Anthony Damian v Suzana Hulak & Ors

Background

1. In June 2015 a Development Application was lodged with North Sydney Council for development consent for the erection of a dual occupancy on the property that is the subject of these proceedings. The Applicant objected to the development application on a number of grounds. The Council advised the First Respondent, who was the applicant on the development application, that the application was unlikely to be approved for a number of reasons. These reasons included issues regarding the bulk and scale of the proposed dual occupancy.
2. Subsequently, in October 2015, the First Respondent made an application to the Fifth Respondent under the State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 ("the SEPP") for a Complying Development Certificate ("CDC") for the erection of a dwelling on the property. The plans that accompanied the CDC application differed from those that accompanied the development application. The CDC was then issued in November 2015.
3. In the Summons commencing the proceedings, the Applicant raises a number of grounds upon which he says that the CDC is invalid. Relevantly, the Applicant alleges that the plans that accompanied the CDC application were largely the same as those that accompanied the development application. By virtue of this, the first ground raised by the Applicant is that the CDC Application was a sham and the true purpose of the proposal was for a dual occupancy. The second ground relied upon by the Applicant is that the purported compliance with the maximum floor area was a sham, in that the removal of parts of the upper floor of the proposal was intended only to purportedly satisfy the development standards for the floor area under the SEPP. The third ground relied upon is that by failing to properly describe the true nature of the development in the application for the CDC, there was no valid CDC application under the SEPP. The Applicant raises four further grounds in the Summons, which stem from the knowledge and actions of the Fifth Respondent. These grounds largely allege that the Fifth Respondent was aware or should have been aware that the application was not for complying development, and that the proposal did not comply with the relevant development standards.
4. On 19 January 2016 five separate notices to produce was issued pursuant to rule 34.1 of the Uniform Civil Procedure Rules 2005 to each of the five respondents. The notices each seek the production of documents described in three paragraphs, with the exception of the Notice to Produce issued to the First Respondent, which also seeks the production of documents described in a fourth paragraph. The first paragraph requires the production of documents relating to the Development Application and the Complying Development Certificate. The active respondents no longer object to that paragraph.
5. The second and third paragraphs, and the fourth paragraph of the Notice to Produce issued to the First Respondent, seek the production of the following documents: "2. Any other documents in your possession relating to communications with any or all of Suzana Hulak, Peter Taras Hulak, Peter Marian Hull and Anthony Protas, or any other person or entity, regarding any proposed development of the Premises from 29 June 2015 to 6 November 2015. 3. All documents: (a) relating to communications between you and any other respondent to these proceedings, or any other person or entity, in relation to the proposed purchase of the Premises, and (b) comprising any financial or other feasibility study or otherwise showing consideration of development of the Premises, from October 2014 to 6 November 2015 4. All documents comprising any instructions to you, design brief, or other document showing or describing the desired outcome of the owners of the Premises in relation to its development, whether by way of communication from anyone else or your own notes of any verbal or other communication, from 14 October 2014 to 6 November 2015." This fourth paragraph is unique to the First Respondent as she was the applicant for the CDC and prepared both the plans that accompanied the development application and those that accompanied the CDC application.
6. The Notice of Motion seeking to set aside the Notices to Produce is supported by the affidavit of Mr Fan of 16 March 2016. That affidavit sets out some of the history of the proceedings following their commencement. That history can be summarised as follows:

• On 12 February 2016 the proceedings were listed before Justice Pain for the first directions hearing. Directions were made for the active respondents to make a request for further and better particulars, and a timetable was put in place for a response to that request as well as for the exchange of affidavits and bundles of tender documents.
• On 17 February 2016 the active respondents sought further and better particulars in relation to a number of aspects of the pleadings.
• On 18 February 2016 the Applicant indicated that they could not respond to the request without the respondents having first complied with the Notices to Produce.

1. Following this, correspondence ensued between the parties' representatives regarding the validity of the Notices to Produce and whether they had been complied with.
2. On 9 March 2016, in a letter to the Applicant's solicitor, the solicitor for the active respondents made it clear that their position was that the Notices to Produce were unnecessarily broad and amount to a 'fishing expedition'. Notwithstanding this position, the active respondents had informally produced the documents that were in their possession and indicated in that letter that there were no further documents to produce. The Notices of Motion were filed shortly thereafter.

