Gertos Holdings Pty Limited v Roads and Maritime Services; G Capital Corporation Pty Limited v Roads and Maritime Services; Marsden Developments v Roads and Maritime Services

[2018] NSWLEC 172

Land and Environment Court

New South Wales

Medium Neutral Citation:	Gertos Holdings Pty Limited v Roads and Maritime Services; G Capital Corporation Pty Limited v Roads and Maritime Services; Marsden Developments v Roads and Maritime Services [2018] NSWLEC 172
Hearing dates:	21 September 2018, written submissions on 21 September 2018 and 2 October 2018
Date of orders:	31 October 2018
Decision date:	31 October 2018
Jurisdiction:	Class 3
Before:	Moore J
Decision:	See the various rulings concerning the elements of the: (1)   Marsden Developments Pty Ltd Notice to Produce; (2)   Mario Pamboris subpoena; (3)   Con Savell subpoena; and (4)   Regency Capital Pty Ltd subpoena
Catchwords:	CIVIL PROCEDURE - Notices to Produce and Subpoenas - applications to set aside - use of a specified notice to produce as containing “reference provisions” - determinations with respect to individual provisions COSTS - costs of interlocutory applications to set aside - parties roughly equally successful - appropriate that there be no order for costs
Legislation Cited:	Land Acquisition (Just Terms Compensation) Act 1991, ss 55(d) and 59(1)(f)
Cases Cited:	Commissioner for Railways v Small (1938) 38 SR 564 Gertos Holdings Pty Limited v Roads and Maritime Services; G Capital Corporation Pty Limited v Roads and Maritime Services; Marsden Developments v Roads and Maritime Services [2018] NSWLEC 166 Rinehart v Rinehart [2018] NSWSC 1102
Category:	Procedural and other rulings
Parties:	Gertos Holdings Pty Limited - 2018/207345 (Applicant) G Capital Corporation Pty Limited - 2018/207357 (Applicant) Marsden Developments - 2018/207366 (Applicant) Roads and Maritime Services (Respondent)
Representation:	Counsel: Mr P Tomasetti SC (Applicants) Mr R Lancaster SC/Mr M Astill, barrister (Respondent)   Solicitors: Rigelsford Jensen & Co Incorporating Mills Lawyers (Applicants) Norton Rose Fulbright Australia (Respondent)
File Number(s):	207345 of 2018; 207357 of 2018; 207366 of 2018
Publication restriction:	No

TABLE OF CONTENTS

Introduction

The acquired properties

The entitlement to compensation

The pending sale of each property

The compensation determinations

The vendors’ claims

The relevant statutory provisions

The current applications requiring determination

The separate question hearing

The Gertos’ interests’ Points of Claim

No Points of Defence

The current procedural contest

The set aside applications

Submissions

Paragraph 1

Paragraph 2

Paragraph 3

Paragraph 4

Paragraph 5

Paragraph 6

Paragraph 7

Paragraph 8

Paragraph 9

Paragraph 10

Paragraph 11

Paragraph 12

Paragraph 13

Paragraph 14

Paragraph 15

Paragraph 16

Paragraph 17

Paragraph 18

Paragraph 19

Paragraph 20

Paragraph 21

Paragraph 22

The relevant legal principles

Structuring of the answers to the elements requiring to be addressed

Rulings concerning paragraphs in the Notice to Produce to Marsden Developments

Rulings concerning paragraphs specific to the Subpoena to Mario Pamboris

Rulings concerning paragraphs specific to the Subpoena to Con Savell

Rulings concerning paragraphs specific to the Subpoena to Regency Capital

Costs

Order

Annexure A

Annexure B

Annexure C

JUDGMENT

Introduction

1. It has been necessary, for the purposes of construction of the WestConnex infrastructure, for there to be a significant number of compulsory acquisitions of property to facilitate construction of the project: Three of the acquisitions by Roads and Maritime Services (the RMS) provide the basis for these three proceedings.

The acquired properties

2. The three properties which have been acquired compulsorily by the RMS were owned by related corporate entities. The three properties are:

1. 160-162 Parramatta Road, Camperdown: This property was owned by G Capital Corporation Pty Ltd (G Corporation) as at the date of acquisition;

2. 164 Parramatta Road, Camperdown: This property was owned by Gertos Holdings Pty Ltd (Gertos) as at the date of acquisition; and

3. 166-172 Parramatta Road, Camperdown: This property was owned by Marsden Developments Pty Ltd (Marsden Developments) as at the date of acquisition.

3. The three owning entities are related, with G Corporation and Gertos having Mr Bill Gertos as its guiding mind as at the date of acquisition.

The entitlement to compensation

4. The owner of each of the acquired properties is entitled to be compensated for the acquisition. The entitlement to compensation arises from the terms of the Land Acquisition (Just Terms Compensation) Act 1991 (the Land Acquisition Act). The Land Acquisition Act codifies, exhaustively, the basis upon which compensation can be claimed for compulsory acquisitions for public infrastructure projects such as WestConnex. It will be necessary, later, to set out the relevant provisions of the Land Acquisition Act engaged for the purposes of these separate question proceedings.

