SAHANA INVESTMENTS PTY LTD and 59 ALBANY HIGHWAY JOINT VENTURE PTY LTD - [2012] WASAT 158

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: COMMERCIAL & CIVIL

ACT: COMMERCIAL TENANCY (RETAIL SHOPS) AGREEMENTS ACT 1985 (WA)

CITATION: SAHANA INVESTMENTS PTY LTD and 59 ALBANY HIGHWAY JOINT VENTURE PTY LTD [2012] WASAT 158

MEMBER: DR B DE VILLIERS (MEMBER)

HEARD: 27 JULY 2012

DELIVERED : 27 JULY 2012

PUBLISHED : 1 AUGUST 2012

FILE NO/S: CC 71 of 2012

BETWEEN: SAHANA INVESTMENTS PTY LTD
Applicant
AND
59 ALBANY HIGHWAY JOINT VENTURE PTY LTD
Respondent

Catchwords:

Order for third party to produce document or material Legitimate forensic purpose Test for document or material to be produced

Legislation:

Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA), s 6(1)(b)
State Administrative Tribunal Act 2004 (WA), s 35, s 35(2)

Result:

Application in respect to interlocutory issue successful

Category: B

Representation:

Counsel:

Applicant: Mr C Wallace
Respondent: Mr Gandhi

Solicitors:

Applicant: Lavan Legal
Respondent: Hotchkin Hanly

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

Apache Northwest Pty Ltd & Ors and Western Power Corporation (1998) 19 WAR 350
Kassa v Bitmead & Anor [2006] WASAT 298
Stanley v Layne Christensen Company [2004] WASCA 50
Telstra Corp Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

The proceeding concerns the question whether false or misleading information, as is understood, pursuant to s 6(1)(b) of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA), had been provided to the applicant by the respondent prior to or at the time the parties entered into a lease.
Both parties brought urgent applications pursuant to s 35 of the State Administrative Tribunal Act 2004 (WA) for third parties to produce documents and material that may be relevant to the proceeding.
The Tribunal considered the relevant authorities and concluded that the applications were not a fishing exercise aimed at trying to establish if a party might have a claim, but rather that it would serve a legitimate forensic purpose for the documents or material that relate to the conditions of use of the tenancy to be produced.
The Tribunal emphasised that:
a)the relevancy of any documents or material produced would ultimately be determined at the final hearing;
b)the documents or material sought may assist the Tribunal to make a determination about the state of mind of the applicant and its understanding of the terms and conditions when the lease was entered into; and
c)any third person who objected to produce documents or material could seek to be heard by the Tribunal and make submissions as to why the orders should be varied.
The reasons for decision were handed down orally. The edited reasons for decision were provided in writing to the parties.

Issue

Should orders be made pursuant to s 35 of the State Administrative Tribunal Act 2004 (WA) (SAT Act) for third parties to produce documents or material that may be of relevance to the proceeding?
The reasons for decision were handed down orally. These are the edited version of those reasons.

Background

The dispute concerns relief the applicant seeks pursuant to s 6(1)(b) of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) (CT(RS)A Act).
The applicant, who manages a Caffissimo establishment, contends that it was told at the time when it entered into the lease that it would enjoy exclusive rights to sell its type of products in the building where the Caffissimo is located. The applicant says that the respondent is allowing the tenant in the remainder of the building to also sell coffee and other products that compete with the Caffissimo. The applicant seeks compensation for the pecuniary loss it has suffered as a result of it being provided with false or misleading information at the time of entering into the lease.
The respondent disputes the contention and says that the application should be dismissed.
The matter is set down for a two day hearing in August 2012.
Both parties now seek urgent orders from the Tribunal for third parties who do not form part of these proceedings, to produce documents or material that may be of relevance to the proceeding.
Due to the urgency of the interlocutory applications, the applications were set down for a hearing on 27 July 2012. Both parties were legally represented. The representatives made written and oral submissions. The Tribunal took all of these submissions into account in its decision.
At the conclusion of the hearing and the handing down of the orders and the reasons for the orders, the legal representative for the respondent requested that written reasons be provided for the decision.
These reasons are an edited version of the oral reasons that were provided at the time when the orders were made.

