FEDERAL COURT OF AUSTRALIA

Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (No 3) [2012] FCA 61

THE COURT ORDERS THAT:

The Applicant’s Notice to Produce dated 25 January 2012 be set aside.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    On 25 January 2012 the solicitors for the applicant (“the CFMEU”) served a Notice to Produce on the respondent BHP Coal Pty Ltd (“BHP Coal”) pursuant to r 30.28 of the Federal Court Rules 2011 (“the Rules”).

2    On 1 February 2012 BHP Coal filed an interlocutory application seeking orders that the Court set aside the Notice to Produce, and that the CFMEU pay BHP Coal’s costs in respect of this application. The trial in the substantive matters in this proceeding commenced yesterday, and the interlocutory application was also listed for hearing. Counsel made submissions in relation to the interlocutory application, and I reserved my decision in respect of that application overnight.

The Notice to Produce

3    At the hearing Ms Howell for the CFMEU informed the Court that Categories 1 and 7 of the Notice to Produce were not pressed by her client. I also granted the CFMEU leave to amend Category 5 of the documents listed in the Notice to Produce. Accordingly, those Categories of documents which the CFMEU continues to press in the Notice to Produce are as follows:

2.    All documents relating to, referring to or setting out the extent and nature of the respondent’s involvement in District Court proceedings 2188/09, including but not limited to:

a.    any documents relating to the funding of the defence in the matter or the provision of financial assistance of any type to Mr Cramond in relation to the matter;

b.    any record of a meeting between Mr Cramond and Mr Mark Stroppiana on 6 August 2009;

c.    any record of any other meetings involving any officer, employee or other representative of the respondent concerning the proceedings; and

d.    any communications by any officer, employee or other representative of the respondent with any third party in relation to the proceedings.

3.    All earlier drafts of:

a.    the ‘Show Cause’ letters to sent to Mr Adams and Mr Winter on 29 July 2011; and

b.    the termination of employment letters sent to Mr Adams and Mr Winter on 5 August 2011.

4.    All documents, including metadata, necessary and sufficient to show the date and time at which the drafts of the letters referred to (3) above were first produced or generated.

5.    All documents containing or evidencing complaints made by Mr Robert Cramond about the following employees of the respondent since August 2008:

a.    Mr Phillip Rose;

b.    Mr Darryl Morris;

c.    Mr Ty McCleod;

d.    Mr Jason Noonan;

e.    Mr Kevin Wilton;

f.    Mr Wayne Taylor; and

g.    Mr Charlie Craig.

6.    All documents relating to proceedings no DR2010/578 before Commissioner Spencer in Fair Work Australia.

Relevant Principles

4    As I have already observed, the Notice to Produce in this proceeding was served on BHP Coal pursuant to r 30.28 of the Rules. This rule provides:

(1)    A party may serve on another party a notice, in accordance with Form 61, requiring the party served to produce any document or thing in the party’s control:

a.    At any trial or hearing in the proceeding; or

b.    At any hearing before a Registrar or any examiner or other person having authority to take evidence in the proceeding.

(2)    If the document or thing required to be produced under subrule (1) is not produced, the party serving the notice may lead secondary evidence of the contents or nature of the document or thing.

(3)    If a notice under subrule (1) specifies a date for production, and is served 5 days or more before that date, the party served with the notice must produce the document or thing in accordance with the notice, without the need for a subpoena for production.

Note : A party who fails to comply with a notice under subrule (1) may be liable to pay any costs incurred because of the failure.

5    Notwithstanding the submission yesterday by Ms Howell, I am not persuaded that the approach implicit in provisions of the Rules concerning Notices to Produce and the discovery process is that principles developed prior to 1 August 2011 in respect of Notices to Produce are of limited or no relevance in respect of the new Rules. It does not appear to be in serious dispute between the parties that a Notice to Produce served pursuant to r 30.28 has the same coercive effect as a subpoena duces tecum: CCom Pty Ltd v Jiejing Pty Ltd (1992) 37 FCR 1 at 3; Microsoft Corporation v CX Computer Pty Ltd (2002) 116 FCR 372 at 380; Seven Network Limited v News Limited (No 5) [2005] FCA 510 at [6]; Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Emergency Transport Technology Pty Ltd [2011] FCA 181 at [10]; Suzlon Energy Ltd v Bangad [2011] FCA 1152 at [14]. It follows that the principles governing the exercise of the power to set aside a Notice to Produce or to excuse a party served with a Notice to Produce from producing documents in answer to that Notice are the same as the principles which govern the setting aside of a subpoena for production issued to a party (cf Foster J in Cheung Kong Infrastructure Holdings Limited v BlueScope Steel Limited [2010] FCA 739 at [29] and Cowdroy J in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union at [11].

