N L Tucker and Associates Pty Ltd v Barker - [2020] WASC 128

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   N L TUCKER & ASSOCIATES PTY LTD -v- BARKER [2020] WASC 128
CORAM:   MASTER SANDERSON
HEARD:   12 MARCH 2020
DELIVERED          :   23 APRIL 2020
PUBLISHED           :   23 APRIL 2020
FILE NO/S:   CIV 2110 of 2019
BETWEEN:   N L TUCKER & ASSOCIATES PTY LTD
Plaintiff
AND
RICHARD JAMES BARKER
First Defendant
SIGNAL TO NOISE PTY LTD
Second Defendant

Catchwords:

Practice and procedure - Application by plaintiff to access document redacted by defendants - Application for defendants to set aside subpoena - Turns on own facts

Legislation:

Corporations Act 2001 (Cth)

Result:

Plaintiff's application granted
Defendants' application dismissed

Category: B

Representation:

Counsel:

Plaintiff	:	G J Douglas
First Defendant	:	I F Tait
Second Defendant	:	I F Tait

Solicitors:

Plaintiff	:	Douglas Cheveralls Lawyers
First Defendant	:	Tait & Co
Second Defendant	:	Tait & Co

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

Hancock v Rinehart [2019] NSWSC 141

MASTER SANDERSON:

