This is an application by the plaintiff to set aside a subpoena issued by the defendant to the Commissioner of NSW Police. The substantive proceedings are a claim by the plaintiff for indemnity under a policy of insurance in respect of warehouse premises at Unit 1, 64-66 Burrows Road, Alexandria. The warehouse and its contents were destroyed by a fire that commenced at approximately 12.30 am on Monday, 16 April 2018. Part of the warehouse was a bond store licensed under Commonwealth customs legislation. The balance of the property was used as an unbonded storage facility for clients of the plaintiff.
The defendant alleges that the fire was deliberately lit with the knowledge and involvement of its insured, the plaintiff. The defendant alleges that the claim is fraudulent. It will bear the onus of proving those allegations.
The subpoena was issued on 25 September 2020 and was first returnable on 9 October 2020. The documents called for are described in the schedule as follows:
All correspondence, incident reports, investigation reports, COPS records, witness and police statements from 1 July 2015 to date held in relation to or referring to;
(a) Morris Automotive Pty Ltd; and
(b) Mr Morris Gazzara.
The schedule continues with a standard clause that expands the meaning of "documents" to include electronic records and the like.
The Commissioner produced documents to the registry under this subpoena in October 2020 but no order for access has yet been made. The plaintiff stated its objection to the subpoena soon after it was issued and the defendant has refrained from pressing for access until now. Although the subpoena has been answered and the present application really concerns access to the produced documents, it has been said that an application to set aside a subpoena is an appropriate procedure in such circumstances: Lowery v Insurance Australia Ltd (2015) 90 NSWLR 320; [2015] NSWCA 303 at [3] and [26] (Basten JA).
The proceedings are listed for final hearing commencing Monday 6 September 2021 with an estimated hearing time of 10 days. A fifteen volume Court book, consisting mostly of evidence, has been compiled and agreed between the parties but has not yet been delivered to the Court. On the hearing of this application I do not have a full picture of the evidence that will be adduced.
The plaintiff contends that the subpoena should be set aside as an abuse of process, for want of any legitimate forensic purpose. It is necessary to refer to the particulars of the defendant's allegations about fraud in order to understand the legitimate forensic purpose claimed by the defendant. Part of the defendant's pleaded and particularised case is that at the time the fire commenced "combustible material in the nature of tyres [was] spread around the warehouse". The defendant alleges that these tyres had been delivered to the premises on Saturday 14 April 2018, that is, within less than 48 hours before the fire.
The plaintiff has taken an affidavit from Morris Gazzara, also known as Maurizio Gazzara, the person whose police records are sought under the subpoena. He carries on an automotive repair business through his company Morris Automotive Pty Ltd, which is also named in the schedule to the subpoena. Mr Gazzara has deposed that he arranged for the delivery of tyres, car batteries and other goods to the insured premises through an exchange of emails with Arthur Russkikh, a person who worked in the plaintiff's business. Mr Gazzara has produced emails dating from Thursday, 12 April 2018 that purport to show him requesting from Mr Russkikh a price for the storage of "car parts and accessories on pallets for export in the next few weeks, until I am ready to export".
Mr Gazzara has identified an invoice dated 2 April 2018 purporting to show that he purchased on that date 318 "mixed used tyres 16/17/18 inch" and 53 used vehicle batteries. It is apparently the intent of this affidavit to convey that the items purchased under the invoice of 2 April 2018 were the subject of the arrangements with Mr Russkikh for storage at the insured premises. Mr Gazzara's emails state that there would be 20-30 pallets. He has deposed that he commenced delivery of these goods to the premises on Friday 13 April 2018 and that he continued the process on Saturday 14 April. He says that during Saturday 14 April, after the unloading of two or three trucks, he was told by Dimitry Fateev that the goods were not properly packed on their pallets and would have to be removed from the warehouse and re-packed elsewhere, before being returned for storage.
Dimitry Fateev is a former director of the plaintiff, whom the defendant alleges participated in the de facto control of the plaintiff's business. The defendant alleges that Dimitry Fateev departed Australia for Vladivostok on a one way fare on Sunday 15 April 2018, being the day that fell between the delivery of the tyres to the premises and the outbreak of the fire. Mr Gazzara has deposed that as a result of Dimitry Fateev's instruction concerning re-packing the pallets, the tyres and other items "had to be re-loaded back onto the trucks" and transported away from the premises. The effect of paragraphs 13 and 14 of Mr Gazzara's affidavit is that re-loading and removal as instructed by Dimitry Fateev was carried out on Saturday, 14 April 2018.
It is not certain at this stage of the proceedings whether the plaintiff will call Mr Gazzara or whether the defendant will call him. The defendant's counsel has made it clear that if the defendant calls Mr Gazzara it will seek leave to cross-examine him under s 38 of the Evidence Act 1995 (NSW). The transaction and series of events that Mr Gazzara describes were very close in time to the fire that the defendant alleges was deliberately lit and that involved a flammable product, namely, motor tyres, said to have been distributed around the warehouse when the fire occurred. The defendant will adduce evidence that the remnants of tyres were found in approximately 15 separate locations throughout the building after the blaze had been put out.
