Better Building Services Pty Limited v Dyer [2004] ACTSC 65 (6 August 2004)

Last Updated: 17 September 2004

BETTER BUILDING SERVICES PTY LIMITED v DIANA VERE DYER

[2004] ACTSC 65 (6 August 2004)

PROCEDURE - production of documents - notice for non-party production - objection by opposing party - relevance - test to be applied

Supreme Court Rules, Order 34B

Evidence Act 1995, ss 55, 56

Lebon v Lake Placid Resort Pty Limited (1995) 1 Qd. R 24

Uthmann v Ipswich City Council (1998) 1 Qd. R 435

Compagnie Financiere Du Pacifique v Peruvian Guano Co (1882) 11 QBD 55

No. SC 790 of 2003

Judge: Master Harper

Supreme Court of the ACT

Date: 6 August 2004

IN THE SUPREME COURT OF THE )

) No. SC 790 of 2003

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: BETTER BUILDING SERVICES PTY LIMITED

Plaintiff

AND: DIANA VERE DYER

Defendant

ORDER

Judge: Master Harper

Date: 6 August 2004

Place: Canberra

THE COURT ORDERS THAT:

1. The solicitors for the defendant notify the solicitors for the plaintiff no later than 3.00 pm on Thursday 12 August 2004 whether or not the defendant proposes to make any further objection to production of specific documents produced by National Australia Bank Limited.

2. In the absence of any further objection, the solicitors for the defendant deliver to the solicitors for the plaintiff the documents produced by National Australia Bank Limited no later than 10.00 am on Friday 13 August 2004.

3. The costs of the application be the plaintiff's costs in any event.

4. The further hearing of the application be adjourned to 13 August 2004.

1. This is an interlocutory application in the course of a building case. The plaintiff contracted to build two residential units on the defendant's block of land at Ainslie. The plaintiff complains that the defendant has failed to pay two progress payments due under the contract, and that she owes the plaintiff some $80,000. The defendant concedes that she has not made the payments, but says that breaches of the contract by the plaintiff entitled her to withhold the payments and to terminate the contract. The defendant makes a counterclaim against the plaintiff for unquantified damages. Issue has been joined and the pleadings are closed.

2. The plaintiff has issued, under the seal of the Registrar of the Court, a notice for non-party production addressed to National Australia Bank Limited, the defendant's bank. The notice requires production to the plaintiff's solicitors of the following documents:

1 All correspondence, agreements, recommendations, proposals, estimates, approvals, notes, diary notes, memoranda, minutes or other records of meetings or conversations, records of inspections, file notes, orders, or any other like documents or records relating to or in connection with Block 5 Section 76 Ainslie in the Australian Capital Territory.

2 Copies of any of the documents sought in paragraph 1 above where the original documents are no longer in the possession, custody or control of the respondent of this notice.

3. The notice was issued under Order 34B of the Supreme Court Rules. The relevant rules are:

Notice for Non-Party Production

2 On application by a party to an action, the Registrar shall, unless the Court otherwise orders, issue a notice requiring a person who is not a party to the action to produce for inspection a document in the person's possession or control relating to a matter in question in the action that the person could be required to produce at the trial of the action.

Service of Notice

4(1) A notice for non-party production shall be served personally;

(2) A copy of the notice must be served on each other party to the action who has an address for service by leaving it at that address within two days after the day the notice is served on the respondent to the notice.

Application to Set Aside or Vary

6(1) The respondent to a notice for non-party production or any other party to the action may, within 14 days after the day the notice is served on the respondent, apply to the Court to have the notice set aside or varied.

(2) On an application under subrule 1, the Court may make such orders as the Court thinks fit.

Privilege or Objection

7(1) If the respondent to a notice for non-party production or any other party to the action -

(a) claims that a document specified in the notice is privileged from production; or

(b) otherwise objects to its production;

the respondent need not produce the document and the applicant for the notice, the respondent or that other party may apply to the Court for a determination in relation to the claim or objection.

. . .

(3) On an application under subrule (1) . . . the Court may make such orders as the Court thinks fit.

4. It will be noted that rule 2 obliges the Registrar to issue a notice on application. In theory it would be open to the Registrar to decline to issue the notice if it appeared not to relate to a matter in question in the action. As a matter of practicality however, having regard to the time and legal skill which would be required to arrive at such an opinion, and the volume of applications for issue of notices for non-party production, notices which appear to be in order are issued as a matter of course, leaving issues as to compliance to be raised by the respondent to the notice or the other party or parties to the action.

5. In the present case, the respondent took no objection to producing the documents. The solicitors for the defendant, however, took objection. They wrote to the solicitors for the plaintiff and to the bank. They did not apply under rule 6 for an order setting the notice aside. They told the bank that they objected to production of the documents on the ground of relevance, and they directed the bank to place the documents in a sealed envelope and deliver them to the Registrar.

6. The plaintiff's solicitors responded by letter which included the following:

It is our view that the notice to the National Australia Bank was properly issued. The National Australia Bank was providing a great proportion of the funding under the contract between the parties. As our clients claim inter alia relates to unpaid money withheld by Ms Dyer, it is clear that information from Ms Dyer's bank touches and concerns that issue. With respect, your assertion that the documents held by your client's bank are not relevant to the proceedings is incorrect.

7. The bank produced the documents to the Court, and the plaintiff has brought the present application, effectively seeking leave to uplift and inspect the documents.

8. Order 34B was inserted in the Rules in 1997. This replaced the procedure established in 1983 by the former Order 39 rule 6A, which required an application to the Court for leave to issue a non-party notice. Until 1983, the only procedure available for bringing documents of a non-party before the Court was by subpoena for production. At that time, the practice was to require production at or shortly before the commencement of the hearing of the action.

