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  4. Elders Rural Services Australia Ltd v Gooden - [2014] QDC 22

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Elders Rural Services Australia Ltd v Gooden[2014] QDC 22

Elders Rural Services Australia Ltd v Gooden[2014] QDC 22

DISTRICT COURT OF QUEENSLAND

CITATION:

Elders Rural Services Australia Ltd & Anor v Gooden [2014] QDC 22

PARTIES:

ELDERS RURAL SERVICES AUSTRALIA LIMITED and ANOTHER (applicant/plaintiff)

v

ANTONY JOHN GOODEN

(respondent/defendant)

FILE NO/S:

140 of 2014

DIVISION:

Civil

PROCEEDING:

Application

ORIGINATING COURT:

District Court, Brisbane

DELIVERED ON:

3 February 2014

DELIVERED AT:

Brisbane 

HEARING DATE:

31 January 2014

JUDGE:

Reid DCJ

ORDER:

Order as per draft, setting aside subpoenas pursuant to r. 416 UCPR

CATCHWORDS:

Originating application – subpoenas for production served on party to proceedings – whether attempt to obtain disclosure – requirement to apply under r. 209 – whether ‘special’ circumstances justify use of subpoena.

Leighton Contractors Pty Ltd v Western Metals Resources Limited (2001) 1 Qd R 261 applied.

Australian Competition and Consumer Commission v Shell Company of Australia Limited (1999) 161 ALR 686 considered.

The Commissioner for Railways v Small (1938) SR (NSW) 564 considered.

Waind v Hill and Anor [1978] 1 NSWLR 372 considered.

AGL Wholesale Gas Limited v Origin Energy Limited (2009) 1 Qd R 305 considered.

Lucas Industry Ltd v Hewitt and Ors (1978) 18 ALR 555 considered.

Xstrata Queensland Limited v Santos Limited and Ors (2005) QSC 323 considered.

Diddams v Commonwealth Bank of Australia (1988) FCA 497 considered.

UGL Rail Services Limited v Harris (Unreported, Supreme Court of New South Wales, Pembroke J, 21 April 2011) considered.

COUNSEL:

A.W Duffy for the Plaintiff

S.R Grant for the Defendant

SOLICITORS:

Herbert Smith Freehills for the Plaintiff

Duncan Cotterill for the Defendant

  1. [1]
    This action, which was commenced by originating application on 16 December 2013, is to go to trial commencing 10 February 2014. It involves a claim by the first and second applicants that the respondent be restrained from engaging in employment contrary to the terms of a Restraint of Trade clause contained in his contract of employment with the applicants, who were formerly his employer.
  1. [2]
    I shall throughout this judgment refer to the applicants in the action as the ‘applicants’ or the ‘first and second applicant’, and the respondent in the action as the ‘respondent’.
  1. [3]
    Before me are two separate interlocutory applications. The applicants have applied pursuant to r. 416 of the Uniform Civil Procedure Rules 1999 (‘UCPR’) to set aside subpoenas for production issued to the proper officer of each applicant and for costs. I shall refer to this application as the ‘strikeout application’.
  1. [4]
    The other application, which I shall refer to as the ‘access application’ is by the respondent. He seeks orders entitling the respondent to inspect and copy all documents produced in response to those subpoenas prior to the trial.
  1. [5]
    Obviously, if the strikeout application is successful the access application is rendered nugatory. If the strikeout application is unsuccessful, the applicants nevertheless oppose my making orders on the access application. Their counsel submits that that issue should be left to the trial judge.
  1. [6]
    Immediately upon being served with the subpoenas on 20 January 2014, the applicants’ solicitors wrote to the respondent’s solicitors (see letter of 21 January 2014 at page 10 of exhibit KZA-1 attached to the affidavit of Katherine Zoe Adams-Lau - document 25). The letter outlined the applicants’ opposition to the subpoenas on the following grounds:
  1. As the application had been commenced by originating application, there was no entitlement to disclosure under UCPR without an order of the Court made under r. 209. To seek disclosure by means of subpoenas on a party to the action was an impermissible attempt to avoid the requirement of applying under r. 209 for an order for disclosure.
  1. To issue a subpoena returnable well prior to the trial date was not permissible because its purpose was clearly not production of documents at trial, but for the purpose of disclosure itself.
  1. Many, perhaps all, of the documents sought were not relevant, relating to the employment condition of persons other than the respondent.
  1. [7]
    It was contended that this was particularly so when the only evidence with respect to other employees was that of a Mr Jackman (whose affidavit was filed by the applicants) that ‘there were no “non-compete” restraints in contracts of some further employees, but there were some other restraints’. That evidence was said to be uncontradicted. It was said that even if disclosure was required, the documents sought, or most of them, would not be required to be disclosed.
  1. [8]
    The respondent’s solicitors’ letter in reply of 22 January 2014 is at page 12 of the same exhibit. In it, the respondent’s solicitors contend:
  1. That the UCPR specifically allow the issue of a subpoena to a party to proceedings to produce relevant evidence, and that, consequently, an application under r. 209 is not required.
  1. The documents sought are of relevance and referred to UGL Rail Services v Harris[1]in which it was said that the applicant’s own counsel, in related proceedings in Victoria, specifically submitted such documents were relevant and in existence.
  1. The provision of the document by way of subpoena, and orders for inspection and copying, were appropriate in view of the urgent nature of the proceedings and imminence of the trial.
  1. [9]
    Two further issues arise if the claim to set aside the subpoenas is dismissed. The applicants claim privilege with respect to one of the documents, the subject of the subpoenas. The issue is set out in letters between the parties’ solicitors at pages 19 and 20 of the affidavit of Rebecca Piechocki, filed before me by leave.
  1. [10]
    The applicant claims legal professional privilege in respect of one of the documents on the basis that the document involves internal email communication in relation to production of documents pursuant to the subpoena of 21 January 2014, and is a confidential communication brought into existence for the dominant purpose of enabling the applicants to obtain legal advice from their external legal advisers.
  1. [11]
    Because the subpoenas required production of the documents on 24 January 2014 and the matter could not be heard on that day, the applicants’ solicitors had caused them to be produced to the court in a sealed envelope to be opened only if the application to set aside the subpoenas is unsuccessful. In addition to the original sealed envelope, nine further documents were found and produced before me, again in a sealed envelope. The document over which privilege is claimed is enclosed in its own sealed envelope within the first sealed bundle, and the parties agreed I should look at it to determine whether it is properly the subject of a claim for privilege if the need to do so arises.
  1. [12]
    The respective submissions of the parties were in line with the contents of the letters attached to the affidavit of Ms Adams-Lau to which I have referred, but, of course, the arguments in support of those contentions were expanded.
  1. [13]
    In support of the submission that to seek disclosure by way of subpoenas was an abuse of process or was a fishing exercise, the applicants’ counsel principally relied on the decisions of Leighton Contractors Pty Ltd v Western Metals Resources Limited[2]; Australian Competition and Consumer Commission v Shell Company of Australia Limited[3]; and The Commissioner for Railways v Small[4].
  1. [14]
    In Leighton Contractors Pty Ltd v Western Metals Resources Limited McKenzie J said:[5]

‘The distinct purposes of discovery and subpoena are reflected in numerous decisions… Statements are to be found in some cases suggesting that a subpoena returnable at a date well in advance of trial is permissible…  The courts in which these decisions were made had at any time no rules permitting discovery from non-parties … The decisions are based on considerations of convenience, or perhaps the inconvenience if it were otherwise, in the conduct of complex litigation in the absence of a procedure for obtaining documents of non-parties.’  

  1. [15]
    His Honour said there are examples:[6] 

‘of the reluctance of courts to recognise the use of a subpoena … in substitution for another available procedure when the purpose is to obtain production of documents in the pre-trial phase and unconnected with the hearing of an application. The mere fact that some of the documents, after inspection, will be used as evidence at trial does not qualify the case as one where a subpoena may be used.’

  1. [16]
    His Honour continued:[7]

‘Where a deliberately proscriptive regime is provided for the obtaining of documents from a non-party, the question presents itself whether the intention was that those safeguards might be avoided by using a different procedure with requirements which are different, but which have some common features… In my opinion, there is no indication in the rules that it is intended that what is really non-party disclosure in the pre-trial phase may be obtained by using a subpoena to produce.’  