On the face of Mr Gazzara's affidavit the transaction and events described by him include unusual features. First, it is unusual that the delivery of tyres to the premises should get to the stage of several truck loads having arrived over two days before the conclusion was reached by those conducting the plaintiff's business that the goods were not properly packed and would all have to be taken away again. Secondly, it seems surprising that Mr Gazzara and his business should be exporting used tyres from Australia. Used tyres would not readily spring to mind as an Australian export commodity. Thirdly, it is not apparent to me at this stage, in advance of the evidence being given, whether the products otherwise stored by the plaintiff in its warehouse were of an homogenous kind or, if so, whether the types of goods stored commonly included bulky automotive and industrial products such as used tyres and car batteries.
Evidence at the hearing may provide some perfectly satisfactory explanation for these features of the transaction and events. In the light of the whole of the evidence the aspects referred to above may be shown not to be unusual at all or not significant, either alone or in combination. Before hearing all of the evidence and arguments the Court cannot draw even tentative conclusions. But having regard to the issues in the case the matters described by Mr Gazzara are such as to warrant the defendant paying close attention to them and forming the view that it should challenge what Mr Gazzara has deposed, in particular, what he has said about his purpose in transporting the tyres to the premises and his claim that he removed them on Saturday, 14 April. The defendant has understandably concluded that it has been put upon enquiry about Mr Gazzara's credit by the sequence of a large number of motor tyres being delivered and then taken away, in the seemingly erratic fashion described by Mr Gazzara, and by the circumstance that this occurred so very close in time to the fire which, according to evidence that the plaintiff will lead, was in part fuelled by the highly combustible material of this very product, motor tyres.
From the features of the case that I have referred to up to this point, it appears legitimate that the defendant should have a proper forensic opportunity to challenge Mr Gazzara's truthfulness, if he should be called by either party. The matters upon which Mr Gazzara's evidence might be tested, particularly as to whether any of his tyres may have remained the building and may have accelerated the fire, are matters integral to the central issue in the case.
The defendant says that it also has a more specific reason for seeking access to police records in order to equip itself to test Mr Gazzara's credibility if he should give evidence. The defendant has informed the plaintiff in correspondence and has informed the Court through counsel that police have advised the defendant's claims investigator that Mr Gazzara and his company have come to police attention "as a [motor vehicle] repairer of concern due to involvement in staged incidents". This information provides a ground for the defendant to expect that by obtaining the police records described in the schedule to the subpoena, it may find intelligence reports, such as would be recorded on the COPS system, and/or incident reports or investigation reports, if not records of charges having been laid, concerning matters of dishonesty on the part of Mr Gazzara and his business.
The test for assessing a legitimate forensic interest in subpoenaed documents has been recently reaffirmed by the Court of Appeal in Secretary of the Department of Planning, Industry and Environment v Blacktown City Council [2021] NSWCA 145 at [65] (Bell P) and [86] and [89] (Brereton JA). The President said this:
[16] It is sufficient, in my view, to justify a subpoena as having been issued for a legitimate forensic purpose if the documents sought are "apparently relevant" or, to use the words of Nicholas J in [ICAP Pty Ltd v Moebes [2009] NSWSC 306], it can be seen that the documents sought to be produced by way of subpoena will materially assist on an identified issue or there is a reasonable basis beyond speculation that it is likely the documents subpoenaed will so assist. Of course, if it can be shown that the material assistance will be to the party that issued the subpoena, the prospect of the forensic purpose of the issuing party being impugned as illegitimate will be virtually non-existent.
Brereton JA held as follows:
[86] […] I agree with [Bell P] that the primary judge did not err in holding that it was not necessary, in order to demonstrate a legitimate forensic purpose for the issue of a subpoena, that the documents sought would likely materially assist the case of the party that issued the subpoena, and consequently did not err in dismissing the application to set aside the subpoena. For myself, however, I am inclined to the view that her Honour also did not misread this Court's decision in ICAP Australia Pty Ltd v BGC Partners (Australia) Pty Ltd [2009] NSWCA 307.
[89] I agree with Bell P, for the reasons given by his Honour, that an issuing party is not required to show that it is "likely" (or "on the cards") that the documents sought will materially assist its case, as distinct from that it is "likely" (or "on the cards") that they will add, in some way or another, to the relevant evidence in the case, and that the essential question is whether the documents called for are apparently relevant, or capable of providing a legitimate basis for cross-examination, in which case there is a legitimate forensic purpose for the issue of the subpoena. In my view, at least in civil proceedings and in the absence of any question of public interest immunity, no more is required to support the issue of a subpoena for production than that there is a reasonable basis for supposing that the material called for will likely add, in the end, in some way or another, to the relevant evidence in the case. This reflects the notions that the documents relate to, throw light on, or are sufficiently relevant to the dispute; that they "appear relevant in the sense that they relate to the subject matter of the proceedings"; or that they could possibly throw light on the issues in the case. Moreover, documents will add "in some way" to the relevant evidence in the case if they are capable of assisting in cross-examination, or go to credit, and notwithstanding that they are inadmissible according to the rules of evidence.
