Albany Port Authority v Commonwealth of Australia
[2006] WASC 101
ALBANY PORT AUTHORITY -v- COMMONWEALTH OF AUSTRALIA [2006] WASC 101
| Link to Appeal : | [2006] WASCA 185 |
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2006] WASC 101 | |
| Case No: | CIV:2019/2004 | 12 MAY 2006 | |
| Coram: | TEMPLEMAN J | 1/06/06 | |
| 15 | Judgment Part: | 1 of 1 | |
| Result: | Subpoenas set aside Apology and indemnity ordered | ||
| A | |||
| PDF Version |
| Parties: | ALBANY PORT AUTHORITY COMMONWEALTH OF AUSTRALIA |
Catchwords: | Practice Inherent jurisdiction Abuse of process Subpoenas Defence filed Use of oppressive subpoenas to investigate whether any evidence exists to support defence Case management Obligations on parties to identify genuine issues Necessity for legal representatives to be fully briefed for directions hearings |
Legislation: | Limitation Act 1935 (WA) Port Authorities Act 1999 (WA) Rules of the Supreme Court 1971 (WA), O 36 r 12(3), O 36 r 18 |
Case References: | Nil Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
COMMONWEALTH OF AUSTRALIA
Defendant
Catchwords:
Practice - Inherent jurisdiction - Abuse of process - Subpoenas - Defence filed - Use of oppressive subpoenas to investigate whether any evidence exists to support defence - Case management - Obligations on parties to identify genuine issues - Necessity for legal representatives to be fully briefed for directions hearings
Legislation:
Limitation Act 1935 (WA)
Port Authorities Act 1999 (WA)
Rules of the Supreme Court 1971 (WA), O 36 r 12(3), O 36 r 18
(Page 2)
Result:
Subpoenas set aside
Apology and indemnity ordered
Category: A
Representation:
Counsel:
Plaintiff : Mr K J Mony de Kerloy
Defendant : Mr M J Feutrill
Solicitors:
Plaintiff : Freehills
Defendant : Phillips Fox
Case(s) referred to in judgment(s):
Nil
Case(s) also cited:
Nil
(Page 3)
- TEMPLEMAN J:
Background
1 On 12 May 2006 I conducted a directions hearing in this action which had been case-managed previously by a Registrar. It was referred to me at the request of the parties in the hope that this would facilitate a resolution of the issues: see transcript of hearing before the Registrar on 19 April 2006, pages 76 - 80.
2 On 12 May, I made a number of orders, including an order setting aside 17 subpoenas which had been issued at the request of the defendant, the Commonwealth of Australia ("the Commonwealth"). I made that order of my own motion because I considered that the subpoenas constituted an abuse of the process of the Court. My reasons for making the order are, I think, clear from the transcript: I did not give a formal judgment.
3 I understand that the Commonwealth wishes to appeal against my orders. That being so, and because I regard the matter as one involving important points of principle, I now set out my reasons for setting aside the subpoenas and for making the other case-management orders. I should add that no application has yet been made to me for leave to appeal.
The action
4 The plaintiff in the action is the Albany Port Authority ("the Port Authority") established by the Port Authorities Act 1999 (WA). The Port Authority has vested in it all Crown land comprising the Port of Albany, including the seabed and the shores. The Port Authority has exclusive control of the Port of Albany and is responsible for its maintenance and preservation.
5 In its amended statement of claim, the Port Authority alleges that between October 1947 and April 1948, Royal Australian Navy Landing Craft LST 3014 was berthed at a jetty in the Port of Albany known as the "Deep Water Jetty" and was loaded with obsolete explosive ordnance for the purpose of disposing of the ordnance at sea. It is alleged that the loading operations were carried out by Australian navy personnel, with assistance from Australian army personnel: and that the commanding officer of the landing craft was in charge of the loading operations. Particulars are given of the various occasions on which ordnance was loaded in this way.
(Page 4)
6 It is then alleged that in the course of the loading operations:
"Australian navy personnel and Australian army personnel wrongfully caused ordnance to spill into the seabed and on to the seabed around the jetty and wrongfully allowed the ordnance to remain on the jetty seabed."
7 The Port Authority alleges that the continuing presence of the ordnance on the seabed is a trespass by the Commonwealth and that the trespass is continuing.
8 The Port Authority then alleges that in August 2000 it entered into a contract with McConnell Dowell Constructors (Aust) Pty Ltd to construct two new berths in the Port of Albany. The work under the contract is said to have commenced in August 2000 and to have involved "the dredging, reclamation and construction of berth structures in the area of the Jetty Seabed."