6    In my view the following principles are relevant to setting aside a Notice to Produce, and to consideration of the interlocutory application before me:

(1)    The party which has issued a Notice to Produce bears the onus of establishing that the documents the subject of the Notice are sufficiently relevant to justify production (Seven Network Ltd v News Ltd (No 11) [2006] FCA 174 at [6], Cheung at [55]).

(2)    Timing of the issue and service of a Notice to Produce is a relevant factor in respect of any application to set aside the Notice.

(3)    A Notice to Produce cannot be used as an alternative to an application for discovery or for further and better discovery.

(4)    It is necessary that the material sought has an apparent relevance to the issues in the principal proceedings. The test of apparent relevance in this context is whether the documents are reasonably likely to add, in the end, in some way or other, to the relevant evidence in the case. (Seven Network (No 11) at [6], Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union at [14]).

(5)    A Notice to Produce cannot be used for the purposes of “fishing” or for the purpose of determining a preliminary question as to whether a party has a supportable case.

(6)    A Notice to Produce may be set aside on the basis that it is unduly burdensome if the width of the categories requested is too broad or the categories are not described with adequate specificity (Tony Azzi Automobiles Pty Ltd v Volvo [2006] NSWSC 283 at [20], Sportsbet Pty Ltd v New South Wales (No 9) [2010] FCA 31).

Consideration

Timing

7    As explained by Brereton J in Tony Azzi Automobiles at [8], service of a Notice to Produce shortly before a trial, imposing a considerable obligation and thus disruption on parties and practitioners already deeply immersed in the preparation for and conduct of the trial, may be unreasonable and vexatious. While traditionally the issue of timing was not determinative of the application to set aside the Notice to Produce and would weigh in the balance when one comes to examine the question of relevance (Tony Azzi Automobiles at [8]), in light of the case management principles discussed by the High Court in Aon Risk Services Australia Ltd v ANU (2009) 239 CLR 175 I am of the view that the potential disruption of a trial by unduly proximate service of a Notice to Produce may be a determinative factor in considering an application to set aside the Notice (cf comments by Branson J in John Flower Diddams v Commonwealth Bank of Australia [1998] FCA 9497).

8    In this case the Notice to Produce was served on the solicitors for BHP Coal on 25 January 2012. In light of seasonal public holidays and the proximity of the trial (due to commence 6 February 2012) it was not practical to list the interlocutory application to set aside the Notice before the first day of the substantive hearing. I consider that, in the circumstances of this case, the timing of the service of the Notice to Produce was unreasonable, particularly in light of the fact that orders for discovery had been made six weeks before in specific terms. No good reason has been provided by the CFMEU for what is, on the facts, such late service of the Notice to Produce. That, in the submission of the CFMEU, BHP Coal should experience no difficulties in complying with the Notice to Produce is not to the point. However, in circumstances where Mr Murdoch at the hearing submitted that documents complying with the Notice could be produced within 24 hours, I am prepared to consider other issues relevant to the application to set aside the Notice to Produce, and it is to those other issues I now turn.

Is the Notice to Produce being used as an alternative to an application for further and better discovery?

9    This proceeding, which was instituted by Originating Application filed 8 August 2011, has been the subject of an extensive agreed discovery process as well as numerous orders by the Court. It is not in dispute that on 23 September 2011 BHP Coal agreed to discover any and all documents within certain categories. On 7 December 2011 in Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (No 2) [2011] FCA 1396 I made an order pursuant to r 20.17 of the Rules that the respondent (“BHP Coal”) make discovery of any and all documents falling within the following categories:

(a) any and all documents, including but not limited to emails, meeting notes and/or statements, relating to District Court proceedings 2188/09.

