result:

Defendants' applications to set aside subpoenas to OPS Screening & Crushing Equipment Pty Ltd and Rio Tinto Limited allowed

Category: B

Representation:

CIV 1465 of 2020

Counsel:

First Plaintiff	:	Mr D Banda & Mr M L Bennett
Second Plaintiff	:	Mr D Banda & Mr M L Bennett
First Defendant	:	Mr J Garas
Second Defendant	:	Mr J Garas

Solicitors:

First Plaintiff	:	Bennett + Co
Second Plaintiff	:	Bennett + Co
First Defendant	:	Armeli & Molony Lawyers
Second Defendant	:	Armeli & Molony Lawyers

CIV 1466 of 2020

Counsel:

First Plaintiff	:	Mr D Banda & Mr M L Bennett
Second Plaintiff	:	Mr D Banda & Mr M L Bennett
Defendant	:	Mr J Garas

Solicitors:

First Plaintiff	:	Bennett + Co
Second Plaintiff	:	Bennett + Co
Defendant	:	Armeli & Molony Lawyers

Case(s) referred to in decision(s):

Apache Northwest Pty Ltd v Western Power Corporation (1998) 19 WAR 350
Astral Land Pty Ltd v Golden Commercial Pty Ltd (No 2) [2013] WASC 368
Boase v Axis International Management Pty Ltd [No 3] [2012] WASC 498
BWS v ARV [No 2] [2021] WASCA 62
Darbyshire v Gilbert [2006] WASCA 13
Green v Fairfax Media Publications Pty Ltd [No 2] [2020] WASC 485
Hancock Prospecting Pty Ltd v Hancock [2013] WASC 290
Harvard Nominees Pty Ltd v Tiller [2019] FCA 1672
Ives v Lim [2010] WASCA 136
Jensen v Nationwide News Pty Ltd [No 6] [2018] WASC 415
Kingsfield Holdings Pty Ltd v Sullivan Commercial Pty Ltd [2013] WASC 347
Marshall v Smith [2013] WASC 432
Mineral Resources Ltd v Destec Pty Ltd [2021] WASC 216
Singh v Friedman [No 2] [2016] WASC 39
Van Duren v Hammond & Roberts Pty Ltd [2017] WASC 308
Weeks v Nationwide News Pty Ltd [No 3] [2019] WASC 268
Western Metropolitan Regional Council v Dicom AWT Operations Pty Ltd [2018] WASC 81
Wookey v Quigley [No 5] [2011] WASC 275

ACTING REGISTRAR HOSKING:

This is an application by the defendants to these consolidated proceedings to set aside two subpoenas to produce documents which were issued by the court on 31 March 2021 at the request of the plaintiffs. The first subpoena was issued to OPS Screening & Crushing Equipment Pty Ltd (OPS subpoena) and the second subpoena was issued to Rio Tinto Limited (Rio Tinto subpoena).
The background to these consolidated proceedings was summarised by her Honour Hill J in Mineral Resources Ltd v Destec Pty Ltd[1] which, for convenience, is set out below:
On 2 April 2020, the first plaintiff commenced civil proceedings CIV 1465 of 2020 against the first defendant. On the same date, the plaintiffs commenced civil proceedings CIV 1466 of 2020 against the second defendant.
In CIV 1465 of 2020, the first plaintiff pleads that it entered into two agreements with the first defendant: a general services agreement for the provision of consultancy services on or about 17 April 2015; and a separate general services agreement for the provision of engineering and modelling services on or about 16 March 2017. The first plaintiff alleges that in breach of these agreements, the first defendant has failed to return all of the first plaintiff's documents then in its possession. By way of relief, the first plaintiff seeks delivery up of any documents which are the property of the first plaintiff, an injunction to restrain the first defendant from using or disclosing any information in the documents, as well as damages.
In CIV 1466 of 2020, the plaintiffs plead that on 26 June 2006, the second plaintiff and the second defendant entered into an executive services agreement. This agreement was terminated in about February 2015, following which the second defendant provided consulting services to the plaintiffs under a general services agreement. The plaintiffs plead that the second defendant has breached his employment agreement and the general services agreement by retaining intellectual property and confidential information of the plaintiffs. By way of relief, the plaintiffs seek delivery up of any documents which are the property of the plaintiffs, an injunction to restrain the second defendant from using or disclosing any information in the documents, as well as damages.
[1] Mineral Resources Ltd v Destec Pty Ltd [2021] WASC 216 [10] - [12].
For the reasons that follow, I find that both the OPS subpoena and the Rio Tinto subpoena should be set aside. In these reasons, I deal with the following matters:
(a)the terms of the subpoenas;
(b)the court's jurisdiction to set aside a subpoena;
(c)legal principles;
(d)the parties' submissions;
(e)disposition; and
(f)conclusion and orders.
On 12 April 2021, two letters addressed to the Principal Registrar were filed on behalf of the defendants which contained applications to set aside the subpoenas pursuant to O 36B r 8A(2) of the Rules of the Supreme Court 1971 (WA) (RSC).
The prescribed time and date to produce documents pursuant to the subpoenas was 10.00 am on 12 April 2021 for the OPS subpoena and 10.00 am on 21 April 2021 for the Rio Tinto subpoena. On 14 April 2021, I made orders extending the time for compliance in respect of both subpoenas to 14 days after the determination of the applications to set aside the subpoenas, or such date as is fixed by the court at the delivery of reasons.
In support of the applications, the defendants rely on their written submissions, the affidavit of Morne Van Zyl sworn 5 May 2021 (Van Zyl affidavit) and a minute of proposed confidentiality orders, which were all filed on 5 May 2021. The defendants also refer to the plaintiffs':
(a)originating summons filed on 18 February 2021 in the proceeding known as CIV 1093 of 2021, for pre-action discovery under RSC O 26A r 4 against the defendants and two other companies; and
(b)inspection application filed on 29 April 2021 in these consolidated proceedings.[2]
[2] Defendants' submissions [7] and [20].
In opposition to the applications, the plaintiffs rely on the written submissions dated 18 May 2021 and the affidavits of Nicholas James Rohr sworn on 28 April 2021 (Rohr affidavit) and Jessica Sara Chapman affirmed on 18 May 2021.