9 The Port Authority alleges that in the course of undertaking the dredging work the contractors discovered the ordnance which had been spilled there during the course of the loading operations in 1947 – 1948.
10 It is alleged further that the presence of the ordnance on the seabed caused work under the contract to be delayed and required a change in the planned work methods to mitigate the risk of detonation of the ordnance. This is alleged to have caused the Port Authority to incur additional costs amounting to some $2.6 million which the Port Authority claims against the Commonwealth.
11 In its defence, the Commonwealth admits very little. In relation to liability, the Commonwealth admits that the landing craft was "intermittently berthed" at the Deep Water Jetty between October 1947 and April 1948 for the purpose of loading ordnance from the second world war for disposal at sea. The Commonwealth admits also that the ordnance which was so loaded was "unfired explosive ordnance". The Commonwealth contends that the use of the loading facilities was "at the specific request of the Government of the State of Western Australia": the loading operations were carried out by Australian navy and army personnel and that the commanding officer of the landing craft was in charge of the loading operations "subject to the powers of the Harbour Master for the Port of Albany".
12 Except in relation to formal matters, that is, essentially, the extent of the Commonwealth's admissions. The Commonwealth denies that there
(Page 5)
- was any spillage of ordnance. It contends that if there was any such spillage "it was involuntary and neither negligent nor reckless". The Commonwealth contends that if there was a continuing trespass (which it denies), any claim for damages suffered prior to 6 August 1998 is statute barred under the Limitation Act 1935 (WA).
13 Despite denying that ordnance was spilled on to the seabed, the Commonwealth admits that the contractors discovered ordnance in the course of undertaking dredging work. However, the Commonwealth denies that the presence of the ordnance so discovered caused any delay in the work carried out under the contract or that the costs of the work were increased.
14 The Port Authority is anxious to resolve the matter. I was told that there have been attempts to narrow the issues in dispute and to settle the action by mediation. The parties' experts conferred for that purpose before proceedings were commenced. Subsequently, the experts have conferred further and there have been two mediations conducted by a Registrar of the Court. Despite that, I am informed by the Commonwealth that:
"At the conclusion of the last mediation in October 2005, the parties agreed the matter is unlikely to settle and should proceed towards trial."
15 That is the position set out in the Commonwealth's schedule of outstanding steps dated 11 May 2006 which was prepared for the purpose of the directions hearing.
16 The outstanding steps identified by the Commonwealth include the following:
"• Subpoena document inspection;
• The likelihood of an application for further discovery from the [Port Authority];
• Provision and inspection of any further discovery from the [Port Authority];
• Interrogatories;
• Exchange of supplementary expert evidence;
• Amendment of pleadings; and
(Page 6)
- • Briefing and taking advice from new Senior Counsel for the [Commonwealth]."
The subpoena issue
17 On 8 March 2006, the Commonwealth applied to a Master for the early return of 17 subpoenas which had been issued the previous day. The subpoenas were addressed to:
Acergy Australia Pty Ltd
Connell Wagner Pty Ltd
Deloitte Touche Tohmatsu
Les Johnson
McConnell Dowell Constructors (Aust) Pty Ltd
R & C Houben Pty Ltd
City of Albany
Department of Consumer and Employment Protection (WorkSafe);
Department of Environment
Department of Housing and Works
Department of Planning and Infrastructure
Department of Premier and Cabinet
Department of Water
Fire and Emergency Services of Western Australia
Public Transport Authority
State Records Office of Western Australia
Western Australian Treasury Corporation.
18 The application was supported by the affidavit of Melanie Cameron McKean, a solicitor employed by the solicitors for the Commonwealth. In her affidavit, Ms McKean set out the background to the claim, the main
(Page 7)
- issues in the proceedings and the reasons for seeking early return of the subpoenas. In relation to each of the addressees, Ms McKean set out in general terms the basis for her belief that the relevant subpoena would result in the production of the documents sought. The affidavit extended to some 23 pages.
19 As appears from the transcript of 8 March 2006, the hearing before the Master was of 15 minutes' duration. The hearing commenced with counsel for the Commonwealth handing Ms McKean's affidavit to the Master and inviting him to read it.
20 Two points emerge from the transcript. First, the Master said he had not had a chance to read all through the affidavit (TS 67). Secondly, it is clear that the Master was concerned only with the question of the early return of the subpoenas, not with their scope. The discussion between the Master and counsel for the Commonwealth related to the logistics of managing what might be a considerable volume of documents and to the further management of the litigation.
21 Counsel for the defendant asked that the subpoenas be returned on 5 April 2006. However, there being no Chambers listed for that date, the Master set 4 April as the return date.
