Supreme Court New South Wales

• Medium Neutral Citation: The City of Sydney v Streetscape Projects (Australia) Pty Limited & Anor [2011] NSWSC 364
• Hearing dates: 27 April 2011
• Decision date: 03 May 2011
• Jurisdiction: Equity Division - Commercial List
• Before: Einstein J

Decision

Application to set aside subpoena dismissed.

Parties to bring in short minutes of order.

• Catchwords: Interlocutory motion - Setting aside a subpoena - Uniform Civil Procedure Rule 33.4
• Legislation Cited: Uniform Civil Procedure Rules 2005
• Cases Cited: Alister v R (1984) 154 CLR 404; Attorney-General (NSW) v Dylan Chidgey [2008] NSWCCA 65; Dense Medium Separation Powders Pty Ltd t/as DMS Powders v Gondwana Chemicals Pty Ltd & Anor [2010] NSWSC 994; Fitzgerald v Magistrate's Court of Victoria [2001] VSC 348; Lakatoi Universal Pty Ltd v Walker [1999] NSWSC 1036; [1998] NSWSC 470; Marnotta and Secretary, Department of Health and Ageing, Re [2004] AATA 800; R v Saleam [1999] NSWCCA 86; R v Le [2000] NSWCCA 49; Roads & Traffic Authority (NSW) v Conolly (2003) 57 NSWLR 310; Trade Practices Commission v Arnotts Ltd (No 2) (1989) 88 ALR 90
• Texts Cited: Ritchies Uniform Civil Procedure NSW by LexisNexis Butterworths 2005; S Odgers, Uniform Evidence Law (Thomson Reuters, 8th ed, 2009)
• Category: Procedural and other rulings
• Parties: The City of Sydney (Plaintiff); Streetscape Projects (Australia) Pty Limited (First Defendant); Moses Edward Obeid (Second Defendant)
• Representation: Counsel: Mr T Jucovic SC, Mr S Climpson, Mr C Bova (Plaintiff); Ms J Baird SC, Mr J Gooley (Defendants); Solicitors: Holding Redlich (Plaintiff); Colin Biggers & Paisley (Defendants)
• File Number(s): 2009/00298673 & 2010/0085353

Judgment

The notice of motion

1 There is before the Court an amended notice of motion filed by the defendants seeking an order that:

(1) The subpoena filed on 25 March 2011 by the plaintiff, issued upon the Commonwealth Bank of Australia, and as amended by correspondence from Holding Redlich Lawyers dated 8 April 2011, as to paragraph 3, be set aside pursuant to Uniform Civil Procedure Rule 33.4.

(2) Alternatively, the subpoena be restricted to paragraphs 1 and 2 as amended.

(3) Alternatively, the subpoena be restricted to facts and issues as identified in the pleadings and outlined in the correspondence of Colin Biggers and Paisley dated 1 April 2011 and 4 April 2011.

(4) The plaintiff pay the costs of this motion.

The proceedings

2 The substantive proceedings before the Court concerns what came to be known as the Smartpole Project developed by the City of Sydney [The City] in around 1996/1997 in preparation for the 2000 Sydney Olympic Games. The purpose of the project was to consolidate and refine street infrastructure (such as street lights, traffic lights, signage and banners) into one unified system.

3 The proceedings were commenced by The City against Streetscape Projects and Mr Moses Obeid in the Supreme Court to enforce what The City argued were contractual obligations that had been breached during the course of the Licence Agreement (and prior to its expiration on 31 August 2009). In the Supreme Court proceedings, the City seeks, inter alia , orders restraining Streetscape Projects from continuing to use the "Intellectual Property" and "Confidential Information" to manufacture "Smartpoles" , delivery up of documents which contain the "Intellectual Property" and "Confidential Information", delivery up of moulds and the recovery of licence fees and royalties for distribution of "Smartpoles" in the United Arab Emirates (UAE), Singapore and other territories.

4 In October 2009, after the expiration of the Licence Agreement, the City commenced proceedings against Streetscape Projects and Australian Light & Data Pty Limited ( Australian Light & Data ) in the Federal Court to restrain post Licence Agreement conduct in relation to, inter alia, the continued use of the trade mark "SMARTPOLE" and what it argued is the deceptively similar mark "SmartMFP", misleading or deceptive conduct and passing off. The City also seeks declaratory relief and damages in relation to the aforementioned conduct. These proceedings were transferred to this Court and renumbered 2010/00085353.

5 When the City became aware (in late 2009) that Streetscape Projects was continuing to sell S2 poles (notwithstanding the expiry of the Licence Agreement), it amended the Federal Court proceedings to seek relief restraining the continued use of the City's "Intellectual Property" in relation to the S2 poles. The City later amended the Supreme Court proceedings to include a similar claim for relief in relation to the S2 poles as well as claim for relief restraining the continued use by Streetscape Projects of other " Smartpoles" .