The subpoenas

In the schedule of documents to the OPS subpoena, the plaintiffs seek production of the following documents:
1.Documents referring to purchase orders received by OPS from the Destec Parties from 1 January 2020 to the present date for the supply and/or hire of equipment or crushing components, equipment or parts to the Destec Parties.
2.Documents recording any agreements between OPS and the Destec Parties from 1 January 2020 to the present date for the supply and/or hire of equipment or crushing components, equipment or parts to the Destec Parties.
3.Documents recording invoices issued by OPS to the Destec Parties from 1 January 2020 to the present date for the supply and/or hire of equipment or crushing components, equipment or parts to the Destec Parties.
4.Communications between OPS and the Destec Parties from 1 January 2020 to the present date with respect to the supply and/or hire of equipment or crushing parts to the Destec Parties.
In the schedule of documents to the Rio Tinto subpoena, the plaintiffs seek production of the following documents:
1.Documents provided by the Destec Parties to (or on behalf of) Rio Tinto relating to any proposals or tenders submitted by the Destec Parties from 1 January 2020 to the present date for the supply of crushing plants to (or on behalf of) Rio Tinto, including but not limited to:
1.1     tender documents;
1.2     engineering, technical and mechanical drawings;
1.3     operating procedure manuals; and
1.4     safety management plans.
2.Communications between (or on behalf of) Rio Tinto and the Destec Parties relating to the supply of crushing plants or crushing services by the Destec Parties from 1 January 2020 to (or on behalf of) Rio Tinto.

In both subpoenas, 'Destec Parties' is defined to mean:
(a)Mr Stephen Leslie Wyatt;
(b)Destec Pty Ltd (ACN 604 671 570); and/or
(c)any officers, employees or agents of the parties listed at (a) and (b) above.

Legal principles

The court's jurisdiction to set aside a subpoena

The court has jurisdiction to set aside a subpoena pursuant to the RSC O 36B r 8A(2), which provides as follows:
On a request by the addressee, a party or any other person with a sufficient interest, the court may, by order -
(a)set aside the subpoena or part of it; or
(b)make or vary directions in relation to removing from and returning to the court, and the inspection, copying and disposal, of any document or thing that has been or is to be produced under it; or
(c)grant other relief in respect of it.
The court may also exercise its inherent jurisdiction to set aside a subpoena. A subpoena may be set aside where it does not serve a legitimate forensic purpose, is oppressive or is otherwise an abuse of process.[3]

Legitimate forensic purpose

[3] Jensen v Nationwide News Pty Ltd [No 6] [2018] WASC 415 [26].

