Broadway Plaza Investments Pty Ltd v Broadway Plaza Pty Ltd

[2019] NSWSC 410

Supreme Court

New South Wales

Medium Neutral Citation:	Broadway Plaza Investments Pty Ltd v Broadway Plaza Pty Ltd [2019] NSWSC 410
Hearing dates:	5 April 2019
Date of orders:	15 April 2019
Decision date:	15 April 2019
Jurisdiction:	Equity
Before:	Ward CJ in Eq
Decision:	1.   Set aside the subpoena issued by Broadway Plaza Pty Ltd on 29 January 2019 to the proper officer, National Australia Bank Limited. 2.   Order Broadway Plaza Pty Ltd to pay the applicants’ costs of the respective applications to set aside the said subpoena.
Catchwords:	CIVIL PROCEDURE — Subpoenas — Application to set aside — Abuse of process –– subpoena issued for the production of documents from the National Australia Bank –– whether a legitimate forensic purpose for production –– whether merely a fishing expedition –– whether the issuing of the subpoena subverts the operation of Practice Note SC Eq 11
Legislation Cited:	Civil Procedure Act 2005 (NSW), s 56 Practice Note SC Eq 11 Uniform Civil Procedure Rules (2005) (NSW), rr 5.3, 33.4, 33.5(2)
Cases Cited:	Associated Dominions Assurance Society Pty Ltd v John Fairfax & Sons Pty Limited (1955) 72 WN (NSW) 250 Attorney General for New South Wales v Chidgey [2008] NSWCCA 65 Commissioner for Railways v Small (1938) 38 SR (NSW) 564 Danihel v Manning [2012] NSWSC 556 ICAP Australia Pty Ltd v BGC Partners (Australia) Pty Ltd [2009] NSWCA 307 ICAP Pty Ltd v Moebes [2009] NSWSC 306 In the matter of Force Corp Pty Ltd (Recs and Mgrs Apptd) (in liq) [2018] NSWSC 896 In the matter of Mempoll Pty Limited, Anakin Pty Limited and Gold Kings (Australian) Pty Limited [2012] NSWSC 1057 Lindsay-Owen v HWL Ebsworth Lawyers [2017] NSWSC 1692 National Employers’ Mutual General Association Ltd v Waind & Hill [1978] 1 NSWLR 372 New Price Retail Services Pty Ltd v Hanna; Australian Pharmaceutical Industries v Hanna [2012] NSWSC 422 One.Tel Ld (in Liq) - SingTel Optus Pty Ltd v Weston [2010] NSWSC 1491 Portal Software v Bodsworth (Portal Software) [2005] NSWSC 1115 R v Saleam [1999] NSWCCA 86 Rinehart v Rinehart [2018] NSWSC 1102 Rinehart v Rinehart [2015] NSWSC 205 Sayour v Elliott [2018] NSWSC 59 The Owners - Strata Plan No 76902 v Roads and Maritime Services [2017] NSWSC 528 Trade Practices Commissioner v Arnotts Ltd (1989) 21 FCR 306; [1989] FCA 340 Tyco Australia Pty Ltd v Leighton Contractors Pty Ltd (2005) 142 FCR 428; [2005] FCAFC 115 Universal Press Pty Limited v Provest Limited [1989] FCA 402 Yes Family Pty Ltd v Sphere Healthcare Pty Ltd [2016] NSWSC 393
Category:	Procedural and other rulings
Parties:	Broadway Plaza Investments Pty Ltd (Plaintiff) Broadway Plaza Pty Ltd (Defendant) Deiri Nominees Pty Ltd (Fourth Cross Defendant on Fifth Cross-Claim) (Applicant on first motion) Combined Projects (Gibbons) Pty Ltd (Fifth Cross-Defendant on Fifth Cross-Claim) (Applicant on second motion) Combined Property Investments Pty Ltd (Sixth Cross-Defendant on Fifth Cross-Claim) (Applicant on second motion) Combined Projects (Redfern) Pty Ltd (Seventh Cross-Defendant on Fifth Cross-Claim) (Applicant on second motion) Combined Projects Holdings Pty Ltd (Eighth Cross-Defendant on Fifth Cross-Claim) (Applicant on second motion) Deicorp Pty Ltd (Tenth Cross-Defendant on Fifth Cross-Claim) (Applicant on second motion) Combined Projects (Arncliffe) Pty Ltd (Eleventh Cross-Defendant on Fifth Cross-Claim) (Applicant on second motion)
Representation:	Counsel: C Bova with B Michael (Plaintiff/First, Third and Fourth Cross-Defendants on Fifth Cross-Claim) JP Gatland (Defendant/Cross-Claimant on First, Second and Fifth Cross-Claims/Cross-Defendant on Third Cross-Claim) V Bedrossian (Fifth to Eighth and Tenth to Eleventh Cross-Defendants on Fifth Cross-Claim)   Solicitors: Adams Lawyers (Defendant) Corrs Chambers Westgarth (Plaintiff) Russells Sydney Partners (Fourth Cross-Defendant on Fifth Cross-Claim) Kreisson Legal Pty Ltd (Fifth, Sixth, Seventh, Eighth, Tenth and Eleventh Cross-Defendants on Fifth Cross- Claim)
File Number(s):	2016/00282940
Publication restriction:	Nil

Judgment

1. HER HONOUR: Before me for hearing on 5 April 2019 were two applications pursuant to r 33.4 of the Uniform Civil Procedure Rules (2005) (NSW) (UCPR) to set aside, wholly or in part, a subpoena issued on 25 January 2019 (the NAB Subpoena) by the defendant, Broadway Plaza Pty Ltd (to whom I will refer as Plaza) for the production of documents by the National Australia Bank (NAB). NAB produced documents in answer to the subpoena, in electronic form on disc, on 6 February 2019. No order for access has yet been made and hence no party has yet had access to the documents produced by NAB.

2. There are two sets of proceedings, which are to be heard together, pursuant to orders made last year by Parker J as I explain below. The first set of proceedings (to which I will refer as the Broadway proceedings) (2016/00282940) has been on foot since September 2016. The second set of proceedings (to which I will refer as the Arncliffe proceedings) (2017/00180712) commenced in 2017. The NAB Subpoena was issued in the Broadway proceedings, although some of the documents sought by it may be relevant to issues in the Arncliffe proceedings.

3. The parties seeking to set aside the NAB Subpoena are: first, Deiri Nominees Pty Ltd (the fourth cross-defendant to the fifth cross-claim in these proceedings) (Deiri Nominees); and, second, the parties who are the fifth to eighth and tenth to eleventh cross-defendants to that fifth cross-claim (entities to whom I will refer, consistently with their submissions, as the Combined Parties – each being a corporate entity with “Combined” in its registered name other than the tenth cross-defendant, Deicorp Pty Ltd). (Where I refer to the tenth cross-defendant individually, I will do so as Deicorp.)

4. The relevant notices of motion by which the present relief is sought are: an amended notice of motion filed 27 March 2019 by Deiri Nominees (the initial notice of motion having been filed on 13 February 2019) and a notice of motion filed 5 March 2019 by the Combined Parties. The relief sought in those notices of motion is similar, although Deiri Nominees seeks as its principal relief the setting aside of the entirety of the NAB subpoena (and in the alternative the setting aside of particular paragraphs of that subpoena) whereas the Combined Parties in their notice of motion have only sought the setting aside of particular paragraphs (but they support the application of Deiri Nominees for the setting aside of the entirety of the subpoena and submitted that, if Deiri Nominees were to succeed in having the whole of the subpoena set aside then, other than in respect of costs, they did not need to be heard on their motion). The oral submissions for the Combined Parties appropriately did not seek to repeat matters dealt with in the oral submissions for Deiri Nominees, it having in effect the running of the applications for the setting aside of the NAB Subpoena.

5. Plaza, unsurprisingly perhaps in light of the history of the litigation and the allegations made therein, resists the setting aside of the NAB Subpoena in whole or in part. In answer to the complaints made by Deiri Nominees and the Combined Parties as to the apparent lack of relevance of the documents sought, and the breadth and prematurity of the subpoena, Plaza emphasises among other things the complexity of the proceedings and the suspicions it has (and difficulties in obtaining an explanation) as to dealings that took place involving the now deceased son of its director (as to which, see further below).

6. For the reasons that follow, I am of the view that at this stage of the proceedings and in its current form, the issue of the subpoena is an abuse of process and that it should be set aside in its entirety. That is not to say that a suitably narrowed subpoena could not in due course be issued seeking relevant documents from NAB. It may therefore be convenient for the disc produced by NAB in answer to the subpoena to be retained on the Court file for the moment, but I will raise this with the parties when judgment is published on the present applications.

Background

7. The following summary of the background to the present applications is largely gleaned from the respective parties’ submissions and affidavits filed in connection with the present applications. It is not to be taken as making any factual findings as to disputed matters. Some of the background to the present applications (in particular the bribe or secret commission allegations) is not unfamiliar to me, having regard to a dispute that came before me in 2017 in which certain claims now being agitated in the fifth cross-claim in the Broadway proceedings were raised (see the background to that dispute as set out in Sayour v Elliott [2018] NSWSC 59).