Submissions

1. There are two principal grounds upon which the active respondents say that the Notices to Produce should be set aside.
2. The first ground is that the documents sought have no legitimate forensic purpose. As such, the active respondents submit that the notices constitute a fishing expedition. The active respondents submit that whilst such documents may assist the Applicant's claim, the mere suspicion that such documents may assist is not sufficient to establish a legitimate forensic purpose. In that respect, counsel for the active respondent relies on the decision of the Court of Criminal Appeal in Attorney General for New South Wales v Dylan Chidgey [2008] NSWCCA 65. Beazley JA (as her Honour then was) sets out the applicable principles and confirms that mere relevance is not sufficient. The active respondents say that the documents sought must go one step further than mere relevance, in that they must also have a legitimate forensic purpose. It is this legitimate forensic purpose that they say the Applicant has failed to articulate or establish.
3. Second, the active respondents seek to set aside the Notices to Produce on the ground that the breadth of the notices renders them an abuse of process in that they are being used as a substitute for discovery. In particular, the active respondents submit that paragraphs 2 and 3(a) are categories concerning communications that are so broad that they will capture irrelevant documents. Counsel for the active respondents refers to the decision of Barrett J in Patonga Beach Holdings Pty Ltd v Lyons [2009] NSWSC 869, where His Honour states (at [14], referring to the decision of Jordan CJ in Commissioner for Railways v Small (1938) 38 SR (NSW) 564): "What is impermissible… is that a person be required to search for or produce all such documents as he or she may have in his or her possession or power relating to a particular subject matter. Jordan CJ continued: "It is not legitimate to use a subpoena for the purpose of endeavouring to obtain what would be in effect discovery of documents"." The active respondents submit that consistent with this principle, paragraphs 2 and 3(a) require them to search for and produce all things within their possession in relation to the particular subject matter, and therefore constitute an abuse of process.
4. The Applicant submits that the documents are sought are relevant to the issue of the true nature of the proposal the subject of the CDC application. The Applicant submits that it is clear from the Summons that this is an issue in the proceedings. Counsel for the Applicant submits that the documents sought meet the test summarised by Craig J in Azar Building and Construction Services Pty Ltd v Transport Infrastructure Development Corporation [2010] NSWLEC 110 at [20], "that it is "on the cards" that the documents will materially assist on an identified issue". The Applicant says that the issue is clearly identified in the Summons, and that it is "on the cards" that the documents sought will be relevant to that identified issue. The Applicant therefore submits that the legitimate forensic purpose to be achieved is to find documents relating to the true nature of the CDC application.
5. The Applicant also submits that the wording of paragraphs 2 and 3(a) are sufficiently precise to enable the respondents to identify the documents required to be produced, and that it would be expected that they would have a discrete file in relation to those documents. As such, the Applicant submits that no 'search' would be required that would render the process a substitute for discovery.

Principles

1. The principles regarding the grounds upon which a Notice to Produce issued pursuant to r 34.1 or a Subpoena should be set aside are well established, although they are often differently articulated. The summary given by Craig J in Azar Building and Construction Services Pty Ltd v Transport Infrastructure Development Corporation is helpful (at [21]): "the requirement [is] for it to be shown that it is "likely" that the documentation sought will materially assist on an identified issue or the alternative requirement that there be a reasonable basis beyond speculation that it is likely the documentation will so assist was not relevantly different to a requirement that it be "on the cards" that the documents would materially assist on an identified issue. Importantly, all the tests, however stated, require identification of an issue or issues in the proceedings with some modicum of particularity which then becomes the measure against which the forensic purpose of the documents can be determined. It is that identification which must inform the requirement to produce the documents sought."
2. The decision of the Court of Criminal Appeal in Attorney General for New South Wales v Dylan Chidgey provides further clarification. Beazley JA states at [59] that "It is not sufficient for a party seeking product of documents to merely establish that such documents are or may be relevant." Her Honour also approves the comments of Mahoney AP in Carroll v Attorney-General for New South Wales (1993) 70 A Crim R 162 (at 182) that a claim that "I wish to see the document to see if it may assist my case" is not sufficient. Her Honour further elaborates at [62]: "the second element of the 'test', that is, that it must be "on the cards" that documents would materially assist the case, subsumes in it the notion that "mere relevance" is insufficient."
3. What this means, consistent with the submissions made on behalf of the active respondents (and further elaborated in the leading judgment of Beazley JA in Attorney General for New South Wales v Dylan Chidgey), is that there are two parts to the test of relevance. Not only must there an identified issue in the proceedings to which the documents sought are relevant, but there must also be a reasonable basis beyond speculation that the documents sought will actually materially assist on that issue and therefore have a legitimate forensic purpose.
4. Further, even if relevance can be established, a Notice to Produce or a Subpoena is liable to be set aside if it is so broad as to amount to a substitute for discovery and therefore constitute an abuse of process (Patonga Beach Holdings Pty Ltd v Lyons).

Consideration

1. I accept that the Applicant has identified the issue to which the documents sought relate. That issue is the true characterisation of the proposal that was the subject of the CDC application. However, notwithstanding this, I am of the view that paragraphs 2 and 3(a) of the notices to produce ought to be set aside. They require the production of any and all communications in relation to any proposed development of the premises and any or all communications in relation to the proposed purchase of the property, limited only by date. Whilst it is true that there may be some communications that might contain some information relevant to the question of the purpose of the application for the CDC, this is not sufficient. I accept the submissions made on behalf of the active respondents in that regard. A mere chance or speculation that there might be something in the documents sought to be produced that will materially assist on the identified issue is not a sufficient basis upon which to seek the production of the documents. It is well established that such speculation is not sufficient to establish a legitimate forensic purpose.
2. Indeed, the breadth of the documents sought in paragraphs 2 and 3(a) indicates that the Applicant is seeking the documents on speculation that they might contain something relevant. I am also of the view that the breadth of documents sought in those paragraphs is tantamount to discovery, and that those paragraphs should be set aside on that basis also.
3. However, in considering paragraph 3(b) of each of the notices, and paragraph 4 of the Notice to Produce to the First Respondent, I am satisfied that a legitimate forensic purpose has been identified and that the documents sought would be materially relevant to the issues as identified in the Summons. In relation to paragraph 3(b), if a document does exist that fits that description, it would be relevant to what the active respondents' intention is in relation to the development of the land. Similarly, I accept that the documents sought in paragraph 4 of the Notice to Produce to the First Respondent are relevant to the question of what instructions were given for the preparation of the plans for the development of the property, and how those instructions may have changed in preparation of the application for the CDC.
4. Accordingly, I make the following orders: 1. Paragraphs 2 and 3(a) of the Notices to Produce issued on 19 January 2016 to the first, second, third and fourth respondent are set aside. 2. The costs of the notice of motion filed 17 March 2016 are reserved. J Gray Registrar of the Court

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