This is the return of two applications both made by letter to a registrar. The first in time is the plaintiff's application of 11 December 2019. The plaintiff sought the following orders:
1.Within 14 days of the date of this order the first defendant give further discovery on affidavit to the plaintiff of the documents which are or have been in the possession, custody or power of the first defendant limited to the following:
(a)all documents relating to flight and accommodation the first defendant during the months of June 2018 and July 2018 to and from Melbourne (including any indirect routes to Melbourne);
(b)all documents relating to the first defendant's meeting with Hans Peter Bauer and/or Marcel Bredow between the dates of 19 July 2018 to 29 July 2018 (inclusive).
2.Within 14 days of the date of this order, the first defendant produce, and allow the plaintiff to make unredacted copies of, documents numbered 5, 6, 14 and 16 in the List of Documents annexed to the affidavit of Richard James Barker sworn 9 September 2019.
By letter dated 12 December 2019 the defendants sought the following orders:
1.The subpoena addressed to Optus Mobile Pty Ltd on 14 November 2019 ('Subpoena') be set aside.
2.Alternative to 1:
(a)the scope of the Subpoena to be limited to international calls;
(b)all information other than in relation to international calls be redacted from the information provided pursuant to the Subpoena;
(c)the plaintiff may not inspect and copy any information other than in relation to international calls.
It is convenient to take these two applications together and deal first with the plaintiff's application. However, before doing so it is necessary to say something about the nature of the dispute between the plaintiff and the defendants. This can be done by reference to the amended statement of claim filed 21 August 2019. The plaintiff pleads that from April 1998 it was the representative and distributor of products from a German company defined as 'NBB' in Australia and New Zealand.[1] The agreement was in writing and was renewable at the end of three year periods.[2] The agreement continued in force and effect until April 2019.[3]
[1] Amended statement of claim filed 21 August 2019 [5].
[2] Amended statement of claim filed 21 August 2019 [6(e)].
[3] Amended statement of claim filed 21 August 2019 [7]
The plaintiff pleads the first defendant was employed by the plaintiff from October 2009 pursuant to an oral employment agreement.[4] In February of 2014 the first defendant entered into what is defined as a 'Confidentiality Deed'.[5] The plaintiff says pursuant to the Confidentiality Deed the first defendant was required to keep certain information confidential.[6] For instance, the plaintiff says the first defendant was required to keep confidential 'information about the financial and business affairs of the plaintiff': see generally par 11 of the amended statement of claim. The plaintiff also pleads the first defendant owed the plaintiff certain fiduciary duties as a consequence of the position he held within the plaintiff and certain duties under provisions of the Corporations Act 2001 (Cth). By par 20 of the amended statement of claim the plaintiff alleges the first defendant breached some or all of the duties he owed to the plaintiff. The paragraph is in the following terms:
[4] Amended statement of claim filed 21 August 2019 [8].
[5] Amended statement of claim filed 21 August 2019 [10].
[6] Amended statement of claim filed 21 August 2019 [11].
20During the period that Barker was an employee and without the knowledge or consent of the plaintiff, Barker:
(a)attended meetings with representatives of NBB to discuss becoming the exclusive distributor of NBB's products in Australia and New Zealand;
(b)negotiated with representatives of NBB to become the exclusive distributer of NBB's products in Australia and New Zealand;
(c)entered in an agreement with NBB to become the exclusive distributor in Australia and New Zealand of NBB's products;
(d)took steps to incorporate Barker's Company in order to use Barker's Company as the vehicle through which to conduct the business of selling and distributing NBB's products in Australia and New Zealand to the exclusion of the plaintiff;
(e)obtained consignment stock from NBB to use in his own or Barker's Company's business of distributing products of NBB in Australia and New Zealand to the exclusion of the plaintiff; and
(f)failed to order sufficient quantities of appropriate spare parts and products from NBB to make provision for existing orders placed and for anticipated future orders by clients of the plaintiff.
For the purposes of these two applications it is relevant at this point to note in particular the allegations made in par 20(a), (b) and (c). The first two subparagraphs allege discussions and negotiations between representatives of NBB and the first defendant. Subparagraph 20(c) refers to a specific agreement allegedly entered into between the first defendant (or potentially the first defendant's agent) and NBB.
The plaintiff pleads that NBB subsequently gave notice to the plaintiff of termination of the contract between the plaintiff and NBB,[7] the first defendant resigned from his employment with the plaintiff,[8] the first defendant incorporated the second defendant[9] and after April 2019 the second defendant became the sole distributor of NBB's products in Australia and New Zealand.[10] The plaintiff seeks against both defendants' damages for breach of the pleaded duties.[11]
[7] Amended statement of claim filed 21 August 2019 [21].
[8] Amended statement of claim filed 21 August 2019 [22].
[9] Amended statement of claim filed 21 August 2019 [23].
[10] Amended statement of claim filed 21 August 2019 [24].
[11] Amended statement of claim filed 21 August 2019 [26] ‑ [27].
The defendants' defence was filed on 5 August 2019 (this defence was filed to the plaintiff's statement of claim which was filed on 19 July 2019). The defence has not been amended. That is hardly surprising ‑ the amendments to the statement of claim are minor and are of no real consequence to the alleged cause of action. In the main the defence consists of denials or non‑admissions ‑ including not admitting there was a contractual relationship between the plaintiff and NBB.[12] As to par 20 the defendant's deny each and every subparagraph. In other words the first defendant denies that he attended any meetings with representatives of NBB or that he negotiated to become NBB's supplier in Australia and New Zealand.[13] The defendants also deny that they entered into any contractual arrangement with NBB.
[12] Defence filed 5 August 2019 [4].
[13] Defence filed 5 August 2019 [20].