Broadway proceedings (2016/00282940)

8. The Broadway proceedings arise out of a now dissolved partnership (the Broadway partnership) between the plaintiff, Broadway Plaza Investments Pty Ltd (Investments), and the defendant, Plaza, for the development (the Broadway development) of a property in Punchbowl (the Punchbowl Property).

9. Investments is a company the shares in which are held by Deiri Nominees, which forms part of a group of construction and development companies run by Mr Fouad Deiri (Mr Deiri). I will refer to that group of companies as the Deicorp Group. Mr Deiri is the director of Investments. Deiri Nominees is said to be a central holding entity in the Deicorp Group.

10. Plaza is a company the shares in which are held by Sayour Holdings Pty Ltd (Sayour Holdings), a company of which Mr Moustafa Sayour (Mr Sayour) is the sole shareholder and director. Mr Sayour was the sole director of Plaza until March 2018 and remains a director of the company.

11. The Broadway partnership was formed on or about 27 December 2011. As adverted to above, it was formed for the purposes of development of the Punchbowl Property into a shopping centre and residential apartments. There was no written partnership agreement. It is said that the arrangement was for Investments to manage the design and construction of the shopping centre and residential apartments and for Plaza to manage the leasing of the centre; and that profits were to be split equally between the two partners. The builder for the project was Deicorp, of which company Mr Deiri was the sole director and Deiri Nominees was the sole shareholder.

12. Mr Deiri’s principal dealings with Plaza throughout the partnership were through Mr Moustafa Sayour’s son, the late Mr Jamil Sayour.

13. On 15 February 2012, a loan to finance the car park and shopping centre was executed with the Commonwealth Bank of Australia (CBA) in the amount of $45.6m. On 20 June 2013, this loan was reinstated as an investment facility and the balance of the loan became part of a separate facility. Construction of the retail shopping centre on the Punchbowl Property was completed in December 2013. The residential apartments were sold in November 2014. Following the sale, the remaining loan to CBA was repaid.

14. From November 2014 to January 2015, a surplus of approximately $18,690,000 was distributed to Investments and Plaza. Investments says that these distributions were made in accordance with Jamil Sayour’s instructions. (On the present applications, Plaza complains that it cannot properly test such assertions, in the absence of documents of the kind it is here seeking, given Jamil Sayour’s death – T 38.33; as to which, see below.)

15. Jamil Sayour died in October 2015. In November 2015, after the discovery by Moustafa Sayour of various matters in relation to the partnership, Mr Sayour asserted to Mr Deiri that Plaza did not receive its share of the partnership profits and that Jamil Sayour had no authority to distribute any partnership moneys. (Mr Sayour has since filed affidavits in the proceedings in which he deposes to his discovery of what he maintains are frauds against Plaza and the Sayour Family Trust – reference was made in that regard to his affidavits sworn 27 October 2016 and 25 October 2017; see T 28.35.)

16. On 21 September 2016, Investments dissolved the partnership and commenced the Broadway proceedings, seeking (among other relief) orders: that the Broadway partnership be wound up; that a receiver be appointed; and that an account be taken. On 29 September 2016, Hallen J made a declaration as to the dissolution of the Broadway partnership and orders were made appointing a receiver to the Broadway partnership’s assets and undertaking.

17. The only assets of the Broadway partnership were the shopping centre and its associated assets. The sale of the centre was settled on 30 March 2017 for $41.2 million. The receiver paid out $34.3 million under the loan to CBA. According to CBA, nothing is presently owing to it.

18. The proceedings are therefore in effect spent insofar as the initial relief sought by Investments is concerned. However, a number of cross-claims have been filed in the Broadway proceedings. Thus, as I understand it, Plaza is now effectively the moving party in these proceedings. Whether or not that is strictly the case is not presently to the point. Suffice it to note that there seems to be little doubt that a substantive part of the proceedings will be taken up with the allegations made by Plaza in relation to the dealings that occurred during the course of the partnership between Jamil Sayour and various cross-defendants.

19. The cross-claims in the Broadway proceedings may be summarised as follows.

20. The first cross-claim was filed on 12 October 2017 by Plaza against CBA and Investments, seeking $108,252.788 from CBA. Plaza alleges that CBA breached its mandate and is liable in respect of forged signatures on facility agreements which funded the Broadway development and cheques drawn on the partnership bank account with CBA (the CBA partnership account).

21. The second cross-claim was filed on 4 June 2018 by Plaza against Investments, seeking $35,760,000, plus interest of $504,000 per month. Plaza alleges that Investments has not paid the sum of $6 million in consideration for the purchase by Investments of Plaza’s 50% interest in the Punchbowl Property nor a further sum of $2 million pursuant to a further contract.

22. The third cross-claim was filed on 13 June 2018 by Investments against Plaza. Investments seeks, among other things, rectification of the contract of sale the subject of the second cross-claim and alleges breach by Plaza of a separate agreement governing the arrangements for the purchase price of the property and the question of interest, as well as breach of fiduciary duty and unconscionable conduct.

23. The fourth cross-claim was filed on 28 June 2018 by Investments against the partners of HWL Ebsworth (HWLE), the lawyers who acted for Investments in relation to the relevant contract of sale (as I understand it, the contract for sale the subject of the second cross-claim). In the alternative to the third cross-claim, Investments alleges that if (which is denied) it is liable to Plaza in respect of the claim made in the second cross-claim, then HWLE is liable to Investments in respect of that liability.

24. Pausing here, I was informed by the solicitor appearing for HWLE (in the context of submissions made for HWLE at the outset of the hearing of the present applications on 5 April 2019, to the effect that certain parts of the proceedings affecting HWLE should be heard separately or on fixed dates so as to obviate the need for HWLE to be represented throughout the whole of the six week hearing listed for this matter) that the allegation against HWLE relates to the provision made for interest in a pro forma contract (i.e., whether the interest charge be monthly or yearly) (T 5.19ff). I was told that the outcome of the rectification argument in relation to the contract for sale (raised by the third cross-claim) will be relevant to the outcome of the second cross-claim and that, in turn, the fourth cross‑claim is contingent on the outcome of the second cross-claim because if the 9% interest rate provided for in the contract is found to have been correctly charged on a monthly basis then the fourth cross-claim is effectively “redundant” (T 5.25). Counsel for Deiri Nominees, however, added the caveat that there is also an agreement alleged to be in accord and satisfaction in relation to a dispute which forms part of the fourth cross-claim (T 6.41ff). The question as to the timetabling for the hearing of the issues relating to the fourth cross-claim has been deferred for consideration after the evidence on the fifth cross-claim has been filed.

25. The fifth cross-claim was filed on 22 August 2018 by Plaza against eleven cross-defendants, including: Investments (the first cross-defendant), Mr Deiri (the third cross-defendant), Deiri Nominees (the fourth cross-defendant), and a number of Deicorp Group entities.

26. Plaza alleges that payments made by the partnership to the builder for the development, Deicorp, were not liable to be paid for various reasons, including a failure to issue payment certificates and invalid variations under the construction contracts.

27. Plaza further alleges (and it is to these allegations that the documents sought by the NAB Subpoena are said to be relevant) that certain payments by Investments or Deicorp Group entities to Jamil Sayour (the making of which were not disclosed to Plaza) (referred to at [48]-[278] of the fifth cross-claim) constituted bribes and that, by virtue of those bribes (and the non-disclosures referred to in the aforesaid paragraphs of the fifth cross-claim, the bribes and non-disclosures being collectively referred to in the pleading as the Bribes), certain matters are to be irrebuttably presumed and are the fact (see [530]-[542]), including that Jamil Sayour was induced to act in certain ways to the detriment of Plaza (including to place his own signature on cheques drawing funds from the CBA joint partnership account and to forge Mr Sayour’s signature on cheques drawing funds from that account).

28. It is alleged that each of the first, fourth to eighth and tenth cross-defendants has received a benefit as a result of the alleged bribes (and breaches of fiduciary duty by the first and third cross-defendants “comprised in their conduct in participating in the bribes and non-disclosures” alleged in the cross-claim) (see [569]). It is further alleged that the first, third to seventh, tenth and eleventh cross defendants “by the said bribes paid by each, and by each of them not disclosing the same to Plaza, acted in concert to secure a mutual benefit, namely the enrichment of the Deicorp Group of companies” by the several payments alleged at [548]-[568] and [182]-[278] of the fifth cross-claim (see [571]).

29. Plaza seeks a raft of declaratory and other relief, including (under the heading “[r]ecovery of money allegedly improperly paid to Jamil Sayour”) equitable compensation.

30. In their respective defences to the fifth cross-claim (filed on 22 February 2019), Deiri Nominees (whose defence is a joint defence with Mr Deiri and Investments) and the Combined Parties each admit to various alleged payments (although they deny that the payments constituted bribes and they deny the claims for relief made against them).

