Australian Securities and Investments Commission v Flugge & Geary (Ruling No 5)
[2015] VSC 665
•16 November 2015
| IN THE SUPREME COURT OF VICTORIA AT MELBOURNE | Not Restricted |
COMMERCIAL COURT
CORPORATIONS LIST
S CI 2007 10077
IN THE MATTER OF AWB LIMITED (ACN 081 890 459)
BETWEEN:
| AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION | Plaintiff |
| v | |
| TREVOR JAMES FLUGGE | Defendant |
- AND -
S CI 2007 10081
IN THE MATTER OF AWB LIMITED (ACN 081 890 459)
BETWEEN:
| AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION | Plaintiff |
| v | |
| PETER ANTHONY GEARY | Defendant |
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JUDGE: | ROBSON J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 10 November 2015 |
DATE OF RULING: | 16 November 2015 |
CASE MAY BE CITED AS: | ASIC v Flugge & Geary (Ruling No 5) |
MEDIUM NEUTRAL CITATION: | [2015] VSC 665 First Revision 21 December 2016 |
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PROCEDURE – Subpoena – Service in a foreign country – Application for leave under rule 7.06 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) – Jurisdiction of the Court to make such an order – Relevant considerations – Principles of international comity between nations – Inability to enforce the subpoena – Whether ‘exceptional circumstances’ exist to justify infringing the sovereignty of Singapore – Relevance of person subpoenaed agreeing to comply with the subpoena – Relevance that person subpoenaed is an Australian citizen, with family in Australia, is a barrister and solicitor of the Court and regularly visits Australia – Application refused.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr N J O’Bryan AM SC with Mr J P Moore QC, Mr C H Truong and Ms C E Klemis | Australian Securities and Investments Commission |
| For the Defendant in S CI 2007 10077 | Mr S K Dharmananda SC, with Mr R F R Pintos-Lopez | Corrs Chambers Westgarth |
| For the Defendant in S CI 2007 10081 | Mr I D Hill QC with Mr A Tragardh | Galbally Rolfe |
HIS HONOUR:
Introduction
ASIC has instituted civil penalty proceedings against Mr Flugge, the former chairman of AWB, and Mr Geary, a former officer of AWB, alleging against each breaches of the Corporations Act 2001 (Cth) arising out AWB’s conduct in selling wheat to Iraq under the United Nations Oil‑for‑Food Program.
ASIC applies under r 7.06(c) of the Supreme Court (General Civil Procedure) Rules 2005 (Vic), for leave to serve a subpoena to attend to give attendance on Mr Christopher Quennell, an Australian citizen, who currently resides in Singapore. Should leave be granted, ASIC also applies for an order for substituted service, by sending a subpoena issued in each proceeding by email to Mr Quennell’s personal and work email addresses, and by fax to Mr Quennell’s work fax number.
Rule 7.06 provides:
The Court, by order, may allow service out of Australia of the following –
(a)originating process in a proceeding relating to—
(i)the wardship, custody, management or welfare of a minor; or
(ii)the custody, management or welfare of a person who is incapable of managing his or her affairs;
(b)an originating motion in a proceeding brought under the any Act;
(c)any summons, order or notice in any proceeding.
Rule 42.01 provides:
subpoena means an order in writing requiring the addressee—
(a)to attend to give evidence;
(b)to produce the subpoena or a copy of it and a document or thing; or
(c)to do both of those things.
Thus, a subpoena is an order that falls within r 7.06(c).
Mr Quennell is a lawyer, admitted to practise in Victoria, and former partner of Blake Dawson Waldron, which firm was engaged by AWB to provide legal advice in relevant periods. ASIC intends to call Mr Quennell to give evidence of his teleconference with Mr Flugge on 30 April 2004. During the interview, Mr Quennell made notes of the conversation with Mr Flugge.
ASIC says that Mr Quennell’s anticipated evidence is relevant to the inland transport payments and Mr Flugge’s knowledge of those payments. Inland transport payments are a central part of ASIC’s case against Mr Flugge.
AWB has waived, alternatively declined to make, any claim for privilege, in Mr Quennell’s anticipated evidence, including his notes of the teleconference with Mr Flugge. Those notes were made public at the time of the Cole Inquiry.