Statutory framework

Section 35 of the SAT Act relevantly provides as follows:
(1)On the application of a party to a proceeding, the Tribunal may order that a person
(a)who is not a party to the proceeding; and
(b)who has, or is likely to have, in the person’s possession or under the person’s control a document or other material that is relevant to the proceeding,
produce the document or material to the Tribunal or the party within the time specified in the order.
(2)The Tribunal may order a person to produce a document or other material despite any rule of law relating to privilege (other than legal professional privilege) or the public interest in relation to the production of documents.
(3)However if the Tribunal considers that any document is or contains protected matter, the Tribunal cannot order a person to produce it to a party.
Section 6(1)(b) of the (CT(RS)A Act) relevantly provides as follows:
(1)Where a retail shop lease is entered into and the tenant has not, at least 7 days before the entering into of the lease, been given a disclosure statement in accordance with subsection (4) or the disclosure statement given contains false or misleading information, the tenant may, in addition to exercising any other right, do either or both of the following
(a)…
(b)apply in writing to the Tribunal for an order that the landlord pay compensation to the tenant in respect of pecuniary loss suffered by the tenant as a result of the omission of the landlord to give a disclosure statement in accordance with subsection (4) or of the giving of false or misleading information by the landlord in the disclosure statement.

Submissions and consideration

The Tribunal considered the relevant authorities which establish that an application for the production and inspection must be for a 'legitimate forensic purpose': (see Apache Northwest Pty Ltd & Ors and Western Power Corporation (1998) 19 WAR 350).
The applicant contends that the respondent allows the operation on the premises of a coffeeselling facility or service which competes with the applicant's product. As a result of the competition, the applicant says that it has suffered a pecuniary loss within the meaning of s 6(1)(b) of the (CT(RS)A Act. The exact nature of the products of the applicant and those that are allegedly sold in competition is not known at this stage to the Tribunal and there is no need to conduct an inquiry about it since it will be the subject of the hearing.
The interlocutory proceedings are directed at material or documents in the possession of third parties that may be of relevance to determine the principal question. Those documents or material, if any, may only be required to be produced if the Tribunal is satisfied that it is 'relevant' to the proceeding.
In these proceedings it is agreed by the two parties that none of the documents referred to are protected matter and the third parties are not parties to the proceeding.
The legal principles to be applied when deciding whether to compel third parties that are unrelated to a proceeding to produce documents to a court or tribunal, and then to allow inspection by parties to the proceedings of such documents or material, are well settled. Those principles and relevant authorities were well summarised in the matter of Kassa v Bitmead & Anor[2006] WASAT 298.
The Tribunal has a discretion to order a third party to produce documents under s 35 of the SAT Act. In exercising its discretion, the Tribunal must consider the potential relevance of the documents in relation to the substantive issues before it and whether the production could serve a legitimate forensic purpose. However, when exercising its discretion, the Tribunal should not embark on a preliminary inquiry into the evidence. Once the documents and/or communications are produced, the parties can make submissions about the relevancy thereof to the proceedings and the Tribunal can make the necessary findings and orders about the main issues in dispute. At this stage, however, the question is whether, based on the information before the Tribunal, the production of such documents and material would serve a legitimate forensic purpose.
A party seeking for a document or material to be produced is not entitled to go on a proverbial fishing expedition, whereby it endeavours to find out whether it may have an arguable case. A request for production must be for the purpose of obtaining evidence to support the parties' case, not to establish whether it has a case.
The Tribunal, as is explained below, is satisfied, in the case of both the submissions, that these urgent applications are not of a nature of a fishing expedition. The applications are specifically aimed for documents or material to be produced in regard to the purported exclusivity of the operations of the Caffissimo. The third parties identified in the applications were, on the basis of evidence before the Tribunal, third parties within the meaning of s 35 of the SAT Act, that had some involvement with the negotiations that gave rise to the lease and the documents, or material held by them that may assist the Tribunal to determine the matter.