31. Finally, the sixth cross-claim was filed on 22 February 2019 by the builder, Deicorp, against Investments and Plaza pleading a quantum meruit claim in the event that Plaza were to succeed on the allegations in its fifth cross-claim that payments made to Deicorp were not liable to be paid pursuant to the construction contracts.

Arncliffe Proceedings (2017/00180712)

32. During the same period as the partnership in relation to the Punchbowl Property development, Mr Deiri also had dealings with the late Jamil Sayour in relation to another development in Arncliffe.

33. In January 2014, Combined Projects (Arncliffe) Pty Ltd (to which I will refer as Combined Arncliffe) was incorporated with two shareholders, Deiri Nominees and Sayour Holdings, to develop a property at Arncliffe (the Arncliffe Property) into some 234 residential apartments and six retail shops. Mr Deiri remains the sole director of Combined Arncliffe. His dealings with Sayour Holdings, up to the time of Jamil Sayour’s death, were all through Jamil Sayour. Mr Deiri and his companies performed the construction work. The development is complete and the sale of the last of the residential apartments settled on 11 February 2019.

32. In 2017, Sayour Holdings commenced the Arncliffe Proceedings, in which access is sought to certain documents, among other relief.

Case management of the respective proceedings

35. On 28 February 2019, Parker J made orders that the Arncliffe Proceedings be heard together with the Broadway Proceedings and, from 18 March 2019 I have case managed the respective proceedings. On 19 March 2019, I made orders for the service of evidence in the proceedings and listed the matter for hearing before Slattery J for six weeks to commence on 4 November 2019. The timetable for the provision of evidence was amended on 5 April 2019 (before the hearing commenced on the present applications) due to delay occasioned by the time required for CBA to produce documents that have been sought for production under a subpoena issued to it by Plaza, in respect of which CBA no longer presses an application it had made for the subpoena, and a related notice to produce, to be set aside. Evidence is now to be filed by Plaza on the fifth cross-claim by 27 May 2019. The matter remains listed before Slattery J on the dates I have fixed. Hence, it was impressed on me by Plaza that there is some urgency in determining the present applications (in that it seeks access to the subpoenaed documents forthwith).

NAB Subpoena

36. As noted above, on 25 January 2019, Plaza caused the NAB Subpoena to be issued. It is relevant to note that, at that stage, the pleadings in relation to the fifth cross-claim had not closed (the defences only being filed on 22 February 2019) and no evidence had been (nor has yet been) filed by any of the parties in relation to the fifth cross-claim.

37. Counsel for Plaza was, however, at pains to note in oral submissions on the present application that there has been a large amount of affidavit evidence already filed in relation to the primary claim (i.e., the claim by Investments in relation to the dissolution of the partnership and seeking an account), going to matters such as: the setting up of the Broadway partnership; the dissolution of the partnership; the nature and division of responsibilities under the partnership; and payments purportedly made by Investments on behalf of the partnership; as well as affidavit evidence going to the discovery of the alleged frauds against Plaza and the Sayour Family Trust and a “range of communications” between Mr Deiri and Jamil Sayour previously unknown to Plaza (see the itemisation of the various affidavits at T 27.48 through to T 29.25). I was further informed that expert evidence was served (on 13 September 2018) from a handwriting expert (Mr Dubedat) as to the authenticity of various signatures purporting to be those of Mr Sayour (see T 29.21), it being said that none of the signatures on documents from about February 2012 are genuine.

38. The fact, however, remains that at the time the NAB Subpoena was issued the pleadings in relation to the fifth cross-claim had not closed and the timetable for the filing of evidence in relation to the fifth cross-claim had not commenced. This is relevant, of course, to the complaint by the applicants on the motions presently before me that the issue of the NAB Subpoena is an attempt to subvert the operation of Practice Note SC Eq 11 (the Practice Note).

39. Counsel for Deiri Nominees classifies the documents sought by the NAB Subpoena (which encompasses some sixteen categories of documents over seven pages) into the following groups:

1. documents recording or evidencing specified transactions pleaded in the fifth cross-claim (referring to [4], [7], [10](a), [10](c), [16] of the NAB Subpoena);

2. documents recording or evidencing specified transactions which are not pleaded in the fifth cross-claim, nor it is said in any other claim (referring to [10](b) of the NAB Subpoena);

3. documents recording or evidencing any payments or receipts generally between specified members of the Deicorp Group (including Deiri Nominees), on the one hand, and other specified persons or entities (including Jamil Sayour, Mr Sayour, and Plaza) on the other hand (referring to [1], [5], [8], [11], [13], [15] of the NAB Subpoena); and

4. bank statements held in the name of specified members of the Deicorp Group, including Deiri Nominees (referring to [2], [3], [6], [9], [12], [14] of the NAB Subpoena).

40. The documents sought in those four categories are described in similar terms in the NAB Subpoena, though with differences in the time periods covered and the entities to which reference is there made.

41. For example, the description of documents sought within the paragraphs grouped in (c) above, for periods that range in dates commencing from the earliest of 1 September 2011 through to 31 December 2015, is to the effect:

all documents, receipts, cheques requested, cheque vouchers presented, and cheques issued from or funded by the accounts [either identified by the name of the account holder or by reference to an earlier paragraph in the NAB subpoena] recording or otherwise evidencing transactions, whether receipts or payments, to any of [a number of named persons or entities]

42. Similarly, the description of documents sought within the paragraphs grouped in (d) above, is to the effect:

copies [of] bank account statements of all accounts held in the name of [a specified cross-defendant to the fifth cross claim] for [a specified] period … (including but not limited to [an identified bank account]).

43. As adverted to above, Deiri Nominees seeks orders pursuant to r 33.4 of the UCPR setting aside the NAB Subpoena in its entirety, on the basis that the whole of the NAB Subpoena is an abuse of process as a substitute for discovery and a subversion of the Practice Note.

44. Alternatively, it seeks an order setting aside the following paragraphs of the NAB Subpoena: [1], [2], [3], [5], [6], [8], [9], [10](b), [11], [12], [13], [14] and [15], on the basis that those paragraphs lack a legitimate forensic purpose and are a fishing expedition.

45. In the further alternative, it seeks an order setting aside a lesser number of paragraphs of the NAB Subpoena ([9], [10](b) and [11]) again on the basis that those paragraphs lack a legitimate forensic purpose but with the added complaint that they “are of particular irrelevance and are particularly intrusive into the commercial affairs of the Deicorp Group and the family affairs of Mr Deiri”.

46. The Combined Parties seek to have [2], [3], [6], [12] and [14] of the NAB Subpoena set aside, on the basis that those paragraphs are expressed in such broad terms that they necessarily capture documents “well outside of those materials which would have even adjectival relevance to the issues pleaded” in the fifth cross-claim.

47. The Combined Parties further raise the possibility that a setting aside of those paragraphs would likely have a broader impact upon the NAB Subpoena (or at least the question of access to the documents produced to date by NAB), noting that the NAB Subpoena has been drafted with overlapping groups of paragraphs (reference being made to [3]-[5]; [6]-[8]; [9]-[11]; [12]-[13]; and [14]-16]). The Combined Parties submit that, as a matter of fairness to NAB, there should probably be a fresh subpoena if paragraphs of the NAB Subpoena are set aside or substantially varied, since this would likely mean that NAB will need to review (and narrow) the scope of its previous production.

48. Similarly, Deiri Nominees argues that the only available course (if some but not all of the paragraphs in the NAB Subpoena are liable to be set aside) is that the NAB Subpoena should be set aside as a whole and for Plaza to issue a fresh subpoena, in circumstances where NAB has already produced documents to the Court.

Relevant principles

49. There was no real dispute as to the applicable principles concerning applications to set aside subpoenas (reference being made by the parties to the summary of those principles set out in Lindsay-Owen v HWL Ebsworth Lawyers [2017] NSWSC 1692 by Rothman J at [24]-[26], where his Honour referred to and extracted particular passages from other decisions of this Court, namely, One.Tel Ld (in Liq) - SingTel Optus Pty Ltd v Weston [2010] NSWSC 1491 (One.Tel) at [22]-[29]; and Portal Software v Bodsworth (Portal Software) [2005] NSWSC 1115 at [19]-[24]). It is not necessary here to repeat those passages.

50. Plaza, in its written submissions, referred to the decision of the Court of Appeal in National Employers’ Mutual General Association Ltd v Waind & Hill [1978] 1 NSWLR 372 (National Employer’s Mutual General Association v Waind), in which the three steps concerning the procedure for third-party subpoenaed material are set out, the second of which being the decision of the judge concerning the preliminary use of the subpoenaed material, including whether or not a party should be given access. I note this because the initial response by Plaza, to a complaint made by Deiri Nominees as to the NAB Subpoena, was to the effect that the documents had already been produced and hence the only issue was as to access. It was not, however, suggested by Plaza on the present application that the production of documents by NAB precludes the exercise of the discretion to set aside the subpoena. As Deiri Nominees notes, if a subpoena ought to have been set aside the discretion can still be exercised to refuse access to inspect the documents that have been produced in answer to that subpoena (see Rinehart v Rinehart [2018] NSWSC 1102 (Rinehart) at [150]). (I also note the complaint made that there was no compliance by Plaza with the rule requiring that it serve on the other parties to the proceedings a copy of any subpoena issued at its request – see UCPR r 33.5(2). In that regard, I was informed by Counsel for Deiri Nominees that a copy of the NAB Subpoena was not served on his client until 12 February 2019, after the documents had already been produced by NAB. There was no explanation for that failure.)