The pending sale of each property

5. As at the date of acquisition of each of these properties by the RMS (this having occurred on 9 February 2018), each property was the subject of a contract for sale. Each of these contracts for sale had been entered into by the relevant owning entity on 28 June 2016. The broad acquisition framework, in each instance, was that an initial deposit of $50,000 was paid to the owning entity with a two-year settlement period for completion and transfer of title. As can be seen from the earlier noted date of compulsory acquisition, completion of these contracts was frustrated by the compulsory acquisition of each property by the RMS. The price set by each contract and the name of the acquiring entity are set out below:

1. For 160-162 Parramatta Road, Camperdown: Acquiring entity Regency Capital Pty Ltd with the purchase price of $27,500,000;

2. For 164 Parramatta Road, Camperdown: Acquiring entity London Capital Pty Ltd with the purchase price of $23,000,000; and

3. For 166-172 Parramatta Road, Camperdown: Acquiring entity Portman Securities Pty with the purchase price of $6,000,000.

6. It is to be observed that the various acquiring entities are also associated in the sense that they have, as I understand it, a common guiding mind. This common guiding mind of the acquiring entities is Mr Mario Pamboris and he has had past commercial associations with Mr Gertos, the guiding mind of the entities owning the properties as at the date of acquisition. The nature of the relationship between Mr Pamboris and Mr Gertos is a matter potentially engaged for consideration in these proceedings.

The compensation determinations

7. The Land Acquisition Act has, as an early element in the statutory scheme for compensation for compulsory acquisitions of land, a process whereby the Valuer General makes a determination as to what is the appropriate amount of compensation to be paid for that compulsory acquisition. This determination is required to address each of the heads of compensation applicable to the property and the circumstances of the relevant holder of an interest in the property as at the date of acquisition.

8. For these three acquisitions, because they were subject to the earlier described contracts for sale as at the acquisition date, the Valuer General was required to assess what was the appropriate compensation to be paid to each of the vendor and the putative purchaser and to make determinations reflecting the outcomes of this assessment. Those determinations set, initially, the compensation to be paid as a result of each of these three compulsory acquisitions.

9. The Valuer General's determinations for each property can be seen in the following table:

The vendors’ claims

10. As can be seen from a comparison of the compensation amounts determined by the Valuer General and the sale price shown in the 2016 contracts for sale of each of the properties (as set out in the above table), the Valuer General's total determinations are, in two instances, significantly lower than the sale price specified in each contract.

11. In each instance, the vending entity has exercised the appeal right given to it by the Land Acquisition Act to seek orders from the Court that the RMS be required to pay to that vendor entity the difference between the Valuer General's total compensation determination for each property and the amount specified in in the relevant uncompleted contract for sale.

The relevant statutory provisions

12. The relevant provisions of the Land Acquisition Act that are engaged by these separate question proceedings are comparatively confined elements in s 55(d) and s 59(1)(f). These two provisions are set out below:

55   Relevant matters to be considered in determining amount of compensation

In determining the amount of compensation to which a person is entitled, regard must be had to the following matters only (as assessed in accordance with this Division):

(a)   …

(b)   …

(c)   …

(d)   any loss attributable to disturbance,

(e)   …

(f)   ...

59   Loss attributable to disturbance

(1)   In this Act:

loss attributable to disturbance of land means any of the following:

(a)   …

(b)   …

(c)   …

(d)   …

(e)   …

(f)   any other financial costs reasonably incurred (or that might reasonably be incurred), relating to the actual use of the land, as a direct and natural consequence of the acquisition.

(2)   …

The current applications requiring determination

13. On 5 July 2018, each owning entity filed a Class 3 Application with the Land and Environment Court seeking to have the RMS required to pay the contested amount to the vending entity on the basis that each entity was entitled to that amount of compensation. For these purposes, each vending entity relied on s 59(1)(f) of the Land Acquisition Act earlier set out.

14. Mr Tomasetti SC, for each vending entity, advanced the proposition that, by the vending entities’ reliance on this statutory provision, matters of assessment of market value did not arise for consideration. His submission was that the sale prices set in each of the contracts which had not been completed as at the date of acquisition provided a conclusively determined basis upon which the additional compensation entitlement for each vending entity was to be calculated.

15. Unsurprisingly, the RMS opposes each of these claims for additional compensation and seeks to uphold the Valuer General's determination with respect to each of the acquired properties.

The separate question hearing

16. On 3 August 2018, Mr Tomasetti proposed that there should be a separate question set down for hearing and determination in each of these three proceedings. Mr Astill, counsel appearing for the RMS, opposed this proposed course in each instance. On 10 August 2018, I decided that determination of a separate question in each of the proceedings was appropriate (see Gertos Holdings Pty Limited v Roads and Maritime Services; G Capital Corporation Pty Limited v Roads and Maritime Services; Marsden Developments v Roads and Maritime Services [2018] NSWLEC 166).

17. At the suggestion of the RMS, a second question was added. The consequence of this is that a separate hearing is to be held to determine the answers to the following questions:

1. Whether there was any “actual use of land” by any of the Applicants that would entitle any of them to any compensation under s 59(1)(f) of the Land Acquisition (Just Terms Compensation) Act 1991?

2. Whether, on the basis of the contracts for sale of the properties, the compensation to be paid to the Applicant in respect of this Applicant’s interest in the land acquired is to be confined to calculation of compensation having regard only to matters arising under s 55(d) and s 59(1)(f) of the Land Acquisition (Just Terms Compensation) Act 1991?

