The Focus Learning Group Pty Ltd v Quality Education Providers Pty Ltd
[2020] FCA 1349
•30 June 2020
FEDERAL COURT OF AUSTRALIA
The Focus Learning Group Pty Ltd v Quality Education Providers Pty Ltd [2020] FCA 1349
File number: VID 492 of 2018 Judge: ANASTASSIOU J Date of judgment: 30 June 2020 Catchwords: PRACTICE AND PROCEDURE - application by respondents to uphold a subpoena issued to a third party - review of decision made by a Judicial Registrar to set aside subpoena – whether subpoenaed documents serve a legitimate forensic purpose – application granted in part Legislation: Australian Consumer Law being Schedule 2 to the Competition and Consumer Act 2010 (Cth), s 18
Federal Court of Australia Act 1976 (Cth), s 35A(5)
Federal Court Rules 2011 (Cth), r 3.11(2)
Division: General Division Registry: Victoria National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Number of paragraphs: 13 Date of hearing: 30 June 2020 Counsel for the Applicant: Ms K. Brazenor
Solicitor for the Applicant: Thomson Geer Lawyers Counsel for the Respondents: Mr S. Rubenstein Solicitor for the Respondents: Piper Alderman Lawyers ORDERS
VID 492 of 2018 BETWEEN: THE FOCUS LEARNING GROUP PTY LTD ACN 128 613 427
Applicant
AND: QUALITY EDUCATION PROVIDERS PTY LTD ACN 167 868 635
First Respondent
AMANJOT SINGH
Second Respondent
GURPREET SINGH AHUJA
Third Respondent
JUDGE:
ANASTASSIOU J
DATE OF ORDER:
2 JULY 2020
THE COURT ORDERS THAT:
1.Pursuant to s 35A(5) of the Federal Court of Australia Act 1976 (Cth) and r 3.11(2) of the Federal Court Rules 2011 (Cth), paragraphs 1 and 2 of the Orders made by Judicial Registrar Luxton on 27 March 2020 be set aside.
2.Pursuant to r 24.15 of the Rules, paragraph 2 of the Subpoena issued by this Court on 16 May 2019 be set aside.
3.The parties have leave to uplift, inspect and copy the documents produced by the Australian Skills and Quality Authority (ASQA) in answer to paragraph 1 of the Subpoena, such documents to be returned within 7 days of being uplifted.
4.The documents produced to the Court by ASQA in answer to paragraph 2 of the Subpoena be returned to ASQA.
5.Each party bear their own costs of and incidental to:
(a)the applicant’s interlocutory application filed 18 June 2019; and
(b)the respondents’ interlocutory application filed 17 April 2020.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
(Delivered ex tempore, revised from transcript)ANASTASSIOU J
BACKGROUND
This is an application made under s 35A(5) of Pt V of the Federal Court of Australia Act 1976 (Cth) and r 3.11(2) of the Federal Court Rules 2011 (Cth) for review of a decision made by a Judicial Registrar for this Court, Judicial Registrar Luxton, on 27 March 2020. The Registrar acceded to an application by the applicant in this proceeding to set aside part of the Subpoena issued at the request of the respondents dated 15 May 2019 directed to ASQA. ASQA is the regulator of registered training organisations (RTOs). The respondents apply to set aside that decision and thereby uphold the issue of the Subpoena. There are three categories of documents sought under the Subpoena, two of which are the subject of this application.
In this proceeding, the applicant alleges that on 8 December 2016, it acquired all of the shares in a company called Apeiron from the first respondent. Apeiron carried on a business offering vocational education and training (VET) services under the name “Chambers International”. Apeiron was registered by ASQA as an RTO and was also registered in the Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS) to provide VET courses to Australian domestic and international students. In purchasing the shares in Apeiron, the applicant says that it relied upon certain representations, including representations contained in the relevant transaction documents, and contained in a Class 9B Occupancy Permit that had been provided in the electronic data room for the purposes of the applicant undertaking relevant due diligence inquiries.
The Building Code of Australia requires all RTOs to hold a valid Occupancy Permit in order to lawfully carry on business and deliver VET and English language courses from a premises. The Occupancy Permit in this instance was issued by a company called ERA Building Consultants and/or by a Mr Chen, or Mr Chan, on behalf of ERA Building Consultants. On 6 April 2018, ASQA notified the applicant that the Occupancy Permit was invalid and, as a result, it proposed to cancel Apeiron’s registration as an RTO and its CRICOS registration.
The applicant alleges that the Occupancy Permit was false and, indeed, that it was a fake permit. The applicant claimed in the alternative that the representations that were made to it by the respondents, including, among others, representations contained in the Occupancy Permit that it was provided with, were representations as to future matters for which the respondents had no proper basis. Consequently, the applicant alleges that the respondents engaged in misleading and deceptive conduct in breach of s 18 of the Australian Consumer Law (Schedule 2 to the Australian Competition and Consumer Act 2010 (Cth)).