  1. [17]
    In Australian Competition and Consumer Commission Company of Australia Limited  v Shell[8], Cooper J set out a statement of Branson J in Diddams v Commonwealth Bank of Australia, where her Honour said:[9]

‘However, the usual legal process by which a party to a proceeding in the court obtain access to the documents of opposing parties are the processes of discovery and inspection.’ (footnotes omitted)

  1. [18]
    Cooper J said:[10]

‘The rationale for this principle is, in my view, that where a particular method has been proscribed by the rules for the achievement of the particular objective, such as the obtaining of further discovery conformably with the rules relating to discovery of documents… it is impermissible to attempt to achieve that objective through the subpoena process.’

  1. [19]
    Such an approach is consistent with the remarks of Jordan CJ in The Commissioner of Railways v Small where his Honour said:[11]

‘Where the subpoena is addressed to a party, it is still necessary that it should state with reasonable particularity the documents which are to be produced… It is true that a party, unlike a stranger, can be required to give discovery; but it is not legitimate to use a writ of subpoena duces tecum as a substitute for an application for disclosure of documents, or as an alternative to an application for further and better discovery. Discovery applications should be made at the proper time and place.’

  1. [20]
    His Honour also referred to the difficulty a judge may have in determining whether documents are of relevance. This is particularly so in the current circumstances and it is, no doubt, because of this that the applicants’ counsel submits that, even if I determine that the subpoena should not be set aside, the question of whether the respondent should be given leave to inspect the documents and take copies thereof should be left to the trial judge. But so, too, the question of relevance may be one better determined by the trial judge who may be expected to have a more fulsome appreciation of the relevant issues.
  1. [21]
    In Waind v Hill and Anor[12], the Court of Appeal said: ‘… It is an abuse to use any subpoena even to a party to obtain discovery.’ The Court had observed that, of course, discovery was available to such a party, as it is here, pursuant to r. 209 UCPR if a court gives leave. It is this distinction between cases where disclosure is available and those where it is not that, in my view, McKenzie J was referring to at paragraph 17 of the Leighton Contractors case.[13] The Court in Waind v Hill and Anor[14]referred to a ‘misconception of the different functions of discovery and of a subpoena’.  The applicants also seek to resist the subpoenas on the basis that the documents sought thereunder are not relevant as, ‘there is no issue in the proceedings as to the employment conditions’ of the persons whose employment documents are sought.
  1. [22]
    The applicant contends that the fact the subpoenas are a ‘fishing expedition’ can be seen from the fact that the persons whose contracts are sought include the applicants’ general counsel, Mr Hastings, human resources manager, Ms Harding, and the former CEO of the second applicant, Mr Jackman. It is said, presumably because of the very different nature of the work these people do compared to the respondent, that the motivation for seeking their contracts must be to cause inconvenience or discomfort. He makes a similar submission with respect to the documents relevant to the respondent’s successor, Mr Underwood, though, of course, much of his work will be similar to that of the respondent despite the fact that the role had been split between two employees after the respondent’s employment had been completed.
  1. [23]
    The applicant refers also to what are said to be the very wide ambit of the subpoena and says that to require such a wide range of documents in the way sought is oppressive. The applicant says that, at best, the documents are of limited marginal relevance and, on that account, the subpoenas ought be set aside. Counsel referred to the following statement of Muir JA in AGL Wholesale Gas Limited v Origin Energy Limited:[15]

‘It is increasingly recognised that courts should strive to achieve efficient cost effective litigation. That goal cannot be reached if parties to litigation are left free to utilise powers such as those in respect of discovery and subpoenas regardless of the utility or lack thereof of the process sought to be employed. The relentless pursuit of the marginal is to be discouraged. In my view, provision of the subpoenaed material would tend to distract the parties from pursuing the central issue in the arbitration and be likely to result in the expenditure of considerable time, energy and moneys on issues of peripheral or scant relevance… If the documents in question are of “apparent relevance” their limited probative value, their extent, their confidentiality and commercial sensitivity combine to make it oppressive to require their production.’