9. The present non-party production system differs in a number of ways from the subpoena procedure. It requires production of documents to the party issuing the notice rather than to the Court, and it is intended to be used well in advance of the hearing. The change has been highly beneficial. It has led to earlier consideration of settlement and to more through preparation of cases before trial. It has reduced wastage of court time.

10. The Supreme Court of Queensland was the first court in Australia to introduce the new system. There is little reported case law to assist in determining the present application, but the general principles were outlined by Lee J in Lebon v Lake Placid Resort Pty Limited (1995) 1 Qd. R 24 and expanded upon by his Honour in Uthmann v Ipswich City Council (1998) 1 Qd. R 435. Both decisions arose from applications by respondents to notices rather than parties to the action: it appears that at that time at least, the Queensland rules did not require service of the notice on other parties.

11. Lee J expressed the opinion in Lebon that the party seeking production bears the onus in the first instance of proving that the documents fall within the scope of the rule (at 32). This requires the party seeking production to establish that the documents relate to a matter in question in the cause. The rule does not permit a party to engage in a fishing expedition in the hope that it may advance his case or damage that of the opponent. In other words, non-party production is not equivalent to discovery against a stranger to the litigation (at 32). The requirement that a specified document must relate to a matter in question in the cause is ordinarily capable of determination only by examination of the pleadings and particulars.

12. Counsel for the defendant submits that in the present case, the bank documents cannot possibly relate to any matter in question in the action. It is the defendant and not the bank which has made the decision not to make the progress payments, and the fact that they have not been made is admitted on the pleadings. The matter in issue is whether or not the plaintiff was justified in withholding payment, having regard to the level of compliance by the plaintiff with the building contract. The defendant does not suggest that her decision not to make the payments had anything to do with her funding arrangements with the bank, or that the bank played any role in the administration of the building project or supervision of the work. In the circumstances, the issue of the notice by the plaintiff can be seen only as a fishing expedition, or a use of the procedure for an ulterior purpose, such as embarrassing the defendant by disclosing confidential material relating to her financial affairs.

13. It appeared to me on the hearing of the application that its determination would be assisted if I had the opportunity to inspect the documents. This is often done where an objection is based on a claim of privilege. The parties agreed to this course and I have carried out the inspection, with a view to identifying the nature of the documents rather than scrutinising each in detail (the documentation produced runs to something of the order of 1000 pages).

14. It is clear that the documentation relates solely to the defendant's dealings with the bank in relation to the Ainslie property and the building project. Included are copies of plans and contractual documentation between the plaintiff and the defendant; loan application documents; correspondence between the defendant and the bank; internal communications between bank staff; and documentation in relation to building work undertaken by another builder on the defendant's instructions, following the breakdown of her contractual relationship with the plaintiff. The documents necessarily include some material relating to the defendant's personal financial position. I was unable to identify anything which I saw as of a sensitive nature.

15. It seems to me that the material produced relates in a general sense to the defendant's dealings with the plaintiff, and to the building project which has given rise to the dispute. It seems to me that the test to be applied is the same as if the documents had been produced to the Court in response to a subpoena. The test is wider than admissibility: the plaintiff does not have to go so far as to satisfy the Court that the material satisfies the admissibility tests expressed in ss 55 and 56 of the Evidence Act 1995. At the same time, the test is narrower than that which applies in relation to discovery between parties to the action: that a document is relevant if it may advance the party's own case or damage the opponent's case, or lead to a course of enquiry which would do so: Compagnie Financiere Du Pacifique v Peruvian Guano Co (1882) 11 QBD 55. The test is aptly expressed by the learned authors of Civil Procedure (Australian Capital Territory) at para 9880.1: it would be a good ground for objection that the documents do not or could not possibly relate to a matter in issue in the action. The present objection does not in my view satisfy that test.

16. As with a subpoena for production, a notice addressed to a non-party must described the documents sought to be produced with sufficient particularity to enable the respondent to identify them readily. This is not an issue in the present case, since the documents have been identified and produced by the bank without objection. For the same reason, I need not concern myself with the confidentiality of the bank's internal communications.

17. I am satisfied that the documents produced relate to matters in question in the action, so that the notice was properly issued by the Registrar. The defendant has not made out her general objection to the production of the documents produced by the bank in their entirety.

18. Because the hearing of the application was focused on the question of the relevance of the documents in their entirety, I propose before permitting inspection by the plaintiff to give the defendant seven days to raise any objection to any specific document produced by the bank which the defendant may seek to pursue notwithstanding these reasons.

19. Although in form this is an application by the plaintiff for an order permitting inspection of the documents, it is in substance the determination of an objection by the defendant to production on the ground of relevance. That objection has been unsuccessful. The documents will be returned to the solicitors for the defendant who will have seven days to make any further application. I shall adjourn the further hearing of the application until 13 August, when any such application may be made orally, provided that the defendant has given the plaintiff written notice of intention to do so. If the defendant decides not to take the matter further, the solicitors for the defendant must deliver the documents to the solicitors for the plaintiff before 10.00 am on 13 August, and the parties will be excused from attendance before the Court on that day.

20. The plaintiff should have its costs of the application regardless of the outcome of the proceedings.

I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Master.

Associate:

Date: 6 August 2004

Counsel for the plaintiff: Mr G T Brackenreg

Solicitor for the plaintiff: Meyer Clapham

Counsel for the defendant: Mr C Whitelaw

Solicitor for the defendant: ST Lawyers

Date of hearing: 30 July 2004

Date of judgment: 6 August 2004