The Gertos’ interests’ Points of Claim

18. On 10 October 2018, the Gertos’ interests filed their Points of Claim (common across all three proceedings). This common document provides a reference point for the matters sought to be dealt with by the challenged Notices to Produce and Subpoenas. A copy of the Points of Claim is Annexure A to this decision.

No Points of Defence

19. As at the time of the preparation of this decision, no Points of Defence has been filed by the RMS.

The current procedural contest

20. The RMS has served a number of Notices to Produce and Subpoenas on a variety of individuals and entities. These pre-trial processes are:

1. Notices to Produce to:

• Gertos Holdings Pty Ltd, G Capital Corporation Pty Ltd and Marsden Developments Pty Ltd; and

2. Subpoenas to:

• Mr Con Savell, Sydney China Connect Pty Ltd, Mr Mario Pamboris, Westwood Accountants, Mr Bill Gertos, Regency Capital Pty Ltd, London Capital Pty Ltd and Portman Securities Pty Ltd.

21. Mr Con Savell is the accountant and registered tax agent for G Corporation, Gertos and Marsden Developments. Mr Savell is also the sole director of Marsden Developments and the principal of the accounting firm Westwood Accountants & Advisors Pty Ltd. Westwood Accountants & Advisors Pty Ltd is an accounting firm providing accounting services to a number of the various Gertos’ entities and it is a tenant of one of the acquired properties. It is not clear how Sydney China Connect Pty Ltd fits within the matrix. The subpoena to this company is to be seen as having been dealt with later (in a generic fashion) on the same basis as has been applied to the Marsden Developments Notice to Produce.

The set aside applications

22. The entities associated with Mr Gertos have applied to have each of these Notices to Produce and Subpoenas set aside. Although the terms of the various Notices to Produce and Subpoenas are not necessarily in identical terms, their structures are such that the objections pressed by the Gertos’ interests to them can be dealt with by grouping them. In this context, a table was produced by the RMS, to assist in understanding each element to which objection was raised and the competing submissions concerning each element. This table used the Notice to Produce addressed to Marsden Developments as the reference provision.

23. It is relevant to note that the grouping in the table produced by the RMS addresses the various Notices to Produce and Subpoenas by paragraph number. However, the paragraphs sharing similarities throughout the Notices to Produce and Subpoenas do not necessarily share paragraph numbers.

24. Although that which follows in my determinations concerning the various contested elements is not in precisely the same form as the table that was provided by the RMS, I have adopted the broad approach used in the development of that table. I have found it of assistance to group the paragraphs of the various Notices to Produce and Subpoenas by shared similarity, rather than by paragraph number.

25. For this purpose, I have also used the Marsden Developments Notice to Produce as a reference document. In addition, to group together the related terms of the various Notices to Produce and Subpoenas not in the Marsden Developments Notice to Produce, I have identified three further reference documents - the Subpoena to Con Savell, the Subpoena to Mario Pamboris and the Subpoena to Regency Capital Pty Ltd.

26. In each instance, I have reproduced the terms in the relevant paragraph and my ruling on each of the contested elements. The relevant ruling for each cited paragraph is to be applied in relation to equivalent paragraphs in other Notices to Produce or Subpoenas. I have also set out the Applicant's submissions concerning why the relevant information sought should not be permitted and the Respondent's submissions as to why the relevant information sought should be required to be provided.

27. For the purposes of giving my rulings, I have followed a process of giving rulings on each of the paragraphs in the Marsden Developments Notice to Produce and, where there are provisions not in the same terms as, or equivalent to, a paragraph in this Notice to Produce, I have given rulings with respect to the relevant paragraph in each of the three subpoenas noted above, at [25], as being used as subsidiary reference documents.

28. However, to provide an understanding (to the extent that it may be able to be obtained from that which follows), I have set out all the relevant submissions in full before moving on to give rulings with respect to each of the paragraphs in the primary reference Notice to Produce or in the relevant subsidiary Subpoenas utilised for this purpose.

Submissions

29. Given that the table provided by the RMS addressed the paragraph of each Notice to Produce and Subpoena by numerical reference to the relevant paragraph of the Marsden Developments Notice to Produce, it is appropriate to set out the submissions as they were before me from this table.

30. Doing so does not make interpreting the submissions easy given the internal cross-referencing. It is, however, the only viable way of setting out what has been advanced to me. I have done as best I can with the material in the fashion described above.

Paragraph 1

Applicant’s submissions

31. The Applicant’s submissions on this paragraph were:

Applicant’s submissions on para 1: see Applicant’s Written Submission (AWS) at [33]-[39]. In relation to the different paragraphs 1 in the Westwood and Regency Capital, the same submission are apt are the Applicant relies on them.

32. The written submissions referred to above are reproduced below:

33   There is nothing in the case stated by the respondent that indicates why public marketing of the properties for sale can have any apparent relevance. No allegation has been made about whether the sale was ‘off market’ or not.

34   It can only be inferred that the respondent wishes to use an answer of “not produced” to this paragraph to underpin an assertion, or use as a building block to make an assertion, that the contracts are fraudulent or a sham (not that such an allegation has yet been made). Given the seriousness of such an allegation, and the fact that ethical conduct of the legal profession regulates the making of such a serious allegation, a proper basis must already exist. It clearly does not. The respondent ought not be permitted to trawl fish for such documents to make a case it does not currently make.