In July 2015, a subpoena in each of the proceedings was issued by the Court, and a request from the prothonotary to the Attorney‑General of Singapore was made to effect service of the subpoena. By letter dated 7 September 2015, the Court was advised that Singapore was ‘unable to accede to the request as it does not fall within the scope of Order 65 Rule 2 of the Rules of Court.’
On 19 August 2015, Mr Lockett, the solicitor for ASIC, emailed the subpoenas to Mr Quennell. By emails sent 18 September 2015 and 16 October 2015, Mr Quennell expressed his view that he had not been properly served with subpoenas in these proceedings in circumstances where personal service had not been effected, and leave of the court had not been obtained. ASIC says that it seems that Mr Quennell’s position is that, given he was AWB’s legal advisor, he will not give evidence unless compelled to do so. However, if proper service is effected, Mr Quennell has advised that he has every intention to comply with the subpoenas.
Rule 7.06(c) provides that the Court may allow service of an order out of Australia. As the cases discussed below indicate, the discretion to do so will only be exercised in exceptional circumstances.
Several reasons are put forward for this approach. First, it is said that to issue an order to the resident of another state is in breach of the principles of comity of nations which the Court should observe. Under the principles of the comity of nations, Australia or its organs of government, should not seek to interfere in the sovereignty of another country by ordering a resident of that country to appear in Australia under pain of punishment. It is also said that the Court should not issue such an order as it is unable to enforce it and a Court should not make an order that it cannot enforce.
ASIC submits that exceptional circumstances exist in this case that warrant the Court exercising its discretion to make the order. ASIC rely on the following circumstances:
(a) Mr Quennell is an Australian citizen and a barrister and solicitor of the Supreme Court of Victoria;
(b) Mr Quennell has agreed to come to Australia if he is validly served with a subpoena to appear in this proceeding;
(c) Mr Quennell regularly visits Victoria; between March 2012 and 28 October 2015, Mr Quennell has visited Australia on at least 10 occasions; his most recent visit being on 2 April 2015;
(d) Mr Quennell’s incoming passenger card supplied by the Department of Immigration and Border Protections states as his emergency contact details (family or friend) the name Michele Quennell with a Victorian telephone number;
(e) Mr Quennell declared on his incoming passenger card that he is an Australian citizen;
(f) Mr Quennell has given as his address an address in East Brighton, Victoria.
(g) A solicitor for ASIC attended the given address on 29 April 2014 and asked to speak to Mr Quennell. The solicitor was informed by the person answering the door that Mr Quennell had been staying at that address but had just returned to Singapore;
(h) Based on these matters, Mr Martin Lockett, a solicitor for ASIC, deposed that he believes that Mr Quennell is an Australian citizen and has family in Victoria whom he regularly visits.
The relevant authorities
The relevant authorities draw a distinction between a subpoena which is a court order and a summons or writ with does not constitute a court order but merely a court procedural document that gives notice to a person of a proceeding. Service of the summons or writ in a foreign country does not involve the Court which issued the document invading or interfering with the sovereignty of that foreign country. The service, however, may enliven the jurisdiction of the Court to hear the matter and the rights of the party to take further steps in the proceeding.
On the other hand, the serving of a subpoena constitutes an order backed by the threat of punishment for contempt of court if the order is not obeyed and as such involves an interference with the sovereignty of the foreign country to govern, without interference, the liberty and conduct of its own citizens.
For the reasons expressed below, I find that r 7.06(c) is enabling only and does not extend the jurisdiction of the court. Thus the power to allow service out of Australia of a subpoena is only enlivened when the Court may otherwise issue a subpoena directed to a resident of another sovereign country. As the authorities below indicate, consistent with the obligation to respect the comity of nations, the Court should not exercise the power if it would be contrary to the principles of the comity of nations unless exceptional circumstances exist.
It is convenient to first deal with order 80 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) that gives effect to the ratification by Australia of the Hague Convention on the Service Abroad of Judicial Documents in Civil or Commercial Matters.[1] Singapore is not a party to the Hague Convention. This was explained by Davies J in this Court in Levy Schneider v Caesarstone Australia Pty Ltd[2] as follows:[3]
[1]Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, 15 November 1965, (entered into force 1 November 2010).