51. As to the relevance of the documents sought by the NAB Subpoena, it was accepted by Plaza that it bears the onus of identifying on reasonable grounds the relevance of those documents. (As I have noted elsewhere, the requirement that a subpoena identify with “reasonable particularity” the documents sought distinguishes the power to compel production of documents by such a process from a party’s discovery obligation (see One.Tel at [40]).)

52. Similarly, Plaza accepts that it bears the onus of establishing that there is a legitimate forensic purpose for production (that it is “on the cards” that the documents sought will materially assist its case (see R v Saleam [1999] NSWCCA 86 at [11] (Simpson J; Spigelman CJ and Studdert J agreeing); Attorney General for New South Wales v Chidgey [2008] NSWCCA 65 at [5], [64] (Chidgey) (Beazley JA, as her Honour then was; James and Kirby JJ agreeing)) and that it is not sufficient merely to show that such documents are or may be relevant to an issue for decision (Chidgey at [59]). This requires attention to the issues in the proceedings (see ICAP Pty Ltd v Moebes [2009] NSWSC 306 at [33] per Nicholas J; Rinehart at [47]).

53. As to what amounts to a “fishing expedition” in this context, see Associated Dominions Assurance Society Pty Ltd v John Fairfax & Sons Pty Limited (1955) 72 WN (NSW) 250 (Associated Dominions Assurance Society v Fairfax) at 254 (per Owen J) and the discussion in Rinehart at [43]-[47].

54. The question thrown up by the first basis on which Deiri Nominees seeks the setting aside of the NAB Subpoena is the interaction between the rules in this Court relating to disclosure of documents (as set out in the Practice Note) and the principles relating to the proper use of subpoenas (an issue on which I had been invited (but declined) to make a policy statement when ruling on a similar application in the Rinehart proceedings).

55. It has been recognised that, although the Practice Note does not in terms apply to subpoenas, very similar considerations attend the issuing of subpoenas (see New Price Retail Services Pty Ltd v Hanna; Australian Pharmaceutical Industries v Hanna [2012] NSWSC 422 at [19] per McDougall J; cited in In the matter of Force Corp Pty Ltd (Recs and Mgrs Apptd) (in liq) [2018] NSWSC 896 at [49] per Gleeson JA) and that a subpoena may be set aside if it involves an attempt to subvert the operation of the Practice Note by seeking what is in substance disclosure within the scope of the Practice Note, in circumstances where the requirements of the Practice Note are not satisfied (see In the matter of Mempoll Pty Limited, Anakin Pty Limited and Gold Kings (Australian) Pty Limited [2012] NSWSC 1057 at [13] per Black J; The Owners - Strata Plan No 76902 v Roads and Maritime Services [2017] NSWSC 528 at [20] per Ball J).

56. Relevantly, the Practice Note, which was issued in March 2012, provides that:

4.   The Court will not make an order for disclosure of documents (disclosure) until the parties to the proceedings have served their evidence, unless there are exceptional circumstances necessitating disclosure.

5.   There will be no order for disclosure in any proceedings in the Equity Division unless it is necessary for the resolution of the real issues in dispute in the proceedings.

6.   Any application for an order for disclosure, consensual or otherwise, must be supported by an affidavit setting out:

the reason why disclosure is necessary for the resolution of the real issues in dispute in the proceedings;

the classes of documents in respect of which disclosure is sought; and

the likely cost of such disclosure.

57. In Rinehart (at [132] and [133]) I accepted that relevance to an issue in the proceedings may not itself lead to the conclusion that the documents in question are “necessary” for the resolution of that issue but did not find it necessary to come to a concluded view on this issue (in light of the conclusion I had reached as to the ambit of much of the subpoenas in that case amounting to a fishing expedition).

58. I also there put on record my agreement with the observations of Darke J in Rinehart v Rinehart [2015] NSWSC 205 (at [18]-[19]) that:

It follows from the observations made by Hely J in Tyco Australia Pty Ltd v Leighton Contractors Pty Ltd (supra) [[2005] FCAFC 115; (2005) 142 FCR 428], referred to earlier, and from what McCallum J said in the slightly different context in Liu v The Age Company Ltd (supra) [[2011] NSWSC 53 at [12] and [13]], that the mere fact that there is some overlap between what is sought on preliminary discovery and what is sought by subpoena does not mean that the subpoena is necessarily an abuse of process. It is necessary to look at the scope and purpose of the particular subpoena in the context in which it has been issued.

I readily accept that there is scope for abuse of the preliminary discovery process through the issuing of notices to produce or subpoenas that seek documents of a type that are the subject of the discovery application. It is a matter about which the Court must be mindful. I further accept that preliminary discovery is an intrusive process insofar as the prospective defendants are concerned and that they are, subject to their general obligations under the Civil Procedure Act 2005 (NSW), entitled to require an applicant to establish all of the prerequisites to the making of an order. Nevertheless, even allowing that the test under UCPR r 5.3(1)(a) that an applicant be a person entitled to make a claim for relief is not particularly stringent, an applicant faced with an argument that its foreshadowed claims are merely speculative ought generally be able to make use of interlocutory procedures to assist it to satisfy that test.

59. With the above in mind, I turn to the bases on which the respective applicants here seek to set aside part or all of the NAB Subpoena.

Substitute for discovery and subversion of Practice Note SC Eq 11 - Prayer 1(a) of Deiri Nominees’ amended notice of motion

60. The primary basis on which Deiri Nominees puts this application is that the NAB Subpoena is an abuse of process in that it amounts to an impermissible substitute for discovery (calling in aid what was said in Commissioner for Railways v Small (1938) 38 SR (NSW) 564 (Small) at 574) and an attempt to circumvent the operation of the Practice Note.

61. It is submitted that to the extent (which is disputed) that the NAB Subpoena calls for documents of any apparent relevance, those documents could be obtained through discovery in the ordinary way, after the service of evidence and upon demonstration that the documents that are sought are necessary.

62. As to the requirements of the Practice Note, it is submitted that those set out in paragraph 4 of the Practice Note have not been satisfied in relation to the NAB Subpoena as a whole, given that evidence has not yet been served (in relation to the fifth cross-claim) and there are no “exceptional circumstances necessitating disclosure” and that those set out in par 5 of the Practice Note are not satisfied because the entirety of the NAB Subpoena calls for documents which are not “necessary” (in the sense of what is reasonably required for a fair trial for the resolution of the real issues in dispute).

63. Deiri Nominees submits that, generally speaking, “exceptional circumstances” would require Plaza to demonstrate that it could not fairly prepare its case for trial without the documents sought (referring to Danihel v Manning [2012] NSWSC 556 at [16] per Bergin CJ in Eq) and that Plaza has not done so.

64. Further, Deiri Nominees complains that the NAB Subpoena is not drafted with reasonable particularity and says that it is drawn in such broad terms that it captures documents which are of no apparent relevance to the issues in dispute.

65. In particular, Deiri Nominees complains, first, that calling for production of documents “evidencing” transactions (see [1], [3], [5], [7], [8], [10], [11], [13], [15] and [16]), whether limited to transactions between certain entities or limited to specific amounts and dates, is too broad, noting that the question whether documents “evidence” a fact are a matter of judgment, including what inferences may be drawn from other facts; and, second, that various of the paragraphs of the NAB Subpoena (referring to [1]-[2], [5]-[6], [8]-[9], [10](b), and [11]-[15]) are drawn in terms so wide that they call for documents of no apparent relevance.

No legitimate forensic purpose - Prayers 1(b) and 1(c) of Deiri Nominee’s amended notice of motion

66. As to the alternative way in which Deiri Nominees seeks the present relief (that there is no legitimate forensic purpose), it points to the allegations made in the fifth cross-claim in respect of the alleged bribes/non-disclosures (to which I have adverted above) and says that the issues raised by the fifth cross-claim in relation to the pleaded transactions relevantly include: the actual occurrence of the transactions pleaded; whether the pleaded transactions were disclosed to Plaza and Mr Sayour, and whether they had knowledge of those transactions; what actual and ostensible authority Jamil Sayour had to act on behalf of Plaza in dealing with Mr Deiri; the reasons why Mr Deiri caused the pleaded payments to be made or the pleaded cheques to be drawn; and whether (if, as Plaza alleges, Jamil Sayour was acting without authority in directing or causing particular payments to be made or cheques to be drawn) Mr Deiri knew about any such alleged lack of authority on the part of Jamil Sayour.