35   Further, even if the documents did exist, the apparent relevance of what is in a real estate brochure or a listing or an advertisement, could ever be on the cards to be tendered by the respondent in its case. The applicant reasonably suspects that a “non-answer” is what the respondent is aiming to elicit. The absence of material as described in paragraph 1 sets the foundation to make some sort of submission.

36   Accordingly, this is either akin to a de facto interrogatory (asking for an answer to the question as to whether the properties were marketed for sale) or for discover (trawl fishing for categories of documents in order to rule out certain possibilities).

37   Either way, it is not a proper request in an NTP or subpoena.

38 Even if ‘mere’ relevance can be said to exist, it is not ‘on the cards’ such documents would ever be tendered (certainly that will not be the case for the applicant). This is a way for the respondent to determine whether or not the properties were listed for sale publicly (and there are other ways of proving such a point). This fits directly within the comment made by Mahoney AP in Carroll v Attorney-General for New South Wales (1993) 70 A Crim R 162 (at 182) being that “I wish to see the document to see if it may assist my case” which as his Honour said, is not sufficient.

39   This appears to be a step along the way to try and make an allegation that the contracts lack legitimacy. That is not the purpose of a subpoena or NTP to provide documents relevant to an identified issue, not to trawl through material which may or may not exist in order to procure sufficient information to then make the allegation. This is the cart before the horse.

Respondent’s submissions

33. The Respondent’s submissions were as follows:

Respondent’s submissions on para 1: In relation to MD1 as it applies to each of the recipients to whom MD1 has been directed, and in relation to Westwood 1, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the issue of whether the existence and circumstances of the contracts for sale should be taken into account, which requires an examination of the circumstances in which the contracts were entered into and the relationship between the Applicants and the purchasers: see Respondent’s Written Submissions at paras 2(b), 4(b), 8, 11(a) to (c), 17 to 24 (the “Arm’s Length” Issue).

34. The written submissions referred to above are reproduced below:

2.   In order to answer the separate questions, it is necessary to consider:

a.   …

b.   if the Applicants had an actual use of the acquired land, then whether the existence and circumstances of the contracts for sale should be taken into account when determining compensation for the acquisition of the Applicants’ interests in the acquired land;

c.   …

d.   …

4.   Even if there was an actual use of the land by the Applicants, the financial loss suffered by the Applicants would be less than the balance of the purchase price under the contracts because:

a.   …

b.   the contract purchase prices do not reflect market rates; and

c.   …

8.   This affidavit shows that the searches undertaken indicate:

a.   The controlling minds of the purchaser companies and the Applicants currently or formerly had a common involvement in a number of companies. Relevantly, Mr Mario Pamboris, director of the purchaser companies, was the director of Marsden Developments Pty Ltd (Marsden Developments) from 22 October 2009 to 23 August 2013;

b.   The purchasers and the Applicants currently share or formerly shared the same registered office, principal place of business and company contact address.

11.   The Respondent wishes to test the evidence by seeking documents that may shed light on:

a.   The nature of the discussions between Mr Savell and Mr Gertos regarding the sale of the Properties, and the use to which the Properties would be put once sold;

b.   The calculation of the sale price of the Properties;

c.   The source of Mr Savell’s knowledge that Mr Gertos held discussions with Mario Pamboris in relation to the sale of the Properties, and why further detail was not included relating to the discussions Mr Savell had with Mr Pamboris in relation to the sale of 166-172 Parramatta Road; and

d.   …

17.   Mr Timothy Mills has sworn an affidavit claiming that each of the Applicants (including Marsden Developments) are ultimately owned by trusts with the same beneficiaries.

18.   Mr White’s affidavit shows that Mr Mario Pamboris was the former director of Marsden Developments. This affidavit further shows that the purchasers and the Applicants currently share or formerly shared the same registered office, principal place of business and company contact address.

19.   It is highly likely that Mr Mario Pamboris, Mr Bill Gertos and Mr Constantine Savell are known to one another.

20.   It is highly likely that Mr Mario Pamboris, Mr Bill Gertos and Mr Constantine Savell have had previous dealings.

21.   It is possible that at one stage, Mr Pamboris was the director of a company that was a trustee for a trust that benefited family members of Mr Gertos.

22.   The Applicants have provided no evidence showing how the contract price was calculated. The contract prices exceed the market value determined by the Valuer General by more than $22 million.

23.   There is currently no evidence that the Properties were put on the market or that there was any market testing before a purchase price was agreed.

24.   Given the relationship between the parties, it appears likely that the transaction was not at arm’s length. It is the Respondent’s position that the contracts for sale did not reflect market rates. The Respondent will adduce further evidence regarding this matter in due course.

Paragraph 2

Applicant’s submissions

35. The Applicant’s submissions on this paragraph are at [41] of its Written Submissions:

41   The submissions made in respect of paragraph 1 are apt for this paragraph. The question that is posed is: what use would documents in this category make to the respondent’s case? Nothing, the applicant answers, to any identified issue. It is simply another way to try and answer a question (were the properties publicly listed for sale?) but which documents could not form part of material that would ever be tendered. Such material itself cannot demonstrate whether the contracts were procured fraudulently or are a sham. Again, this fits within the “I wish to see the document to see if it may assist my case” per Mahoney AP, and that is not a proper request in an NTP or subpoena. It is discovery or de facto interrogatories.