In determining whether a subpoena is for a legitimate forensic purpose, the court will consider whether the documents sought:
(a)give rise to a line of inquiry which is relevant to the issues before the trier of fact;
(b)are required for a fair disposal of the action; and
(c)allow the parties to appraise the strengths and weaknesses of their and their opponent's case.[4]
[4] Weeks v Nationwide News Pty Ltd [No 3] [2019] WASC 268 [9].
Apparent relevance is a low threshold. Ultimately, the relevance of the documents produced will be a question for determination at trial. It is not appropriate for the court to embark on a detailed preliminary enquiry involving evidence from the issuing party and the recipient of the subpoenas.[5]
[5] Van Duren v Hammond & Roberts Pty Ltd [2017] WASC 308 [32]; Boase v Axis International Management Pty Ltd [No 3] [2012] WASC 498 [10] - [19].
To determine whether subpoenaed documents are relevant to matters in issue, the court must look to the pleadings.[6] The issuing party must identify expressly and with precision the legitimate forensic purpose for which it seeks access to the documents. The issuing party must then satisfy the court it is 'on the cards' that the documents would materially assist the issuing party in its case.[7] A document may provide material assistance even if it is not admissible in the proceedings.[8] A legitimate forensic purpose extends to material which may relate to the cross‑examination of a witness.[9]

Abuse of process and oppression

[6] Wookey v Quigley [No 5] [2011] WASC 275 [8] - [9].

[7] Weeks v Nationwide News Pty Ltd [No 3] [11].

[8] Green v Fairfax Media Publications Pty Ltd [No 2] [2020] WASC 485 [9].

[9] Darbyshire v Gilbert [2006] WASCA 13 [14].

A subpoena may be an abuse of process of the court when it can be characterised as 'fishing', on the basis it does not seek to obtain evidence to support a party's case or defence, but rather to assist that party to discover whether it has a case or defence at all. A subpoena will also be an abuse of process where it has been used for the purpose of obtaining discovery against a third party or where it would be oppressive to require a party to comply with the subpoena.[10]
[10] Hancock Prospecting Pty Ltd v Hancock [2013] WASC 290 [23].
Confidentiality is not of itself a ground for setting aside a subpoena.[11] However, confidentiality is a factor to be taken into account, together with those tests for oppression which are determined by reference to the breadth of the subpoena, the definition of documents involved and the type of degree of burden placed on those to whom the subpoena is addressed, in relation to the inspection of documents produced.[12]
[11] Western Metropolitan Regional Council v Dicom AWT Operations Pty Ltd [2018] WASC 81 [10].
[12] Apache Northwest Pty Ltd v Western Power Corporation (1998) 19 WAR 350; Jensen v Nationwide News Pty Ltd [No 6] [48].

