Brian Neville Mayfield and Marlene Theresa Mayfield (ATF B and M Mayfield Superannuation Fund) v P and B Corporation Pty Ltd (ATF North Cape Development Trust) [No 3]
[2016] WASC 291
•19 SEPTEMBER 2016
BRIAN NEVILLE MAYFIELD & MARLENE THERESA MAYFIELD (ATF B & M Mayfield Superannuation Fund) -v- P & B CORPORATION PTY LTD (ATF North Cape Development Trust) [No 3] [2016] WASC 291
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2016] WASC 291 | |
| Case No: | CIV:2796/2013 | 31 AUGUST 2016 | |
| Coram: | ALLANSON J | 19/09/16 | |
| 11 | Judgment Part: | 1 of 1 | |
| Result: | Application granted Plaintiffs not to be permitted to inspect documents produced | ||
| B | |||
| PDF Version |
| Parties: | BRIAN NEVILLE MAYFIELD & MARLENE THERESA MAYFIELD (ATF B & M Mayfield Superannuation Fund) RICHARD COBLEY & ROBYN COBLEY (ATF R & R Cobley Family Super Fund) KENNETH MAXWELL DOWNES & LYNETTE LORRAINE GRIEVES PETER DAVID HORWOOD AND JILL HORWOOD DISCOVERY III PTY LTD FORMERLY LATITUDE FISHERIES PTY LTD (ATF Boschetti Superannuation Fund) MURRAY RONALD HORAK & ASTRID JEANETTE MARQUERITE HORAK MARTIN RYAN HORAK & URIEL GERALDINE DEKALBERMATTEN P & B CORPORATION PTY LTD (ATF North Cape Development Trust) BARRY COLIN HUMFREY PETER FRANCIS BELL REGIONAL WA PTY LTD FORMERLY P & B SERVICES PTY LTD KENESTA PTY LTD JOHN SCOTT THOMSON BIRDANCO NOMINEES PTY LTD (T/As RSM Bird Cameron) |
Catchwords: | Practice and procedure Subpoenas Subpoena to produce served on defendant's IT service provider Subpoena recipient remotely accessing defendant's server Turns on own facts |
Legislation: | Rules of the Supreme Court 1971 (WA), O 36B r 4, O 36B r 9 |
Case References: | Boase v Axis International Management Pty Ltd [No 3] [2012] WASC 498 Heugh v Central Petroleum Ltd [No 2] [2013] WASC 323 Jeffery & Katauskas Pty Ltd v SST Consulting Pty Ltd [2009] HCA 43; (2009) 239 CLR 75 Rankilor v City of South Perth [2016] WASCA 28 Rochfort v Trade Practices Commission (1982) 153 CLR 134 Stanley v Layne Christensen Co [2004] WASCA 50 Walton v Gardiner [1993] HCA 77; (1993) 177 CLR 378 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- First Plaintiffs
RICHARD COBLEY & ROBYN COBLEY (ATF R & R Cobley Family Super Fund)
Second Plaintiffs
KENNETH MAXWELL DOWNES & LYNETTE LORRAINE GRIEVES
Third Plaintiffs
PETER DAVID HORWOOD AND JILL HORWOOD
Fourth Plaintiffs
DISCOVERY III PTY LTD FORMERLY LATITUDE FISHERIES PTY LTD (ATF Boschetti Superannuation Fund)
Fifth Plaintiff
MURRAY RONALD HORAK & ASTRID JEANETTE MARQUERITE HORAK
Sixth Plaintiffs
MARTIN RYAN HORAK & URIEL GERALDINE DEKALBERMATTEN
Seventh Plaintiffs
AND
P & B CORPORATION PTY LTD (ATF North Cape Development Trust)
First Defendant
BARRY COLIN HUMFREY
Second Defendant
PETER FRANCIS BELL
Third Defendant
REGIONAL WA PTY LTD FORMERLY P & B SERVICES PTY LTD
Fourth Defendant
KENESTA PTY LTD
Fifth Defendant
JOHN SCOTT THOMSON
Seventh Defendant
BIRDANCO NOMINEES PTY LTD (T/As RSM Bird Cameron)
Eighth Defendant
Catchwords:
Practice and procedure - Subpoenas - Subpoena to produce served on defendant's IT service provider - Subpoena recipient remotely accessing defendant's server - Turns on own facts
Legislation:
Rules of the Supreme Court 1971 (WA), O 36B r 4, O 36B r 9
Result:
Application granted
Plaintiffs not to be permitted to inspect documents produced
Category: B
Representation:
Counsel:
First Plaintiffs : Mr M L Bennett
Second Plaintiffs : Mr M L Bennett
Third Plaintiffs : Mr M L Bennett
Fourth Plaintiffs : Mr M L Bennett
Fifth Plaintiff : Mr M L Bennett
Sixth Plaintiffs : Mr M L Bennett
Seventh Plaintiffs : Mr M L Bennett
First Defendant : Mr C S Williams
Second Defendant : Mr C S Williams