[2][2012] VSC 126 (‘Levy Schneider’).
[3]Levy Schneider, [2]–[4].
Order 80 gives effect to the ratification by Australia of the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters 1965 (‘the Convention’).[4] This Convention contains the protocol for transmission of a ‘judicial’ or ‘extra-judicial’ document from one Convention country to another Convention country for the purpose of serving the document in the other Convention country. The Convention does not address or comprise substantive rules relating to the actual service of process within the foreign country.
The protocol involves a request for service in the Model Form, the content of which is picked up in Order 80. Order 80 applies to service in a Convention country of a ‘local judicial document’. That expression is defined in Rule 80.1 to mean:
A judicial document that relates to civil proceedings in the Court.
Rule 80.04(1) provides that a person seeking to have a local judicial document served on a person in a Convention country outside Australia must make application in the form prescribed by r 80.04 to the Prothonotary. If the Prothonatary is satisfied that the application and its accompanying documents comply with the requirements of r 80.04, the Prothonatary must make a request to the foreign Convention country for the service of the local judicial document in that country. If the request is made, the relevant authority of the foreign Convention country will execute the request for service or cause it to be executed either by a method prescribed by the internal law of that country for the service of documents,[5] or by a particular method requested by the applicant, unless that method is incompatible with the law of the foreign Convention country,[6] or by simple delivery to an addressee who accepts it voluntarily.[7]
Order 80 simply prescribes the process which must be undertaken in order for a request for service to be made to the relevant authority of the foreign Convention country. Order 80 does not give authority to the Prothonotary to allow service of a local judicial document outside of Australia. Where Order 80 applies, the Convention may be relied for the purposes of transmitting a request for service of a local judicial document abroad. But the Convention does not by its own force authorise service of documents abroad. The Convention’s purpose is to facilitate the transmission of a letter of request where a document is to be served abroad and to facilitate the execution of service in the foreign country.
[4]Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, 15 November 1965, (entered into force 1 November 2010).
[5]Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, 15 November 1965, (entered into force 1 November 2010), Article 5(a).
[6]Ibid, Article 5(b).
[7]Ibid, Article 5.
In Gloucester (Sub-Holdings 1) Pty Ltd v Chief Commissioner of State Revenue,[8] White J in the Supreme Court of New South Wales considered an application by the defendant for leave to issue a subpoena to produce documents to be served on Noble Group Limited in Hong Kong. The plaintiff had objected to a stamp duty assessment. The defendant wished to subpoena documents from Noble Group in Hong Kong that held a majority interest in the plaintiff, to meet the objection.
[8][2013] NSWSC 1419 (‘Gloucester’).
White J refused the application on the ground that to grant leave to serve the subpoena on Noble Group in Hong Kong would be contrary to the principles of international comity. White J said that:[9]
Comity includes that principles of restraint by which courts, recognising the essentially territorial nature of their jurisdiction, are slow to assert their judicial power beyond the limits of their own jurisdiction so as to interfere with the sovereignty of a foreign State.
[9]Gloucester, [16].
White J noted that, where possible, statutes are to be construed conformably with the comity of nations and established rules of international law referring to Barcelo v Electrolytic Zinc Co of Australasia Ltd;[10] Polites v Commonwealth;[11] Minister for Immigration and Ethnic Affairs v Teoh;[12] and Plaintiff M70/2011 v Minister for Immigration and Citizenship.[13]
[10](1932) 48 CLR 391, 423–4 (‘Barcelo’).
[11](1945) 70 CLR 60, 68–9 (‘Polites v Commonwealth’).
[12](1995) 183 CLR 273, 287.
[13](2011) 244 CLR 144, 234.