  1. [24]
    In support of the claim to be able to obtain the documents by means of the subpoena, the respondent’s counsel submitted:
  1. (a)
    that the issue of the subpoenas was a proper exercise of the discretion of the registrar; 
  1. (b)
    the documents produced under the subpoenas are directly relevant to determination of the substantive proceedings;
  1. (c)
    the affidavit evidence relied on by the applicants refers to the documents sought under the subpoenas; 
  1. (d)
    the document sought under the subpoenas are clearly described;
  1. (e)
    special circumstances exist that justify exercise of the court’s discretion to allow for access to the documents prior to trial within the context of the progression of the matter to trial commencing 10 February 2014 by way of an expedited process ordered by Judge Ryrie on the 15 January 2014.
  1. [25]
    In my view, it is unnecessary to separately consider the submission in ‘(a)’ above as the applicants do not seek to challenge the subpoena on the basis that the registrar’s discretion was not properly exercised other than as part of the respondent’s overall submission on the more general matters. Counsel for the respondent referred to r. 415 of UCPR which provides, in essence, that a subpoena can be set aside under r. 416 on:

Any sufficient ground including: 

  1. (a)
    want of relevance;  or
  1. (b)
    privilege;  or
  1. (c)
    oppressiveness, including oppressive because substantial expenses may not be reimbursed;  or
  1. (d)
    non-compliance with these rules.
  1. [26]
    He submits that under Pt 4 Ch 11 UCPR the right to issue a subpoena against a party to proceedings as well as a non-party is specifically recognised. It must be recalled, however, that the applicant bases its submission that the issue of the subpoenas against the applicant was inappropriate, not because a subpoena cannot be issued against a party to proceedings, that is not disputed, but because to do so as an effective substitute for seeking disclosure under r. 209 is a procedure not allowed at law and on the basis of relevance and oppressiveness.
  1. [27]
    Counsel referred to the decision of McKenzie J in the Re Leighton Contractors case[16]to which I have referred. He emphasised the case was involved with the issue of subpoenas against a non-party. He submitted that case supported the view that in ‘special circumstances’ it was appropriate to seek production of documents prior to trial. In my view, such circumstances might include jurisdictions where there were no, or inadequate, rules with respect to disclosure and the justice of a case required such a step. Importantly, however, McKenzie J said in respect of the question of whether issuing a subpoena returnable prior to trial was justified that statements to that effect in other jurisdictions or earlier cases might not be applicable under the provisions of the UCPR.
  1. [28]
    In my view, his Honour was there clearly referring to the fact that the UCPR effectively “covers the field” with respect to disclosure, whether from a party or a non-party. In my view, it is in that sense that his Honour made the remarks which I earlier set out at [16] hereof. In my view, those words strongly support the view that the more appropriate course here was for an application for disclosure under r. 209(1)(c) of the UCPR.
  1. [29]
    The applicant, however, submits that the ‘special circumstances’ of this case justify the approach the respondent has taken and relied on Lucas Industry Ltd v Hewitt and Others[17]where Smithers J said (Bowen CJ and Nimmo J agreeing):

‘I see nothing in any of the authorities to throw doubt on the principle that when, according to the nature of any particular proceeding, considerations of justice and convenience require production of relevant documents at some particular time, whether before or after trial, production should then be ordered.”

  1. [30]
    That case was, however, somewhat unusual in that orders had been made that ‘expert evidence’ in the action be by way of affidavit with the usual rights of cross-examination. As a consequence it was necessary to effectively give such evidence in chief prior to the hearing of the matter. Clearly, in such circumstances, practical considerations dictated the desirability of documents being produced by strangers to the litigation when the time to prepare the relevant evidence-in-chief of such experts arrived. Importantly, the headnote to that case also indicates that, whilst the subpoena might have been properly set aside had it been, in substance, an attempt to obtain discovery from those not party to the proceedings, such was not the case as the subpoena did not oblige its addressees to assess the relevance of particular documents to the issues in the case.
  1. [31]
    Counsel for the respondent also addressed the question of the extent to which relevance dictated whether a subpoena should be set aside and referred to a decision of McMurdo J in Xstrata Queensland Limited v Santos Limited and Others[18]. His Honour said: 

‘In contrast with the rules for disclosure between parties or by non parties, the rules dealing with subpoenas do not, at least expressly, require that the documents be directly relevant. There is no particular basis for thinking that the difference is through a drafting error. The processes of disclosure and subpoena have many differences. One already mentioned is that disclosure, even by a non party, ordinarily involves no order by or other involvement of the court. To confine the process of disclosure to a more limited category of documents might be thought to be more appropriate where ordinarily the process is pursued without the involvement of the court. In my view the rules relating to subpoenas, and particularly r. 414, should not be limited by implication, such that the court could issue only a subpoena requiring directly relevant documents.’