Third Defendant : No appearance
Fourth Defendant : Mr C S Williams
Fifth Defendant : Mr C S Williams
Seventh Defendant : Mr M C Goldblatt
Eighth Defendant : Mr M C Goldblatt
Solicitors:
First Plaintiffs : Bennett + Co
Second Plaintiffs : Bennett + Co
Third Plaintiffs : Bennett + Co
Fourth Plaintiffs : Bennett + Co
Fifth Plaintiff : Bennett + Co
Sixth Plaintiffs : Bennett + Co
Seventh Plaintiffs : Bennett + Co
First Defendant : Solomon Brothers
Second Defendant : Solomon Brothers
Third Defendant : No appearance
Fourth Defendant : Solomon Brothers
Fifth Defendant : Solomon Brothers
Seventh Defendant : Hammond King Touyz
Eighth Defendant : Hammond King Touyz
Case(s) referred to in judgment(s):
Boase v Axis International Management Pty Ltd [No 3] [2012] WASC 498
Heugh v Central Petroleum Ltd [No 2] [2013] WASC 323
Jeffery & Katauskas Pty Ltd v SST Consulting Pty Ltd [2009] HCA 43; (2009) 239 CLR 75
Rankilor v City of South Perth [2016] WASCA 28
Rochfort v Trade Practices Commission (1982) 153 CLR 134
Stanley v Layne Christensen Co [2004] WASCA 50
Walton v Gardiner [1993] HCA 77; (1993) 177 CLR 378
1 ALLANSON J: These reasons deal with an application by the defendants to set aside a subpoena issued to a third party which provided information technology services to some of the defendants. Alternatively, the defendants seek an order prohibiting the plaintiffs from inspecting documents returned on the subpoena.
2 On the same day I heard an application by the plaintiffs for further and better discovery of specified documents. That application is quite discrete, and will be the subject of separate reasons.
The subpoena
3 On 31 May 2016 the plaintiffs issued a subpoena to the proper officer, Logic IT Solutions Pty Ltd, to produce documents and things specified in sch B to the subpoena. That schedule has five paragraphs:
1. all emails between [email protected] and [email protected] in the period 1 July 2009 to 3 February 2014;
2. all emails between [email protected] and any email address containing the domain '@rsmi.com.au' in the period 1 July 2009 to 3 February 2014;
3. all emails between [email protected] and [email protected] in the period 1 July 2009 to 3 February 2014; and
4. all emails between [email protected] and [email protected] in the period 1 July 2009 to 3 February 2014; and
5. all emails between [email protected] and any email address containing the domain '@quantumcredit.com.au' in the period 1 June 2010 to 3 February 2014.
4 The defendants, except Mr Bell, have applied to set aside the subpoena; alternatively for orders prohibiting the plaintiffs from inspecting any documents produced in compliance with it.
5 The defendants rely upon two affidavits.
6 The first is an affidavit of Mr Humfrey, dated 15 July 2016. Mr Humfrey deposes that in the period covered by the subpoena, RSM Bird Cameron was the accountant for the first, fourth and fifth defendants and also other companies in which he was interested. It also prepared personal income tax returns for Mr Humfrey and his wife. Mr Thomson was the representative of RSM Bird Cameron who had primary carriage of that work. Mr Humfrey communicated with Mr Thomson about a variety of matters, including the North Cape Development Trust, the subject of the action, but also other projects. His communications were in part by email to the address specified in par 1 of sch B of the subpoena. He also communicated with other representatives of RSM Bird Cameron during that period in relation to a range of matters, including personal income tax returns. These communications were sent to or received from the email address containing the domain names specified in par 2 of the subpoena.