The parties' submissions

Defendants' submissions

The defendants submit that the subpoenas are a fishing expedition and are otherwise not for a legitimate forensic purpose. The defendants contend that this emerges from there being no 'definite case set up' on the pleadings that would support the legitimate use of the subpoenas, and the plaintiffs having invoked RSC O 26A r 4 to obtain pre-action discovery of documents relating to the same issue.[13] The defendants submit a party is only able to obtain documents by subpoena that are relevant to a 'definite case set up' on the pleadings and that a party cannot '[put] up nothing, then [seek] to fish around for some basis to support a plea…', citing Marshall v Smith[14] and Kingsfield Holdings Pty Ltd v Sullivan Commercial Pty Ltd[15] as authorities for those propositions.[16]
[13] Defendants' submissions [1] - [3], [32] and [35].
[14] Marshall v Smith [2013] WASC 432 (Marshall v Smith) at [9] - [12]
[15] Kingsfield Holdings Pty Ltd v Sullivan Commercial Pty Ltd [2013] WASC 347 (Kingsfield Holdings) at [40] and [47].
[16] Defendants' submissions [22].
With reference to the RSC O 26A r 4 application, and the requirements to be satisfied in relation to the same, the defendants suggest the plaintiffs must therefore be taken to be contending that they:
(a)have not reached a decision about whether to take proceedings;
(b)'may' have a cause of action against the defendants and/or two other companies as 'potential part[ies]';
(c)'want' to commence proceedings against the 'potential party'; and
(d)have not been able to obtain sufficient information 'to enable the decision to be made' as to whether to commence proceedings.[17]
[17] Defendants' submissions [3] and [25], citing BWS v ARV [No 2] [2021] WASCA 62 [27] - [37] and Ives v Lim [2010] WASCA 136 [18].
The defendants submit that position is incompatible with the issuing of the subpoenas, by which the plaintiffs must be taken to contend are needed to support the commenced and pleaded case. The defendants submit the subpoenas, if not set aside, would circumvent the requirements of RSC O 26A r 4 and constitute an abuse of process.[18]
[18] Defendants' submissions [4].
If the subpoenas are not set aside, the defendants submit the appropriate course is to limit access and inspection under a confidentiality regime. This is premised on the basis that the second plaintiff and first defendant are trade rivals[19] and information sought by the subpoenas is confidential and commercially sensitive.[20]
[19] Defendants' submissions [12]; Van Zyl affidavit [9] - [10], [12] - [20].
[20] Defendants' submissions [5].
In relation to the Rio Tinto subpoena, the defendants submit Rio Tinto invited the first defendant to tender for the supply of crushing services at the Gudai-Darri (Koodaideri) Incremental Tonnes Project. Both the first defendant and second plaintiff submitted tenders and the first defendant’s tender was successful.[21]
[21] Defendants' submissions [13]-[14]; Van Zyl affidavit [12], [14] - [15].
The first defendant's tender proposed utilising the 'Destec Plant' on a 'build-own-operate' basis, although the conveyors and load out infrastructure were bespoke and designed for the project. The defendants submit that the design of the Destec Plant and the bespoke aspects of the design for the Rio Tinto project have significant unique features, especially in relation to its assembly, testing, transportation and installation. It is said to be highly confidential and commercially sensitive.[22]
[22] Defendants' submissions [14]-[15]; Van Zyl affidavit [14], [16] - [20].
The defendants submit no definite case is set up on the pleadings with respect to the Rio Tinto tender involving alleged breach of the relevant agreements or other equitable or statutory duties.[23] The defendants further submit there are no pleaded allegations to the effect that, in breach of the relevant agreements, the defendants used any alleged confidential information to design and construct a crushing and screening plant that was the subject of the first defendant's Rio Tinto tender, or at all.[24]
[23] Defendants' submissions [32].
[24] Defendants' submissions [10].
The defendants contend the highest the plaintiffs put their case is in par 27.2 of the consolidated statement of claim, which pleads it is to be 'inferred' the second defendant 'used or caused another entity to use the Copied Files to the detriment of [the plaintiffs]', with no particulars provided in respect of 'Copied Files', the alleged 'use' and no identification of the other 'entity'.[25]
[25] Defendants' submissions [33].
The defendants submit that by the subpoenas, the plaintiffs seek documents from Rio Tinto and OPS implicitly (but not set up on the pleadings) to support their case that the design and construction of the Destec Plant, and its use in the Rio Tinto tender, was in breach of the relevant agreements or other equitable or statutory duties.[26] The defendants further submit it is not permissible to 'fish around' for some basis to support a plea, contending that is what the plaintiffs are attempting to do by the subpoenas.[27]
[26] Defendants' submissions [36].
[27] Defendants' submissions [34].
The defendants submit the plaintiffs have invoked RSC O 26A r 4 to obtain pre-action discovery of documents, which relate to the same issue as the subpoenas and the plaintiffs’ inspection application.
Counsel for the defendants refers to a letter sent on 10 February 2021 (before the application for pre-action discovery was made) from the solicitors for the plaintiffs.[28] Counsel for the defendants submits certain statements made in that letter on behalf of Mineral Resources Limited (MRL) and Crushing Services International Pty Ltd (CSI) (together, the plaintiffs) constitute admissions that the plaintiffs do not know whether their intellectual property has been used in the design or construction of the Destec Plant, nor whether the plaintiffs' intellectual property was used in relation to the plant the subject of the defendants' Rio Tinto tender. The letter states (among other things):
(a)'MRL understands that the crushing plant being developed by one of the Destec entities is intended to be used by Destec to provide commercial services to third parties';
(b)'MRL and CSI are entitled to evaluate whether they have claims for infringement of their intellectual property, breach of confidence and breach of the GSAs and if so the parties against whom such claims may be made'; and
(c)'In the event of refusal to provide [the requested documents] … MRL and CSI will commence proceedings … seeking orders compelling your clients to provide pre-action discovery of the requested documents and inspection'.[29]
[28] Van Zyl affidavit, MVZ-5, 42 - 45.
[29] Van Zyl affidavit, MVZ-5, 44 - 45.
Counsel for the defendants also refers to the Rohr affidavit filed on behalf of the plaintiffs in support of their inspection application. Mr Rohr in his affidavit states 'the inspection … of the Destec Crusher and if different the Rio Tinto Crusher is directly relevant to the issues in this matter'.[30] Counsel for the defendants submits no such case is pleaded and that position conflicts with and contradicts the position put in the letter of 10 February 2021, to the effect that the plaintiffs sought inspection to evaluate and ascertain whether they in fact had a cause of action.
[30] Rohr affidavit [17].