In Barcelo, the High Court of Australia considered the application of a Victorian statute that sought to reduce interest payments on debentures registered in Victoria but not on debentures registered in the UK. In construing the Victorian statute Dixon J applied the rule of construction that statutes are to be construed conformably with the comity of nations. He said:[14]
I have come to the conclusion that in such a situation the only safe course to pursue is to apply the settled, if artificial, rule of construction for confining the operation of general language in a statute to a subject matter under the effective control of the Legislature. ‘Every statute is to be so interpreted and applied, as far as its language admits, as not to be inconsistent with the comity of nations or with the established rules of international law’ (per Hannen P. in Bloxam v Favre, adopting Maxwell on Statutes). ‘It is always to be understood and implied that the legislature of a country is not intending to deal with persons or matters over which, according to the comity of nations, the jurisdiction properly belongs to some other sovereign or State’ (per James L.J. in Niboyet v Niboyet and see, too, per Brett L.J., whose judgment has prevailed). Thus the Victorian Marriage Act ‘is to be construed so as to harmonize with the rules of international law. General words, such as any wife, any husband, are to be construed as any wife (any husband) domiciled in Victoria at the time of the institution of the suit; and perhaps in the case of the wife as meaning also any wife who has been deserted by her husband and who at the time of the desertion was domiciled in Victoria. It seems probable that an English or Victorian Court would, apart from any express statutory provision, claim jurisdiction in such a case of desertion, and would recognize a decree of a foreign Court given in similar circumstances. In construing the Act, therefore, the general words would be held to cover such a case, which would produce no conflict with the rules of international law’ (per Cussen J. for the Full Court in Forster v Forster).
[14]Barcelo, 423, (citations omitted).
Similarly, in Polites v Commonwealth, Dixon J said:[15]
It is a rule of construction that, unless a contrary intention appear, general words occurring in a statute are to be read subject to the established rules of international law and not as intended to apply to persons or subjects which, according to those rules, a national law of the kind in question ought not to include.
[15]Polites v Commonwealth, 77.
In CSR Ltd v Cigna Insurance Australia Ltd,[16] the High Court (Dawson, Toohey, Gaudron, McHugh, Gummow and Kirby JJ) considered the meaning of ‘comity’ referring to the explanation given by the Supreme Court of the United States in Hilton v Guyot[17] in the following terms:
‘Comity’, in the legal sense, is neither a matter of absolute obligation, on the one hand, nor of mere courtesy and good will, upon the other. But it is the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens or of other persons who are under the protection of its laws.
[16](1997) 189 CLR 345.
[17][1895] ISSC 185; (1895) 159 US 113 15 163–4.
In Agar v Hyde,[18] the High Court (Gaudron, McHugh, Gummow and Hayne JJ) were dealing with the service of an originating motion outside the jurisdiction and had this to say about ‘comity’:[19]
In Amin Rasheed Corpn v Kuwait Insurance, Lord Diplock said that jurisdiction exercised by an English court over a foreign corporation which has no place of business in England, as a result of granting leave under the relevant rule of court to serve out of the jurisdiction:
‘is an exorbitant jurisdiction, i.e., it is one which, under general English conflict rules, an English court would not recognise as possessed by any foreign court in the absence of some treaty providing for such recognition. Comity thus dictates that the judicial discretion to grant leave under this paragraph [of the rules] should be exercised with circumspection in cases where there exists an alternative forum, viz the courts of the foreign country where the proposed defendant does carry on business, and whose jurisdiction would be recognised under English conflict rules.’
Considerations of comity, and consequent restraint, have informed many of the reported decisions about service out of the jurisdiction. It is, however, important to notice that rules of court, or local statutes, providing for service outside the jurisdiction are now commonplace - at least in jurisdictions whose legal systems have been formed or influenced by common law traditions. Further, as the Court of Appeal rightly noted in its reasons in these matters, contemporary developments in communications and transport make the degree of ‘inconvenience and annoyance’ to which a foreign defendant would be put, if brought into the courts of this jurisdiction, ‘of a qualitatively different order to that which existed in 1885.’
[18](2000) 201 CLR 552 (‘Agar v Hyde’).
[19]Agar v Hyde, [42] (citations omitted).