CATEGORY 1 DOCUMENTS
Turning to the Category 1 documents. This category of documents encompasses all Class 9B Occupancy Permits issued by ERA Design Studio, ERA Building Consultants and/or Mr Chen or Mr Chan, purportedly in accordance with the Building Code of Australia on behalf of any business in Australia offering VET services and registered as an RTO. The applicant contends that there is no legitimate forensic purpose for the provision of this category of documents to the respondents as they concern the issue of Occupancy Permits to persons other than the first respondent, and, accordingly, can have no relevance in this proceeding to the claim made by the applicant.
The applicant also argues that the respondents had no knowledge of the issue of an Occupancy Permit to other persons at the time that the applicant claims to have relied upon the Occupancy Permit in question. Accordingly, the applicant contends that there is no proper or legitimate forensic purpose for which Occupancy Permits in the possession of ASQA should be provided under subpoena. I am sympathetic to that argument. Pre-eminently as a matter of logic, it is difficult to see how documents, of which the respondents was not aware at the time that the representations were made, can be said to affect or be relevant to its state of mind. However, the respondents will apparently lead evidence to the effect that it was told through various individuals that Mr Chan or Mr Chen was a suitable and experienced building surveyor who could be retained for the purposes of providing to the first respondent the relevant Occupancy Permit.
Assuming such evidence is given and depending upon how and to what extent that evidence is challenged in cross-examination, it is conceivable, though unlikely, that the documents the subject of Category 1 could be relevant in support of the veracity of the respondents’ belief in what they were told concerning the experience and suitability of Mr Chan or Mr Chen as the building surveyor. It is conceivable that representations made to the respondents about Mr Chan or Mr Chen might be capable of being corroborated by the tender of documents in Category 1 which demonstrate the truth of the representations apparently made to the respondents, that Mr Chan or Mr Chen was an experienced and suitable building surveyor to provide such occupancy permits.
However, whether the documents in Category 1 are relevant in that way and admissible for that purpose will ultimately be a matter for debate at trial and will need to be assessed in the context in which any such documents are sought to be tendered, including the course of both examination and cross-examination. As I cannot rule out the potential tender of the Category 1 documents for the purpose for which I have described, I consider that there is a legitimate forensic purpose for the purposes of the production of the documents in answer to the Subpoena.
An affirmative answer to that question should not be understood to mean that the documents would be received in evidence as relevant to any particular factual issue, or any issue going to the state of mind of any particular witness that may be called to give evidence. However, I am satisfied that for the purposes of the present application, the Category 1 documents do satisfy the test of having, potentially at least, a legitimate forensic purpose. Accordingly, insofar as the Registrar has set aside the Subpoena in respect of Category 1 documents, I will set aside the Registrar’s decision to that extent.
CATEGORY 2 DOCUMENTS
The second category of documents is, in my view, clearer. The Registrar was correct in setting aside the Subpoena in respect of this category. The Category 2 documents concern actions taken by ASQA in respect of those RTOs who obtained an Occupancy Permit from ERA Design Studio, ERA Building Consultants and/or Mr Chen or Mr Chan, and the responses and actions taken by any such RTO to obtain a valid Occupancy Permit from a registered building surveyor. I cannot at present see how any actions taken by ASQA in connection with such occupancy permits can be relevant to the issues as presently articulated in the claim and defence.
Likewise, I do not regard any documents that ASQA has concerning responses and actions taken by other RTOs in relation to an Occupancy Permit provided by the previously mentioned building surveyor to be relevant to any issue that arises in this proceeding. The contention of the applicant was that such documents are entirely collateral to the matters in dispute between the parties to this proceeding, and they have the potential if produced and ultimately made the subject of, or purportedly the subject of, evidence in this proceeding to distract the proceeding and the issues that arise in it into quite collateral inquiries as to arrangements between ASQA and the RTO concerned.
In my view, there is little, if any, probative weight likely to emerge from an examination of separate arrangements between ASQA and other RTOs. In order to make any valid comparison, if there is any point to such comparison, one would have to look closely at any similarities and differences in the arrangements that existed before any comparisons could be drawn. So far as the respondents are concerned, I understood that the relevance of the Category 2 documents was to establish that, had steps been taken by the applicant to rectify the defects in the premises in order to make them compliant, these documents would assist in establishing that once such rectification had occurred, ASQA’s policy would have been to allow the RTO to continue its activities from the premises once it had been made compliant.
If that is the point in aid of either a mitigation defence or some other causation defence or any defence relevant to the assessment of damages, that point, if it is relevant, may be proven in a number of more direct ways. It is not for the Court to say how a party may wish to prove its case. That is a matter for the party. However, where what is on its face proposed is a collateral inquiry into arrangements with strangers to this proceeding, that has the potential of distracting the proceeding and leading to inquiries that in turn demand an analysis of their comparative similarity, the likelihood, in my view, the prejudice thereby caused will substantially outweigh any probative value such documents might have. I am therefore not satisfied that there is a proper forensic basis for the Category 2 documents. Accordingly, I will uphold the Registrar’s decision in respect of the Category 2 documents under the Subpoena.
I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Anastassiou. Associate:
Dated: 21 September 2020
0
0
3