67. It is noted that several paragraphs of the NAB Subpoena call for documents recording or evidencing transactions which are not pleaded in the fifth cross-claim (nor, it is said, in any other claim), including: paragraphs calling for documents recording or evidencing any payments or receipts generally, within time spans of several years, between specified members of the Deicorp Group, on the one hand, and other specified persons or entities (including Jamil Sayour, Mr Sayour and Plaza) (see [1], [5], [8], [11], [13], [15]); a paragraph calling for documents recording or evidencing a specific transaction (not pleaded in the fifth cross-claim) for $29,500 on 30 November 2011 (see [10](b)); and paragraphs calling for bank statements held in the name of specified members of the Deicorp Group, including Deiri Nominees (see [2], [3], [6], [9], [12], [14]).

66. Complaint is also made as to various paragraphs ([1](g)-(h), [5](g)-(h), [8](g)-(h), [11](g)-(h), [13](g)-(h), and [15](g)-(h)) seeking documents recording or evidencing transactions with entities to which no reference appears to be made in any of the pleadings (namely, JS 75 Pty Ltd and MMA Investments (Australia) Pty Ltd), it being said that it is unclear what possible relevance such transactions could have to the issues to be determined.

67. Deiri Nominees submits that these paragraphs of the NAB Subpoena are framed so widely as to capture documents which have no apparent relevance to the matters in issue and that on that basis it cannot be “on the cards” that the documents sought in those paragraphs would materially assist Plaza in its pleaded case.

68. Deiri Nominees argues that the only evident purpose of seeking documents recording or evidencing transactions between Deicorp Group members and persons or entities associated with Mr Sayour or Jamil Sayour is to trawl through the financial records of the Deicorp Group in search of a case which Plaza does not currently advance, but which it hopes it might discover (and says that this is a “quintessential fishing expedition”). In that regard it is submitted that:

A fishing expedition of this kind is particularly intrusive to the Deicorp Group and Mr Deiri’s family affairs. It would involve provision of confidential financial information and transactions pertaining to numerous members of the Deicorp corporate group, including in relation to subsidiaries involved in commercial and residential developments at locations throughout Sydney which have no bearing on this proceeding. The bank statements of Deiri Nominees also record that entity’s dealings in relation to the assets of Mr Deiri’s family trust. There is no legitimate purpose for Plaza to trawl through this material.

71. Thus it is submitted that [1]-[2], [5]-[6], [8]-[9], [10](b), and [11]-[15] of the NAB Subpoena have no legitimate forensic purpose and that the orders in Prayer 1(b) of the amended notice of motion should be made setting them aside; or, in the alternative, that at the very least paragraphs [9], [10](b) and [11] should be set aside, as sought in Prayer 1(c) of the notice of motion (on the basis that these are particularly egregious, in seeking documents which encompass the bank statements of Deiri Nominees).

72. Counsel for Deiri Nominees submits that the attempted justification for the individual categories (in Plaza’s written submissions), as having a legitimate forensic purpose, is expressed at such a level of generality that it is almost meaningless; and that insofar as Plaza has submitted that production of the documents will materially assist to determine whether any further bribes have been paid to Jamil Sayour which have not been disclosed (see [19](b) of Plaza’s written submissions extracted at [83] below), this is effectively an admission of fishing.

73. Emphasis is placed on the limited time period to which certain of the allegations relate (for example by reference to [293]-[305] of the fifth cross‑claim) compared to the period over which documents are sought; and to the fact that (see [66]-[72] of the defence) most of the factual matrix is wholly admitted as to the date of payments (and, where not admitted or denied, that what is relevantly being put in issue is the alleged intention – see for example the allegation at [298]; see T 25.24ff).

Combined Parties’ notice of motion

74. The Combined Parties, in their separate notice of motion, base their complaint largely on the lack of apparent relevance for the documents sought (and hence lack of any obvious forensic purpose) noting that almost all of the specific transactions pleaded by Plaza in the fifth cross-claim are admitted by them (and the Deiri Nominees’ group of cross-defendants); but also on the breadth of the terms in which the documents sought to be produced are identified.

75. In oral submissions, Counsel for the Combined Parties made the further submission that, insofar as Plaza in its submissions says that it does not know why certain amounts were paid, bank statements will not provide that explanation but that, in any event that the Combined Parties’ defence (at [563]-[566]) provides that explanation (namely that the relevant entity was the nominated recipient of the payment)) (see T 27.25).

Plaza’s submissions

76. At the outset, in its written submissions, Plaza notes that prior to the amendment of the notice of motion filed by Deiri Nominees, no objection had been taken to the production of documents within the categories at [1], [4], [5], [7], [8], [10](a), [10](c), [13], [15] or [16]. Accepting that this is the case, it is difficult to see what relevance this has to the determination of the present applications.

77. Complaint is made for Plaza that the affidavit filed by the solicitor acting for the Combined Parties (Mr Graham) “gives no hint” as to why [2], [3], [6], [12] and [14] of the NAB Subpoena (these being paragraphs seeking bank account statements of various of the Combined Parties) should be set aside. As I understand the written and oral submissions for the Combined Parties, it is clear that the basis on which this relief is sought is as summarised above.

78. Complaint is also made that the affidavit filed by Deiri Nominees’ former solicitor (Mr Delaney), in support of the application to set aside [9], [10](b) and [11] of the NAB Subpoena, insofar as it suggests (at [30]) that documents recording Deiri Nominees’ bank transactions are “commercially sensitive” and relate to “transactions associated with Deiri Nominees and its shareholdings in the Deicorp companies”, does not address why, for example, [10](b) (concerning a specific transaction) is “commercially sensitive” and does not explain what “commercially sensitive information” means or what information is contained in the bank statements which might come within the terms of that phrase as understood in general parlance. The position of Deiri Nominees in this regard (I assume, by reference to its written submissions) is that it may be inferred that the financial records of a company (said to be the central holding company for the Deicorp Group) are documents which it would regard as commercially sensitive, in the sense that it would regard it as intrusive for its financial records to be made available for inspection by other entities (beyond that which might be called for in the context of particular litigation or otherwise required under relevant legislative or regulatory regimes). I would have thought that the modern emphasis placed on the privacy of financial records in general would readily explain Deiri Nominees’ position.

79. More pertinently, in response to the submissions made by the respective applicants, Plaza submits that: the documents sought have a sufficient apparent connection to the issues in the proceedings to justify their production; that apparent relevance is established since the documents called for “could possibly throw light on the issues in the main case” in the manner considered in Portal Software and Trade Practices Commissioner v Arnotts Ltd (1989) 21 FCR 306; [1989] FCA 340 that the issue of the NAB Subpoena is not a substitute for discovery; that there is a legitimate forensic purpose to the production of the documents; that this is not an impermissible fishing expedition; and that the NAB Subpoena does not attempt to subvert the operation of the Practice Note.

80. Plaza notes that much of the material sought under the NAB Subpoena concerns copies of presented cheques and “bank traces” of those cheques. It says that this material is not amenable to an application for discovery because the internal records of a bank (which show where cheques were presented, when cheques were cleared, whether the cheques as presented contained markings or directions by the payee, and to where the funds were directed) are not matters of which the cross-defendants could provide adequate disclosure by way of discovery of documents. It is thus submitted that the seeking of bank statements and bank records does not subvert the operation of the Practice Note.

81. An example given in written submissions of this is the allegation as to the payment of a sum of $400,000 on or about 10 October 2011 by Deiri Nominees to Jamil Sayour (the transaction the subject of the call for documents at [10](a) of the NAB Subpoena) (see [48]-[55] of the fifth cross-claim). Plaza says that this was by way of a cheque for $400,000 payable to “Michael Sayour” which Investments asserts was the deposit for the purchase of its 50% share of the Punchbowl Property. Plaza says that Investments provided a copy of the cheque voucher in un-presented form (a copy of which was tendered on the present applications – see Exhibit 1) but that there is no evidence as to whether this cheque was in fact presented and there is no record of its receipt nor any record of receipt by Jamil Sayour.

82. In relation to the documents sought at [10](b) (which relate to a cheque withdrawal of $29,500 on or about 30 November 2011), Plaza says this concerns “an inquiry” as to whether the NAB has any record of Deiri Nominees making a payment for the purchase of land at a particular address in Matthews Street, Punchbowl. Plaza says that “it has been repeatedly asserted that [Investments] (whose sole shareholder is Deiri Nominees) has carried the financial and administrative burden of the Matthews Street Unit Trust” and that the issue of joint ownership and the circumstances of joint ownership are live issues in the proceedings. Plaza notes that there are allegations contained in the fifth cross-claim in relation to this property (see [293]-[305]) and relief is claimed in relation to that property, including that the property is held by the ninth cross-defendant on trust for Plaza and an order for its transfer to Plaza. (Pausing there, I note that there appears to be no specific allegation in the fifth cross-claim as to a transaction in the amount specified at [10](b) of the NAB Subpoena – and it is by no means apparent from the pleading that the transaction the subject of the call for production of bank documents is connected with the purchase of that property.)