In the pre-action discovery application that was subsequently made, the plaintiffs seek to obtain 'documents recording or evidencing the designs, drawings and modules of the crushing plant under construction at [Destec's premises] in or about October 2020'. [31]
[31] Defendants' submissions [35].
In the inspection application, the plaintiffs seek orders that the plaintiffs' representatives be permitted to inspect:
(a)'crushing plant or other plant that was then under construction at [Destec's premises] in around October 2020' (which the defendants submit is materially indistinguishable from the equipment described in the pre-action discovery application); and
(b)'crushing plant that was the subject of a tender submission … to … Rio Tinto from 1 January 2020 …'.[32]
[32] Defendants' submissions [20].
The defendants contend the plaintiffs' positions regarding the pre-action discovery application, and conversely the subpoenas and inspection application, are incompatible. That is, on the one hand the plaintiffs seek pre-action discovery to obtain further information to potentially solidify a cause of action, and on the other hand, the subpoenas and the inspection application are required to support the commenced and pleaded consolidated proceedings.[33]
[33] Defendants' submissions [38].
The defendants submit the absence of a case set up on the pleadings reveals, consistent with the plaintiffs' conduct in invoking RSC O 26A r 4, that the plaintiffs are fishing to discover whether they have a case at all.[34]
[34] Defendants' submissions [39].
While the defendants concede fishing is permitted, to an extent, under RSC O 26A r 4, they submit that process is only available if the procedural requirements are met and that the subpoenas, if not set aside, would circumvent those requirements constituting an abuse of process.[35]

Plaintiffs' submissions

[35] Defendants' submissions [40].