Respondent’s submissions

36. The Respondent’s submissions were as follows:

Respondent’s submissions on para 2: In relation to MD2 as it applies to each of the recipients to whom MD2 has been directed, and in relation to MD3 as it applies to each of the recipients to whom MD3 has been directed, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Arm’s Length” Issue.

Paragraph 3

Applicant’s submissions

37. The Applicant’s submissions on this paragraph were at [43] of its Written Submissions:

43   The submissions above in relation to paragraphs 1 and 2 are relied upon. This is [sic]

Respondent’s submissions

38. The Respondent’s submissions were as follows:

Respondent’s submissions on para 3: In relation to MD3 as it applies to each of the recipients to whom MD3 has been directed, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Arm’s Length” Issue.

In relation to MD4 as it applies to each of the recipients to whom MD4 has been directed, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the issue of whether there was an “actual use of land” by the Applicants: see Respondent’s Written Submissions at paras 2(a), 15, 16 (the “Actual Use” Issue) and the “Arm’s Length” Issue.

39. The Written Submissions referred to above are reproduced below:

2.   In order to answer the separate questions, it is necessary to consider:

a. the way in which the Applicants dealt with or used the acquired land (noting that the actual use must exist in fact at the time of the acquisition, and cannot be either “a future use or potential use”: Blacktown Council v Fitzpatrick Investments [2001] NSWCA 259 at [26]-[27]);

b.   …

c.   …

d.   …

15.   The Respondent wishes to test the evidence by seeking documents that may confirm:

a.   Whether the corporate trustees involving Mr Gertos have invested in property and developed property, and whether the Applicants are included in this category;

b.   The identity of the companies for which Mr Savell has prepared financial accounts, and that have owned commercial property and been involved with numerous development projects;

c.   Whether the Properties were held as a redevelopment opportunity, or rather as a passive investment.

Issues that arise from the affidavits

16.   The evidence of Mr Savell and Mr Mills purports that the Applicants were in the business of developing land, however no documents have been produced to substantiate that claim. There is no evidence of plans for the redevelopment of the Properties. The Respondent submits that the Applicants were more likely passive investors only, collecting rent from tenants for up to 18 years, according to the affidavit of Mr Savell dated 14 September 2018. Further documents relating to the Applicants’ past experience in property development, and any plans for the redevelopment of the Properties have been called for under the notices to produce and are required to determine whether there was an “actual use of land” by the Applicants:

Paragraph 4

Applicant’s submissions

40. The Applicant’s submissions on this paragraph were:

Applicant’s submissions on para 4: see AWS at [45] - [46] and for the Pamboris subpoena, the submissions in relation to paragraph 3 of the NTP to Marsden are apt and relied upon.

41. The Written Submissions referred to above are reproduced below:

45 It again remains unknown what this material relates to, in terms of any issue in the case. If it is said to be the highest and best use of the land, then that is not a material issue in the case. The applicant relies on the contracts for sale to represent the market value of the land, or, subject to the outcome of the separate question, a recouping of the losses in relation to that pursuant to s 59(1)(f).

46   If it is said that this material is relied upon in relation to a germane, but not yet made, allegation that the contracts are fraudulent or a sham, then the submissions in relation to paragraphs 1 to 3 above are relied upon.

Respondent’s submissions

42. The Respondent’s submissions were as follows:

Respondent’s submissions on para 4: In relation to MD4 as it applies to each of the recipients to whom MD4 has been directed, and MD5 as it applies to each of the recipients to whom MD5 has been directed, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Actual Use” Issue and the “Arm’s Length” Issue.

In relation to Pamboris 4 as it applies to each of the recipients to whom Pamboris 4 has been directed, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the issue of whether the financial costs (which include losses) allegedly suffered by the Applicants equate to the balance of the purchase price of each contract or some other sum, which requires an exploration of whether the purchasers had the financial capacity to pay stamp duty on the contracts and whether they would have been able to complete the contracts had the compulsory acquisition not occurred: see Respondent’s Written Submissions at paras 2(c), 4(a), 11(d), 22, 24, 25 (the “Settlement” Issue) and the “Arm’s Length” Issue.

43. The Written Submissions referred to above are reproduced below:

2.   In order to answer the separate questions, it is necessary to consider:

a.   …

b.   …

c.   if so, whether the financial costs (which include losses) allegedly suffered by the Applicants equate to the balance of the purchase price of each contract or some other sum;

d.   …

4.   Even if there was an actual use of the land by the Applicants, the financial loss suffered by the Applicants would be less than the balance of the purchase price under the contracts because:

a.   the purchasers would not have been able to raise the necessary funds to pay stamp duty and complete the contracts;

b.   …

c.   …

11.   The Respondent wishes to test the evidence by seeking documents that may shed light on:

a.   …

b.   …

c.   …

d.   The ability of the purchasers to pay stamp duty and complete the contracts for sale.

22.   The Applicants have provided no evidence showing how the contract price was calculated. The contract prices exceed the market value determined by the Valuer General by more than $22 million.

24.   Given the relationship between the parties, it appears likely that the transaction was not at arm’s length. It is the Respondent’s position that the contracts for sale did not reflect market rates. The Respondent will adduce further evidence regarding this matter in due course.

25.   On the evidence, it is unclear whether the purchasers had the financial capacity to pay stamp duty on the contracts and whether they would have been able to complete had the compulsory acquisition not occurred. Further documents called for under the subpoenas to produce are required to resolve this issue.

