RSM Bird Cameron Partners v Crisp

[2013] VCC 1776

IN THE COUNTY COURT OF VICTORIA Revised
(Not) Restricted

AT MELBOURNE

COMMERCIAL LIST
GENERAL DIVISION

Case No. CI-12-05408

RSM BIRD CAMERON PARTNERS (A FIRM) AND ANOR	Plaintiffs
v.
GLENN ANTHONY CRISP	Defendant

---

JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	19 November 2013
DATE OF JUDGMENT:	20 November 2013
CASE MAY BE CITED AS:	RSM Bird Cameron Partners & Anor v. Crisp
MEDIUM NEUTRAL CITATION:	[2013] VCC 1776

REASONS FOR JUDGMENT

---

Catchwords:              Practice and procedure – Subpoena – Whether effectively seeking non-party discovery – Subpoena set aside - Kennedy Taylor (Vic) Pty Ltd v. Grocon Pty Ltd [1999] VSC 242 per Gillard J, followed.

---

APPEARANCES:	Counsel	Solicitors
For the Subpoena Recipient	Mr D. McAloon	Altus Laywers
For the Defendant	Mr D. Gilbertson	Rothwell Lawyers

HIS HONOUR:

1John Wood is the addressee of a subpoena issued by the defendant on 10 September 2013. The subpoena seeks the production of six categories of documents itemised in the schedule. In an affidavit sworn 24 October 2013, Mr Wood has stated that in relation to “Items 1, 3 and 6 of the Schedule...I have no documents to produce”. The defendant, through his counsel, makes no complaint about this response.

2Mr Wood otherwise seeks to have the subpoena set aside, objecting that the requirement for him to produce the documents set out in items 2, 4 and 5 of the schedule to the subpoena constitutes a “fishing expedition”, intended as non-party discovery rather than the production of documents to be used as evidence in the proceeding. Alternatively, it is submitted, the search for and production of the documents would be unduly burdensome for Mr Wood and should not be required.

3The first plaintiff is a firm of accountants. The second plaintiff is an associated company. The defendant is a former partner of the firm. In the proceeding, the plaintiffs seek to recover from the defendant approximately $.5m in respect of which it is alleged he failed to properly account to the plaintiffs, being fees and expenses received whilst he was acting as the liquidator of Foodlife Inventory Holdings Pty Ltd.

4The defendant denies the claim and has filed a counterclaim alleging that a person or persons acting on behalf of the first plaintiff, leaked a copy of the statement of claim to a journalist (Adele Ferguson) before it was served upon him. He alleges that this was done “maliciously”, for the purpose of damaging his business and reputation. It is also alleged that further material sent to another journalist (Keith Moor) was in a similar category.

5Although Mr Wood is not named in the Defence and Counterclaim, an affidavit sworn by the defendant on 12 November 2013 asserts that Andrew Beck, a partner of the plaintiffs and a friend of Mr Wood, had told him that Mr Wood was the source of the relevant communications with the journalist Moor. Records subpoened from Telstra have apparently shown that, after 1 July 2011, Mr Wood and the journalist Ferguson communicated by telephone and SMS. The defendant contends that Mr Wood was the person who passed on information at the behest of the first plaintiff, and for malicious purposes.

6The schedule to the subpoena defined certain terms and then provided:

“The documents and things you must produce are as follows:

1.  All correspondence including but not limited to emails, letter and facsimiles between you and:

a.    Maxine Fensom

b.    Adele Ferguson

c.    Keith Moor

relating to the defendant for the period from 1 July 2011 to date.

2. All correspondence between you and RSM and/or Beck in relation to the defendant for the period from 1 July 2011 to date.

3. All mobile telephone communication records between you and:

a.    Maxine Fensom

b.    Adele Ferguson

c.    Keith Moor

relating to the defendant for the period from 1 July 2011 to date.

4. All file notes, recordings or any other documents relating to discussions between RSM and/or Beck and you and relating to the defendant for the period from 1 July 2011 to date.

5. All documents provided to you which relate to either or both of Viking and the defendant.

6. Any images of the defendant which are in your possession”.

7Items 1, 3 and 6 are specific requests and the documents, if they existed and were held by Mr Wood, would appear to have direct relevance as the evidence the defendant proposes to rely upon to prove his counterclaim. However, the position in relation to items 2, 4 and 5 is far less obvious.

