Before the Court are two Notice of Motion. The first is the plaintiffs' Amended Notice of Motion dated 28 August 2023 seeking to set aside three Notice to Produce issued by the defendant to the plaintiffs, which are dated 18 May 2022 (First NTP), 18 April 2023 (Second NTP) and 21 August 2023 (Third NTP). The second is the defendant's Notice of Motion dated 1 June 2023 seeking discovery of essentially the same documents as are sought under the three NTPs. The defendant accepts that if the plaintiffs fail to set aside the three NTPs, the defendant's Notice of Motion for discovery falls away.
[2]
Background
The plaintiffs, Mr and Mrs Haddad, as purchasers signed a contract for the sale of land with the defendant, Mr Ko, as vendor on 25 March 2021. The plaintiffs purported to rescind the contract on around 29 June 2021. The plaintiffs rely on cl 38 of the contract contending that, on its proper construction, if one purchaser became mentally ill then the other purchaser, or both purchasers, could rescind the contract by notice in writing (see Amended Statement of Claim [10] and [11]). The plaintiffs plead at [12] of their Amended Statement of Claim that Mr Haddad, the second plaintiff, "became mentally ill from on or around 24 June 2021". They then relevantly particularise the content of that allegation as "Expert report of the plaintiffs filed in these proceedings", which is the report of Dr Sidorov dated 28 March 2022.
Dr Sidorov's report addresses a number of questions directed to the "mental condition" of Mr Haddad, including Question 1 which asked Mr Sidorov to identify Mr Haddad's mental condition between 25 March 2021 and 26 August 2021 with reference to any "DSM-5 criteria" if relevant and Question 3, which asks him whether Mr Haddad's "mental condition" as identified in response to Question 1, "could … have caused an inability, or at least an impediment, on the part of Mr Haddad to fulfill the obligations [set out in the contract]". Dr Sidorov concludes that "there is no evidence Mr Haddad suffered a mental condition at the time of entering the contract on 25 March 2021" but that there was a "mental condition" causing an impediment "in July 2021". It is apparent from Dr Sidorov's report and the letter of instruction provided to Dr Sidorov by the plaintiffs' solicitor, that the term "mental condition" was used in the questions asked of him rather than "mental illness" to accommodate the observations of Davies J in the case referred to below.
The defendant has denied all the paragraphs of the Amended Statement of Claim which allege that the plaintiff was entitled to and did rescind the contract pursuant to cl 38. Consequently, the plaintiff has the onus of proof on that issue: Currie v Dempsey (1967) 69 SR (NSW) 116 at 125.
The expression "mentally ill" is not defined in the contract. The parties accept that the observations of Davies J in Brennan v O'Meara [2009] NSWSC 1374, which concerned a similar although not identical clause in a contract for the sale of land, are of assistance. In that case his Honour said:
[37] The linking in the clause (and in similar clauses) of death, mental illness, bankruptcy and liquidation provides strong support for Gzell J's view that what the clause is directed at are events which cause an impediment to the fulfilment of contractual obligations. None of the events necessarily precludes completion of the contractual obligations but death, bankruptcy and liquidation necessarily involve considerable delays in moving the contract to completion. That supports the view that the words "mentally ill" must also entail a state of affairs that causes a delay in fulfilment of the contractual obligations.
…
[40] Although the definitions of "mental illness" and a "mentally ill person" in the Mental Health Act (and it should be noted that those definitions are identical in the 1990 Mental Health Act) provide a useful guide to the meaning of the words "mentally ill" in the clause, I do not consider the requirements of those sections have to be met for the purpose of the clause. It may be enough to show, for example, that the person suffered from a mental illness as defined in s 4 without the added requirement in s 14 of the reasonable belief concerning care, treatment or control that was necessary.
[41] On the other hand, it will not be sufficient for a person who wishes to take advantage of a provision such as cl 33(a) to point to a diagnosis from a doctor or a psychiatrist that a party is suffering from a mental illness within the meaning of the categorisation of mental illness in a manual such as DSM - IV. Such a mental illness may be of a nature or magnitude that does not cause any impediment to the fulfilment of the contractual obligations brought about by the entry into the contract (cf the death of one joint vendor as in Karfoal).
…
[43] However, there is nothing in the doctors' reports which suggests an inability of Mr O'Meara to function or deal with his affairs nor that he lacked any mental or emotional capacity to engage in, enter into, or complete business, commercial or legal transactions. Moreover, none of the doctors' reports provides a basis for his assertion that he was unable to work at any particular time. In fact, Dr Danesi's report said that he was able to function both with work and socially. Nor did Mr O'Meara's own evidence disclose any inability to work.
In the letter of instructions provided to Dr Sidorov, reliance is placed on [37], [40] and [43] above. Importantly, it is clear from his Honour's observations in these paragraphs that the relevant mental illness must cause an impediment to the fulfilment of the purchasers' contractual obligations. The defendant also contends that it follows that it must be the relevant mental illness, and not some other factor such as lack of finance, which impeded the purchasers from completing the contract. It is open, on the pleadings and evidence, to the defendant to run that argument.
The defendant's case is that Mr Haddad did not become mentally ill after the contract was signed, and will challenge Mr Haddad's evidence to that effect in cross-examination. The defendant will also challenge the plaintiff's contention that Mr Haddad's mental illness caused the plaintiff's recission of the Contract rather than their inability to obtain finance. It is said that this will be a case where credibility is a key issue and cross-examination of Dr Sidorov on his evidence as to the "mental condition" of Mr Haddad will also be key.
[3]
Relevant principles
It is common ground that a notice to produce (like a subpoena) is liable to be set aside where it lacks a legitimate forensic purpose, ie. the documents sought lack apparent relevance to the issues in the proceeding, and the party issuing the subpoena bears the onus of establishing the apparent relevance of the documents sought. To establish that the documents sought under a notice to produce are "apparently relevant", the issuing party is required to show that it is likely (or "on the cards") that the documents sought to be produced will materially assist on an identified issue or there is a reasonable basis beyond speculation that it is likely (or "on the cards") that the documents subpoenaed will so assist: Secretary of the Department of Planning, Industry and Environment v Blacktown City Council [2021] NSWCA 145 at [65] per Bell P (McCallum JA agreeing) and [89] per Brereton JA.
Bell P (as his Honour then was) added at [68] that:
"The word "apparent" admits of the possibility that the documents sought by way of subpoena may not ultimately turn out to be relevant. Their apparent relevance, however, should be able to be ascertained by an examination of the description or identification of the document or documents sought in the schedule to the subpoena in light of the issues in the case, as they present themselves on the pleadings, in particulars and/or in affidavits or witness statements if they have been filed or served at the time of the issue of the subpoena."
[4]
First and Third NTPs
The First NTP and the Third NTP are in essentially the same form, the Third NTP having been served to overcome a "technical defect" with the First NTP being that the return date did not comply with the requirements of Uniform Civil Procedure Rules 2005 (NSW) r 34.1. It is sufficient to refer only to the Third NTP which seeks the following:
1. All documents evidencing or recording Mr Haddad's mental condition from 1 January 2014 to 24 March 2021.
2. All documents evidencing or recording any prescription for drugs that were prescribed to Mr Haddad for mental health conditions between 1 January 2014 and 26 August 2021, including but not limited to:
1. Escitalopram.
The plaintiffs submit that paragraph 1 is too broad because it requires an evaluative judgment by the plaintiffs as to documents evidencing or recording Mr Haddad's "mental condition" and also because evidence of Mr Haddad's "mental condition" is a matter for expert evidence, which has now been exchanged between the parties.
I accept that there is merit in the first criticism, but not the second. As the plaintiffs submitted, paragraph 1 would potentially catch documents such as text messages in the period specified which said that he was "feeling sad". It would be arguable that such a text message evidenced Mr Haddad's mental condition at the relevant time. In my view, paragraph 1 should be limited to documents evidencing or recording an assessment by a medical practitioner of Mr Haddad's mental condition from 1 January 2014 to 24 March 2021. This is because Mr Haddad's mental condition from 2014 is in issue, given the medical history outlined in Dr Sidorov's report and the opinions expressed by him in that report. However, in my opinion it is necessary to limit the documents required to be produced to those which involve an assessment by a mental practitioner of Mr Haddad's mental condition to ensure that only documents likely to be relevant to that issue are produced, and to avoid an unnecessarily onerous burden being imposed on the plaintiffs.
It may well be that Dr Sidorov has been provided with all the documents which evidence or record an assessment by a medical practitioner of Mr Haddad's mental condition in the relevant period, but the Third NTP serves a legitimate forensic purpose of ensuring that there is no other such medical assessment which has not been provided to the experts (and which therefore has not been taken into account by them in giving their expert reports).
The plaintiffs also submit that paragraph 3 suffers from the same vice of requiring an evaluative judgment of which prescription drugs were prescribed to Mr Haddad for mental health conditions over the relevant period. In my view there is no such evaluative judgment required and the paragraph serves a legitimate forensic purpose in ensuring that the full picture regarding Mr Haddad's treatment for mental health conditions over the relevant period is made available to the defendant for the purposes of cross-examination of both Mr Haddad and Dr Sidorov.