Paragraph 5

Applicant’s submissions

44. The Applicant’s submissions on this paragraph were at [48] of its Written Submissions:

48   The submission made in relation to paragraph 4 are relied upon without repetition.

Respondent’s submissions

45. The Respondent’s submissions were as follows:

Respondent’s submissions on para 5: In relation to MD5 as it applies to each of the recipients to whom MD5 has been directed, MD4 as it applies to each of the recipients to whom MD4 has been directed and MD6(a)-(f), as it applies to Westwood, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Actual Use” Issue and the “Arm’s Length” Issue.

In relation to MD6, as it applies to Sydney China Connect, and MD6(g)-(l) as it applies to Westwood, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Arm’s Length” Issue.

Paragraph 6

Applicant’s submissions

46. The Applicant’s submissions on this paragraph were at [50] of its Written Submissions:

50   “Any documents concerning the sale” is the broadest of possible descriptions which clearly is tantamount to a request for discovery. This is obviously a request to review documents in order to see if any allegation is able to be made, and not documents relevant to an identified issue, about which it is clearly on the cards that such documents will add to the relevant evidence in the case.

Respondent’s submissions

47. The Respondent’s submissions were as follows:

Respondent’s submissions on para 6: In relation to MD6(a)-(f), as it applies to each of the recipients to whom MD6 has been directed and MD5 as it applies to each of the recipients to whom MD5 has been directed, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Actual Use” Issue and the “Arm’s Length” Issue.

In relation to MD6(g)-(l) as it applies to each of the recipients to whom MD6 has been directed and MD7 as it applies to each of the recipients to whom MD7 is directed, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Arm’s Length” Issue.

Paragraph 7

Applicant’s submissions

48. The Applicant’s submissions on this paragraph were at [53] of its Written Submissions:

53   The issue of other purchasers, or whether the property was for sale as a public offering, is dealt with in relation to the submissions made for paragraphs 1 to 3 above.

Respondent’s submissions

49. The Respondent’s submissions were as follows:

Respondent’s submissions on para 7: In relation to MD7 as it applies to each of the recipients to whom MD7 has been directed, Sydney China Connect 7, MD6 as it applies to each of the recipients to whom MD6 has been directed and MD8 as it applies to Westwood, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Arm’s Length” Issue.

Paragraph 8

Applicant’s submissions

50. The Applicant’s submissions on this paragraph were at [55] of its Written Submissions:

55   It is entirely unknown how documents within this category could provide documents which materially assist on an identified issue. No issue is identified in relation to the trusts, the beneficiaries or any other matter. Unless this again falls into the category of documents the respondent seeks to trawl fish for something to make a case that the contracts were a sham or fraudulently entered into, then it remains a mystery what it could be material to. If it is the former, then the submissions in relation to paragraphs 1 to 3 are relied upon.

Respondent’s submissions

51. The Respondent’s submissions were as follows:

Respondent’s submissions on para 8: In relation to MD8 as it applies to each of the recipients to whom MD8 has been directed, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Actual Use” Issue and the “Arm’s Length” Issue.

In relation to MD9 as it applies to each of the recipients to whom MD9 has been directed, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Arm’s Length” Issue.

Paragraph 9

Applicant’s submissions

52. The Applicant’s submissions on this paragraph were:

Applicant’s submissions on para 9: see AWS at [57] and in relation to Pamboris subpoena, the matters put in paragraph [59] of the AWS are relied upon.

53. The Written Submissions referred to above are reproduced below:

57   It could only be that the existence of or use of the deposit goes to the fraudulent / sham contract putative issue, and again the submissions in relation to paragraphs 1 to 3 are relied upon without repetition.

59   The submissions in relation to paragraph 8 are relied upon.

Respondent’s submissions

54. The Respondent’s submissions were as follows:

Respondent’s submissions on para 9: In relation to MD9 as it applies to each of the recipients to whom MD9 has been directed and Pamboris 9, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Arm’s Length” Issue.

In relation to MD10 as it applies to each of the recipients to whom MD10 has been directed, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Actual Use” Issue and the “Arm’s Length” Issue.

Paragraph 10

Applicant’s submissions

55. The Applicant’s submissions on this paragraph were:

Applicant’s submissions on para 10: see AWS at [59] (and for those that related to MD 11, see directly below).

56. The Written Submissions referred to above are reproduced below:

59   The submissions in relation to paragraph 8 are relied upon.

Respondent’s submissions

57. The Respondent’s submissions were as follows:

Respondent’s submissions on para 10: In relation to MD10 as it applies to each of the recipients to whom MD10 has been directed, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Actual Use” Issue and the “Arm’s Length” Issue.

In relation to MD 11 as it applies to Westwood, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Actual Use” Issue.

In relation to MD 11 as it applies to each of Pamboris, Regency, London Capital & Portman Securities, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Settlement” Issue.

Paragraph 11

Applicant’s submissions

58. The Applicant’s submissions on this paragraph were:

Applicant’s submissions on para 11: see AWS at [61], or for those that relate to MD, directly below. For Savell, the submissions in relation to paragraphs MD13 and 14 are relied upon.

59. The Written Submissions referred to above are reproduced below:

61   This could never be relevant to any aspect of the case, even if the fraudulent / sham contract was put in issue.

Respondent’s submissions

60. The Respondent’s submissions were as follows:

Respondent’s submissions on para 11: In relation to MD11 as it applies to each of the recipients to whom MD11 has been directed and MD12 as it applies to Westwood, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Actual Use” Issue.