In Gloucester, White J cited with approval the decision of Rogers CJ Comm D in Arhill Pty Ltd v General Terminal Co Pty Ltd,[20] where Rogers CJ held that granting leave to serve a subpoena on a Japanese company in Japan was contrary to the provisions of international law and comity. In Arhill, Rogers CJ said that a subpoena is a part of a court’s compulsive jurisdiction, as it compels a witness to appear or produce documents under the threat of punishment for contempt. Rogers CJ held that the relevant rule in New South Wales permitting a subpoena to be served out of the jurisdiction should be read ‘consistently with “the established criteria of international law with regard to comity” c.f. Re Tucker; Ex parte Tucker.’[21]
[20](1990) 23 NSWLR 545, 551 (‘Arhill’).
[21]Arhill, 554; referring to Re Tucker; Ex parte Tucker [1988] 2 WLR 748 (‘Tucker’), 758; 611.
In Tucker, Dillon LJ said that:[22]
Moreover, the English court has never had any general power to serve a subpoena ad testificandum or subpoena duces tecum out of the jurisdiction on a British subject resident outside the United Kingdom, so as to compel him to come and give evidence in an English court.
[22]Tucker, 756.
In Gloucester, White J referred, inter alia, to a decision of Lockhart J in Re Deposit and Investment Co Ltd,[23] where his Honour held that a rule of the Federal Court permitting service outside Australia ‘was not to be read as an extension of the Court’s jurisdiction.’[24] Lockhart J said:[25]
To invade the sovereignty of another country’s jurisdiction and interfere with its sole power over persons present within it, stronger and clearer language is needed…
[23](1991) 30 FCR 463 (‘Re Deposit’).
[24]Gloucester, [23].
[25]Re Deposit, 466.
In Gloucester, the defendant referred to Caswell v Sony/ATV Music Publishing (Australia) Pty Ltd,[26] a decision of Hallen AsJ who dismissed an application to set aside a grant of leave to issue a subpoena in the United States of America. Hallen AsJ expressed the view that in this day and age the principle of comity may have less weight than it did in the past. Hallen AsJ referred to the global economy and the changes in the way businesses communicate with each other in such an economy. White J rejected this submission and the suggestion that the principles of comity have less weight that they have had in the past.
[26][2012] NSWSC 986 (‘Caswell’).
After reviewing relevant Australian authorities, White J held that the discretion to make such an order [the subpoena] against an overseas non-party should not be exercised where to do so would be to infringe the sovereignty of the foreign state.[27]
[27]Gloucester, [30].
In Stemcor (A/Asia) Pty Ltd v Oceanwave Line SA,[28] Allsop J of the Federal Court of Australia refused leave to the plaintiff under order 27 of the Federal Court Rules to issue a subpoena for production to a foreign party present in Germany and not present in Australia. Allsop J held that it was not necessary for him to decide whether or not he had power to do so. His Honour said:[29]
… At the moment I am not prepared to grant leave to issue the subpoena even assuming that the Court has power. I do not refuse to do so for any discretionary reason attendant upon an appreciation of the issues of the case. Rather, I would adopt the approach of Rogers CJ Comm D in Arhill and view the service of an order upon a German company demanding that it do something in Australia on pain of punishment in proceedings to which it has not submitted as such an invasion of German sovereignty as not to be contemplated except in the most exceptional circumstances (assuming there to be power). See also Mackinnon v Donaldson, Lufkin and Jennrette Securities Corporation [1986] Ch 482; and Gao v Zhu[2002] VSC 64.
Such a subpoena, if served, even using the methods contemplated by the Convention, is not capable of enforcement. Without other steps being taken to enlist German governmental assistance (whether executive or judicial), Australian courts cannot enforce compliance on pain of punishment. In the absence of enforcement procedures the order is an empty threat, or the equivalent of a mere request couched in imperative terms. The Court should not be seen to be engaged in such conduct. A similar view was expressed by Giles J in Aetna Pacific Securities v Hong Kong Bank of Australia Ltd (29 April 1993, NSWSC, unreported).
[28][2004] FCA 391 (‘Stemcor’).
[29]Stemcor, [11]–[12].
In Levy Schneider, Davies J of this Court, considered an application to serve a subpoena to give evidence on a foreign citizen, Mr Yakim, who was resident in Israel. Mr Yakim said through his solicitors that he had been requested many times throughout his professional career to attend various courts worldwide and that he had always complied with those courts’ orders and requests. Further, Mr Yakim said that he would respect any lawful court order that would be addressed to him if a subpoena was served to attend and give evidence in the case and he would fully comply with the Court’s orders.