10    The relevance of District Court proceedings 2188/09 was explained in that judgment.

11    In Australian Competition & Consumer Commission v Shell Co of Australia Ltd [1999] FCA 212 Cooper J considered an application to set aside a subpoena, and in that context discussed the issue whether the applicant for the subpoena ought properly to have made an application for further and better discovery pursuant to O 15 r 8 of the Federal Court Rules (now r 20.21 of the Rules). His Honour observed:

48 In Commissioner for Railways v Small (1938) 38 SR (NSW) 564, Jordan CJ said (at 574 - 575):-

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: AG v Wilson; Earl of Powis v Negus. 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 discovery 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. It would greatly impede the trial of actions at nisi prius, and impose an intolerable burden upon the presiding judge, if he were required form time to time to suspend proceedings and wade for himself through masses of documents for the purpose of endeavouring to determine whether any of them are relevant. Especially is this so when the documents may be called for whilst the case is still at the stage when it is difficult or perhaps impossible for the Judge to know what may become relevant and what may not. In the absence of special circumstances, eg Griebart v Morris [1920] 1 KB 659, a party is no more entitled to use a subpoena duces tecum than he is a summons for interrogatories, for the purpose of ‘fishing’, ie, endeavouring, not to obtain evidence to support his case, but to discover whether he has a case at all: Hennessy v Wright 24 QBD 445 at 448, or to discover the nature of the other side's evidence: Briebart v Morris [1920] 1 KB 659 at 666. Even if the documents are specified, a subpoena to a party will be set aside as abusive if great numbers of documents are called for and it appears that they are not sufficiently relevant: Steele v Savory [1891] WN 195.

49 In a recent case dealing with an application to set aside a subpoena addressed to a respondent, Diddams v Commonwealth Bank of Australia [1998] FCA 497, Branson J said (at p 6 of her Honour's reasons):-

However, the usual legal processes by which a party to a proceeding in the Court obtains access to the documents of opposing parties are the processes of discovery and inspection. Where the court has by detailed directions set a timetable for the undertaking of the procedural steps necessary to bring a matter to readiness for trial, including a timetable for the discovery and inspection of documents, it is to be expected that the parties will seek such documents ‘relating to any matter in question between [them]’ as they wish to have access to through the process of discovery and inspection (O15 r2(2)). If such documents are sought by subpoena or notice to produce issued close to trial, the Court's endeavours to manage the process of the preparation of the matter for trial, and to ensure that no interlocutory issues are outstanding at the hearing date, may be subverted.

Order 15 rule 8 of the Federal Court Rules provides a procedure whereby particular discovery may be sought where a party is dissatisfied with the extent of discovery made by an opposing party. The discretion given to the Court by O15 r8, and the requirement that, before any order may be made under that rule, it should appear to the Court ‘... from evidence or from the nature or circumstances of the case or from any document filed in the proceeding that there are grounds for a belief that some document or class of document relating to any matter in question in the proceeding may be or may have been in the possession, custody or power of [the] party’, ought not, in my view, to be able to be avoided by the simple device of serving a subpoena duces tecum upon an opposing party.

..... The rules of court do not place on judges the responsibility of determining for the parties which of their respective documents are required to be discovered. Judges have not traditionally assumed such a role. I do not consider that by choosing to issue a subpoena, rather than to seek an order pursuant to O15 r8 of the Federal Court Rules, a party should be able to achieve the result of placing such a responsibility on a judge. Moreover, in this case it would have been inappropriate for the conduct of the trial to have been further disrupted by my being required to read documents produced in response to a subpoena called during the course of the taking of evidence.

50 The rationale for this principle is, in my view, that where a particular method has been prescribed 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 espoused in Mulley v Manifold [1959] HCA 23; (1959) 103 CLR 341, it is impermissible to attempt to achieve that objective through the subpoena process. This broader principle was applied by Beaumont J in Kizon v Palmer (1997) 75 FCR 261, in a case where the material sought to be produced via subpoena was prohibited from production in discovery . On that basis the subpoena was set aside as an abuse of process. This decision was affirmed on appeal (Kizon v Palmer [1998] FCA 312, Northrop, French and Branson JJ).

51 Like the case before Branson J in Diddams v The Commonwealth Bank of Australia, this case has been the subject of a managed timetable and other than the issues raised by this subpoena and motion, the matter is ready for trial. In those circumstances the ACCC should not be permitted to avoid the evidentiary onus required in O 15 r 8 in order to go behind two affidavits of documents provided by Shell by issuing a subpoena in this form.