8Mr Wood swore an affidavit in relation to the subpoena on 24 October 2013. He is a director of the Dominion Group of companies which provide valuation and auctioneering services. In March 2011, Dominion was engaged to act in relation to the realisation of the assets of the Viking Group of companies. The defendant was appointed the liquidator of the Viking Group, at a time when he was part of the plaintiffs (as was Mr Beck). There is apparently a dispute between the Dominion Group and the defendant concerning the Group’s entitlement to fees in relation to the work it performed.

7.In the circumstances, Mr Wood’s counsel Mr McAloon submitted that items 2, 4 and 5 in the schedule were far too wide and “what the [defendant] was seeking to achieve by serving the subpoena was to have [Mr Wood] give discovery [and that as a consequence] the service of the subpoena was an abuse of process” (see Belsart v. Man Po Holdings (Aust) Ltd per Beach J, unreported 31 August 1998, quoted with approval by Gillard J at para. 24 in Kennedy Taylor (Vic) Pty Ltd v. Grocon Pty Ltd [1999] VSC 242).

8.At para. 71, Gillard J said that, On a plain and literal interpretation of r42.10, aided by the definition and the forms, it is inescapable that the procedure under r42.10 is only available where the document is potentially required for evidence at the trial of a proceeding”. Further, at para 77, His Honour said, “The purpose for which r42.10 was enacted supports the conclusion that the subpoena should only be used to require evidence before trial and that if documents are sought for a purpose other that possible evidence at trial then r42.10 could not be used”.

9.At paras. 7 and 8 of the defendant’s affidavit, there are statements which suggest that the defendant, and those advising him, have misunderstood the purpose of the subpoena process. The affidavit comments on Mr Wood’s solicitors’ failure to respond to a request from the defendant’s solicitor as to “whether or not Wood is asserting there are and never were any telephone communication records [as sought in item 3 of the schedule] or he is no longer in possession of any documents in this category”. This is language more appropriate for a dispute about discovery.

10.I consider that, in the circumstances of the business relationship between Wood, Beck and the defendant and in the context of the issues raised by the counterclaim, the description of the documents sought in items 2, 4 and 5 of the schedule is far too wide and should properly be categorised as a “fishing expedition”, and therefore should not be permitted. The subpoena should be set aside as to those items in the schedule.

11.Mr Wood in his affidavit estimated the quantity of materials that he would need to examine to comply with the subpoena and the time this was likely to take, and therefore the costs he would require the defendant to pay. This analysis was primarily undertaken to support a submission that the subpoena was “oppressive” and that he should not be required to “undertake a search of an excessively large amount of documents”.

12.Mr Wood said that in relation to items 2 and 4, he would need to examine “about 20 to 25 archive boxes and electronic data [over] approximately 1.5 weeks” at an estimated cost of $33,000. In relation to item 5, Mr Wood said there were about an additional 100 archive boxes and electronic data that would need to be examined over a period of about 6 weeks at an estimated cost of $132,000. Mr Wood also said that as a result of his computer server crashing, he had lost emails in his possession which met, or might have met, the descriptions in items 2, 4 and 5.

13.At the commencement of the application, defendant’s counsel Mr Gilbertson stated that the defendant had wished to cross-examine Mr Wood upon these statements in his affidavit to attempt to show that the estimates of time and cost were excessive. Mr Wood was not available to be cross-examined because he apparently needed to be with his mother who was receiving treatment for a recently diagnosed serious illness. I determined to proceed with the application without permitting Mr Wood to be cross-examined at that time.

14.It was my view that it would be unlikely the cross-examination would achieve any more than the testing of the basis of Mr Wood’s estimates by suggesting that the examination of boxes containing an indeterminate number and type of documents and the examination of the surviving electronic data might take a lesser time. Ordinarily, the party serving the subpoena would be required to provide security for at least a significant part of the likely cost of retrieving the documents and electronic data. It has been unnecessary to determine that question, or indeed whether the issues in dispute between the parties in the proceeding would justify such a exercise.

15.The orders I propose to make are as follows:

a.    The subpoena addressed to John Wood dated 10 September 2013, insofar as it seeks production of the documents described as items 2, 4 and 5 of the schedule to the subpoena, is set aside.

b.    The defendant must pay Mr Wood’s costs of the subpoena, including the costs reserved on 25 October 2013 and the costs of the hearings on 19 and 20 November 2013, to be assessed by the Costs Court in default of agreement.

- - -

Certificate

I certify that these 4 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on 20 November 2013.

Dated:       20 November 2013

Philippa Gilkes

Associate to His Honour Judge Anderson