83. Insofar as the legitimate forensic purpose of the NAB Subpoena, in its written submissions Plaza says that it seeks production of bank documents and records: which are relevant to identified issues in the proceedings; are specifically referred to in the pleadings; or are sought on the reasonable basis (in the context of allegations of fraudulent arrangements, bribes and secret commissions) that the documents and records sought will materially assist:

(a)   with shedding light on the complex financial dealings between the Cross-Defendants and Jamil Sayour or Jamil Sayour’s entities in circumstances where it is alleged that Jamil Sayour was receiving payments in the nature of secret commissions or bribes; or

(b)   to determine whether there are further bribes paid to Jamil Sayour which have not been disclosed; or

(c)   to establish or counter the assertions of the Cross-Defendants as to payments made to Moustafa Sayour and Plaza for which neither can account; or

(d)   to determine who made contributions to the purchase of a property at [xxx] Matthews Street Punchbowl; or

(e)   to determine where various payments from the CBA Partnership Account were made.

84. Turning to the specific paragraphs of the NAB Subpoena, Plaza makes the following submissions.

85. First, as to [1], [5], [8], [11], [13] and [15], which seek copies of what Plaza refers to as “bank traces” (i.e., documents, receipts, cheques requested, cheque vouchers presented, and cheques issued from or funded by the accounts there identified, recording or otherwise evidencing transactions, whether receipts or payments, to any of the persons or entities there named), Plaza submits that the named entities to which payments have been made are “squarely relevant to the proceedings in the context of a number of (now-known) concealed payments”. Plaza submits that the subpoena “seeks information on”, among other things, all payments made to Jamil Sayour personally; the trust he created, which was known as “the Sayour 2 Family Trust”; and Sayour Holdings, “the company by which Mr Deiri has asserted in the Arncliffe proceedings was Jamil Sayour’s investment vehicle and entity” by which he had an interest in Combined Arncliffe (referring to the pleading at [133]-[146] of the fifth cross-claim).

86. Insofar as the said paragraphs refer to Moulikyah Pty Ltd, this is identified as “a company which Jamil Sayour caused to be incorporated, appointing Moustafa Sayour then inserting himself as director”, from whose accounts significant frauds were perpetrated on Plaza. Insofar as they refer to MMA Investments Australia Pty Ltd and JS 75 Pty Ltd, it is said that these are companies incorporated by Jamil Sayour which remain in the control of Catharine Elliot (who is identified as Jamil Sayour’s former de facto spouse and the administratrix of his estate).

87. Insofar as some of those paragraphs refer to transactions evidencing payments to or from another named woman (Ms Riley), she is identified as the vendor of the property at Matthews Street “which was claimed to have been part of the partnership assets though the registered proprietor is the Ninth Cross-Defendant”. It is submitted that this material is directly relevant to matters at issue in the proceedings since Investments has asserted “throughout that it or a related entity paid for half the purchase price” of the Matthews Street property. Plaza says that the subpoena in that regard is directed to that inquiry (referring to the allegations at [293]-[305] of the fifth cross-claim).

88. As to the documents sought at [2] of the NAB Subpoena, which seeks copies of bank account statements of all accounts held in the name of the eighth cross-defendant to the fifth cross-claim, Plaza says that the allegations against this cross-defendant concern: first, its receipt of $500,000 from the CBA Partnership Account in late November 2014 ([563]-[566]); and, second, its demand from the receiver of a payment of $130,000 “arising from a payment made by it in September 2016 in circumstances where there was no authorisation by Plaza for such payment”. In this regard Plaza says that it does not know “and is entitled to an explanation as to” why those amounts were paid to the eighth cross-defendant in circumstances where it was not a creditor of the partnership.

89. Plaza says that the request for bank statements is for a limited period of time (1 January 2014 to 30 September 2016) and is in respect of proving those transactions specifically. It is submitted that this information is “adjectivally relevant”, given: the allegations of secret commissions and bribes being paid by the Deiri Group to Jamil Sayour, the “admitted inter-relationship” between the Deiri entities, and the fact that there have been conflicting explanations provided by Mr Deiri as to payments to Jamil Sayour.

90. As to [3], which seeks copies of bank account statements of all accounts held in the name of the sixth cross-defendant to the fifth cross-claim for the period from 1 January 2013 to 31 December 2015, and [4], which seeks for the same period copies of all documents, receipts, cheques requested, cheque vouchers presented and cheques issued from or funded from the accounts identified in [3] which evidence a transaction identified as a cheque withdrawal of $200,000 on or about 25 September 2013, Plaza says as follows.

91. First, that the allegations against this cross-defendant concern: its payment in September 2013, directly into the CBA partnership account, of an amount of $200,000 which the sixth cross-defendant claims was in part-payment of Investments’ obligations under the contract of sale (referring to its defence to the second cross-claim); and its receipt of $425,000 from the CBA Partnership Account in late November 2014 (referring to [554] of the fifth cross-claim).

92. Second, that, with regard to the $425,000 payment, Plaza does not know “and is entitled to an explanation as to why” this amount was paid to the sixth cross-defendant in circumstances where it was not a creditor of the partnership “or whether the earlier payment into the CBA Partnership Account is the basis on which such an entitlement arises”.

93. Third, Plaza repeats the matters put at [89] above in relation to this request for documents.

94. As to [6], which seeks copies of bank account statements of all accounts held in the name of the seventh cross-defendant, whether in its own right or as a trustee, for the period from 1 July 2012 to 31 December 2015; and [7], which seeks copies, for the same period of all documents, receipts, cheques requested, cheque vouchers presented, and cheques issued from or funded by the accounts identified in [6] which evidence five identified transactions, ranging in dates from on or about 9 July 2012 to on or about 8 February 2013, Plaza submits as follows.

95. It says that the allegations against the seventh cross-defendant are “several” and that the bank statements sought cover the period over which the transactions which are alleged were made. (I interpose here to note that in fact the period extends for almost three years beyond the last of those identified transactions.)

96. Plaza explains the allegations made in the fifth cross-claim in relation to each of the five identified transactions.

97. As to the first two of those transactions, it is alleged (see [556] of the fifth cross-claim) that the seventh cross-defendant paid approximately $200,000 to Jamil Sayour in July 2012 as a bribe or secret commission. Plaza says that a copy of the cheque voucher has been produced in the context of the second cross-claim but that it is entitled to make full investigations as to the manner and source of that payment “particularly in circumstances where the following day, Deicorp sent by international funds transfer a number [sic] of $500,000 to Moustafa Sayour in Lebanon” (see [72] of the fifth cross-claim).

98. As to the third of those transactions, it is alleged (see [88]-[96] of the fifth cross-claim) that the seventh cross-defendant paid to Jamil Sayour an amount of $150,000 by cheque addressed to him personally. Plaza says that a copy of that cheque voucher has been produced in the context of the second cross-claim but, again, that it is “entitled to make full investigations as to the manner and source of that payment”.

99. As to the fourth of those transactions, it is alleged (see [97]-[105] of the fifth cross-claim) that the seventh defendant delivered a cheque for $3.25 million payable to “Moustafa and Jamil Sayour Trustee for the Sayour Family Trust” just days after the third transaction. Plaza says that the cheque was given to Jamil Sayour who did not tell Plaza of the receipt and that months later “it is apparent from Plaza’s investigations that some of the proceeds of his cheque came home to Plaza and credit has been duly allowed for some of this payment”. Plaza says that it requires access to the bank statement of the seventh defendant “in order to establish the matters which it alleges took place including receiving evidence as to the source of the funds on which the cheque was drawn”.

100. As to the fifth of those transactions, it is alleged ([114]-[122] of the fifth cross-claim) that a payment of $400,000 was made to Jamil Sayour on or about 13 February 2013. Plaza notes that the seventh cross-defendant and Investments have asserted in their defence to the second cross-claim that, as part of the consideration for Investments’ share of the land, the seventh cross-defendant drew a cheque in favour of “Sayour Investments Pty Ltd” (the former name of Plaza) for $400,000.00. Plaza says that this amount has not been located or traced by Plaza and that the manner and circumstances of the payment are in issue. Plaza submits that it is likely that the bank statements may disclose information relevant to this issue.

84. Finally, Plaza says that the seventh cross-defendant received $7.2 million from the CBA Partnership Account between November 2014 and January 2015; that it does not know and is entitled to an explanation as to why this amount was paid to the seventh cross-defendant in circumstances where it was not a creditor of the partnership; and that these matters are placed in issue by the pleaded allegations at [556]-[562] of the fifth cross-claim.

85. As to [9], which seeks copies of bank account statements of all accounts held in the name of Deiri Nominees, whether in its own right or as a trustee, for the period 1 July 2011 to 31 December 2015, Plaza says that the only basis for the objection to these bank statements is the potential that the bank statements contain information which is “commercially sensitive”. It is submitted that, given that the production of this material is to the Court and in the course of proceedings, it is not conceivable what matters require protection, noting that no application has been made “for confidential orders or suppression”.