12    In my view, these observations of his Honour provide useful general commentary in respect of the Notice to Produce before me. In respect of Category 2 of the Notice to Produce, it is difficult to form any conclusion other than that the CFMEU is endeavouring by the Notice to revisit the interlocutory application decided on 7 December 2011, and in respect of which orders were then made by the Court. I form this view because while Category 2 similarly relates to documents referring to or setting out the extent and nature of BHP Coal’s involvement in District Court proceedings 2188/09, the class of documents sought appears broader than that ordered on 7 December 2011.

13    At the hearing Ms Howell conceded that the CFMEU could have sought further and better discovery, but was constrained by production of lists of documents by BHP Coal on or around 23 December 2011 and then in January 2012. While the exigencies of the Christmas holiday period are clear, I am not satisfied that they justify a Notice to Produce in the terms before me. Indeed I understand from the submissions of Counsel for the CFMEU that, even at this late stage, an application by the CFMEU for further and better discovery is viewed by the CFMEU as an option. In the circumstances I am not persuaded that time pressures demanded the service of a Notice to Produce.

14    In respect of Categories 3, 4, 5 and 6 the basis upon which the CFMEU seeks production of the relevant documents rather than further and better discovery is not clear to me. The principal affidavit of Mr Craig regarding his decision to terminate the employment of Mr Adams and Mr Winter was filed on 16 November 2011, and the Amended Defence of the CFMEU filed on 30 November 2011. Discovery in respect of the earlier drafts of the “show cause” and termination letters could have been sought at any time from and including those dates.

Relevance, breadth, and “fishing”

15    The primary submissions of both parties focussed on the apparent relevance of the documents described in the Notice to Produce.

16    For the CFMEU, Ms Howell submitted in summary:

    Both Mr Craig and Mr Cramond will be called as witnesses by BHP Coal.

    Documents in Categories 2, 3 and 4 are relevant to the state of mind, and credit, of Mr Craig, and the Court ought not take a narrow view of relevance in light of the provisions of the Fair Work Act 2009 (Cth) which form the basis of the applicant’s claims.

    Documents in Categories 3 and 4 are relevant to the processes of Mr Craig in respect of his decision-making, and will allow the CFMEU to test his evidence.

    Documents in Categories 5 and 6 raise similar issues in relation to the credit of Mr Cramond.

17    Mr Murdoch for BHP Coal submitted, in summary, that:

    the Notice to Produce is being used by the CFMEU to “fish” for evidence; and

    documents sought are not relevant.

18    In my view the submissions of BHP Coal in respect of relevance of Categories 2, 3, 4 5 and 6 are compelling. I am not persuaded that the documents described in those categories are of apparent relevance, such that an application to set aside the Notice to Produce can be resisted. In particular:

    Category 2 seeks all documents relating to, referring to or setting out the extent and nature of the respondent’s involvement in the relevant District Court proceedings. The breadth of Category 2 is such that, in my view, it is tantamount to a “fishing” exercise.

    I am unable to identify how earlier drafts of the “show cause” and termination letters described in Category 3 would be reasonably likely to add to the relevant evidence in the case (cf comments of Cowdroy J in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union at [14], [18], [19] and [20]). On the material before me, I do not accept that evidence of earlier drafts of these letters goes to the state of mind of Mr Craig, or is relevant to his credit.

    In relation to Category 4, I accept the submission of BHP Coal that no suggestion has been made that the show cause letters were drafted at an inappropriate or dubious time. Accordingly, the date the letters were drafted is not a point in issue, and is not of apparent relevance.

    In relation to Categories 5 and 6 I am not satisfied as to their relevance because:

    documents falling into these categories do not appear relevant to any live issue in the proceeding;

    I am not satisfied that documents containing or evidencing complaints made by Mr Cramond about other employees is in any way relevant to issues in the proceeding, including Mr Cramond’s credit;

    to the extent that the CFMEU claims documents described in Categories 5 and 6 may be relevant to Mr Cramond’s credit, again this appears tantamount to an exercise in “fishing”.

Conclusion

19    As I observed earlier, the CFMEU bears the onus of establishing that the documents the subject of the Notice to Produce are sufficiently relevant to justify production. I am not satisfied that this onus has been discharged.

20    The appropriate order is that the Notice to Produce be set aside.

Associate:

Dated:    7 February 2012