Fordyce v Ho

Fordyce v Ho - [2015] NSWCA 240 - NSWCA 2015 case summary — Zoe

Judgment

THE COURT: The applicants seek leave to appeal against a search order (see Uniform Civil Procedure Rules 2005 (UCPR), Pt 25, Div 3) made ex parte on 1 October 2014 and against an order dismissing a motion to set aside that search order. The second order was made on 5 May 2015: Robert Ho v Paul Mervyn Fordyce t/as PMF Legal Trading [2015] NSWSC 544. As each of those orders was interlocutory, the applicants require leave to appeal: Supreme Court Act 1970 (NSW), s 101(2)(e). The summons seeking that leave was filed on 1 June 2015, more than six months after the search order were made. The applicants therefore also require an extension of the time for seeking leave to appeal from that order: UCPR, r 51.10(2).
The applicants are a solicitor and the corporation through which his professional services are provided. Prior to May 2014 the applicants had acted for the respondents in relation to two proceedings referred to as the BBQ King proceedings and the Guardianship Tribunal proceedings. In June 2014 the respondents applied under s 350 of the Legal Profession Act 2004 (NSW) for an assessment of the legal costs due to the applicants in relation to these proceedings. In response to that application, in August 2014 the applicants produced six costs agreements, dated between 3 April 2012 and 28 January 2014 and said to relate to the provision of those legal services. The respondents dispute having seen or received those costs agreements before that time.
On 1 October 2014 the respondents commenced proceedings in the Equity Division seeking declarations that the six propounded agreements were of no force and effect, and a declaration that each of the costs assessments should proceed on the basis "that there is no costs agreement": Legal Profession Act 2004, s 361. A substantial issue in those proceedings was whether, as the applicants maintain, those costs agreements were created and delivered to the respondents on or about the dates they bear.
On the same day the respondents applied ex parte for a search order in relation to the applicants' electronic data with respect to the creation, modification, review or transmission of the six costs agreements. The order as sought and made followed the form of the search order in Practice Note No. SC Gen 13. It permitted an independent computer expert to have access to and inspect those records for the purpose of copying and removing the parts of the files concerning those agreements.
The ex parte order was served on the applicants on 2 October 2014 and was executed on 2, 7, 8, 9 and 10 October 2014. On 15 October 2014 orders were made by consent including in relation to the preparation of a report by the independent computer expert on the data which had been obtained. On 12 November 2014 the applicants foreshadowed a motion seeking to set aside the search order. On 24 November 2014 an amended notice of motion was filed. That motion sought to set aside the search order on the grounds summarised by the primary judge: [2015] NSWSC 544 at [14]. The motion was listed for hearing on 15 December 2014 but did not proceed on that day.
By 17 December 2014 the computer expert had undertaken a limited initial forensic analysis of the copied data and prepared a draft report. On that day there was a short hearing at which directions were made for the exchange of written submissions. That occurred and judgment was delivered on 5 May 2015.
The computer expert's draft report provided some support for the respondents' assertion that documents had been created after their indicated dates. In this respect it is sufficient to refer to the observation made by the primary judge in his reasons at [61]: Prima facie the Klein report establishes that a number of the files were only created a significant period after the date which the costs letter bears hence lending support to the plaintiffs' case that the costs agreements were not in existence at the time that Mr Fordyce has asserted in his costs responses they were.
The grounds on which the applicants sought to have the search order set aside included that on the ex parte application there was non-disclosure of six matters, providing a basis for setting aside the orders ab initio; and that the respondents had not established that they had a "strong prima facie case on an accrued cause of action" as required by UCPR, r 25.20(a). The primary judge dealt with each of these arguments. In relation to the latter, there was evidence that the respondents had not signed or received any of the six costs agreements and an absence of evidence of any correspondence from the applicants enclosing them or requesting that they be signed or returned.