  1. [32]
    In support of the conclusion that the documents sought under the subpoena were relevant, reference was made to UGL Rail Service Limited v Harris[19] where Pembroke J said:

‘I should also return to the comparison between Mr Harris and Mr Stephenson. In assessing the reasonableness of the 12 month Restraint Period, it is relevant to have regard to the length of restraints enforced by the plaintiff against other equivalent employees.’

  1. [33]
    The applicant’s counsel submits, therefore, that the documents are clearly relevant or serve a legitimate forensic purpose in the assessment of the reasonableness of the restraint of trade.
  1. [34]
    With respect to the appellant’s argument that the subpoenas are an improper attempt to obtain disclosure and contrary to the reasons of the UCPR, the respondent’s counsel submits that the special circumstances in this case are the fact that the hearing has been expedited, having been set down to commence on 10 February 2014, only 27 days after the hearing for interlocutory relief on 14 January 2014. It was submitted that the respondent ought be entitled to consider any documents required to be disclosed by the subpoenas to properly consider their relevance to the question of the reasonableness of the restraint upon him.
  1. [35]
    The cases cited to me do not cause me to conclude that the circumstances here relied on as ‘special’ justify a conclusion that the principle that a subpoena should not be used, in effect, to obtain disclosure prior to trial, whether from a party or a non-party, should not apply. In my view, that principle is clearly enunciated by McKenzie J in the Leighton Contractors case[20]I have referred to. Although that case concerned a non-party subpoena, I can see no basis for the view that it is not equally applicable to this case. Although it is true that the hearing of the case is imminent, in my view the proper procedure was, and is, to apply for an order under r. 209(1)(c) of the UCPR.
  1. [36]
    If that were done, I have no doubt the trial judge could make orders, if appropriate, for disclosure within time limits that must be imposed having regard to the fact the trial is to commence next Monday. That is particularly so as the documents that would have been required to be disclosed pursuant to the subpoena have been identified and are, indeed, on the court file.
  1. [37]
    I do not propose to allow the respondent to make an instanter application under r. 209 for a direction that the provisions of Ch 7, Pt 1 UCPR apply because that is a matter more appropriately dealt with by the trial judge. She is more fully apprised of the issues of the case and so more readily able to determine questions of relevance that will inevitably arise on any such application. The question of relevance is somewhat different on an application to set aside subpoenas, as McMurdo J recognises in Xstrata Qld Ltd v Santos[21]
  1. [38]
    Furthermore, her Honour is in a better position to determine such matters having regard to her management of the process of bringing the matter to trial.
  1. [39]
    As Branson J said in Diddams v Commonwealth Bank of Australia:[22]

‘If such documents are sought by subpoena or notice to produce issued close to trial, the court endeavours to manage the process of the preparation of the matter for trial… may be subverted.’

  1. [40]
    In my view, the trial judge is best placed to make that assessment. I will therefore order as per the two draft orders supplied to me by the applicant’s counsel.

Footnotes

[1] (Unreported, Supreme Court of New South Wales, Pembroke J 21 April 2011).

[2] (2001) 1 Qd R 261 at 18-22.

[3] (1999) 161 ALR 686 at 50.

[4] (1938) SR (NSW) 564 at 574-575.

[5] (2001) 1 Qd R 261 at 17.

[6] Leighton Contractors Pty Ltd v Western Metals Resources Limited (2001) 1 Qd R 261 at 18.

[7] Leighton Contractors Pty Ltd v Western Metals Resources Limited (2001) 1 Qd R 261 at 20-21

[8] (1999) 161 ALR 686 at 49.

[9] (1998) FCA 497 at 6.

[10] Australian Competition and consumer Commission Company of Australia Limited  v Shell (1999) 161 ALR 686 at at 50.

[11] (1938) SR (NSW) 564 at page 574.

[12] [1978] 1 NSWLR 372 at 382.

[13] (2001) 1 Qd R 261.

[14] [1978] 1 NSWLR 372.

[15]  (2009) 1 Qd R 305 at 322.

[16] Leighton Contractors Pty Ltd v Western Metals Resources Limited (2001) 1 Qd R 261.

[17] (1978) 18 ALR 555 at 567.

[18] (2005) QSC 323 at 46-47..

[19] (Unreported, Supreme Court of New South Wales, Pembroke J 21 April 2011) at 37.

[20] Leighton Contractors Pty Ltd v Western Metals Resources Limited (2001) 1 Qd R 261.

[21] [2005] QSC 323 at 46.

[22] (1988) FCA 497 at 6.

Close

Editorial Notes

  • Published Case Name:

    Elders Rural Services Australia Ltd & Anor v Gooden

  • Shortened Case Name:

    Elders Rural Services Australia Ltd v Gooden

  • MNC:

    [2014] QDC 22

  • Court:

    QDC

  • Judge(s):

    Reid DCJ

  • Date:

    03 Feb 2014

Litigation History

EventCitation or FileDateNotes
Primary Judgment[2014] QDC 2203 Feb 2014Claim by liquidator for insolvent trading against a director. Ordered that Mr Featherstone pay the sum of $198,151.14 plus interest: Jones DCJ.
QCA Interlocutory Judgment[2015] QCA 2627 Feb 2015Appellant's application for an adjournment of the hearing of the appeal refused: Gotterson JA, Douglas J, P Lyons J.
Appeal Determined (QCA)[2015] QCA 4301 Apr 2015Appeal dismissed: Gotterson JA, Douglas J, P Lyons J.

Appeal Status

Appeal Determined (QCA)

Cases Cited

Case NameFull CitationFrequency
AGL Wholesale Gas Ltd v Origin Energy Ltd[2009] 1 Qd R 305; [2008] QCA 366
2 citations
Jump To
Cite 1 - [2009] 1 Qd R 305
Cite 2 - [2009] 1 Qd R 305
Australian Competition and Consumer Commission v Shell Company of Australia Limited (1999) 161 ALR 686
4 citations
Jump To
Cite 1 - (1999) 161 ALR 686
Cite 2 - (1999) 161 ALR 686
Cite 3 - (1999) 161 ALR 686
Cite 4 - (1999) 161 ALR 686
Diddams v Commonwealth Bank of Australia (1988) FCA 497
2 citations
Jump To
Cite 1 - (1988) FCA 497
Cite 2 - (1988) FCA 497
Diddams v Commonwealth Bank of Australia (1998) FCA 497
1 citation
Jump To
Cite 1 - (1998) FCA 497
Leighton Contractors Pty Ltd v Western Metals Resources Limited[2001] 1 Qd R 261; [2000] QSC 27
8 citations
Jump To
Cite 1 - [2001] 1 Qd R 261
Cite 2 - [2001] 1 Qd R 261
Cite 3 - [2001] 1 Qd R 261
Cite 4 - [2001] 1 Qd R 261
Cite 5 - [2001] 1 Qd R 261
Cite 6 - [2001] 1 Qd R 261
Cite 7 - [2001] 1 Qd R 261
Cite 8 - [2001] 1 Qd R 261
Lucas Industries Ltd v Hewitt (1978) 18 ALR 555
2 citations
Jump To
Cite 1 - (1978) 18 ALR 555
Cite 2 - (1978) 18 ALR 555
National Employers' Mutual General Association Ltd v Waind and Hill (1978) 1 N.S.W. L.R. 372
3 citations
Jump To
Cite 1 - (1978) 1 N.S.W. L.R. 372
Cite 2 - (1978) 1 N.S.W. L.R. 372
Cite 3 - (1978) 1 N.S.W. L.R. 372
The Commissioner for Railways v Small (1938) SR NSW 564
3 citations
Jump To
Cite 1 - (1938) SR NSW 564
Cite 2 - (1938) SR NSW 564
Cite 3 - (1938) SR NSW 564
Xstrata Queensland Ltd v Santos Ltd [2005] QSC 323
3 citations
Jump To
Cite 1 - [2005] QSC 323
Cite 2 - [2005] QSC 323
Cite 3 - [2005] QSC 323

Cases Citing

Case NameFull CitationFrequency
Cohen v Fealy [2020] QDC 2711 citation
1

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