7 Mr Humfrey says that during this period he also obtained legal advice or caused companies to obtain legal advice and on some occasions communicated that advice to Mr Thomson or RSM Bird Cameron.
8 During that period, Mr Humfrey said he also discussed a range of matters with Mr Bell, communicating with him, in part, by email at the addresses specified in pars 3 and 4 of the subpoena. The emails did not relate only to the North Cape Development Trust.
9 Mr Humfrey says that Quantum Credit is a financier from whom the first defendant borrowed in its capacity as trustee for the North Cape Development Trust, but also for three other projects. During that time he also discussed a range of topics with a Mr Eadie. His communications with Quantum Credit and Mr Eadie were at email addresses containing the domain specified in par 5 of the subpoena.
10 Mr Humfrey also deposes to the relationship between the defendants and Logic IT Solutions. From about early 2011 the fifth defendant, a company which trades as Humfrey Land Developments, started using Logic IT Solutions to provide the following services:
1. maintain a server located in the fifth defendant's offices and on request resolve problems that may arise with that server;
2. manage a domain name for a Humfrey Land Development's website;
3. act as the fifth defendant's internet service provider; and
4. otherwise assist in resolving information technology problems on request.
11 Mr Humfrey says he cannot find any document constituting or recording a contract between the fifth defendant and Logic IT Solutions and believes that Logic IT Solutions provided its services on an ad hoc basis, with requests for services made by email and telephone, and 'involved onsite and remote support'. Mr Humfrey's statement of the ad hoc nature of the provision of services is consistent with two letters provided by solicitors acting for Logic IT Solutions and attached to his affidavit.
12 The defendants also rely upon an affidavit, sworn 15 July 2016, of Paul Joseph, the Chief Information Technology Officer and Director of Operations of RSM Bird Cameron. Mr Joseph deposes to his experience in the field of information communications and technology. He says that on 23 June 2016 and 11 July 2016 he spoke with Mr Van Namen of Logic IT Solutions. Mr Van Namen told him that he was the person who accessed the documents which Logic IT Solutions proposed to produce in response to the subpoena.
13 Mr Van Namen told Mr Joseph, in effect, that he obtained those documents by using a system of remote access. Logic IT Solutions did not, on its own premises, have any computer or storage media that held the relevant data that it required in order to respond the subpoena. As the IT provider, Logic IT Solutions had the means to access the fifth defendant's computer using access rights that were granted to it in its capacity as administrator of the fifth defendant's network. After obtaining remote access, Mr Van Namen was able to locate all of the data on the fifth defendant's computer and create a copy of the 'mailbox' of Mr Humfrey. He exported all of the data in that mailbox across to the Logic IT Solutions' premises, a process of exporting and copying which took over an hour.
14 On 13 July 2016, Mr Joseph spoke with a Mr Norris of Norris and Hyde IT, the current IT provider to the fifth defendant. Mr Norris told him that the mailbox for Mr Humfrey contains items back to 22 June 2006, over 46,000 items including calendar entries, contact details, and over 10,000 deleted items.
15 Finally, Mr Joseph states from his knowledge that RSM Bird Cameron is a national accounting firm, with over 1,750 different email addresses using the domain @rsmi.com.au.
Subpoena to produce
16 Subject to limited exceptions, a party may request the court to issue a subpoena to produce: Rules of the Supreme Court 1971 (WA) O 36B. The recipient is obliged to comply. Leave of the court is not required for the issue of a subpoena to produce documents or things before trial.