86. Plaza further says in this regard that: Deiri Nominees is the sole shareholder of Investments and trustee of the F Deiri Family Trust and is “vitally interested” in these proceedings; that Deiri Nominees claims to have made a payment to “Michael Sayour” in October 2011 which has not been located or accounted for by Plaza in its investigations to date; and that, while a copy of the cheque purportedly received by Jamil Sayour or Mr Sayour has been provided, this document, without the context of when the cheque was presented (which it is said can be obtained from access to the bank statement on which the cheque was drawn), does not assist the resolution of what payments were received by whom in respect of which obligations.

87. Plaza notes that Deiri Nominees made further payments to Jamil Sayour, including an amount of $250,000 in October 2012 by cheque which was apparently made out to the Sayour Family Trust (having regard to the voucher supplied by Investments in the course of the second cross-claim). Plaza says that it requires to know when this cheque was presented and the source of the payment.

88. As to [10], which seeks, for the period between 1 September 2011 to 31 December 2015, copies of all documents, receipts, cheques requested, cheque vouchers presented, and cheques issued from or funded by the accounts identified in [9] (i.e., Deiri Nominees’ accounts) which evidence three identified transactions between 10 October 2011 and 29 October 2012, Plaza sets out in its written submissions what it alleges is the position in relation to the first two of those transactions.

89. As to the first (see [10](a)), a cheque withdrawal of $400,000 on or about 10 October 2011, Plaza says that Investments asserts this to be the deposit for the purchase of the Punchbowl Property. Plaza says that Investments has provided a copy of the cheque voucher in un-presented form. However, it is said that there is no evidence as to whether this cheque was in fact presented and the defendants have no record of its receipt including any record of receipt by Jamil Sayour.

90. As to the second, ([10](b)), a cheque withdrawal of $29,500.00 on or about 30 November 2011, Plaza says (as adverted to earlier) that the documents sought are directly relevant to matters at issue in the proceedings, since Investments has asserted “throughout” that it or a related entity paid for half the purchase price, including the deposit for the Matthews Street land, and that the subpoena in that regard is directed to that inquiry (referring to [293]-[305] of the fifth cross-claim).

91. No separate submission is made as to the third transaction ([10](c)), a cheque withdrawal of $250,000.00 on or about 29 October 2012.

92. As to [12], which seeks copies of bank account statements of all accounts held in the name of the fifth cross-defendant, for the period 1 August 2013 to 31 December 2015, Plaza says that the allegations against this cross-defendant concern: first, its payment in August 2013 of $150,000 to Jamil Sayour ([123]-[131] of the fifth cross-claim); second, its allegation that Jamil Sayour was in receipt of a loan of $40,000 from this cross-defendant in November 2014 ([49]-[52] of Deiri Nominees’ defence to the fifth cross-claim); and, third, its receipt of $160,000.00 from the CBA partnership account in November 2014 in circumstances where this entity was not a creditor and apparently had no claim on the partnership’s income ([552] of the fifth cross-claim).

93. Plaza notes that, as to the August 2013 payment, Investments asserts in its defence to the second cross-claim that this payment was in partial satisfaction of amounts owing under the contract for sale of land. It says that this payment has not been able to be identified in Plaza’s accounts nor in the accounts of Jamil Sayour. Plaza says that it is entitled to an explanation as to why this amount was paid to Jamil Sayour and the source of the funds for this payment. It says that the bank account statements will identify when the cheque was presented and will assist with locating the destination of the payment.

94. As to the alleged loan of $40,000 from this cross-defendant in November 2014, Plaza notes that Investments, Mr Deiri and Deiri Nominees admit (though it says that the admission is not “at large”) (see [49]-[52] of the defence to the fifth cross-claim) that the loan was paid to Jamil Sayour and admit that the proceeds of the loan was applied to Combined Arncliffe as a shareholder loan from Sayour Holdings. Plaza considers that the bank account statements of the fifth cross-defendant are likely to disclose the “ultimate source of the loan” and says as such the material is relevant to a live issue in the proceedings.

95. As to [14], which seeks copies of bank account statements of all accounts held in the name of Deicorp for the period 1 July 2011 to 31 December 2015, including but not limited to a named account, Plaza says that the allegations against Deicorp are largely set out in the reply to the first cross-claim and the fifth cross-claim.

96. Plaza alleges that it was Deicorp, together with Mr Deiri as its sole director and Deiri Nominees as its sole shareholder, which stood to gain most in the course of the transactions it engaged in with Jamil Sayour and with Plaza, saying that Deicorp was the beneficiary of both building contracts and the profits arising therefrom. Plaza says that Deicorp paid regular payments to Jamil Sayour of $10,000 (each month for nine months) starting just before the partnership was formally entered into between Investments and Plaza. Plaza says that the explanation now provided in the defence to the fifth cross-claim is inconsistent with former explanations “and silence on the question in proceedings which have been on foot since September 2016”. Plaza also notes that Deicorp admits it paid $1 million dollars to Jamil Sayour by way of an overseas transfer of funds (which was not disclosed to Plaza but for which it now claims credit in the second cross-claim).

97. It is said that the circumstances of those payments, the source of the funds by which those payments were made and, possibly, the authorisations for those transactions are likely to be manifest in the bank statements; and hence this material is squarely relevant to live issues in the proceedings.

98. Further, it is noted that Deicorp demanded from the Receiver a payment of $370,000 arising from payments made by it in 2016 in circumstances where there was no authorisation by Plaza for such payment. It is said that the source of those funds by which such payments were garnered is a relevant matter “albeit that the time restriction may necessitate a further subpoena for Deicorp’s bank statements from 1 January 2016 – 30 Sept 2016”.

99. Thus, Plaza submits, the material sought from the NAB is relevant to the proceedings and it is reasonable that the material produced will assist in the resolution of issues in the proceedings.

100. In oral submissions, Counsel for Plaza made very clear that, by the NAB Subpoena, what is sought is not only documents as to the payments that are known to have been made but also to determine whether there are any additional payments that are not presently known to have been made, as well as the source of the payments (T 31.34):

The bank statements are sought on the basis that not only should they reveal that the payment as known will be extant but also the source of those payments, when those payments were presented. …

118. It was said that the reason why the bank statements are required is that Plaza wants to know when (or if) a particular cheque was presented on the account of Deiri Nominees and that the bank statements will tell that. (Although it was submitted at one point that, as a matter of common sense, a bank statement is also likely to tell whether an amount was repaid to Deiri Nominees, that submission was later withdrawn.)

119. It is submitted that, in circumstances where the fifth cross-claim was filed on 22 August 2018 and the defences to that cross-claim were not filed until six months later, it was not improper for Plaza to issue the NAB Subpoena prior to the closure of pleadings or the receipt of the defence. Plaza says that it filed its pleading, promptly answered extensive requests for particulars, promptly provided all documents that have been requested informally, and was required to proceed with diligence in the prosecution of its claims (including in a legitimate manner invoking the subpoena process to gather evidence). Plaza submits that “to ensure that the totality of the factual matrix is available to it” it was appropriate to issue the NAB subpoena to a bank “to obtain on evidence on which it relies for its case” and that it did so in the vacuum of not by then having received those defences (T 30.32). Thus it is submitted that the fact that there are now admissions made in the defences (that were not to hand when the subpoena was issued) is not a matter which was in Plaza’s control.

120. Counsel for Plaza emphasises that this was not a “pre-emptive strike” (at T 31.11) on behalf of Plaza; rather, that this was in the context of complex and lengthy litigation where there was already evidence on foot in regard to the establishment of the partnership and many of the allegations contained in the fifth cross-claim concerning the entry and formation of the partnership (and where the second cross-claim directly concerned the entry of Investments and Plaza into a partnership and the transfer of land). It is said that those matters have been live issues between the parties for the last two years; and that the material that has been served by Investments in terms of the six affidavits of Mr Deiri has not adequately explained any of the payments that appear to have been made to Jamil Sayour by Deicorp, by Investments or by any of the related Combined Parties.

121. In essence what is said that the NAB Subpoena is not a fishing expedition because there is a “lack of speculativeness to it” (at T 33.33), in the sense that it is not a matter of mere speculation, since it is known that various payments were made to Jamil Sayour (and not disclosed to Plaza).

122. Emphasis is placed on the perceived inconsistency between matters raised in the pleadings (such as the admission that the $10,000 monthly payments were made but on the basis that Jamil Sayour had said that he needed to be paid for his work with respect to leasing) with affidavit evidence of Mr Deiri that, as between the partners, it was Plaza that had responsibility to manage the leasing of the centre. (Pausing here, however, it is not clear how a bank statement would demonstrate or make good any proposition that might be made as to that inconsistency.)

123. Ultimately, the thrust of the argument as to the perceived relevance of the bank statements was that (T 36.43):

… the bank statements are likely to show payments made to Jamil Sayour and the fact that Plaza does not yet know whether this is the entirety of the payments or whether there are in fact other payments has some force in Plaza being able to then obtain access to these bank statements to ensure that all of the payments that have been made are known to Plaza and, if necessary, those additional payments may be pleaded.

124. Counsel for Plaza emphasised the number of payments that it was discovered had been made to Jamil Sayour (and had not been disclosed to it at the time), the submission being that (from T 38.41):

… the force of the number of payments that have been made that were not disclosed to Plaza, that the bank statements are likely to give information not only as to the making of those payments, and in large part the making of those payments is admitted but it’s to understand precisely who, when and where those payments were made and the source of the funds of those payments.