The primary question for the Tribunal to ask is whether the parties have a legitimate forensic purpose to seek the production of the documents or the material in question.
In the matter of Stanley v Layne Christensen Company [2004] WASCA 50, an appeal from an interlocutory decision of Master Sanderson, Miller and Heenan JJ at [9], confirmed the four principles identified by Master Sanderson. Those principles were also referred to in the submissions by the respondent in these proceedings. The principles can be summarised as follows:
1)A legitimate forensic purpose will be established if a document gives rise to a line of inquiry which is relevant to the issues before the trier of fact, including for the purpose of meeting the opposing case by way of crossexamination.
2)In assessing whether a legitimate forensic purpose exists in relation to documents sought on an early return of subpoena, it must be borne in mind that the necessity for having a document to fairly dispose of the issues at trial might well not become apparent before trial.
3)At least one object of the rule permitting early return of subpoenas is to appraise the parties of the strength and weaknesses of the case at an early stage. Hence no narrow view as to the legitimate purpose of a subpoena ought to be taken.
4)There is no requirement that to avoid the stigma of fishing, a party must already by in possession of some evidence before issuing a subpoena.
The Tribunal will consider the applications in light of those principles.
In regard to the documents or material sought by the applicant, the Tribunal is satisfied that the applicant has shown that the Monadelphous Group Ltd (Monadelphous Group), which is the tenant of part of the building from where the applicant operates, may have information and/or material in its possession that may assist the Tribunal to determine the question as to whether a coffee service is being managed or run at the premises, and if such material or documents are held, whether those documents or material may assist the Tribunal to make a finding pursuant to s 6(1)(b) of the CT(RS)A Act. The Tribunal enquired from the respondent's legal representative during the hearing about the nature of operations, if any, that the Monadelphous Group may allow to be undertaken on the premises that may be in competition with the Caffissimo. Mr Gandhi, for the respondent, indicated that the answer could not be provided. It is therefore necessary for the Tribunal to order the Monadelphous Group to produce whatever documents or material that it holds that may be relevant about the operation of a coffeeselling facility or service, if any.
In regard to the documents sought by the applicant from the real estate management agent, Knight Frank Australia Pty Ltd (Knight Frank), the Tribunal is satisfied that the applicant has shown that Knight Frank may be in possession of documents and/or correspondence about the operation of a coffee service or coffeeselling facility on the remainder of the premises, that may assist the Tribunal to determine the question under the lease. Knight Frank may also be able to shed light on the use of the premises prior to the parties entering into the lease.
Knight Frank may be able to assist the Tribunal in regard to the prior use of the premises; it may have given verbal and/or written assurances to the applicant about matters of relevance to the establishment of the Caffissimo; or it may have engaged in some form of correspondence with the applicant or with another party or person about the exclusivity of the applicant's intended operations. All such documents or material may be relevant to these proceedings. It is, however, only when the documents or material are sighted that final conclusions about relevancy can be made.
The Tribunal concludes, therefore, that orders should be made requiring Monadelphous Group and Knight Frank to produce documents or material of relevance to this proceeding.
The Tribunal will next consider the application by the respondent for documents and material to be produced.
The respondent seeks three orders requiring Talbot Olivier, legal practitioners, Mr Mike Barr and Mrs Wendy Barr, to produce documents and material that may be relevant to the question under consideration. The Tribunal was told that Mr Barr and Mrs Barr are the franchisors of Caffissimo and that they may be able to shed light on matters of relevance to this proceeding.
The Tribunal will first deal with the applications in relation to Mr and Mrs Barr. The application for them to produce documents will be treated together since, according to the evidence before the Tribunal, they are jointly the franchisor of Caffissimo.