6 Over time, both sets of proceedings have been substantially amended and issues in both proceedings have overlapped to the point where there are now many issues in common in both proceedings and much of the pleading (particularly that of Streetscape Projects) is replicated in both proceedings. The parties have agreed that evidence in the Supreme Court proceedings be evidence in the Federal Court proceedings and vice versa. I made a formal order to this effect on 11 April 2011.

The Authorities

7 I have in numerous instances set out the principles relevant to setting aside a subpoena pursuant to r33.4 of the Uniform Civil Procedure Rule s. See for example Dense Medium Separation Powders Pty Limited trading as Dense Medium Separation Powders Pty Ltd t/as DMS Powders v Gondwana Chemicals Pty Ltd & Anor [ 2010] NSWSC 994.

8 Then, as now, I accept Beazley JA's statement [with whom James and Kirby JJ agreed] in Attorney-General (NSW) v Dylan Chidgey [2008] NSWCCA 65, that:

"The test for determining whether a party is required to produce documents pursuant to a subpoena was stated by Simpson J (Spigelman CJ and Studdert J agreeing) in R v Saleam [1999] NSWCCA 86 at [11], in the following terms:

The principles governing applications [for an order that documents not be produced] are no different from those governing applications for access to documents produced in answer to a subpoena. Before access is granted (or an order to produce made) the applicant must (i) identify a legitimate forensic purpose for which access is sought; and (ii) establish that it is "on the cards" that the documents will materially assist his case ..."

The genesis of the expression "on the cards" is to be found in the judgment of Gibbs CJ in Alister v R [1983] HCA 45; (1984) 154 CLR 404 at 414.

9 In Roads & Traffic Authority (NSW) v Conolly (2003) 57 NSWLR 310 , Adams J at [12] referred to a decision of Balmford J in Fitzgerald v Magistrate's Court of Victoria [2001] VSC 348 ; [2001] 34 MVR 448 , in which her Honour, at [20], stated, "I note that in the second edition of the Oxford English Dictionary 'on the cards' is defined as meaning 'within the range of probability'".

10 Accepting this to be so, it seems to me that the relevant "range" is therefore between the barely probable and highly probable. With respect, it seems to me that this area of the law is bedevilled with metaphors. I think the essential notion is that there is a reasonable chance that the material sought will assist the defence. If it is reasonable to infer that the material sought exists and that it is relevant to an issue, though its content is unknown, it will almost invariably be logically the case (as it seems to me) that such a chance exists, even though it might be thought to be unlikely. Seeking that material therefore seems to me to be a legitimate forensic purpose, providing of course that the factual issues and the character of the material sought are precisely identified.

11 In Lakatoi v Walker [1999] NS W SC 1036 , I outlined an earlier interlocutory judgment of Rolfe J in the same proceedings ([1998] NSWSC 470) which dealt with a number of subpoenas which had been issued and dealt with a number of notices of motion seeking to set aside those subpoenas. The judgment included a reasonably detailed examination of the authorities and of the principles involved. Rolfe J enunciated, in a fashion which I would not depart from, the basic parameters which are to inform the Court in the exercise of its discretion where an application to set aside a subpoena is pursued.

12 On the one hand, there is clearly to be recognised, the obvious danger of permitting a party by use of the subpoena procedure, to investigate issues of credit having no conceivable relevance to issues pleaded, in the sense that to permit subpoenas of that type to be called would open up matters falling outside the legitimate field of enquiry raised by the issues in contest. On the other hand, it seems to me quite clear that inspection should be granted, so far as is necessary, in the proper conduct of the litigation, where the Court forms the view that the material falls within the legitimate field of enquiry raised by the issues in contest and is reasonably likely to add in the end in some way or other to the relevant evidence in the case. The exercise, recognised by Rolfe J, involves the need to balance these alternative considerations.

13 The determination of the Court in the balancing exercise and in particular the proper approach to the question of relevance, requires the Court, as Rolfe J indicated, to bear in mind the entitlement of the parties to build up what his Honour referred to as "an evidentiary mosaic".

14 As Rolfe J said, that exercise generally cannot be done, particularly in complicated commercial litigation, by the tender of one piece of evidence or the assertion that only limited material is relevant to the issues involved. As his Honour said, "particularly is that so when one must have regard to the desirability of as full a cross-examination as possible, assisted by the availability of documents which will aid that". Hence, as his Honour stated, both as to issues and as to the issue of credit, the Court should not be astute to find irrelevance at an early stage in the proceedings.

15 The breadth of the definition of relevance should also be borne in mind. As Sully J observed in R v Le [2000] NSWCCA 49 at [19]:

"[Section] 55 speaks of a rational effect that is brought about "directly or indirectly". This is very broad language, and it suggests, in my opinion, a wide rather than a narrow focus to the inquiry whether a proffered piece of evidence has the rational potential which s 55 requires." See further S Odgers, Uniform Evidence Law (Thomson Reuters, 8th ed, 2009) at p 182-183.