In relation to Savell 11 as it applies to each of Savell and Gertos, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Arm’s Length” Issue.

In relation to MD 12 as it applies to each of Pamboris, Regency, London Capital & Portman Securities, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Settlement” Issue.

Paragraph 12

Applicant’s submissions

61. The Applicant’s submissions on this paragraph were:

Applicant’s submissions on para 12: see AWS at [63] and otherwise see response to MD16 below. As to Savell 12, see MD11 above. As to Westwood 12, it is trawl net fishing to seek to obtain all taxation / accounting advice records from Westwood to the individuals identified.

62. The Written Submissions referred to above are reproduced below:

63   The submissions in relation to paragraph 11 are relied upon.

Respondent’s submissions

63. The Respondent’s submissions were as follows:

Respondent’s submissions on para 12: In relation to MD12 as it applies to each of the recipients to whom MD 12 is directed and Savell 12 as it applies to Savell and Gertos, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Actual Use” Issue.

In relation to Westwood 12(a), (c) - (e), the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Actual Use” Issue and “Arm’s Length” Issue.

In relation to Westwood 12(b) and (f) and MD16 as it applies to each of the recipients to whom MD16 is directed, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Arm’s Length” Issue and the “Settlement” Issue.

In relation to MD13 as it applies to Pamboris, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Arm’s Length” Issue.

Paragraph 13

Applicant’s submissions

64. The Applicant’s submissions on this paragraph were:

Applicant’s submissions on para 13: it is unknown what allegation is made about the timing or nature of Pamboris directorship of Marsden Developments. Otherwise see submissions in relation to paragraphs 12 or 16.

Respondent’s submissions

65. The Respondent’s submissions were as follows:

Respondent’s submissions on para 13: In relation to MD13 as it applies to Marsdens and Westwood and MD14 as it applies to Pamboris, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Arm’s Length” Issue.

In relation to MD 12 as it applies to Savell 13 and Gertos 13, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Actual Use” Issue.

In relation to MD 16 as it applies to G Capital and Gertos and Pamboris 16 as it applies to Regency, London Capital & Portman Securities, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Arm’s Length” Issue and the “Settlement” Issue.

Paragraph 14

Applicant’s submissions

66. The Applicant’s submissions on this paragraph were:

Applicant’s submissions on para 14: as per paragraphs 13 above, and otherwise see submissions in relation to MD17.

Respondent’s submissions

67. The Respondent’s submissions were as follows:

Respondent’s submissions on para 14: In relation to MD14 as it applies to Marsden and Westwood and MD15 as it applies to Pamboris, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Arm’s Length” Issue.

In relation to Pamboris 17 as it applies to Regency, London Capital & Portman Securities, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Settlement” Issue.

In relation to MD16 as it applies to Savell and Gertos, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Settlement” Issue and the “Arm’s Length” Issue.

Paragraph 15

Applicant’s submissions

68. The Applicant’s submissions on this paragraph were:

Applicant’s submissions on para 15: see MD 18 and AWS at [69].

69. The Written Submissions referred to above are reproduced below:

69   How the post- facto compensation was received and dealt with can never have anything to do with an entitlement to compensation by an interest-holder. Unless this goes somehow to the putative fraudulent / sham contract argument (and if it does the submissions in relation to paragraphs 1 to 3 are relied upon), then it cannot be relevant.

Respondent’s submissions

70. The Respondent’s submissions were as follows:

Respondent’s submissions on para 15: In relation to MD15 as it applies to Marsdens and Westwood and MD18 as it applies to G Capital and Gertos, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Arm’s Length” Issue.

In relation to MD16 as it applies to Pamboris, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Settlement” Issue and the “Arm’s Length” Issue.

In relation to MD17 as it relates to Savell and Gertos, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Arm’s Length” Issue and the “Actual Use” Issue.

In relation to Pamboris 18 as it applies to Regency, London Capital & Portman Securities, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Settlement” Issue.

Paragraph 16

Applicant’s submissions

71. The Applicant’s submissions on this paragraph were:

Applicant’s submissions on para 16: see AWS at [69]. For tax returns and financial ‘position’ as per the Pamboris, Regency, London and Portman submissions, this is trawl fishing to seek to found an allegation that the contracts couldn’t be completed. It is not legitimate to seek the documents before making the allegation,

72. The Written Submissions referred to above are reproduced below:

69   How the post- facto compensation was received and dealt with can never have anything to do with an entitlement to compensation by an interest-holder. Unless this goes somehow to the putative fraudulent / sham contract argument (and if it does the submissions in relation to paragraphs 1 to 3 are relied upon), then it cannot be relevant.

Respondent’s submissions

73. The Respondent’s submissions were as follows:

Respondent’s submissions on para 16: In relation to MD16 as it applies to Marsdens and Westwood and in relation to Pamboris 16, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Arm’s Length” Issue and the “Settlement” Issue.

In relation to MD 18, as it applies to Savell and Gertos, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Arm’s Length” Issue.

In relation to Regency 16 as it applies to Regency, London Capital & Portman Securities, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Settlement” Issue.

Paragraph 17

Applicant’s submissions

74. The Applicant’s submissions on this paragraph were:

Applicant’s submissions on para 17: see response for paragraph 16.

