Solarus Projects Pty Ltd v Vero Insurance Ltd

Supreme Court of NSW|2012-09-03|Before: Button J

Judgment 1HIS HONOUR: Before the Court is a notice of motion seeking review of a decision of Registrar Bradford on 31 May 2012 declining to set aside a notice to produce and a subpoena on the ground that they are an abuse of process. 2The motion raises three issues. The first is the nature of such a review. In particular, it is disputed between the parties whether it is in the nature of a de novo hearing or whether error must be identified in the judgment of the Registrar. The second issue (assuming that the first position is correct) is whether, in my own evaluation, the notice to produce and subpoena constitute an abuse of process. The third issue (assuming that the second position is correct) is whether error can be identified in the judgment of the Registrar.

Background 3The moving party on the motion is the defendant Vero Insurance Limited. That party is the defendant in the substantive proceedings, was the applicant before the Registrar, and is the applicant for review before me. For ease of comprehension I will refer to that party as "Vero Insurance". 4The first plaintiff in the substantive proceedings is Solarus Projects Pty Ltd (receivers and managers appointed) (in liquidation). The second plaintiff in the substantive proceedings is G.A.P. Constructions (Qld) Pty Ltd. The first plaintiff was the respondent before the Registrar and is the respondent before me. For ease of comprehension, I shall refer to it as "Solarus". 5The second plaintiff played no role before the Registrar at all, nor before me. I shall refer to it as "GAP". 6A thumbnail sketch of the background of the litigation is as follows. Solarus and GAP were in the business of building apartments in Townsville. A contract of insurance was brokered by Willis Australia Ltd with Vero Insurance. It is said that the building project suffered serious damage as a result of torrential rain. Solarus and GAP made a claim against Vero Insurance purportedly pursuant to the contract of insurance. 7Vero Insurance refused to pay the claim on the simple basis that neither Solarus nor GAP was named as the insured in that document. The party named as the insured in that document is Glen Alpine Properties Pty Ltd. Furthermore, although there is a lengthy extended definition of the insured in that document, Vero Insurance took the position that neither Solarus nor GAP fell within that extended definition. That approach of Vero Insurance led Solarus and GAP to institute proceedings in this Court.

Procedural chronology 8On 11 May 2011, Solarus and GAP filed a statement of claim. In short, they sued pursuant to the contract of insurance. At that time they were represented by the same firm of solicitors. 9On 14 September 2011, Vero Insurance filed a defence. In short, the defence asserts that neither Solarus nor GAP falls within the primary or extended definition of the insured in the contract. Liability was also denied on a number of other bases that it is not necessary to recount for the purposes of my determination. 10In a reply filed on 21 October 2011, Solarus and GAP asserted that they fell within the extended definition. 11On 25 January 2012, a solicitor who was a partner of the firm currently acting for Solarus wrote to the solicitors for Vero Insurance and informed them that his firm had recently received instructions to act for Solarus. 12By letter of 17 February 2012, the solicitors for Vero Insurance wrote to the solicitors for Solarus pointing out that they were of the opinion that it was contrary to law for two plaintiffs in the one proceedings to be separately represented, unless leave had been granted. The solicitors for Vero Insurance indicated that, unless the position was rectified, they would seek to have the proceedings stayed. 13By letter of 17 February 2012, the solicitors for Vero Insurance wrote to the solicitors then acting for GAP. That letter was to the same effect. 14By letter of 21 February 2012, the solicitors then acting for GAP replied to the solicitors for Vero Insurance, and copied the letter to the solicitors acting for Solarus. That letter was to the effect that the solicitors for GAP agreed with the solicitors for Vero Insurance, and were content for the proceedings to be stayed until the situation was altered. 15On 1 March 2012, the solicitors for Vero Insurance wrote to the solicitors for Solarus enquiring whether a resolution of the problem had been achieved, in light of an upcoming directions hearing on 6 March 2012. An identical letter was sent to the solicitors then acting for GAP. 16On 5 March 2012, the solicitors for Solarus wrote to the solicitors for GAP and the solicitors for Vero Insurance proposing that the proceedings be split into two separate actions, to be heard together, and seeking to be informed whether GAP and Vero Insurance would oppose that course. 17On 19 March 2012, the solicitors for Solarus wrote to the solicitors for Vero Insurance. It is appropriate to set out the body of that letter in full: "We refer to prior correspondence. Your client contends in its Defence filed on 14 September 2011 that Solarus Projects Pty Ltd (Solarus) is not insured under the Project Contract Works Insurance Policy number CTSO10377771 (Policy) issued by your client in respect of the construction project at 69 - 77 Palmer Street Townsville Queensland (Project). Vero's contention appears to be based on the fact that Solarus is not the named insured in the Policy schedule (that being Glen Alpine Properties Pty Limited) nor does it fall within the extended definition of insured in the Policy. Solarus accepts that it is not the named insured under the Policy. It does not accept that it does not fall within the extended definition of Insured in the Policy. However, even if Vero's intentions [sic] are correct, Solarus says that it was the clear intention of Vero and the insured parties for the Policy to cover all of the entities involved in the Project. Solarus was one of those entities. It was the owner of the property at 69 - 77 Palmer Street Townsville and the entity which entered into a finance facility with Westpac Banking Corporation (Westpac) providing funding for the project. Our discussions with Willis Australia Limited, which effected the policy with Vero, confirm that it was the clear intention of all involved in the writing of the risk that all entities with a proprietary interest in the Project would be insured under the Policy. Vero's contention that neither Solarus nor the builder, GAP Constructions Pty Limited, are insured under the policy is misconceived. Solarus intends to amend its claim against Vero to plead, in the alternative, that it is entitled to rectification of the Policy to name Solarus as an insured party. However, before doing so, Solarus requests that Vero reconsider its position and indicate whether or not it will consent to the Policy being rectified so as to name Solarus as an insured party, or alternatively to admit that Solarus is a named insured under the Policy and a party entitled to enforce any benefit under the Policy. Given the orders made by the Court on 6 March 2012 that Solarus file a Notice of Motion and supporting material (including an amended pleading) by 27 March 2012, would you please advise Vero's position by 5:00pm on Thursday, 22 March 2012. We look forward to hearing from you." (emphasis by italics added by me) 18By letter of 22 March 2012, the solicitors for Vero Insurance informed the solicitors for Solarus that Vero Insurance would not consent to rectification of the contract in accordance with the letter of the solicitors for Solarus of 19 March 2012. The solicitors for Vero Insurance reiterated their position that Solarus was neither a named insured nor an entity that fell within the extended definition of the insured. 19By letter of 27 March 2012, the solicitors for Solarus wrote to the solicitors for GAP and the solicitors for Vero Insurance. Again, it is appropriate to set out the body of that letter in full: "We refer to the orders made by Registrar Bradford of the Supreme Court of New South Wales on 6 March last. Our client is unable to fully comply with the orders involving it. We have accordingly requested the Court to re-list the matter for further directions as soon as possible. We will advise you as soon as a new date has been advised by the Court. The orders required our client to file by today a Notice of Motion, supporting affidavit evidence and an amended pleading. Our client has received advice from Senior Counsel that any amended pleading will need to include a claim for rectification of the Vero insurance policy. This is necessary in light of Vero's contention in its defence that our client is not an insured under the policy in its current form. Vero has confirmed in its correspondence dated 22 March 2012 that its position on this issue is unchanged. Our client does not accept Vero's contention that Solarus is not insured under the policy in its current form. However, in light of that contention Solarus has no option but to seek rectification of the policy in the alternative. Our client is unable to finalise the rectification portion of its pleading until Willis' broking file and Vero's underwriting file have been produced to the Court. A subpoena addressed to Willis and a Notice to Produce addressed to Vero are returnable before the Court on 16 and 17 April respectively. Once the Court has relisted the matter, we will write to you with a proposed new timetable." (emphasis by italics added by me) 20By notice of motion of 3 April 2012, Vero Insurance sought to set aside a notice to produce for inspection dated 14 March 2012 and addressed to it, and a subpoena to produce filed 12 March 2012 and served by Solarus on Willis Australia Ltd, the insurance broker.

Before the Registrar 21To summarise the submissions of Vero Insurance before the Registrar, it was submitted that both the notice to produce and the subpoena should be set aside as an abuse of process. In short, it was submitted that the predominant purpose of each of those processes was to undertake a "fishing expedition" with regard to whether a claim for rectification could be made out. 22Furthermore, it was submitted that the notice to produce should be set aside for a separate reason. It was said that, although the document described itself as having been issued under r 34.1 of the Uniform Civil Procedure Rules 2005, in truth it was a notice to produce for inspection under r 21.10. It was submitted that the notice to produce did not possess sufficient specificity for it to comply with the requirements of that rule. 23Solarus resisted the motion on the basis that the global issue to be determined in the litigation was whether it was entitled to recover under the insurance policy. The subpoena and the notice to produce, it was submitted, addressed the issue of who falls within the definition of insured. 24Solarus further submitted that the issuing of the subpoena and notice to produce was not a "fishing expedition". On the contrary, it was said that the documents sought would allow Solarus to better particularise any claim for rectification that it may plead, rather than to determine whether the remedy could be pleaded at all. 25By judgment of 31 May 2012, the Registrar rejected the arguments of senior counsel for Vero Insurance. In short, the Registrar considered that the overarching issue in the proceedings was whether Solarus was "entitled to cover under the Policy". Bearing in mind the issues raised by the pleadings, the Registrar considered that the subpoena and the notice to produce were issued for a legitimate forensic purpose. The Registrar did "not accept that the pre dominant purpose of the Subpoena and Notice to Produce is to allow [Solarus] to see if a case for rectification is open to it." The motion was dismissed. 26By notice of motion filed on 26 June 2012, Vero Insurance seeks to review that decision of the Registrar.

Issues 27As I have indicated, it seems to me that three issues require determination. The first is the nature of such a review. That threshold issue was not the subject of agreement between the parties before me. The second is, assuming that such a review does not require identification of error at first instance, what my own approach should be to the questions of abuse of process with regard to the subpoena and the notice to produce, and (as a secondary matter) lack of specificity with regard to the notice to produce. The third is, assuming that such a review does require identification of error at first instance, whether there were any errors in the judgment of the Registrar. It is convenient to deal with the issues in that order.

Rule 28It is convenient at this stage to set out r 49.19 in its entirety: "49.19 Review of registrar's directions, certificates, orders, decisions and other acts If in any proceedings a registrar gives a direction or certificate, makes an order or decision or does any other act, the court may, on application by any party, review the direction, certificate, order, decision or other act and make such order, by way of confirmation, variation, discharge or otherwise, as the court thinks fit."

Submissions of senior counsel for Vero Insurance 29The primary submission on behalf of Vero Insurance with regard to this issue was that a review pursuant to the rule does not require identification of error at first instance. It was submitted that the leading decision is Tomko v Palasty (No 2) [2007] NSWCA 369; (2007) 71 NSWLR 61. Contrary to the submissions made on behalf of Solarus, senior counsel for Vero Insurance submitted that there is no divergence in the judgments of Basten JA, on the one hand, and Hodgson and Ipp JJA on the other. In response to an enquiry by me as to whether there had been any subsequent synthesis of those views by the Court of Appeal, I was informed that there had not. It was submitted that that was because there is, in truth, no divergence. 30In short, it was submitted that the approach to such a review is that it is generally de novo. Any issue as to fresh evidence does not arise here, because no new evidence was presented to me that was not placed before the Registrar. In order to deal with what Hodgson JA said (with the agreement of Ipp JA), about appropriate judicial reticence in reviewing decisions of registrars with regard to practice and procedure, senior counsel submitted that the question before me is indeed one of significance. That submission was made on the basis that the determination of the question of the subpoena and notice to produce could very well determine whether Vero Insurance will be the subject of a claim in rectification by Solarus. In other words, this interlocutory question could indeed have the effect of finally determining the rights of more than one party. 31In short it was submitted that, in accordance with what was said in Tomko v Palasty (No 2) when the judgments are analysed as a whole, the review should be determined de novo, and success for Vero Insurance would not depend on identification of error at first instance.

Submissions of senior counsel for Solarus 32Senior counsel for Solarus resisted the submissions of senior counsel for Vero Insurance. He submitted that the judgments of the majority of the Court of Appeal in Tomko v Palasty (No 2) significantly tempered what had been said by Basten JA. It was submitted that the judgment of the Registrar was to do with nothing more than a question of practice and procedure; namely, whether two processes compelling the production of documents should be set aside. Therefore, it was submitted, error must be identified at first instance. 33My attention was drawn to the decision of McCallum J in Taylor v O'Neill [2012] NSWSC 626. In that case, itself a review of a decision of a registrar with regard to whether to set aside compulsory process, her Honour drew attention to the fact that it was the approach of Hodgson JA that commanded the support of the majority of the Court of Appeal in Tomko v Palasty (No 2).

Determination 34I consider that, in the circumstances of this case, I should approach the review on the basis that it does not require identification of error at first instance for me to come to a different decision to that of the Registrar. 35My respectful understanding of the judgments in Tomko v Palasty (No 2) is as follows. Basten JA was of the view that such a process does not require identification of error at first instance. At [52], his Honour said: "It follows that the proper approach to an application in relation to a decision of the Registrar is as follows: (1) the application should be treated as a "review", pursuant to s 121(3) of the Supreme Court Act and the Uniform Civil Procedure Rules, r 49.19; (2) a review, unlike an appeal, does not require demonstration of error, nor is it restricted to a reconsideration of the material before the primary decision-maker; (3) authorities with respect to the conduct of appeals against the exercise of discretionary powers, such as House v The King, do not in terms apply to a review; (4) nevertheless, similar policy considerations may arise in relation to a review, including: (a) a court may be less inclined to intervene in relation to a decision concerned with the management of an on-going proceeding, as opposed to one which terminates the proceeding or prevents its commencement; (b) different factors may need to be addressed in relation to breach of time limits in relation to the commencement of proceedings, as compared with breach of time limits for steps to be taken in the course of proceedings properly commenced, and (c) a court may be more inclined to intervene on a review based on fresh evidence, changed circumstances or where error is demonstrated in the decision under review." 36Hodgson JA said in Tomko v Palasty (No 2) at [6] - [10]: "[6] I agree that a review of a decision of a registrar is not an appeal, subject to s 75A of the Supreme Court Act; and that in such a review a court must exercise its own discretion. [7] In my opinion, this discretion extends to a discretion as to whether, and if so how, to intervene; and in my opinion, there is an onus on a person seeking to have a court set aside or vary a registrar's decision to make out a case that the court, in the interests of justice, should exercise its discretion to do so. [8] In the case of a decision on practice or procedure, this will normally require at least demonstration of an error of law, or a House v The King error, or a material change of circumstances, or evidence satisfying the strict requirements for fresh evidence. Even then, a court may not think that the interests of justice require intervention. This could be so, for example, if the error of law is a deficiency of reasons and the result is on its face not an unreasonable one. [9] In the case of a decision which finally determines a party's rights, or which (albeit one of practice or procedure) has a decisive impact on those rights, a court may be more willing to intervene. It may permit further evidence to be led which does not satisfy the strict requirements for fresh evidence, if it is satisfied that the interests of justice require this. It may decide to substitute its own discretionary decision for that of the registrar, even though no House v The King error is shown, again if it is satisfied that the interests of justice require this. To that extent, the review may be considered a de novo hearing. [10] In my opinion, this approach is consistent with the position that such reviews are not appeals and involve the exercise of discretion by the reviewing body; and with the policy considerations referred to by Jordan CJ in In the Will of Gilbert (1946) 46 SR (NSW) 318 at 323; 63 WN (NSW) 176 at 179. It is also consistent with the general principles concerning interlocutory applications: they do not finally decide matters, and successive applications can be brought for the same orders; but generally, a later application for orders that have previously been refused will be summarily dismissed unless a change of circumstances is shown or there is evidence satisfying the strict requirements for fresh evidence." 37Applying those principles to this case, I am persuaded that the question of whether these compulsory processes should stand possesses significance in the proceedings. I do not consider that it is merely one of many interlocutory steps along the way towards the hearing. Rather, I accept the submission of senior counsel for Vero Insurance that resolution of this question has a real potential to determine whether or not Solarus will be able to mount a case for rectification against Vero Insurance. It could very well have a "decisive impact" on the rights of the parties. 38Vero Insurance has discharged the onus of persuading me that I should exercise my discretion to intervene. I am satisfied that, in the interests of justice, I should substitute my own judgment for that of the Registrar without the need for identification of error on his part. 39Finally it is true that in Taylor v O'Neil McCallum J drew attention to what Hodgson JA said in Tomko v Palasty (No 2). However, in that case it was noteworthy that the plaintiff was in no position to make submissions as to the nature of the review. Furthermore, no transcript of the proceedings before the Registrar was available to McCallum J, and her Honour proceeded to determine the issue de novo. In short, despite the emphasis placed upon the judgment of Hodgson JA by her Honour, I do not consider that the decision in Taylor v O'Neil is determinative in the circumstances of the matter before me. 40In short, I consider that the first issue should be determined by approaching the review on the basis that it does not require identification of error in the judgment of the Registrar. However, as against the possibility that I am wrong in that finding, I shall recount briefly at the end of this judgment the submissions of the parties for and against the proposition with regard to the third issue identified by me (namely, whether there was an error in the judgment of the Registrar), and I shall provide a brief determination in that regard.

Second issue - abuse of process? 41I turn then to consider the second issue; namely, whether both the subpoena and the notice to produce should be set aside on the basis that they are abuses of process.

Submissions of senior counsel for Vero Insurance 42It was submitted on behalf of Vero Insurance that a number of legal principles apply. 43First, Vero Insurance has standing to seek to set aside the subpoena addressed to Willis Australia Ltd, which is of course a third party. Reliance was placed upon Botany Bay Instrumentation v Stewart [1984] 3 NSWLR 98 and Jonal Properties Pty Ltd v MS McLeod Holdings Ltd [1994] SASC 4380. 44Secondly, a compulsory process that is nothing more than a fishing expedition to see whether a claim can be made out is by that fact an abuse of process and should be set aside. Reference was made to The Commissioner for Railways v Small (1938) 38 SR (NSW) 564; Associated Dominions Assurance for Society Pty Ltd v John Fairfax & Sons Pty Ltd (1952) 72 WN (NSW) 250; Carroll v Attorney General for New South Wales (1993) 70 A Crim R 162; R v Saleam [1999] NSWCCA 86 and R v Saleam (1989) 16 NSWLR 15. 45Thirdly, the question is not whether the sole purpose of the compulsory process is an abuse of process. Rather, the question is whether that is the predominant purpose. Reference was made to the judgments in Williams v Spautz [1992] HCA 34; (1992) 174 CLR 509. 46Fourthly, in circumstances such as this it is appropriate to look into the mind of the solicitor for Solarus, and not that of his client. Reliance was placed upon the judgment of Yates J in Campaign Master (UK) Ltd v Forty Two International Pty Ltd (No 4) [2010] FCA 398; (2010) 269 ALR 76, particularly at [51]: "It may be necessary, therefore, in a case of alleged abuse of process, to have regard to the purpose of a party's legal adviser. In my view this is likely to be so where the alleged abuse of process resides in the taking of some step by a party (such as procuring the issue of a subpoena) where the initiation or execution of that step arises in the course of the day to day carriage of the matter by the legal adviser and is the product of the advice, recommendation or judgment of that legal adviser acting within the scope of more generally expressed instructions to act in the interests of his or her client in that proceeding. In those cases the operative purpose is likely to be the legal adviser's purpose, which is to be attributed to the party for whom he or she acts." 47Applying those principles to the evidence in this case, it was submitted that I would be satisfied that the predominant purpose of the solicitor for Solarus in serving the notice to produce and filing the subpoena was not the legitimate forensic purpose of seeking to obtain evidence relevant to the claim already made. Rather, it was submitted that I would be satisfied that it was for the illegitimate forensic purpose of seeing whether a separate remedy in the form of rectification could be made out. That would constitute "fishing", it was submitted, and would therefore be an abuse of process that should lead to the subpoena and the notice to produce being set aside. 48Four aspects of the evidence were relied upon. 49First, the clear contents of the letter of 27 March 2012, and in particular its fourth paragraph, were said to show what was in the mind of the solicitor for Solarus. 50Secondly, the circumstances in which that letter was written were said to support the proposition of senior counsel. In other words, it was said that the failure to prepare, file and serve an amended statement of claim in accordance with the timetable of the Registrar is suggestive that it could not be done without receipt of the documents sought. 51Thirdly, the fact that a statement of claim relying upon the remedy of rectification has never been filed by Solarus, in all of the months since, is supportive of the inference that it cannot be done without the documents to which I have referred. 52Fourthly and finally, it was submitted that it is noteworthy that no evidence from the solicitor who was the author of the letter of 27 March 2012 was placed before the Registrar or me. It was submitted that, in those circumstances, I would more readily draw an inference that his evidence would not assist the case for Solarus, in accordance with the rule in Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298. 53It was submitted that it is not correct to conflate the proceedings as currently pleaded (which call for construction of a written contract) with rectification. Senior counsel submitted that those two forms of relief are conceptually different. 54It was accepted that the documents sought pursuant to the notice to produce and subpoena may indeed have some relevance to the proceedings in their current state. However, the point was emphasised that merely because the fruits of the compulsory processes may have some relevance to the case as currently pleaded does not detract from the submission that the predominant purpose of the solicitor is to seek to see whether rectification can be pleaded in the future. 55Separately, it was submitted that, however it describes itself, the notice to produce is in truth brought pursuant to r 21.10 and not r 34.1. The simple submission was made that the notice to produce is not sufficiently specific to comply with the former rule.

Submissions of senior counsel for Solarus 56In response, the following submissions were made. 57First, the overarching issue in these proceedings is whether or not Solarus can rely upon the contract of insurance against Vero Insurance. Construction of the contract and rectification, although conceptually different, are merely aspects of that greater question. It is impractical and artificial to divide up the legal issues in the way that Vero Insurance urged me to do. 58Secondly, there is a vast evidential overlap between the material that could be relevant to construction of the contract and the material that could be relevant to rectification. Not only as a matter of legal principle but also as a matter of relevant and admissible evidence, it is highly artificial to divide the questions up in the way urged upon me by senior counsel for Vero Insurance. 59Thirdly, a fair reading of the crucial part of the crucial letter does not lead to the conclusion that the predominant purpose of the solicitor was to "fish" for rectification. It is noteworthy that it was said merely that a pleading of rectification could not be "finalised". One can infer, senior counsel submitted, that the question of rectification was hardly predominant in the mind of the solicitor. 60Fourthly, regard should be had to Campaign Master (UK) Ltd v Forty Two International Pty Ltd and Alexander v Australian Community Pharmacy Authority (No. 3) [2010] FCA 506. In those cases a distinction was drawn between the immediate purpose and the ultimate purpose of a litigant, building upon what was said in Williams v Spautz. It was submitted that, if one applies that sort of analysis to this case, neither the immediate nor ultimate purpose of the solicitor for Solarus was to effect an abuse of process. 61Fifthly, Jones v Dunkel cannot be called in aid by Vero Insurance to bolster its case because, on analysis, there is no prima facie evidence to be bolstered. 62Sixthly, a finding of abuse of process should not be lightly made against a solicitor. 63Seventhly and finally, with regard to the separate question of the specificity of the notice to produce and its true nature, senior counsel for Solarus submitted that, if there are deficiencies, they should be corrected by me, pursuant to s 14 of the Civil Procedure Act 2005. In any event, he submitted that those deficiencies could hardly be determinative of the larger question.

Legal Principles 64I accept the submission that Vero Insurance has standing to be heard regarding whether the subpoena issued by Solarus to a third party is an abuse of process. I also accept that, in the circumstances of this case, it is a matter of considering the purpose of the solicitor for Solarus, and not his client. Furthermore, I accept that the question is what was his predominant purpose in issuing the process, and that merely because a subsidiary purpose may have existed as well is not determinative. 65It is true that, speaking generally, I should be slow and careful about coming to the conclusion that a step in litigation taken by solicitor is an abuse of process. On the other hand, judicial officers determine every day that a subpoena should be set aside on the basis that it is in truth a "fishing expedition".

Application of legal principles to the evidence 66Applying those principles to the evidence in this case, I consider that it has been established that the predominant purpose for the issue of the notice to produce and subpoena was to "fish" in order to see whether a claim in rectification could be made out. I have come to that conclusion on the basis of four aspects of the evidence. I shall state them in descending order of importance. 67First, a fair reading of the crucial paragraphs of the crucial letter leads me to that view. And it is important to recall that that letter was sent in the context of a request for consent to rectification having been peremptorily rejected. 68Secondly, the fact that the solicitors for Solarus have never "cut the Gordian Knot" by simply filing an amended statement of claim that includes a claim for rectification, and thereafter serving a notice to produce and subpoena seeking documents in support of that pleaded claim, is supportive of the proposition that in truth they are unable to plead rectification without the fruits of the compulsory process. 69Thirdly, the pressure that was being applied to the solicitors for Solarus at the time by the timetable of the Registrar, and their inability to comply with that timetable, is supportive of that interpretation of the letter. 70Fourthly, the failure to place any evidence from the solicitor before the Court does have, to my mind, some probative value. I consider that the contents of the crucial letter do provide prima facie evidence of the proposition of Vero Insurance as to the predominant purpose of the compulsory process. The fact that the solicitor was not called to shed light upon what was, in fact, in his mind when he wrote that letter and prepared that process bolsters the submissions made on behalf Vero Insurance. 71Separately, whilst I accept that the overarching question in these proceedings is whether or not Solarus can rely upon the contract of insurance, there does seem to me to be an important conceptual distinction between, on the one hand, construction of the contract and, on the other hand, the remedy of rectification. As Sheller JA (with whom Mason P and Handley JA agreed) said in the decision of National Australia Bank Ltd v Budget Stationary Supplies (1997) 217 ALR 365 at 381: "Whereas interpretation is concerned with the meaning of the language on the face of the document and its ambiguities, rectification may be ordered when the meaning of the document is clear, but it fails to express the real intention of the parties. When construing a contract, a court is concerned with what the parties appear to have meant, and may have regard to external and objective criteria. On the other hand, a court asked to rectify may investigate what the parties (subjectively) agreed to, rather than what they must (objectively) have meant." 72Finally, I do not accept the submission that an analysis of immediate and ultimate purpose is useful in this case. The simple question is whether the compulsory processes were issued for a forensic purpose that was predominately illegitimate. 73In short, I am comfortably satisfied that the subpoena and notice to produce were issued for the predominant purpose of seeing whether a claim in rectification could be made out. I therefore consider that they constituted a "fishing expedition", and should be set aside. I also consider that an ancillary order with regard to the return of documents should be made.

Secondary Issue 74In light of my determination with regard to the primary submission of senior counsel for Vero Insurance, I shall not proceed to analyse in any detail the alleged formal deficiencies in the notice to produce. It does seem that it is something of a hybrid that falls between r 21.10 and r 34.1. But in any event, it is hardly useful to do so, because both parties accepted that any judgment of mine founded on formal deficiencies could be overtaken by the simple expedient of issuing a fresh and formally correct process.

Conclusion regarding second issue 75In short, in undertaking a review of the judgment of the Registrar that I have determined as a matter of discretion and in the interests of justice does not require identification of error at first instance, I have respectfully come to a different conclusion from that of the Registrar. I consider that the orders sought in the notice of motion filed 26 June 2012 of Vero Insurance should be made.

Ancillary determination of third issue 76Finally, as I indicated above, as against the possibility that I am wrong in my approach to the first issue, I shall briefly discuss the question of whether errors have been established in the judgment of the Registrar. 77In doing so, I do not propose to quote at any length from the judgment of the Registrar. 78Four errors were relied upon. The first was said to be a failure to consider the predominant purpose. However, in his judgment, the Registrar said "I do not accept that the pre dominant purpose of the Subpoena and Notice to Produce is to allow the First Plaintiff to see if a case for rectification is open to it." In light of those words appearing in the judgment, I do not accept that the Registrar failed to consider the predominant purpose. 79The second error was said to be a finding that was made that was not available on the evidence. It was submitted that the Registrar was in error in finding that the processes would assist "in the sense of specificity to the proposed amended pleading". But it seems to me that, in light of the precise words used in the crucial paragraph of the crucial letters and in particular the word "finalised", such a finding of fact was reasonably open. 80The third error was said to be a failure to draw a Jones v Dunkel inference. The error in short was said to be an absence of reference to that submission in the written judgment of the Registrar. 81However, I accept the submission of senior counsel for Solarus that, as a matter of practical reality, a busy registrar dealing with interlocutory questions can hardly be expected to deal explicitly with every single submission made by the parties. Furthermore, I consider that one could infer that, in coming to his findings of fact, the Registrar took that submission into account. 82Fourthly and finally, it was said that the Registrar failed to apply the correct test. It was submitted that the references by the Registrar to the question of whether the processes were issued for a legitimate forensic purpose, along with a reference to what was said by Nicholas J in ICAP Pty Ltd v Moebes [2009] NSWSC 306, were insufficient. It was submitted that the written judgment of the Registrar needed to grapple explicitly with the two-stage test enunciated by Simpson J in R v Saleam [1999] NSWCCA 86. In other words, it was submitted that there needed to be not only a legitimate forensic purpose demonstrated, but also that it was "on the cards" that the documents sought by the compulsory processes would materially assist. 83Again, I do not consider that the reasons of the Registrar should be examined microscopically. Reading the judgment as a whole, it seems to me that the Registrar engaged with the questions with which he was confronted sufficiently and correctly. 84In short, as against the possibility that I am incorrect in my approach to the first issue, I have come to the conclusion that, if the true test is whether or not error has been established on the part of the Registrar, I am not so satisfied. 85I do not perceive any disjunction between my own finding with regard to the second issue that the orders sought should be made, and my finding with regard to the third ancillary issue that error has not been established in the judgment of the Registrar supporting his finding that the orders should not be made. That is because minds will legitimately differ in matters such as this one, featuring as it does questions of fact and inference, combined with evaluative judgments about the degree to which different aspects of legal processes such as construction of a contract and the remedy of rectification are interrelated. 86To draw a comparison derived from the criminal law, it is quite common for a judge sitting in the Court of Criminal Appeal and hearing an appeal against sentence to consider that he or she would have imposed a lesser and different sentence than the one imposed at first instance (if the appeal had been de novo) but also to consider that the sentence actually imposed at first instance is not manifestly excessively and does not thereby demonstrate error (in the context of an appeal based on identification of error).

Conclusion 87In short, I have approached the question for myself and not as an exercise of identification of error on the part of the Registrar. I consider that it has been established that the predominant purpose of issuing the notice to produce and the subpoena was to engage in a "fishing expedition" as to rectification, and is therefore an abuse of process. I regard it as otiose to analyse the arguments founded on alleged deficiencies in the notice to produce. Finally, if I am wrong in my characterisation of the review, I do not perceive error in the judgment of the Registrar. 88I propose to make orders in accordance with those sought in the notice of motion of Vero Insurance. As for costs, I consider that Solarus should pay the costs of this motion.

Orders (1)The orders dismissing the defendant's notice of motion and that the defendant pay the first plaintiff's costs made by Registrar Bradford on 31 May 2012 be set aside and in their place: (a)Order that the notice to produce for inspection dated 14 March 2012 and served by the first plaintiff on the defendant be set aside; (b)Order that the subpoena to produce filed on 12 March 2012 and served by the first plaintiff on Willis Australia Limited be set aside; (c)Order that the documents produced by Willis Australia Limited pursuant to the subpoena to produce filed on 12 March 2012 be returned to Willis Australia Limited; and (d)Order that the first plaintiff pay the defendant's costs of the notice of motion dated 3 April 2012. (2)The first plaintiff pay the defendant's costs of the notice of motion filed 26 June 2012.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 10 April 2013

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