Returning to the matter at hand

16 The part of the subpoena in question seeks the production from the Commonwealth Bank of All:

(1) loan or finance applications and documentation provided in support of any such applications;

(2) loan or funding agreements;

(3) balance sheets;

(4) statements of shareholding;

(5) annual reports;

(6) financial statements;

(7) letters of comfort;

(8) statements of group structure or relationships between members of such groups,

dated or in force within the Period in respect of any company or person who was during the Period a customer of the Bank and who was a part of the "larger association" as referred to in the statement in the letter from Stephen Small of CBA dated 17 September 2007 and annexed and marked "A" to this subpoena, that "Streetscape Projects (Aust) Pty have (sic) been valued clients of the Bank for the last twelve month (sic). The group are part of a larger association which have been clients of the Bank for over thirty years. The association is valued and has been a good customer of the Bank."

17 These disputed documents are those contained in packet S29. There was no objection by the defendant to the documents contained in packet S28.

The defendant's submissions

18 In support of the notice of motion, Ms Baird relied on correspondence by her instructing solicitor, Mr Jeffery David Collins, with the solicitor for the plaintiff (JDC-2). This was annexed to Mr Collins affidavit filed 5 April 2011.

19 In reference to paragraph 3 of the subpoena it was submitted that:

(1) The scope of the subpoena fails to provide reasonable particularity and is so broad as to include any unrelated business dealing and unrelated entities and also irrelevant dealings and entities in respect of a period of more than 30 years;

(2) The subpoena calls for documents not limited to the facts and issues of the pleadings in this matter; and

(3) The subpoena calls for documents not relevant to the proceedings, or any issue in the proceedings.

20 Ms Baird further argued that there have already been other forms of discovery, including a subpoena for packet S28, which would have covered all the relevant documents.

21 It was submitted that paragraph 3 is a fishing expedition. The documents subpoenaed bear no relevance to any fact in issue and are not for a legitimate forensic purpose. Concerns were also expressed over the confidential nature of the documents contained in packet S29.

The plaintiff's submissions

22 Mr Bova made submissions in reply, opposing the defendant's notice of motion.

23 In respect of Mr Collins first argument in JDC-2 concerning the ambiguity and broadness of paragraph 3, it was submitted that since the Commonwealth Bank did not object on this basis and actually produced the relevant documents, the argument is clearly wrong.

24 Turning to the relevant nexus, the plaintiff explained that paragraph 3 of the subpoena arose from a letter by the Commonwealth Bank to the New Dehli State government (Annexure 'A' to Exhibit 27/4 P). It was submitted that it is therefore a legitimate forensic purpose for The City to inquire as to who are those members referred to and what is their relationship with the defendants.

25 The plaintiff set out in considerable length the permissible scope of a subpoena. Mr Bova relied on the understanding expounded in Ritchie's Uniform Civil Procedure NSW and in particular on formulations in Trade Practices Commission v Arnotts Ltd (No 2) (1989) 88 ALR 90 at 103; Re Marnotta and Secretary, Department of Health and Ageing [2004] AATA 800 at [42] and Alister v R (1984) 154 CLR 404. These expressions of the law are consistent with the understanding I have expressed above.

26 Finally, Mr Bova addressed two subsidiary objections raised by the defendants. These were:

(1) If the documents contained in packet S29 were relevant to the proceedings they would have been discovered previously in general discovery; and

(2) Packet S29 contains confidential documents.

27 As to the first objection, the plaintiff submitted that the documents in packet S29 were not discoverable as they were third party documents and such documents were not subject general discovery. Addressing confidentiality, it was submitted that confidentiality concerns should not bar access, provided the usual processes were followed.

Conclusion

28 The contested documents sought by the plaintiff arise from a letter by the Commonwealth Bank to the New Dehli State government (Annexure 'A' to Exhibit 27/4 P). In this letter the Bank makes clear reference to a "larger association" with which Streetscape is associated. In light of this, the plaintiff's request to view this material is not a mere fishing expedition. There is a reasonable chance that the material sought will assist the defence in understanding the potential magnitude of the alleged breaches by the defendants and the potential damages award that may follow. It will assist in building the relevant "evidentiary mosaic" as described by Rolfe J in Lakatoi v Walker [1998] NSWSC 470 .

29 As for the subsidiary objections relating to the broadness of the subpoena and confidentiality, I accept Mr Bova's submissions. The Commonwealth Bank has complied with the subpoena and therefore the broadness argument is no longer a live issue. Further, any concerns over confidentiality, should be dealt with in the usual way.

30 There is therefore no need to address the defendant's alternative suggested approaches to access which involved determining which categories of documents are and are not within the relevant scope of discovery.

31 The application to set aside the subpoena is dismissed. The parties are to bring in short minutes of order when they can address on costs and a suitable confidentiality regime.

32 The plaintiff is to pay the Commonwealth Bank's costs of compliance with the subpoena.

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Decision last updated: 03 May 2011