22 On that day, the Commonwealth applied to the Master to extend until 4 July 2006 the return date of the subpoenas which remained outstanding. Again, the application was supported by an affidavit of Ms McKean in which she set out the background to the application and identified those subpoena recipients who required an extension of time. They were:
Connell Wagner Pty Ltd
McConnell Dowell Constructors (Aust) Pty Ltd
Department of Environment
Department of Planning and Infrastructure
Department of Water
Public Transport Authority
State Records Office of Western Australia.
23 In essence, the reason for the application was the volume of the documents requiring inspection and the difficulty faced by at least three of
(Page 8)
- the recipients, who, Ms McKean said, had contacted her to request that representatives of the Commonwealth attend at their premises to assist in identifying documents which should be produced in response to the relevant subpoena.
24 It is hardly surprising that some of the recipients of the subpoenas have experienced this difficulty. I do not think that my life in the law has been particularly sheltered. However, as I observed to counsel for the defendant during the course of the directions hearing, in over 20 years of practice and 10 years as a Judge of this Court, I have never seen subpoenas as oppressive as these. By way of example, I refer to the subpoena addressed to McConnell Dowell Constructors (Aust) Pty Ltd. It requires the production of:
"All documents including, but not limited to, accounts, advices, agreements, applications, approvals, audits, budgets, calculations, certificates, charts, claims, contracts, correspondence, court documents, diagrams, diaries, deeds, drawings, emails, facsimiles, file notes, forms, invoices, job sheets, letters, licences, logs, maps, memorandums, minutes, notes, notices, plans, pleadings, permits, photographs, registers, remittances, reports, schedules, sketches, statements, statutory declarations, subcontracts, surveys, tables, tenders, timelines, timesheets, transmittals, variation approvals, variation orders and videos …"
- There follows 30 paragraphs in which are set out the matters to which the documents relate. These paragraphs are also couched in wide and general terms such that a detailed investigation must inevitably be undertaken in order to ensure compliance. I am informed by the Commonwealth that McConnell Dowell has about 50 archive boxes of documents relating to the works at the Port of Albany in its Perth office and at least six archive boxes of documents in its Melbourne office.
25 Another recipient who has requested assistance from the Commonwealth has some 108 lever arch files of documents which will need to be examined.
26 By way of further example, the subpoena addressed to the Proper Officer of the Department of Premier and Cabinet requires the production of:
"All documents including, but not limited to, advices, agreements, applications, approvals, audits, budgets, claims,
(Page 9)
- contracts, correspondence, court documents, deeds, licences, maps, memorandums, minutes, notes, notices, photographs, reports and statements concerning, arising from or including … investigation, seabed clearance, dredging, rock removal or construction work in the Port of Albany in the period from 1947 to present."
- That is only one of 18 categories of documents sought by that subpoena. Many of the subpoenas require investigations relating to events which took place as long ago as 1947. That addressed to the State Records Office requires the production of all documents "concerning, arising out of or including … Military use of or presence within, the Port of Albany in the period from 1939".
27 I do not propose to burden these reasons with lengthy quotations from the other subpoenas. It is, I think, sufficient to repeat that they are all couched in terms which require the recipients to undertake detailed investigations.
28 The rationale for the width of the subpoenas is set out in par 4.3 of the Commonwealth's schedule of outstanding steps to which I have referred above. It is in the following terms:
"One important reason for the early return of subpoenas arises from the fact that the events in issue occurred almost 60 years ago, at a time when the Port of Albany was under the control of the Crown. However, since 1999 the Port has been under the control of the [Port Authority] which, pursuant to section 5 of the Port Authorities Act 1999 (WA), is not an agent of the Crown. The [Commonwealth] expects there are documents relevant to the matter in the possession of the Crown which may not be in the possession, custody or power of the [Port Authority]. As set out in the [Commonwealth's] Outline of Submission, the subpoena process is, in substance, part of the discovery process."
29 In my view, it is clear from that paragraph and from the extraordinarily wide terms of the subpoenas, that the conduct of the Commonwealth in issuing them is an abuse of the process of the Court. The law is well settled and clear. It is summarised conveniently in Seaman on Civil Procedure in Western Australia at [36.18.2]:
"There will be an abuse if the Court is satisfied that the subpoena has not been served bona fide for the purpose of
(Page 10)
- obtaining evidence in the case … or that it is oppressive. Oppression may be shown, for example, if the subpoena is an attempt to obtain discovery, or 'fishing', or fails to specify with reasonable particularity the documents which are to be produced, or will put a stranger to the trouble and expense of ransacking his or her records and endeavouring to form a judgment as to whether any of his or her papers throw any light on the dispute (Commissioner for Railways v Small (1938) 38 SR (NSW) 564 at 573 – 5) …"
- I consider that each of the 17 subpoenas issued in this case contravenes the principles set out above. The subpoenas are not directed at obtaining evidence: they are an attempt to discover whether any evidence exists. They are the kind of documents which one would expect to emanate from a Royal Commission. They are admittedly an attempt to obtain discovery; they are unquestionably "fishing"; they fail to specify with reasonable particularity the documents to be produced and they must inevitably involve a great deal of trouble for the recipients in identifying documents which might answer the very general descriptions set out in the subpoenas. The costs of assembling, reviewing and analysing the documents produced will be very substantial.