Davies J held that a subpoena is an order within the meaning of r 7.06(c). Her Honour held that the court had the power under r 7.06(c) to give leave to a person to serve a subpoena outside Australia. Her Honour said, however, that the courts showed a general reluctance to exercise the power where the document to be served is a subpoena to give evidence or to produce documents. Her Honour referred to and relied on Arhill and Stemcor (referred to above).
Her Honour held that:[30]
The indication from Mr Yakim that he will attend if served with a subpoena is not a persuasive reason for granting leave, in my view. If served with a subpoena Mr Yakin will be compelled to attend to give evidence under threat of sanctions for non-attendance. The compulsion is the very reason that Australian Courts generally will not allow the service of such a subpoena because Australian Courts cannot enforce compliance.
[30]Levy Schneider, [9].
In Sweeney v Howard,[31] Windeyer J set aside service of a subpoena on Ms Koffel who was residing in England. Leave had been obtained to serve Ms Koffel by substituted service, and Ms Koffel applied to set the service aside. Ms Koffel was an Australian citizen and a solicitor of the Supreme Court of New South Wales. Ms Koffel did not wish to come to Sydney to give evidence.
[31][2007] NSWSC 262 (‘Sweeney v Howard’).
Windeyer J found that the relevant rule in New South Wales did give authority for a subpoena to be served outside Australia and that in the circumstances of the case there was nothing in the comity of nations which would require the court to resist this. His Honour referred to information issued by the Attorney General of the United Kingdom that the government of the United Kingdom did not consider service in the United Kingdom of a subpoena issued out of a foreign court to be an interference with the governance of that country.
His Honour said that nevertheless, the position had at least ordinarily been accepted that there was no jurisdiction to serve a subpoena overseas. He accepted that an originating process could be served overseas.
It was argued that Ms Koffel was a solicitor and that she ought to assist the Court, and also that as an Australian citizen it would be proper for the Court to make an order because, although it could not be enforced against her immediately, if she failed to comply with it, she would be liable to punishment for contempt if and when she returned to Australia. This argument did not find favour with Windeyer J. He said:[32]
While that is, at least, the theoretical position, I do not think it is satisfactory for the Court to issue some process intended to be compulsory unless there is some means of enforcement of it in the immediate future.
[32]Sweeney v Howard, [13].
He said that as a matter of discretion he would not do so in that case.[33] His Honour said:[34]
I should also say that apart from bankruptcy cases, counsel has not been able to refer me to any occasion on which a subpoena has been issued in the circumstances here. As I understand it, the position has always been that if you have a recalcitrant witness in a foreign country, to get the evidence of that witness, it is necessary to take it on commission, or on some equivalent basis. Whilst that is not the determining factor, it is at least something to be taken into account.
[33]Sweeney v Howard, [13].
[34]Sweeney v Howard, [14].
In the exercise, of his discretion Windeyer J set service aside of the subpoena.
In Mackinnon v Donaldson, Lufkin and Jennrette Securities Corporation,[35] Hoffmann J in the Chancery Division discharged an order to Citibank NA requiring production of documents from its New York office. The subpoena was served on the Citibank office in London. His Lordship said:[36]
The content of the subpoena and order is to require the production by a non-party of documents outside the jurisdiction concerning business which it has transacted outside the jurisdiction. In principle and on authority it seems to me that the court should not, save in exceptional circumstances, impose such a requirement upon a foreigner and, in particular, on a foreign bank. The principle is that a state should refrain from demanding obedience to its sovereign authority by foreigners in respect of their conduct outside the jurisdiction.
[35][1986] Ch 482, (‘Mackinnon v Donaldson’).
[36]Mackinnon v Donaldson, 493.
In Gao v Shu,[37] Habersberger J of this Court set aside a subpoena served on the Bank of China of Shanghai for the production of documents. Habersberger J referred to Mackinnon v Donaldson and noted that the general rule was subject to the qualification of ‘exceptional circumstances’. He found there was nothing exceptional in the circumstances of the case before him.