As far as Mr and Mrs Barr are concerned, the Tribunal is satisfied that the respondent has shown that Mr and Mrs Barr may be in possession of material or documents about the events leading up to and surrounding the entering into the lease that may assist the Tribunal to determine the question under consideration. The information potentially held by Mr and Mrs Barr may assist to determine the state of mind of the applicant when the lease was negotiated and the conditions for operating the franchise were considered, the requirements for the franchise to be awarded, the advice, if any, that was given in regard to exclusive rights and any other material of relevance to the dispute. Of particular relevance is the question whether any verbal or oral assurances, advice or conditions were raised or given about the possible exclusivity of the operations of the Caffissimo. Mr and Mrs Barr may have given advice to the applicant, or they may have engaged the applicant in ways other than formal advice about the terms of the lease, in particular, the importance or not of exclusivity of its operations or its intended operations. Such material or information may have contributed to the state of mind of the applicant. Any documents or material that may shed light on the interaction between the applicant and Mr and Mrs Barr about the purported exclusivity of operations of the Caffissimo may therefore be of assistance to the Tribunal.
It must be emphasised that the Tribunal's decision for documents and material to be produced is not aimed at requiring Mr and Mrs Barr to disclose all interaction between the franchisors and the applicant in regard to the general commercial nature or viability of the venture. The order is specifically aimed at the disclosure of information regarding the operation, if any, of the exclusivity of the Caffissimo.
As far as documents or material held or produced by Talbot Olivier are concerned, the Tribunal notes the provisions of s 35(2) of the SAT Act:
The Tribunal may order a person to produce a document or other material despite any rule of law relating to privilege (other than legal professional privilege) or the public interest in relation to the production of documents.
Mr Gandhi supports the application for a legal representative to produce documents or material with reference to the decision of the full Federal Court in the matter of Telstra Corp Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152, in which, relevantly, the following was said:
Where, as in this case, a party pleads that he or she undertook certain action 'in reliance on' a particular representation made by another, he or she opens up as an element of his or her state of mind at the time that he or she undertook such action. The court will be required to determine what was the factor, or what were factors, which influenced the mind of the party so as to induce him or her to act in that way. That is, the party puts in issue in the proceeding a matter which cannot fairly be assessed without examination of relevant legal advice, if any, taken as having consented to the use of the relevant privileged material, or to put it in another way, to have waived reliance on the privilege which such material would otherwise attract.
The essence of Mr Gandhi's contention is that, to the extent that the applicant had a specific understanding or a state of mind to the effect that it had exclusive rights to undertake a certain activity in the building of which its tenancy formed part, the reason or advice that gave rise to such a state of mind must be disclosed to the Tribunal. The Tribunal would then be able to gauge if the state of mind was reasonable. In this regard, Mr Gandhi refers to any verbal or other assurances that may have been given to the applicant, that the respondent would not allow any competing uses within the premises and any advice regarding such assurances. The question Mr Gandhi raises in his written submission is whether the applicant's reliance on assurances, if any, were reasonable in light of advice received from Talbot Olivier.
The Tribunal agrees with the submission that the documents or material or advice or information or correspondence or communication that may have been produced by Knight Frank, Mr and Mrs Barr and Talbot Olivier, specifically in regard to the exclusivity of operations by Caffissimo, may be of assistance in these proceedings; it may serve a valid forensic purpose and it must, subject to the orders made, be provided to the parties and the Tribunal.
The Tribunal emphasises that this order does not relate to legal advice in general about the terms of the lease, but it specifically relates to advice that may have been given in regard to the exclusivity, or assurances of exclusivity, of the applicant's operations.
In these proceedings, where the applicant relies on its state of mind and its understanding of discussions, assurances and advice it received in regard to the exclusive rights of operation, it is essential to determine what influenced that state of mind so as to cause the applicant to act in a certain way or to entertain a certain belief. The relevant advice about exclusivity, if any, may be a key to this assessment of the state of understanding by the applicant.