The plaintiffs submit the defendants' applications to set aside the subpoenas should be dismissed for the following reasons. First, the subpoenas seek documents which:
(a)give rise to a legitimate line of inquiry which is relevant to the matters in issue (by reference to the pleadings);
(b)are required for the fair disposal of this action;
(c)will allow the parties in this action to appraise themselves of the strengths of their and their opponents’ respective cases.[36]
[36] Plaintiffs' submissions [1.1] and [36].
Secondly, the defendants have not shown the documents sought under the subpoenas give rise to a case or defence that is not currently pleaded.[37]
[37] Plaintiffs' submissions [1.2].
Thirdly, there is no application by either recipient of the subpoenas to the effect that the subpoenas are oppressive.[38]
[38] Plaintiffs' submissions [1.3].
The plaintiffs refer to the following parts of the pleadings which they say go to the use of the plaintiffs' confidential information by the second and/or first defendant for their own benefit and/or to the detriment of the plaintiffs.[39] The plaintiffs refer to the allegations in par 35 and par 36 of the consolidated statement of claim that:[40]
[39] Plaintiffs' submissions [10].
[40] Plaintiffs' submissions [8].
Mr Wyatt's conduct in using or causing another entity to use the Copied Files for purposes other than to discharge his obligations under the ESA or Destec to discharge its obligations under the Consulting Agreement or Engineering Agreement was unauthorised and constituted a breach of Mr Wyatt and Destec's duties of confidence to MRL and CSI. [35]
By reason of this breach of confidence:
36.1 Mr Wyatt and Destec have profited; and
36.2 MRL and CSI have suffered loss and damage. [36]
Particulars
(a)Further particulars will be provided following the close of evidence and discovery.
The plaintiffs also refer to their allegations in par 37 and par 38 of the consolidated statement of claim that:[41]
[41] Plaintiffs' submissions [9].
Mr Wyatt's conduct in copying and retaining the Copied Files and/or using or causing another entity to use the Copied Files for purposes other than in the discharge his obligations under the ESA constituted:
37.1 an improper use of the information in those files to gain an advantage for himself, and further or alternatively for Destec, and has thereby contravened section 183(1)(a) of the Corporations Act 2001 (Cth); and
37.2 an improper use of the information in those files to cause detriment to CSI, and has thereby contravened section 183(1)(b) of the Corporations Act 2001 (Cth). [37]
By reason of these contraventions:
38.1 Mr Wyatt and Destec have profited; and
38.2 MRL and CSI have suffered loss and damage. [38]
Particulars
(a)Further particulars will be provided following the close of evidence and discovery.
The plaintiffs contend the defendants' submissions (particularly the submission that the highest the plaintiffs put their case is in par 27.2 of the consolidated statement of claim) do not address the entirety of the pleadings and the substance of the allegations in par 35 to par 38 of the consolidated statement of claim and par 5.3 of the consolidated reply.[42]
[42] Plaintiffs' submissions [25].
Counsel for the plaintiffs refers to the defendants' pleaded response to par 27 of the consolidated statement of claim. Namely, that the defendants deny par 27 and state the alleged inference is not open 'and should be rejected on the evidence in any event'.[43] Counsel for the plaintiffs submits the defendants’ argument that there is 'no definite case' fails to have regard to this paragraph of the defence (containing the reference to 'on the evidence') or the consolidated reply.
[43] Consolidated defence [26].
In par 5.3 of the consolidated reply (which responds to par 22(g) of the consolidated defence), the plaintiffs allege that the files accessed, copied and/or deleted by the second defendant included files constituting the plaintiffs' property, including the plaintiffs' documents containing confidential information. The particulars provided in respect of that paragraph include (among other things) that in February 2020, the second defendant accessed, copied and/or deleted files relating to the rates charged by the plaintiffs to its clients including (among others) Rio Tinto, and the plaintiffs' drawings showing the design and construction elements for its crushing plants and other equipment for services supported by the plaintiffs to a number of their clients (noting the clients as particularised do not include Rio Tinto).
The plaintiffs submit their claim includes unlawful use of confidential information by the defendants and that the documents sought under the subpoenas will likely provide examples demonstrating the unlawful use of the plaintiffs’ confidential information around the development of a crushing and screening plant, which is the same as or similar to the crushing and screening plants developed by the plaintiffs. The plaintiffs further submit it is not necessary for them to first plead each specific example of unlawful use of confidential information to justify the issue of subpoenas.[44]
[44] Plaintiffs' submissions [26].
The plaintiffs submit the Rio Tinto subpoena seeks documents which give rise to a line of inquiry as to whether the defendants have improperly used the plaintiffs' confidential information for the benefit of the defendants or detriment of the plaintiffs.[45] They further submit that, among other things, the drawings, manuals and plans sought to be obtained will open lines of inquiry (including in cross examination):
(a)as to whether and to what extent the defendants have used the plaintiffs' drawings and designs to develop and construct their own crushing plant; and consequently
(b)were successful (at the plaintiffs' expense) in the Rio Tinto tender,[46]
in circumstances where there is evidence before the court that a crushing plant constructed by the defendants is 'strikingly similar' to the plaintiffs' Next Gen 1 crusher.[47]
[45] Plaintiffs' submissions [16].
[46] Rohr Affidavit [10].
[47] Plaintiffs' submissions [17]; Rohr Affidavit [7] and NJR-3, 164 - 182.
The plaintiffs contend the OPS subpoena seeks documents which evidence use of the plaintiffs' confidential information by the defendants.[48] OPS are one of the plaintiffs' key suppliers with respect to parts for crushing and screening plants.[49] The documents sought by the OPS subpoena include purchase orders and invoices for, agreements and communications with respect to, the supply and/or hire of equipment or crushing components, equipment or parts from OPS to the Destec Parties. The plaintiffs submit these documents will give rise to lines of inquiry as to whether the defendants are building crushing plants the same or similar to the plaintiffs' crushing plants, using the plaintiffs' confidential information.[50]