17 The court may, on the application of a party or any person having a sufficient interest, set aside a subpoena in whole or in part, or grant other relief in respect of it: O 36B, r 4. The rules do not prescribe the grounds on which the court may act, but there are some principles that are well established. Where leave was required to issue a subpoena, the courts accepted that a legitimate forensic purpose must exist in relation to documents sought before leave would be granted: see, for example, Stanley v Layne Christensen Co [2004] WASCA 50 [9]. The principles explained in those cases have been applied where a subpoena has issued without leave, and the recipient or a party has applied to set it aside or prevent inspection of documents: see, for example, Heugh v Central Petroleum Ltd [No 2] [2013] WASC 323; Boase v Axis International Management Pty Ltd [No 3] [2012] WASC 498 [10] - [21]. It is inappropriate to use a subpoena to a party as a substitute for discovery: see Rankilor v City of South Perth [2016] WASCA 28 [38] and the cases there cited. More generally, it is well established that courts have aninherent power to prevent misuse of their procedures in a way which, although not inconsistent with the literal application of procedural rules of court, would nevertheless be 'manifestly unfair to a party to litigation ... or would otherwise bring the administration of justice into disrepute among right-thinking people': Walton v Gardiner [1993] HCA 77; (1993) 177 CLR 378, 393; Jeffery & Katauskas Pty Ltd v SST Consulting Pty Ltd [2009] HCA 43; (2009) 239 CLR 75, 93 [28].
18 The inherent power of the court to control conduct of proceedings is not affected by the rules: O 1 r 3A.
Consideration
19 In my opinion, the terms of the subpoena and the facts revealed in the affidavit of Mr Humfrey and Mr Joseph are sufficient reason for the court to intervene.
20 First, the subpoena makes no attempt to confine itself to relevant documents. For example, it will capture documents relating to personal tax affairs. It may capture documents for which legal professional privilege may be claimed, or documents for which commercial confidentiality should be recognised, have no relevance in this action.
21 The plaintiffs submit that the subpoena has not imposed an unreasonable burden on the recipient. Logic IT Solutions has been able to identify the documents and download them, without exercising any further judgment. The burden on the subpoena recipient, however, is not the only consideration. The procedures now in place under the rules permit a party or person having sufficient interest to object to a document or thing being inspected: O 36B r 9. Where a large volume of material has been produced to the court in this way, the owner of the documents may bear the burden of itself inspecting and determining whether to object to inspection of particular documents. Given the volume of documents potentially captured, it will be unreasonably burdensome for the defendants to review all of them to determine which of them may be inspected by the plaintiffs without objection.
22 Second, the obligation to produce documents on subpoena is an intrusion into a person's right to keep his documents to himself. The owner of documents may wish to claim privilege, or otherwise object to production. The court has power to order a person to produce documents which he is physically able to produce. But in exercising that power, the court may properly have regard to whether a subpoena is addressed to the right person to produce the documents: Rochfort v Trade Practices Commission (1982) 153 CLR 134, 140 (Gibbs CJ). The owner of the documents should generally be the one required to produce the documents; it is the owner who should decide at first instance whether any of them are caught by the subpoena and the owner should bear the responsibility for not producing them: Rochfort (143 - 145) (Mason J). The subpoena in this case is not addressed to the right person.
23 Third, the documents subpoenaed are all documents of the parties. If relevant, they should be produced on discovery (the parties having agreed to an order for general discovery). The procedure under O 36B is not a substitute for discovery. The plaintiffs submit that they have received very limited documentation during discovery in relation to some issues, including the dealings between Mr Humfrey, Mr Thomson and RSM Bird Cameron. The defendants, however, are represented by experienced solicitors. There is no reason to doubt that the defendants' legal representatives understand and will comply with their obligations under O 26.
24 Fourth, Logic IT Solutions has apparently used access rights that were granted to it while it was providing information technology services to the fifth defendant to remotely access and download documents from the fifth defendant's server. The evidence of the contract with Logic IT Solutions is limited, and does not show any express contractual restrictions on access to the fifth defendant's server and computers. But there is no evidence that Logic IT Solutions had any right of access other than for the purpose of providing services. A subpoena assumes that the recipient has the ability or capacity to produce the documents or things specified. Here the evidence shows no more than that the subpoena recipient had the technical knowledge and means to access a client's computer or server, and a service contract which gave it access rights.
Conclusion
25 Taking all of those matters together, I am satisfied that this subpoena is not a proper use of the court's procedures to compel the production of documents. While it may fall within a literal application of the rules, I believe it is a process to which the court should not give its support.
26 There are two alternative forms of relief sought to set the subpoena aside, or to refuse inspection of the documents produced. The documents have already been produced to the court. It is sufficient that I order that the plaintiffs be not permitted to inspect the documents produced.
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