The Tribunal realises that a requirement for a legal representative to produce a document or material pursuant to s 35 of the SAT Act is a matter that may require further consideration since the third parties were not privy to the hearing. None of the third parties are aware of the application today, and they may wish to be heard about the orders and the scope thereof. The Tribunal will therefore, so as to enable time for Talbot Olivier or any of the other third parties to comment or object to any of these orders made, provide time for them to respond to the Tribunal and to make submissions why they object to such orders being made.
The Tribunal will therefore make orders to the effect that if any third party ordered to produce documents or material by these orders objects to such production, they must, on or before 2 August 2012, inform the Tribunal if they wish to have the orders varied. Such an application can then be dealt with by an urgent hearing.

Orders

The orders are as follows:
1.By not later than 3 August 2012, Knight Frank Australia Pty Ltd must produce to the Tribunal all documents or materials in its possession or control relating to the establishment and operation of the coffee facility in the offices of Monadelphous Group Limited at 59 Albany Highway, Victoria Park, Western Australia (referred to in the letter dated 19 July 2011 sent to Ryan Abbott of Knight Frank Australia Pty Ltd from John Collings of Monadelphous Group Limited (letter attached).
2.By not later than 27 July 2012, Monadelphous Group Limited must produce to the Tribunal all documents or materials in its possession or control relating to the establishment and operation of the coffee facility in its offices at 59 Albany Highway, Victoria Park, Western Australia (referred to in the letter dated 19 July 2011 sent from John Collings of Monadelphous Group Limited to Ryan Abbott of Knight Frank Australia Pty Ltd (letter attached).
3.By not later than 3 August 2012, Talbot Olivier Lawyers of level 8, Wesfarmers House, 40 The Esplanade, Perth in the State of Western Australia must produce to the Tribunal the following documents or materials in its possession or control:
(a)all documents or materials concerning any request from the applicant for advice as regards exclusive cafe use in the development at 59 Albany Highway, Victoria Park (subject development);
(b)all documents or materials concerning any responses to the applicant's request for advice as regards exclusive cafe use in the subject development and any advice given as regards exclusive cafe use in the subject development; and
(c)all documents or materials passing between Talbot Olivier and the applicant concerning the representations and/or assurances allegedly made by the respondent's managing agent, Knight Frank [Australia Pty Ltd], to the applicant that the respondent would not allow competing uses in the subject development,
all between 5 July 2010 and 15 October 2010.
4.By not later than 3 August 2012, Wendy Barr of 84 Nanson Street, Wembley in the State of Western Australia must produce to the Tribunal the following documents or materials in her possession or control:
(a)all documents or materials concerning any request from the applicant to Wendy Barr (Caffissimo franchisor) for advice as regards exclusive cafe use in the development at 59 Albany Highway, Victoria Park (subject development).
(b)all documents or materials concerning any responses from Wendy Barr to the applicant's request for advice as regards exclusive cafe use in the subject development and any advice given as regards exclusive cafe use in the subject development; and
(c)all documents or materials passing between Wendy Barr and the applicant concerning the representations and/or assurances allegedly made by the respondent's managing agent, Knight Frank, to the applicant that the respondent would not allow competing uses in the subject development,
all between 5 July 2010 and 15 October 2010.
5.By not later than 3 August 2012, Mike Barr of 84 Nanson Street, Wembley in the State of Western Australia must produce to the Tribunal the following documents or materials in his possession or control:
(a)all documents or materials concerning any request from the applicant to Mike Barr (Caffissimo franchisor) for advice as regards exclusive cafe use in the development at 59 Albany Highway, Victoria Park (subject development);
(b)all documents or materials concerning any responses from Mike Barr to the applicant's request for advice as regards exclusive cafe use in the subject development and any advice given as regards exclusive cafe use in the subject development; and
(c)all documents or materials passing between Mike Barr and the applicant concerning the representations and/or assurances allegedly made by the respondent's managing agent, Knight Frank, to the applicant that the respondent would not allow competing uses in the subject development,
all between 5 July 2010 and 15 October 2010.
6.If any person ordered to produce documents by these orders objects to that production, they must inform the Tribunal and the parties on or before 2 August 2012 if they wish the orders to be varied and to be heard as to the grounds for the objection.

I certify that this and the preceding [46] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
DR B DE VILLIERS, MEMBER