30 Order 36 r 18 of the Rules of the Supreme Court 1971 (WA) empowers the Court to set aside a subpoena on the application of the recipient. There has been no such application in the present case: and this is not a matter of direct concern to the Port Authority. However, as is said in Seaman at [36.18.1], a subpoena is set aside in the inherent jurisdiction of the Court to prevent abuse of its process. It follows, that where the Court is satisfied that there has been an abuse, it is entitled to act of its own motion to bring that abuse to an end, and, in my view, it should do so.
31 Counsel for the Commonwealth submitted that there were a number of reasons for permitting the subpoenas to remain in force. First, counsel said, the Master ordered the early return of the subpoenas. The implication in that submission is that the Court had tacitly approved the subpoenas.
32 However, as I have noted above, the application was not made to the Master for leave to issue the subpoenas, but for an early return date. The subpoenas had already been issued. As is clear from the transcript (and as I confirmed with the Master) he had no opportunity to consider whether the subpoenas were oppressive: this possibility was not drawn to his attention. The Master was entitled to assume that because the
(Page 11)
- Commonwealth could be expected to act as a model litigant, it would not seek to have subpoenas issued which constituted an abuse of the process of the Court.
33 Secondly, counsel informed me that all the recipients of the subpoenas which were of "a government nature" (other than the State Records Office) had responded to their respective subpoenas, without objection.
34 I do not find that submission in the least compelling. I can fully understand that any person or institution receiving a subpoena issued by the Supreme Court on the application of the Commonwealth will assume that the request is proper.
35 Counsel's third submission, which is an extension of the second, is based on counsel's instructions that the State Solicitor's Office had been advising the State government instrumentalities which had received subpoenas and that the firm of Deacons had been advising Connell Wagner Pty Ltd in relation to the response to the subpoenas.
36 In my view, those considerations are irrelevant. If, as a matter of law, the subpoenas are an abuse of process, that circumstance cannot be remedied by a failure to object to the process. Further, I do not regard the fact that some of the subpoenas have already been complied with as a reason not to set them aside. In my view, the principle is sufficiently important to justify that action.
37 In all the circumstances, I had no hesitation in setting the subpoenas aside. Further, I was anxious to ensure that the recipients of the subpoenas should be informed that they had not been imposed upon as a result of a considered decision by the Court, and that the Court had acted to remedy an abuse of its process as quickly as possible and as far as possible. My intention was to halt the expenditure of further public funds and to limit the inconvenience to the recipients of the outstanding subpoenas. I considered it appropriate to have an officer of the Court convey this message, and that the Commonwealth's solicitor should do so.
38 I therefore directed Ms McKean to write forthwith to each of the recipients of the subpoenas saying that:
• the subpoena had been issued by the Court on the application of the Commonwealth and that the subpoenas were issued without the Master being given a proper
- opportunity by the Commonwealth to consider the application;
- • the subpoenas had been reviewed by me and that I had come to the conclusion that they were oppressive and an abuse of the process of the Court and that I had ordered that the subpoena be set aside;
• she apologised for any inconvenience caused to the recipient and informed the recipient that the Commonwealth would indemnify the recipient for any costs reasonably incurred in complying with the subpoena;
• there might possibly be some later, limited subpoena, but the recipient was to take no further action in relation to the subpoena received thus far.
39 I permitted the Commonwealth to review the documents obtained under subpoena but directed that they must be collected and sent back to their owners as soon as convenient. Any documents in the Court were to be uplifted for that purpose.
40 Order 36 r 12(3) of the Rules of the Supreme Court provides for a subpoena to issue "upon its being sealed by an officer of the Central Office". Because the Court does not become involved other than administratively, it relies on the legal practitioners who are its officers to ensure that subpoenas do not exceed their proper scope. A subpoena should never be an instrument of oppression: a principle which, in my view, has been contravened in this case.
Other matters arising in the directions hearing
41 As I have noted above, I was informed by the Commonwealth that the parties had agreed that the matter was unlikely to settle and should proceed towards a trial.