Finally, when considering whether to discharge the search order on the basis that there were not sufficient grounds for making it, the primary judge took into account the evidence obtained on the execution of the order and the utility of setting aside the executed order. He concluded: [82] The orders which I made on 1 October 2014 have been executed. No further steps are required of Mr Fordyce nor is any further access to his computer required. No application was made at the time of receipt of the order or even on 15 October when Mr Fordyce was represented to set aside the order or to preclude the expert from preparing his report. The report is not in final form. The experts have what they need to finalise the report but have been prevented from so doing pending the outcome of this application. The material to which the experts have had access is material … which the plaintiffs would be entitled to see as part of the normal discovery process. The Klein report, notwithstanding that it is not a final report, coupled with Mr Ho and Mr Wilson's evidence and the evidence relating to the correspondence with the Tribunal in my view constitute a sufficiently strong prima facie case to warrant the continuation of the orders. [83] Even were I wrong in that conclusion I think there is enough to warrant the completion of the Klein report in any event. There is a practical aspect to the matter to which attention needs to be given namely that if Mr Fordyce's computer does reveal that documents were created well after the date which they bear as the Klein report indicates at least on the material analysed by Mr Ghorbani to date I do not think it can be said that it is in the interests of justice to set aside the orders and require the return of copies made of relevant files and data on Mr Fordyce's computer.
The amended draft notice of appeal asserts errors on the part of the primary judge in making the search order (proposed grounds 1 to 6) and in refusing to set it aside (proposed grounds 7 to 10). If the appeal is successful the applicants seek orders that the search order be set aside ab initio and that any and all copies of the records taken and held by the forensic expert be destroyed. In oral argument Mr Fordyce, appearing for the applicants, submitted that an order for destruction was necessary to ensure that copies of his clients' records, other than those of the respondents, would not be misused accidentally or otherwise. It was also said that such material had been unjustifiably copied either because the orders made were too wide or because the breadth of the material seized went beyond the terms of the orders. Neither of these arguments is raised by a proposed ground of appeal and neither was relied upon in support of the application made to the primary judge.
The proposed appeal concerns interlocutory orders made in proceedings where the amount at issue in respect of the underlying legal costs claimed was described by the primary judge as being "of a very small order - and could be as low as $22,000". In his supplementary written submissions to this Court, Mr Fordyce suggested that the amount in dispute could be higher, but still "as low as $50,000". On either view the amount in dispute is not significant and is likely to be matched by the costs of the proposed appeal.
Notwithstanding the applicants' submission as to the breadth of the material copied and now in the possession of the computer expert, the position remains that the relief sought in the proposed appeal is of no substantial practical utility to the applicants. It will not advance their position in the underlying proceedings. The "fruits" of the search order remain available to the respondents by pursuit of the discovery process. For that reason the originals of relevant copied electronic files would have to be produced and would be available for expert analysis. To the extent that the applicants seek to protect material in the possession of the computer expert which is not relevant to the issues in those proceedings, that material (described as "Non Listed Things") is subject to an existing undertaking that it be kept "confidential and secure" and, as a matter arising from the execution of the search order, remains subject to the control of the Court as to whether it should be returned or destroyed.
Section 56 of the Civil Procedure Act 2005 (NSW) requires this Court to give effect to the overriding purpose of that Act which is to "facilitate the just, quick and cheap resolution of the real issues" in proceedings. A significant issue in the underlying proceedings is whether, as the respondents contend, the costs agreements on which the applicants rely were not provided to them on or about the dates they bear. The resolution of that issue is not advanced by the prosecution of the proposed appeal. It is advanced, however, by the early final determination of the underlying proceedings and with the benefit of material obtained on the execution of the search order which, if the appeal proceeded and the applicants obtained the relief they seek, would remain available (albeit in its original form) in any event.
There is one further matter. The applicants foreshadowed that should leave to appeal be granted, they would seek to adduce further evidence as to the existence of other electronic records that were not seized and have not been examined by the computer expert. Those records were said to be relevant to determining when the costs agreements were first created. The refusal of the application for leave does not prejudice the applicants in relation to the adducing of this evidence directed to that issue as it arises in the underlying proceedings.
In all the circumstances the application for leave to appeal should be dismissed with costs.

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