[48] Plaintiffs' submissions [18].
[49] Plaintiffs' submissions [19].
[50] Plaintiffs' submissions [20] - [21].
The plaintiffs suggest they will be able to use the documents produced pursuant to the OPS subpoena to compare the components, equipment and parts supplied by OPS to the defendants or hired by the defendants from OPS, against the components, equipment and parts used by the plaintiffs in the development crushing plant.[51]
[51] Plaintiffs' submissions [22].
The plaintiffs contend the defendants put misplaced reliance on the decisions in Marshall v Smith and Kingsfield Holdings.[52] The plaintiffs submit those decisions stand as authority for the proposition that a defendant to defamation proceedings ought to plead a defence of justification by reference to existing materials and should not be able to obtain documents by subpoena for the purposes of drafting particulars.[53]
[52] Plaintiffs' submissions [28], referring to the defendants' submissions [22], fn. 14.
[53] Plaintiffs' submissions [29], citing Marshall v Smith [6] and [11]; Kingsfield Holdings [40] and [47].
While I accept that submission and acknowledge that those decisions are generally cited in the context of defamation proceedings, they are also authorities for principles of more general application and have on occasion been cited as such.[54]
[54] See, for example, Harvard Nominees Pty Ltd v Tiller [2019] FCA 1672 [3]; Astral Land Pty Ltd v Golden Commercial Pty Ltd (No 2) [2013] WASC 368 [12].
The plaintiffs also seek to distinguish between Marshall v Smith and the present case. They contrast the circumstances of that decision, where his Honour Le Miere J found it was not appropriate to determine whether the subpoena had a legitimate forensic purpose until the pleadings were resolved, with the present case where the plaintiffs submit the pleadings have closed and the plaintiffs have provided pleadings with particulars.[55]
[55] Plaintiffs' submissions [30].
In relation to the paragraph of Kingsfield Holdings to which the defendants refer, the plaintiffs submit that the court drew an important distinction between issuing subpoenas for the purposes of putting on pleadings and a party properly invoking the forensic processes of the court to augment its position before trial.[56]
[56] Plaintiffs' submissions [31] - [32], citing Kingsfield Holdings [40] and [44].
The plaintiffs accept a legitimate forensic purpose is to be assessed based on prior pleadings and not the prior possession of evidence.[57] However, the plaintiffs refer to affidavit material they have filed in these proceedings as demonstrating that they have an underlying factual basis to support their pleadings, and directly addressing the defendants' assertion that the plaintiffs are fishing to discover whether they have a case at all.[58] The plaintiffs contend it is apparent from the affidavit material to which they refer that certain files and folders were accessed, copied or created during the period after the plaintiffs required the defendants to return the laptop to the plaintiffs and before the laptop was returned.[59]
[57] Plaintiffs' submissions [33], citing Marshall v Smith [9].
[58] Plaintiffs' submissions [33] and [35].
[59] Plaintiffs' submissions [34], Rohr Affidavit, [11] - [16], NJR-5 187 - 189, NJR-6 190 - 193 and NJR-8 196.
The plaintiffs submit documents sought in the pre-action discovery application differ in at least two respects from the documents sought by the subpoenas and the inspection application.[60] First, in the pre-action discovery application, the plaintiffs seek production of documents from additional defendants (Destec Crushers Pty Ltd and Destec Contracting Pty Ltd). The inspection application does not seek inspection from, nor do the subpoenas seek document production from, those entities.[61]
[60] Plaintiffs' submissions [37].
[61] Plaintiffs' submissions [38] - [40].
Secondly, the issues between the parties in these proceedings are different to the matters the subject of the pre-action discovery application in CIV 1093 of 2021.[62] In that application, the plaintiffs seek documents recording or evidencing the designs, drawings and modules of the Canning Vale Crusher.[63] The OPS subpoena seeks (in summary) production of documents relating to the supply or hire of equipment or crushing components, equipment or parts. The plaintiffs submit those documents may or may not relate to any components, equipment or parts used to design or construct the Canning Vale Crusher.[64]
[62] Plaintiffs' submissions [41].
[63] Plaintiffs' submissions [42].
[64] Plaintiffs' submissions [43].
The Rio Tinto subpoena seeks (in summary) production of tender documents, operating procedure manuals and safety management plans provided by the Destec Parties, and communications between those parties and Rio Tinto, in relation to the supply of crushing plants from the defendants to Rio Tinto.[65] Again, the plaintiffs submit the crushing plant the subject of the tender may or may not be the same crushing plant, or derived from the same designs, drawings and modules, as the Canning Vale Crusher. Further, that the engineering, technical and mechanical drawings in relation to the supply of crushing plants from the defendants to Rio Tinto may or may not capture some of the same documents sought in the pre-action discovery application.[66]
[65] Plaintiffs' submissions [44].
[66] Plaintiffs' submissions [45] - [46].
In making those submissions, the plaintiffs effectively acknowledge the issues between the parties in these proceedings, in respect of the subpoenas, may in fact not be different to the matters the subject of the pre-action discovery application. However, the plaintiffs maintain their position that the issue of the subpoenas is not and cannot be regarded as an attempt to circumvent the requirements of RSC O 26A r 4, because different categories of documents are sought from different parties in relation to different subject matter.[67] The plaintiffs submit the possibility of overlap in the documents does not mean the issue of the subpoenas is an abuse of process.[68]
[67] Plaintiffs' submissions [47].
[68] Plaintiffs' submissions [48].
In relation to the defendants' alternative position that a confidentiality regime should be imposed, the plaintiffs submit the defendants bear the onus of establishing why the court should impose such a regime in relation to the documents produced under the subpoenas.[69]
[69] Plaintiffs' submissions [51], citing Civil Procedure Western Australia, [39B.9.5] and Singh v Friedman [No 2] [2016] WASC 39 [34].
The plaintiffs submit the defendants have not sufficiently demonstrated why the court should exercise its discretion to impose their proposed confidentiality regime in relation to the subpoenaed documents, particularly those the subject of the OPS subpoena.[70]
[70] Plaintiffs' submissions [52] and [55].

Disposition

In the OPS subpoena, the plaintiffs seek production of documents referring to purchase orders, recording agreements or invoices issued, and communications between OPS and the Destec Parties from 1 January 2020 to the present date for the supply and/or hire of equipment or crushing components, equipment or parts to the Destec Parties.
In the Rio Tinto subpoena, the plaintiffs seek production of documents provided by the Destec Parties to (or on behalf of) Rio Tinto relating to any proposals or tenders submitted by the Destec Parties from 1 January 2020 to the present date for the supply of crushing plants to (or on behalf of) Rio Tinto, including tender documents, engineering, technical and mechanical drawings, operating procedure manuals and safety management plans, together with related communications.
The plaintiffs submit the purpose for which they seek access to the documents to be produced by the OPS subpoena is to compare the components, equipment and parts supplied by OPS to the defendants or hired by the defendants from OPS, against the components, equipment and parts used by the plaintiffs in the development of crushing plant. The plaintiffs submit these documents will give rise to lines of inquiry as to 'whether' the defendants are building crushing plants the same or similar to the plaintiffs' crushing plants, using the plaintiffs' confidential information.[71]
[71] Plaintiffs' submissions [21] - [22].
The plaintiffs submit the Rio Tinto subpoena seeks documents which give rise to a line of inquiry as to whether the defendants have improperly used the plaintiffs' confidential information for the benefit of the defendants or detriment of the plaintiffs.[72] They further submit the documents sought to be obtained will open lines of inquiry (including in cross examination) as to 'whether' and to what extent the defendants have used the plaintiffs' drawings and designs to develop and construct their own crushing plant and consequently were successful (at the plaintiffs' expense) in the Rio Tinto tender.[73]
[72] Plaintiffs' submissions [16].
[73] Plaintiffs' submissions [17].
I accept that the plaintiffs plead to unlawful use of their confidential information by the defendants. However, there is no pleading or particulars to the effect that the defendants have used the plaintiffs' confidential information, including drawings and designs, to design, develop, build or construct their own crushing plant that was the subject of the Rio Tinto tender, or at all. That issue does not arise on the pleadings. The inference pleaded at par 27 does not go that far, nor do the allegations pleaded in par 35 to par 38 of the consolidated statement of claim. Further, I do not accept the plaintiffs' submission that the defendants' responsive plea, that the alleged inference is not open 'and should be rejected on the evidence in any event', is sufficient to establish that whether the defendants are developing, building or constructing a crushing plant is a matter in issue arising from the pleadings.
Accordingly, I am not satisfied the plaintiffs have identified expressly and with precision a legitimate forensic purpose served by the subpoenas.
As to the interplay between the subpoenas and the RSC O 26A r 4 application, I accept the plaintiffs' submission that different categories of documents are sought from different parties. I consider the pre‑discovery application does not in and of itself mean the issue of the subpoenas is an abuse of process. However, I accept the defendants' submission that the concurrent pre-action discovery application and issuing of the subpoenas engenders seemingly inconsistent positions being adopted by the plaintiffs, at least as against the defendants to these proceedings.
It is evident from the plaintiffs' submissions that documents produced by the subpoenas will give rise to lines of inquiry as to 'whether' the defendants have designed, developed, constructed or built their own crushing plant using the plaintiffs' confidential information (for the purpose of the Rio Tinto tender or at all), that the plaintiffs do not know whether or not that is in fact the case.
Even if it could be said that a legitimate forensic purpose tangentially arises from the pleadings as to the defendants' alleged use of the plaintiffs' confidential information for the benefit of the defendants or detriment of the plaintiffs, the subpoenas appear to be 'fishing expeditions' to support that plea. It is not 'on the cards' that the documents sought by either of the subpoenas would materially assist the plaintiffs' case. It is not sufficient that there is a chance that something useful might turn up in the documents sought by the subpoenas.

Conclusion and orders

Both the Rio Tinto subpoena and the OPS subpoena should be set aside on the grounds that they serve no legitimate forensic purpose. The subpoenas are otherwise an abuse of process in that they may be characterised as 'fishing expeditions'.
Costs should follow the event and in circumstances where the defendants have been successful in their applications, the plaintiffs should pay the defendants' costs of the applications.
For these reasons, I propose to make orders in the following terms:
1.The subpoena issued to the proper officer of Rio Tinto Limited (ACN 004 458 404) be set aside.
2.The subpoena issued to the proper officer of OPS Screening & Crushing Equipment Pty Ltd (ACN 009 318 674) be set aside.
3.The plaintiffs pay the costs of the defendants' applications to set aside the subpoenas dated 12 April 2021, such costs to be assessed if not agreed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
IB
Court Officer
21 OCTOBER 2021