By the time this matter was argued the defendants had conceded the documents referred to in par 1 of the application. It is very difficult to see how in the light of the plaintiff's pleaded case these documents were not discovered when the initial affidavit of discovery was drawn. Be that as it may, they have now been discovered and that issue can be put to one side. The remaining question is whether the redacted sections of the agreement entered into by NBB and the second defendant ought be disclosed. A copy of the redacted version of the agreement appears as attachment TMW9 to the affidavit of Tahnee Michelle Watson sworn 11 December 2019. The redactions appear in two clauses. The first is cl 5.5 which is part of cl 5 headed 'Transactions'. The disclosed section of the clause reads as follows:
If not otherwise agreed to, Signal to Noise shall, for each supply of order, adhere to the following payment scheme:
The structure of the document indicates there follows two 'dot points' which are redacted. In other words, the defendants are not disclosing just how the payment scheme is to be administered.
The other redactions appear in cl 19. That clause is sub‑headed 'Term and Termination'. Clause 19.1 is redacted in part. The un‑redacted part reads 'this agreement shall become effective upon signing by the Parties'. Clause 19.3 is redacted in its entirety. Clause 19.2 is to the effect if the agreement is terminated any product orders placed before the termination will be processed as if the agreement continue. Clause 19.4 refers to circumstances in which the agreement may be terminated despite the provisions of cl 19.1. The context of the redacted terms does not give any hint as to what they may cover.
The defendants say the material was redacted because it is irrelevant. That was the reason given in the discovery affidavit and it was maintained in counsel's written and oral submissions. Dealing first with the payment terms, counsel for the defendants maintained that such terms were not relevant to the matters in dispute between the parties. With respect that cannot be right. The plaintiff says the financial arrangements between the plaintiff and NBB was one of the matters covered by the Confidentiality Agreement. If the payment arrangements in the contract between NBB and the second defendant were the same or perhaps more favourable than the payment terms between the plaintiff and NBB it may indicate the first defendant used confidential information in his discussions with NBB. This section of the agreement ought be disclosed to the plaintiff.
Nor am I satisfied the redaction portions of cl 19 are irrelevant. In particular the redacted sections of sub‑clause 19.1 may be highly relevant. It may be the parties anticipated the plaintiff taking proceedings against the defendants. In any event, the clause may well deal with the term of the agreement. It may be relevant if the term is for three years ‑ the same term as the agreement between the plaintiff and NBB ‑ the plaintiff can argue the first defendant used confidential information in negotiating with NBB. The point is broader than that and really picks up the redacted cl 19.3. The plaintiff needs to know in what circumstances the arrangement between the second defendant and NBB can be brought to an end. It is a central question in calculating any damages. For that reason alone the clause in its entirety ought be disclosed.
In reaching the conclusion that orders sought by the plaintiff ought be made I have not taken the step of actually looking at the un‑redacted agreement. Had I thought it necessary to do so to determine this application I would have had no hesitation in inspecting the document. In fact, I am satisfied the position is so clear inspection is not warranted. Subject to hearing from the parties I intend to make orders largely in terms of par 2 of the plaintiff's application.
Turning then to the subpoena issued by the plaintiff to Optus Mobile Pty Ltd dated 14 November 2019, the documents sought by the plaintiff are described as follows:
Copies of all documents held by Optus Mobile Pty Ltd relating to the mobile phone with the number **** *** ***, including but not limited to tax invoices, account charges, and mobile summaries detailing calls made and received and messages sent and received for the period 1 January 2018 to 31 April 2019.
Some background facts are necessary. By way of letter dated 23 October 2019 the plaintiff's solicitors requested that the defendants provide further discovery of various documents including 'mobile phone records of the first defendant's personal mobile telephone evidencing any telephone conversations between the first defendant and NBB from December 2017 up to and including 29 April 2019'. The defendants' solicitors responded by letter dated 31 October 2019. That letter enclosed 'the first defendant's personal mobile phone records for April 2019 being the only mobile phone records of the first defendant which evidenced any telephone conversations with NBB up to and including 29 April 2019'. It was said the remainder of the information requested was irrelevant. There was some disagreement between the parties as to the applicable legal principles. It was the defendants' position the court could set aside a subpoena where there was no legitimate forensic purpose for the subpoena and where it amounts to a fishing expedition: See Hancock v Rinehart [2019] NSWSC 141 [103]. As an overall statement of position that is correct. It is the basis upon which I have approached this application. There was also a disagreement between the parties as to who bears the onus of establishing there was a legitimate forensic purpose to the subpoena and that it was not a fishing expedition.
Accepting without deciding for the purposes of this case the plaintiff bears the onus of establishing the subpoenas were issued for a legitimate forensic purpose. It has clearly satisfied the requirements of that test. The plaintiff alleges in its pleaded case there was a meeting between representatives of NBB and the first defendant.[14] That is denied in the defence.[15] The plaintiff is clearly entitled to look at the first defendant's telephone records to see when contact with NBB commenced. It is not difficult to imagine the line of cross‑examination at trial. The plaintiff is not fishing. It has hearsay evidence to suggest a meeting took place between the first defendant and NBB in Melbourne in April of 2019. What is wants to know is what contact was made by the first defendant with NBB before the meeting took place. The telephone records are relevant ‑ it might even be said directly relevant ‑ to that question.
[14] Amended statement of claim filed 21 August 2019 [20].
[15] Defence filed 5 August 2019 [20].
The application to set aside the subpoena and/or restrict access to the records produced will be dismissed. The parties ought to confer in an attempt to agree orders as to costs. If no orders can be agreed then competing minutes are to be provided within seven days of the publication of these reasons.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
CB
Associate to Master Sanderson
23 APRIL 2020