42 I pointed out to the parties that I regard that as an astonishing proposition which, in my view, is wholly unacceptable.
43 I was told by counsel for the Port Authority that it had evidence from persons who were engaged in loading munitions from an Australian munitions dump in the countryside on to boats anchored at the Albany Port Jetty, who saw "bombs falling off the sides" (TS 89).
(Page 13)
44 Even on the limited admissions made by the Commonwealth in its defence, it seems to be common ground that the ordnance discovered on the seabed in the Port of Albany was either the property of the Commonwealth or for which the Commonwealth was responsible. Counsel for the Commonwealth informed me that one of the bombs could have been expected to have come from a Catalina flying boat, the implication being that someone other than the Commonwealth might have been responsible for dropping it into the harbour. However, counsel was unable to answer my question as to whether the Commonwealth intended to contest seriously that the bombs and other munitions discovered on the seabed were not Commonwealth ordnance. Despite that, counsel accepted that damages was the real issue in the case (TS 92).
45 Counsel went on to say that the reason for the wide ranging investigation which had been undertaken was that "there are a number of hypotheses that might be consistent with the ordnance remaining on the seabed floor …" (TS 92).
46 I reiterate my concern about the Commonwealth's conduct in this case. It is clear that ordnance has been found on the seabed in the Port of Albany. It is equally clear that it has been necessary to remove the ordnance and that some cost was involved. That cost must be met from public funds. I do not think the public would be concerned whether the cost was paid by the State or the Commonwealth. However, I think the public would be extremely concerned to know that instead of concentrating their efforts on resolving the practical problem of ordnance removal in the most cost effective and efficient way, the parties have locked horns in expensive and complex litigation which will undoubtedly result in very considerable further expenditure of public funds to the profit only of the parties' legal representatives.
47 Experience teaches that if, in a case such as this, the parties were commercial entities litigating at the expense of their shareholders, it is likely that they would settle the case. I think it unacceptable that the Commonwealth should be profligate with public funds, not only as evidenced by its general attitude to settlement, but, more particularly, in relation to the subpoenas and the very substantial costs involved. I note that the subpoenas appear to be directed substantially to the issue of liability, when quantum is the real issue in the case.
48 It is not necessary to deal with other matters arising in the course of the directions hearing. However, there is an important point arising from the hearing which I do wish to mention.
(Page 14)
49 Counsel for the Commonwealth who, as I understand it is the second junior barrister instructed in the case, was unable to provide much assistance because he had only limited knowledge of the case as a whole. As I have noted above, counsel was unable to tell me whether the Commonwealth intended to contest liability. No doubt the Commonwealth's position would depend on the outcome of the fishing expedition which I regard as an abuse of the Court's process.
50 Although counsel informed me that the Commonwealth wanted to amend its defence, he was unable to tell me, except in general terms, what the thrust of the amendment would be. Counsel said that "essentially and in broad terms" the Commonwealth intended to take issue with the way the Port Authority managed the harbour expansion works. The object of the amendment would be to ensure that the Commonwealth's defence reflected its expert evidence. Again, this is a matter of quantum, not liability.
51 I was informed by counsel for the Port Authority that there was a genuine dispute between its expert and the two experts appointed by the Commonwealth, all of whom were engineers with expertise in dredging. Clearly, this is the issue which must be resolved. However, the pleadings thus far give no indication of the nature of the dispute.
52 This is wholly unsatisfactory, given that the issues should now be clear. The experts have all written reports and engaged in lengthy mediations well before the directions hearing.
53 Since counsel for the defendant was unable to assist me in identifying the ambit of the dispute, the directions hearing was a somewhat pointless exercise. I therefore directed the parties to confer by counsel as soon as possible for the purpose of:
(1) identifying the issues in relation both to liability and quantum; and
(2) proposing a means of resolving those issues.
54 In addition, I directed that the transcript of the hearing was to be sent as soon as practicable to the Chairman of the Port Authority and to the Commonwealth Minister for Defence. These were the individuals whom, I was informed by counsel, had authority to settle the proceedings.
55 These observations will, I hope, serve to emphasise the importance of ensuring that the legal representatives of parties who appear at a directions hearing are fully acquainted with the case and are able to assist
(Page 15)
- the case manager to the fullest extent possible. In my view, the object of case management is not simply to programme an action to trial. It includes an obligation on the parties, as well as the Court, to ensure that genuine issues are identified and resolved as quickly and as efficiently as possible.
56 I reserved the costs of the directions hearing on 12 May. I propose to deal with them when the matter returns to me following the conferral between counsel.
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