Here, the subpoena concerns police records relating to a single witness whose evidence concerns the central issue in the case and whom the defendant is likely to challenge by as to his truthfulness. "There is a reasonable basis beyond speculation" that the witness' criminal history and/or police intelligence holdings concerning him are likely to assist with respect to the identified issue of whether combustible tyres were purposefully placed and left in the insured building shortly before the fire. The documents called for under the subpoena appear "capable of providing a legitimate basis for cross-examination" of the witness. As Brereton JA held, the subpoena does not lack legitimate forensic purpose merely because documents produced under it may not be admissible according to the rules of evidence. I do not consider it necessary that in order to be supportable the subpoena would need to be confined to documents specifically related to police records or holdings concerning matters of dishonesty in relation to Mr Gazzara. Police holdings may still be material for purposes of cross-examination on credit although they concern a broader range of criminal activity than what would fall within the classification of offences of dishonesty.
The call for documents is objected to on the grounds that it covers too long a period, namely, more than five years from July 2015 until the issue of the subpoena in September 2020. There is no objection from police that this requires them to produce a burdensome volume of material. It is a reasonable possibility that records of police investigations or intelligence for the whole of that period may bear upon Mr Gazzara's credibility in a way that is important to the disposition of this case. Instances of dishonesty that may have come to the attention of police arising out of events subsequent to the fire may be relevant.
The plaintiff has relied particularly on Lowery v Insurance Australia Ltd. The appellants in that case were the insured under a motor vehicle policy. They bore the onus of proving that the vehicle had been stolen. The insurer defended the claim in the District Court in reliance upon evidence tending to suggest that the vehicle had been deliberately removed from a parking lot with the connivance of the insured. The vehicle was found a relatively short distance away, destroyed by fire. It was over-insured by $60,000, under a policy that had been taken out only four days before the loss. The vehicle had not been stripped of parts. There appeared to be no motive to remove and destroy it, except on the part of the insured themselves.
The insurer's subpoena to the Commissioner of the NSW Police sought production of records in relation to both of the insured, their son and a person who controlled the car park from which the motor vehicle was removed. In relation to each of those people the documents sought from the Commissioner were described in the schedule as follows:
Your complete record file relating to [named person] including but not limited to all criminal records, all complaints, reports and any documentation relating to any incidents involving [the named person].
The Court of Appeal accepted that, although it was unnecessary for the defendant to plead fraud, the credibility of the four people referred to in the subpoena would be in issue and that the insurer was entitled to resist the claim on the basis that the insured had not proved that the vehicle was taken and destroyed without their consent or connivance. By majority (Basten JA and Emmett AJA) the Court of Appeal held that the subpoena lacked legitimate forensic purpose and that it should have been set aside. Their Honours did not endeavour to restate the principles by which legitimate forensic purpose is assessed. No test was articulated in terms different from the formulations recently confirmed in Secretary of the Department v Blacktown City Council. Clearly their Honours found it to be no more than speculation that there may be documents amongst those caught by the subpoena that may possibly be used to impugn the witnesses' credit.
It is tempting but unreliable to make comparisons with the facts of other cases in this field. This subpoena under consideration here is directed to the Commissioner's records in respect of a single witness whose evidence is at the centre of the principal issue in the case. The subpoena and the circumstances in Lowery v Insurance Australia Ltd are in no respect comparable. The subpoena schedule in that case did not limit the documents sought to a date range. There was no evidence, as there is in the present case, of an intimation to the insurer that any of the people whose criminal records were called for were adversely known to police with respect to issues of honesty in the motor repair trade. In Lowery v Insurance Australia Ltd there was no equivalent of the evidence in the present case, concerning Mr Gazzara, that two days before the event giving rise to the claim he was involved in moving into the insured premises highly flammable material of the kind that was later found to have contributed to the blaze. These are very specific matters focusing attention upon Mr Gazzara and upon any documents that may touch his history of probity or otherwise.
[2]
Orders
I do not accept the plaintiff's contention that the subpoena is an abuse of process. Accordingly, orders will be entered as follows:
1. The plaintiff's notice of motion filed on 20 August 2021 to set aside the subpoena is dismissed with costs.
2. The defendant is to have access to the documents produced by the Commissioner of Police under the subpoena issued to him on 25 September 2020.
3. The plaintiff may have access to those documents on and after 3 September 2021.
[3]
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Decision last updated: 03 September 2021