[5]
Second NTP
The Second NTP seeks production of the following documents:
(1) A copy of Mr Haddad's tax returns for the financial year ended 2020.
(2) A copy of Mr Haddad's tax returns for the financial year ended 2021.
(3) A copy of Mr Haddad's tax returns for the financial year ended 2022.
(4) All documents evidencing or recording applications for finance made by Mr Haddad between:
(a) 23 February 2021 and 23 March 2021; and
(b) 23 March 2021 and 31 August 2021.
(5) All documents evidencing or recording communications with financial institutions in which Mr Haddad is a party sending or receiving such communications between:
(a) 23 February 2021 and 23 March 2021; and
(b) 23 March 2021 and 31 August 2021.
(6) All medical records evidencing or recording the mental health Mr Haddad that have not already been produced between the dates of:
(a) 1 January 2014 and 31 December 2018;
(b) 1 December 2020 and 23 February 2021;
(c) 23 February 2021 to 23 March 2021;
(d) 23 March 2021 to 31 August 2021; and
(e) 31 August 2021 to 28 March 2022.
(7) All documents evidencing or recording the referral of Mr Haddad to a psychiatrist as referred to in the letter of Dr Artinian of 24 June 2021, including, but not limited to:
(a) The letter of referral; and
(b) Any document evidencing or recording the use of that referral.
(8) All documents evidencing or recording the appointment in paragraph 56 of Mr Haddad's affidavit.
(9) A copy of the e-mail in paragraph 63 of Mr Haddad's affidavit.
(10) All documents evidencing or recording the offer in paragraph 70 of Mr Haddad's affidavit.
The plaintiffs object to paragraphs 1-5 on the basis that none of the documents sought are relevant to the issues raised by cl 38 of the Contract. The defendant submits that a key issue between the parties is whether Mr Haddad actually became impeded from completing the contract because of his mental condition or illness which arose only after the contract was entered into on 25 March 2021, or if the real reason for the plaintiffs being unable to complete the contract was that they could not obtain finance. In so far as the tax returns are concerned, the plaintiffs have put their financial position in issue both through their evidence and this is a matter relevant to their capacity to obtain finance.
In my view, the documents sought by paragraphs 1-5 are relevant for the reasons submitted by the defendant.
In relation to paragraph 6, the defendant accepts that paragraphs 6(a)-(c) are superfluous if the defendant is entitled to paragraph 1 of the Third NTP. Even with the narrowing of paragraph 1 of the Third NTP referred to at [12] above, in my view that is still the case.
In relation to paragraphs 6(d) and (e), the defendant says that the request for medical records in respect of the period 23 March 2021 to 31 August 2021 relates to the period in which Mr Haddad says he became mentally ill (being the time between the date of the contract and the final settlement date) and the period 31 August 2021 to 28 March 2022 deals with an observation made in Dr Sidorov's report which states that Mr Haddad's "symptoms have now mostly resolved", which the defendant submits is relevant to the question whether Mr Haddad became mentally ill after the contract was entered into or rather, exhibited symptoms of a mental illness which commenced before that time. In my view, paragraphs 6(d) and (e) are relevant and not impermissibly wide.
Paragraph 7 relates to a statement made by Dr Artinian, Mr Haddad's general practitioner, in his letter to Mr Haddad dated 24 June 2021 that Mr Haddad had been referred to a psychiatrist. The defendant seeks the letter of referral to establish who the psychiatrist is and, under paragraph (b), any report issued by that psychiatrist following the referral. Paragraph 7(b) is poorly expressed and I will allow it if it is refined to state simply "any document evidencing or recording the report by the psychiatrist to whom Mr Haddad was referred by that referral".
Paragraphs 8, 9 and 10 have been responded to and, accordingly, are not presently relevant.
[6]
Conclusion
For the above reasons, I decline to set aside the Second NTP and the Third NTP but will order that the paragraphs identified earlier in these reasons which are too broad be read in the narrower manner indicated in these reasons. The First NTP is no longer pressed as it is superseded by the Third NTP, and the defendant's motion is also not pressed.
In relation to costs, my preliminary view is that as each party has had some success, the appropriate order is that costs be in the cause, but if either party wishes to press for a different order they should notify my Associate by 5:00pm on 30 August 2023 by email of the costs order they seek, in which event I will make orders for a timetable for written submissions as to costs. If no party seeks any other orders as to costs, I will make final orders on Thursday, 31 August 2023 to reflect the above reasons, including that costs be in the cause.
[7]
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Decision last updated: 29 August 2023