[37][2002] VSC 64.
In ASIC’s written submissions, ASIC concedes that the subpoena may infringe the sovereignty of Singapore. ASIC submits:
The following matters may indicate that service out of the subpoena would likely encroach upon the sovereignty of Singapore:
(a)Singapore Rules of Court do not themselves permit service out of subpoenas.[38] The express preclusion of the court’s power to compel an individual resident outside Singapore by means of subpoena ‘must be understood as a recognition of long-established principles of international law that define a state’s extraterritorial criminal jurisdiction’: Serafica Rogelio T & Ors v Transocean Offshore Ventures Ltd.[39]
(b)The Singapore Ministry of Law, in response to the Supreme Court of Victoria’s request for service of the subpoena on Mr Quennell noted ‘we are unable to accede to the request as it does not fall within the scope of Order 65 Rule 2 of the Rules of Court.’
[38]A subpoena shall not be served on any person outside of the jurisdiction: O 38 r 18 of the Rules of Court.
[39][2013] SLR 1040, [29].
Analysis and conclusion
As indicated above, in Gloucester and Arhill the Court found that it would be against the comity of nations to permit one state to invade the sovereignty of another state by making compulsory orders against residents of their state. Those cases did not consider whether there were exceptional circumstances that may have justified granting leave to issue a subpoena directed to a resident of another state. Consistently with those authorities, I find that it would not be appropriate for the Court to allow the service of a subpoena upon Mr Quennell in Singapore.
If required to consider whether exceptional circumstances exist that would justify the Court allowing the service of a subpoena upon Mr Quennell in Singapore, I am of the view that exceptional circumstances do not exist.
In Caswell, Hallen AsJ declined to overturn a decision to permit a subpoena to be served outside Australia, as discussed above. The company upon whom the subpoena was directed applied to set aside the subpoena. The application was dismissed. One of the matters that the associate judge took into account was that the applicant owned all the issued shares of the defendant and thus the Court could enforce compliance with the subpoena. His Honour rejected the contention of the applicant that the subpoena would be futile as it could not be enforced.
In this case, Mr Quennell is not associated with the defendants. Nor was it established that Mr Quennell had property in Australia.
Even if such a connection was established, I am not satisfied exceptional circumstances exist. There are no special circumstances relating to Singapore which would justify the Court interfering in its sovereignty. The circumstances that ASIC rely relate to Mr Quennell’s connection with Australia and his willingness to attend.
Justice Davies did not accept Mr Yakim’s agreement to obey the subpoena as sufficient to make out exceptional circumstances. In Gao v Zhu, Habersberger J did not accept the facts there as satisfying the ‘exceptional circumstances’ qualification. In Gao v Zhu, the plaintiff Mr Zhu had served a subpoena on the Bank of China’s branch in Melbourne for the Bank of China in Shanghai to produce documents relating to a transaction that took place in China. The Bank of China was incorporated in China.
Although the Bank of China had a branch in Melbourne, Habersberger J did not consider that exceptional circumstances existed ‘to infringe the sovereignty of a foreign country by allowing a subpoena taking effect in that foreign country, and relating to business transacted in that foreign country.’[40]
[40]Gao v Zhu, [14].
Mr Quennell’s association with Australia may be relevant as to whether exceptional circumstances, exist. In my opinion, however, those circumstances do not constitute exceptional circumstances sufficient to justify the infringement of the sovereignty of Singapore by the Court allowing a subpoena to be served in Singapore compelling Mr Quennell, a resident of Singapore, to attend to this Court and give evidence, and in default be liable for contempt.
ASIC has correctly not sought an order for substituted service, if leave to serve out of Australia was not granted. In Mondial Trading Pty Ltd v InteroceanMarine Transport Inc,[41] Dawson J sitting as a single judge in the High Court of Australia, held that in the absence of an agreed mode of service upon the defendant, the plaintiff ought to have obtained leave for service outside the jurisdiction and seek to effect service, before an application to apply for substituted service could be entertained.
[41](1985) 65 ALR 155.
For those reasons, in my discretion, I refuse the application.
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