It isn’t known, for example, where amounts have been paid to Jamil have subsequently gone back into the cross-defendant’s coffers and have then been recycled. It simply isn’t known. It would be a much different matter and I completely accept that if it's a single payment the bank statement might reveal when a cheque was presented, but this is a consequence where there is payment after payment after payment over a series of years to a person who has now died.

…

Because Jamil was acting for Plaza in some limited circumstances. That, in my submission, adds to the force of the fact that not only were there a huge number of payments made to Jamil. Each time those payments are alleged not to have been disclosed to Plaza it is, and I can say that with some certainty, that the admission by [the seventh cross-defendant] is consistent through the pleading that there is admissions that those payments were in fact not disclosed to Plaza by the payer.

… What follows from that is further force of the submission that it’s not a matter of speculation that Plaza should have access to these bank statements. It’s not a matter of fishing. There are payments that have been discovered. Those payments have been significant and over a significant period of time and they have been admitted by the cross-defendants that there was no disclosure made to Plaza of the payments that those cross-defendants made to Jamil Sayour.

125. The submission was, in effect, that, because some payments have been discovered to have been made and it was admitted that they had not been disclosed to Plaza, it would not be fishing for Plaza to trawl through bank statements (over a lengthy period) in order to see whether there are any other payments that were made that had not been disclosed; that submission being put in the context of the particular facts of the present case, noting that the parties were involved over a substantial number of years and the payments first took place, as far as Plaza knows, from October 2011.

Determination

126. As noted earlier, it is accepted by Plaza that a subpoena may be set aside as an abuse of process where it is used as a substitute for discovery or discovery against a third party (see Associated Dominions Assurance Society v Fairfax; Small; National Employers’ Mutual General Association Ltd v Waind at 382 (Moffitt P, with whom Hutley and Glass JJA agreed)); and, as recognised by Hely J in Tyco Australia Pty Ltd v Leighton Contractors Pty Ltd (2005) 142 FCR 428; [2005] FCAFC 115, at least prima facie it would be an abuse of process for an applicant for preliminary discovery to seek to compel production of documents by notice to produce when the production of the documents is sought under the provisions applicable to applications for preliminary discovery (see Hely J at [54]; and see Hill J at [34] and [37]), his Honour considering that to issue a notice to produce the very documents sought by the action for pre-action discovery would amount to an abuse of process. (See also Yes Family Pty Ltd v Sphere Healthcare Pty Ltd [2016] NSWSC 393 where such a conclusion was drawn by Slattery J at [28].)

127. In the present case, there has been no application for preliminary discovery, so it obviously cannot be said that there is an abuse of process in seeking to obtain by way of subpoena the very documents sought under such a process that is on foot at the same time as the subpoena is issued. However, the fact that there is a process by which Plaza might have sought the production of documents in order to determine whether it has a claim in relation to other payments that it suspects might have been made, but which Plaza chose not to invoke, highlights the prematurity of Plaza instead invoking the subpoena process at this stage of the proceedings, in circumstances where Plaza candidly acknowledges that at least one of the purposes of issuing the NAB Subpoena is to seek to obtain evidence as to whether there are additional payments in respect of which it might have a claim.

128. In my opinion, whether intended to do so or not, the invocation of the subpoena process at this stage does subvert the operation of the Practice Note in relation to disclosure of documents. I accept that some of the documents sought by the NAB Subpoena are not documents that might ordinarily be expected to be available to be produced on discovery by the cross-defendants (for example, internal bank records). However, there is no reason to think that bank statements or other financial records of the cross-defendants would not be able to be discovered in due course by the cross-defendants; and whether the internal bank records will be necessary in order to establish the source of funds or whether, and if so, to what account cheques were presented, will depend on the evidence yet to be adduced by the cross-defendants.

129. There was no attempt by Plaza, before it issued the NAB Subpoena, to apply for an order for disclosure of documents of the kind there sought on the basis that there were exceptional circumstances necessitating their disclosure (and ex hypothesi no compliance with the requirements of [6] of the Practice Note).

130. As I noted in Rinehart (at [43]), the Court of Appeal in ICAP Australia Pty Ltd v BGC Partners (Australia) Pty Ltd [2009] NSWCA 307 at [22] when considering what is a legitimate forensic purpose for the issue of compulsory process of this kind (there a notice to produce) held that the primary judge had not erred by stating that:

… it must be shown that it is likely the documentation will materially assist on an identified issue, or there is a reasonable basis beyond speculation that it is likely the documentation will.

131. I accept that there is a tension between the test required for an order for disclosure to be made (that it be necessary for the resolution of the real issues in dispute in the proceedings) and that which is required to be established in order to satisfy the requirement that a subpoena be issued for a legitimate forensic purpose.

132. However, that tension is in my opinion able to be resolved by acceptance of the proposition that, notwithstanding that there may be a legitimate forensic purpose to a subpoena (applying the “on the cards” test of relevance), it will nevertheless be an abuse of process if a subpoena is issued in circumstances where this will subvert the operation of the Practice Note by seeking what is in substance disclosure in circumstances where the requirements of the Practice Note are not satisfied. That is precisely the case here.

133. The fact that there was a period of some six months for the filing of the defences to the fifth cross-claim is not an answer to that; nor is the (commendable) wish of Plaza to progress with expedition the preparation of the case for hearing (as is required under provisions such as s 56 of the Civil Procedure Act 2005 (NSW)). The Practice Note in relation to disclosure was issued in the context of the overriding mandate for the just, quick and cheap resolution of the real issues in dispute in proceedings in this Court; and non-compliance with the Practice Note should not be condoned.

131. Furthermore, it is impossible not to conclude that there is a very real sense in which the issue of the NAB Subpoena is a fishing expedition. It is helpful to restate what has been recognised as meant by a “fishing expedition”, as explained in Associated Dominions Assurance Society v Fairfax at [254]:

A “fishing expedition”, in the sense in which the phrase has been used in the law, means, as I understand it, that a person who has no evidence that fish of a particular kind are in a pool desires to be at liberty to drag it for the purpose of finding out whether there are any there or not.

135. That is precisely what Plaza is here seeking to do – to trawl through an array of bank statements and other internal bank records (over a period beyond the immediate period of the transactions in question) in order to ascertain whether its suspicion that there may be additional payments that were made to Jamil Sayour (and not disclosed to it) is correct. The fact that there is no speculation as to the making of some such payments does not mean that it is not now speculation that there are more such payments. This is not a situation akin to that which was considered in the balance of the paragraph extracted above from Associated Dominions Assurance Society v Fairfax:

If, however, there is material before the Court pointing to the probability that a party to litigation has in his possession documents tending to destroy his case or to support the case of his opponent and that privilege from inspection of such documents has been wrongly claimed, an application by that opponent to be allowed to inspect them cannot properly be described as a mere “fishing expedition”.

136. There is nothing in the material here before me to point to the probability that there are any additional payments at all. That remains a matter of pure speculation. So too, it seems to me, is the proposition that some form of interrogation or examination of the internal bank documents will provide an “explanation” for particular payments. The payments the subject of pleaded transactions have been admitted. Insofar as what is in dispute is the reason for the payments or what was done in relation to some or all of those payments, that may be the subject of evidence from the cross-defendants in due course (which it might then be permissible for Plaza to test by a more focussed subpoena to the bank or otherwise by an application for leave to issue interrogatories, unfashionable as that process now is).

137. In those circumstances I consider that the whole of the NAB Subpoena should be set aside as an abuse of process. As indicated earlier, it may be that some of the documents sought under that subpoena can later be the subject of a fresh subpoena (once the evidence has been served and if it is then necessary for the resolution of the real issues in dispute in the proceedings that particular documents, identified with reasonable particularity, be produced). In those circumstances the practical course might be to retain the computer disc in the Court file (particularly where there has been no objection by NAB to the production of the documents) but I will hear from the parties as to that course.

138. I should add that I also consider there to be force in the objection to the call for documents that “evidence” particular matters. As Hill J contemplated in Universal Press Pty Limited v Provest Limited [1989] FCA 402 (at [10]), it may be an abuse of process to issue a subpoena that requires “a person not a party to litigation to form a judgment as to what is relevant to the issues joined in a proceeding to which he is not a party” (his Honour there citing National Employers’ Mutual Association Ltd v Waind at p 382). Calling for documents that “evidence” certain matters does in my opinion call for the recipient of the subpoena to form a judgment about factual matters and thus does not identify with reasonable particularity the documents sought to be produced.

139. Costs should follow the event.

Orders

140. For the above reasons I make the following orders:

1. Set aside the subpoena issued by Broadway Plaza Pty Ltd on 29 January 2019 to the proper officer, National Australia Bank Limited.

2. Order Broadway Plaza Pty Ltd to pay the applicants’ costs of the respective applications to set aside the said subpoena.

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Decision last updated: 15 April 2019