REASONS FOR JUDGMENT
1 The question before me relates to notices of motion to set aside six notices to produce served by the cross-claimants, who are also applicants in other matters involving the Westpac Banking Corporation (the bank), on the cross-respondents, Chubb Insurance Company of Australia Limited and Allianz Australia Insurance Limited, who are the bank's insurers (the insurers).
2 The circumstances in which each of the notices to produce was served are the same. In short, the cross-claimants are themselves the subject of a cross-claim by the bank, which is the respondent in the primary proceedings. In response to the bank's claim, the cross-claimants deny that the conduct alleged by the bank was either in breach of their employment contracts or outside the scope of their employment. Additionally, the cross-claimants contend that if there were any breach as alleged by the bank, as employees of the bank at the relevant time, they would be entitled to be indemnified by the insurers pursuant to a directors' and officers' liability insurance policy held by the bank.
3 The notices to produce are all in the same terms. They seek that each of the two insurers in each matter produce "all claim files and documents relating to the claims made by the cross-claimant".
4 The notices of motion seek to have the Court set aside the notices to produce. It was common ground between the parties that the relevant principles in relation to the validity or setting aside of a notice to produce are the same as those which have been developed in respect of the validity and setting aside of subpoenas.
5 The insurers seek to have the notices to produce set aside on two grounds. The first and primary ground is that the notices to produce are a form of abuse of process, in that they are being used impermissibly as a substitute for general discovery. The second and subsidiary ground is that the notices to produce have not been issued for a legitimate forensic purpose, in that they seek discovery of an amorphous collection of potential documents, the relevance of which is not apparent.
6 The cross-claimants reject the contention that the notices to produce are being used as a substitute for general discovery. They say that the notices to produce contain a simple request for production of the claim file. The request is accordingly confined in its terms and is far from a request for discovery of any kind. The cross-claimants also say that the documents sought to be produced, being the claim file, are self-evidently relevant because, while their cross-claim alleges an entitlement to indemnity, indemnity has not yet been granted or refused by the insurers. The cross-claimants, they say, are in a difficult position. The primary insured is the bank, and the cross-claimants make their claim against the insurers under the bank's policy.
7 The relevant principles were not in dispute between the parties. Mr White, for the insurers, drew my attention to the decision in Pasini v Vanstone [1999] FCA 1271 (Pasini), a decision of Finn J. At [30], Finn J noted that under the Federal Court Rules as then in place, a party did not have an unqualified right to discovery. The position remains the same under the current procedures of the Court, as reflected in Practice Note CM5 ("Discovery"), which confirms that the Court will not order general discovery as a matter of course, even where the parties seek a consent direction to that effect. Instead, as para 3 of Practice Note CM5 states:
[t]o prevent orders for discovery requiring production of more documents than are necessary for the fair conduct of a case, orders for discovery will ordinarily be limited to the documents required to be disclosed by Order 15 rule 2(3) [of the Federal Court Rules].
8 Order 15 rule 2(3) relates to discovery on notice, and requires production only of the documents on which the party relies, the documents that adversely affect the party's own case, the documents that adversely affect another party's case, and the documents that support another party's case.
9 In Pasini, Finn J went on at point (v) of [30] (citing Australian Securities Commission v Somerville (1994) 51 FCR 38) to observe that "whether or when discovery will be ordered 'depends upon the nature of the case and the state of the proceedings at which the discovery is sought.'" Further, at point (vi) his Honour said (citing Australian Competition and Consumer Commission v Shell Co of Australia Ltd (1999) 161 ALR 686; [1999] FCA 212 and Kizon v Palmer (1997) 75 FCR 261):
[w]ith the rules of Court having prescribed the method by which parties can obtain discovery or further discovery, and having regard to the constraints imposed on discovery, it is impermissible to attempt to achieve discovery through resort to the subpoena process.
10 Accordingly, and as Finn J said at [31] (citing Commissioner for Railways v Small (1938) 38 SR (NSW) 564)), objection can be taken to a subpoena - and hence a notice to produce - on various grounds, including that "it is an abuse of process in that 'it is not legitimate to use a writ of subpoena… as a substitute for an application for discovery of documents.'"
11 In terms of relevance, the test ultimately is whether the documents sought by the subpoena - or in this case, notice to produce - are reasonably likely to add in some way to the relevant evidence in the case.
12 The difficulty for the cross-claimants in relation to the notices to produce relates to the nature of the case, and more particularly to the present stage of the proceedings. The cross-claimants have filed their cross-claim seeking indemnity against the insurers. The insurers, however, have not yet filed and served defences; nor, it appears from the submissions that have been put to me, has either of the insurers yet indicated whether indemnity will be granted or refused.
13 The reasons the insurers have not yet filed defences were articulated late last year, and have much to do with the fact that at that time the cross-claimants were foreshadowing amendments, and potentially substantial amendments, to their statements of claim. I accepted the submission for the insurers that they should not be required to plead in circumstances where the cross-claimants had not yet settled the scope of the case to be brought.
14 Accordingly, I accept Mr White's submission that, in this respect at least, the proceedings can be said to be ones in which issue has not yet been joined by the filing and service of defences. I also accept Mr White's submission that the notices to produce do not simply seek what has been described as the claim file. Far from it: the notices to produce seek not only the claim file for each matter, but also all documents relating to the claims made by the cross-claimants. That description does involve a potentially amorphous collection of documents, some of which may ultimately prove to be relevant, but some of which may not. The terms of the notices to produce (inevitably, given the current stage of the proceedings) do not reflect any apparently relevant issue in dispute between the parties.
15 In these circumstances I am satisfied that the notices to produce cannot be said to seek a confined class of documents. They seek every document potentially relevant to the cross-claims, irrespective of whether they do or do not or might or might not relate to matters which are ultimately in issue in the proceedings. In the context established by the Federal Court Rules and Practice Notes, this constitutes an impermissible attempt to use notices to produce to obtain discovery.
16 Furthermore, the onus is on the cross-claimants to demonstrate that the notices to produce meet the test of apparent relevance. Given the generality of what is sought by those notices, it is not possible to determine that that onus has been satisfied. This flows in large part from the fact that the notices to produce are, as Mr White submitted, essentially premature.
17 On the basis of the first of the grounds relied upon by Mr White - namely that the notices to produce are an impermissible attempt to obtain general discovery by other means - I consider that the notices to produce must be set aside.
I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot.