The Food Improvers Pty Ltd v BGR Corporation Pty Ltd

NEW SOUTH WALESDISTRICT REGISTRY NSD 1140 OF 2005

REASONS FOR JUDGMENT (REVISED FROM THE TRANSCRIPT) 1 The defendants have moved to set aside subpoenas served by the plaintiffs on the Caritas Centre and on Dr Newman Harris pursuant to O 27 r 4. The basis on which the defendants do so is that they argue principally that the subpoenas seek information which is manifestly irrelevant to the issues between the parties or constitute some kind of fishing expedition or, alternatively, that they would require the production of documents containing observations by third parties as to the state of mind of Mr Fred Gulson who is one of the directors of a number of the defendants and the person with the day to day control of the first defendant, BGR Corporation Pty Limited, as I understand the current state of the pleadings. 2 The issue arises in this way: in the further amended statement of claim, pars 45-77 allege that a number of incidents occurred in late May and June 2005 between, among others, Mr Gulson, Mr John Bax, who is the second plaintiff, and Mr Gobert, who was, at the time, a person involved in the conduct of the BGR business or that of one or more of its subsidiaries. The plaintiffs allege that Mr Gulson's conduct was angry, rude, loud and, for example (par 49), involved a lack of self-control or, according to some of the material in the particular, and extracts of correspondence set out in the pleading, a degree of powerful ego such as, so the plaintiffs' allegations go, may have been capable of making out an oppression claim in the way in which Mr Gulson was, at that time, exercising his powers as a majority shareholder and a person controlling or capable of controlling the affairs of BGR and its subsidiaries. 3 The defence to the further amended statement of claim alleges (in par 43) that these allegations in substance amount to a ruse to deflect responsibility for the refusal by Mr Bax and Mr Gobert in late May 2005, to continue to participate in business travel and arrangements overseas to do with the BGR Group's business. The defendants assert that it was Mr Gobert and Mr Bax who were supposedly completely unprofessional, intentionally disobedient, in serious breach of their duties, and wilfully neglectful in the discharge of their obligations under their employee or consultancy arrangements with the BGR Group. 4 It is clear that, on this part of the case, there is a real issue as to how, among others, Mr Gulson was conducting himself and whether it was his behaviour and the way in which he was behaving, which was capable of making out the claim for oppression or was irrelevant to it, depending on which side's point of view is ultimately to be accepted. I have been referred to a number of passages in the affidavits of Mr Gulson, sworn 20 July 2005, Mr Williams, sworn 22 June 2006, and Mr Bax, sworn 11 July 2005, which indicate competing versions of the conduct each side in the litigation relies upon on this part of the case. 5 In his affidavit of 20 July 2005, Mr Gulson says that on 3 July 2005 he checked into the Caritas Centre and was at that time under extreme stress. He says that it was on a recommendation that he decided that it was in his best interests to rest and receive dedicated medical attention. He said that he wished his condition to remain a private matter and for that reason, he and his wife told friends, family and staff of the Main Camp Group, which is, as I apprehend it, the substantial business of the BGR Group of companies, that he had acute bronchitis. 6 The argument has indicated that the Caritas Centre and Dr Newman Harris were involved in the care of Mr Gulson in respect of his then state of mind. 7 The question for me to decide is whether there could be any legitimate forensic purpose served by requiring the subpoenas to be both answered and, if so, any documents produced inspected by the plaintiffs. The defendants argue that the observations which may have been made by third parties such as doctors and staff at the Caritas Centre, and Dr Harris, would only be of Mr Gulson's then present state of mind in early July 2005 and could have no legitimate forensic bearing on what his state of mind may have been at the times relied on by the plaintiffs in late May 2005 and June 2005. I have not been asked to inspect any of the material which may have produced in answer to the subpoenas for the purposes of determining whether there was any reason having regard to the contents thereof to support the defendants' argument. 8 Accordingly, I have to approach assessing the legitimacy of the forensic purpose on the basis of the test indicated by Gibbs CJ in Alister v The Queen (1984) 154 CLR 404 at 414 and in Reg v Saleam (1989) 16 NSWLR 14 at 18A-B where the test was described as one involving the assessment by the Court as to whether it was 'on the cards' that there would be material produced in answer to the subpoena that could reasonably be seen as materially assisting the party causing the subpoena to issue in the sense of being able to be used in or in relation to evidence in the proceedings. 9 I am of opinion that it is likely that there will be material in the histories given by Mr Gulson to doctors and medical staff in early July 2005 as to the events which were connected to and preceded reasonably proximately his admission to the Caritas Centre at that time. I think it is 'on the cards' that that history will touch upon events pleaded in the further amended statement of claim and further amended defence in the period in late May and June 2005 and events that are touched on in the affidavits of the various persons, reference to which I have set out above. 10 The defendants argue that I should view the material as capable of going only to Mr Gulson's credit if I were minded to take the view that there may be histories or opinion evidence or observation evidence as part of a business record contained in the documents. I do not consider that on the material before me I could form a view that what would be produced in answer to the subpoena would go only to credit. 11 I think that on my current understanding of the issues in the dispute, informed by the paragraphs in the pleadings and affidavits to which I have referred, the relatively proximate medical records, including histories and observations of Mr Gulson, may be relevant in determining whether or not there was any admission by him or opinion or other observation which is likely to show that one account or other of his behaviour in the approximately six or seven weeks beforehand is more likely than not to have occurred. 12 The stress of which Mr Gulson spoke in paragraph 18 of his affidavit of 20 July 2005 as having been experienced by him as at 3 July 2005 is not inconsistent with the accounts relied on by the plaintiffs and may or may not, depending on how the evidence at the trial comes out, be connected to the events on which the plaintiffs rely to make a case of oppression by him. Obviously, I have no view, one way or the other, as to what ought, ultimately, to be the findings to be made in this area because I have no sufficient information on which to judge that. But, I am mindful that the temporal connection between Mr Gulson's admission to the Caritas Centre, the relatively recent events relied on by the plaintiffs and the dispute between both sides as to what happened, may all be touched on in the material that is sought, the subject of the subpoenas, and which I think it is on the cards is likely to, at least in part, be contained in the answers to the subpoenas. 13 It was then put by the defendants that, even if there were such material contained in the documents that might be the subject of production by the subpoena, that it would not be material to which the trial judge could give weight, and may raise a further issue as to how reliable anything put forward as an admission by Mr Gulson might be, having regard to his condition at the time - that is, in early July 2005. It was suggested that if his condition in early July 2005 was such that any history that he gave could be rendered unreliable because of his distressed or upset state of mind at that time, it may be necessary to call other evidence to explain or qualify what he said, or otherwise, make what he said in July 2005 inadmissible. 14 I think these are all matters which, if they arise at all, will need to be addressed at the time it is sought, if at all, to rely upon any such material, if it exists. Issues as to whether any discretions should be exercised under ss 135 or 136 of the Evidence Act 1995 (Cth) will fall to be considered when any such material is deployed or sought to be deployed in evidence. And it may be at that time, as I discussed in argument, that it is necessary to call medical evidence to explain the significance or circumstances of matters that might be relied on. However, I do not think this is a reason to set aside the subpoenas to either the Caritas Centre or Dr Harris, and it is in essence, at this point, purely speculative as to whether this issue would arise at all. 15 The defendants then put that what the plaintiffs were really seeking to do by the issue of these two subpoenas was to trawl through them to see whether there was anything material that might suit their case. Again, I do not think that that is an accurate assessment. The state of mind of Mr Gulson and his behaviour are issues in the proceedings. He, himself, revealed, in his affidavit of 20 July 2005, that he had sought treatment because of his extreme stress very soon after the events on which the plaintiffs rely. I do not think this is, in any way, a mere fishing expedition, and I am of opinion there is an apparently legitimate forensic purpose for which the subpoenas have been sought. I therefore refuse the application to set them aside. 16 The envelopes in which the documents produced by Caritas Centre and Dr Harris, in answer to the subpoenas, addressed to them by the plaintiffs, should be marked, 'Confidential: access restricted by order of Rares J of 10 July 2006', until further order. 17 I order that the order returning subpoenas on 12 July 2006 be vacated.

18 I order that the defendants pay the plaintiffs' costs of the motion returnable today.

I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares.

Counsel for the Defendants: Mr S Reuben with Mr D Jarrett