Respondent’s submissions

75. The Respondent’s submissions were as follows:

Respondent’s submissions on para 17: In relation to MD17, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Arm’s Length” Issue and the “Actual Use” Issue.

In relation to MD18 as it applies to Westwood, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Arm’s Length” Issue.

Paragraph 18

Applicant’s submissions

76. The Applicant’s submissions on this paragraph were:

Applicant’s submissions on para 18: see AWS at [69], and otherwise response at paragraph 16.

77. The Written Submissions referred to above are reproduced below:

69   How the post- facto compensation was received and dealt with can never have anything to do with an entitlement to compensation by an interest-holder. Unless this goes somehow to the putative fraudulent / sham contract argument (and if it does the submissions in relation to paragraphs 1 to 3 are relied upon), then it cannot be relevant.

Respondent’s submissions

78. The Respondent’s submissions were as follows:

Respondent’s submissions on para 18: In relation to MD18, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Arm’s Length” Issue.

In relation to Pamboris 18 and in relation to Regency 18 as it applies to Regency, London Capital & Portman Securities, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Settlement” Issue.

Paragraph 19

Applicant’s submissions

79. The Applicant’s submissions on this paragraph were:

Applicant’s submissions on para 19: see response at paragraph 16.

Respondent’s submissions

80. The Respondent’s submissions were as follows:

Respondent’s submissions on para 19: In relation to Pamboris 19 as it applies to each of the entities to whom Pamboris 19 has been directed, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Settlement” Issue.

Paragraph 20

Applicant’s submissions

81. The Applicant’s submissions on this paragraph were:

Applicant’s submissions on para 20: see response at paragraph 16.

Respondent’s submissions

82. The Respondent’s submissions were as follows:

Respondent’s submissions on para 20: In relation to Pamboris 20 as it applies to each of the entities to whom Pamboris 20 has been directed, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Settlement” Issue.

Paragraph 21

Applicant’s submissions

83. The Applicant’s submissions on this paragraph were:

Applicant’s submissions on para 21: see MD 17

Respondent’s submissions

84. The Respondent’s submissions were as follows:

Respondent’s submissions on para 21: In relation to Pamboris 21 as it applies to each of the entities to whom Pamboris 21 has been directed, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Settlement” Issue.

Paragraph 22

Applicant’s submissions

85. The Applicant’s submissions on this paragraph were:

Applicant’s submissions on para 22: see MD 18.

Respondent’s submissions

86. The Respondent’s submissions were as follows:

Respondent’s submissions on para 22: In relation to Pamboris 22 as it applies to each of the entities to whom Pamboris 22 has been directed, the documents called for have apparent, adjectival relevance to (and it is clearly “on the cards” that they will materially assist the Respondent’s case with respect to) the “Arm’s Length” Issue.

The relevant legal principles

87. In Rinehart v Rinehart [2018] NSWSC 1102 at [43] to [54], Ward CJ in Equity set out the relevant legal principles applicable in circumstances such as these:

43)   As to what is a legitimate forensic purpose for the issue of compulsory process of this kind (subpoenas or, as considered in some of the cases, notices to produce), the Court of Appeal in ICAP Australia Pty Ltd v BGC Partners (Australia) Pty Ltd [2009] NSWCA 307, held that the primary judge had not erred by stating that, for a notice to produce to have a legitimate forensic purpose:

… 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.

44)   Determining whether there is a legitimate forensic purpose requires reference to the particular case, or identified issue, that the documentation sought is reasonably expected to be likely to assist, as observed by Nicholas J in ICAP Pty Ltd v Moebes [2009] NSWSC 306 (at [33]):

… the legitimate forensic purpose of a subpoena necessarily depends upon identification of the case which is likely the documentation will assist. The task in meeting the test will become difficult where the issue relied upon cannot be identified because either it has not been included in the pleadings or particulars, or the terms in which it has been expressed are obscure and imprecise.

45)   In Portal Software International Pty Ltd v Bodsworth [2005] NSWSC 1115, Brereton J described the relevant test (in considering whether to set aside the notice to produce that had there been issued) as being (see at [24]) whether the documents sought have “a sufficient apparent connection to justify their production or inspection” (citing White v Tulloch (1995) 127 FLR 105; 19 Fam LR 696). His Honour said that the test of adjectival relevance (i.e., as distinct from substantive relevance) will be satisfied if the material has apparent relevance and is established if the documents called for “could possibly throw light on the issues in the main case” (at [24]), citing Trade Practices Commission v Arnotts Ltd (No 2) [1989] FCA 340; 21 FCR 306).

46)   More recently, Gleeson JA, in In the matter of Force Corp Pty Ltd (Recs and Mgrs Apptd) (in liq) [2018] NSWSC 896 described the permissible scope of a subpoena for production of documents as directing attention to the apparent relevance of the documents sought (see at [22]).

47)   Whether the formulation of the test in civil proceedings is best expressed as an “on the cards” test (i.e., that it is on the cards that the documents sought will materially assist on an identified issue) (see the use of that expression in criminal proceedings in Alister v R (1984) 154 CLR 404; [1984] HCA 85; R v Saleam (1989) 16 NSWLR 14, at 18; Attorney-General (NSW) v Chidgey [2008] NSWCCA 65), or that the material could “possibly throw light on” an identified issue (see Trade Practices Commission v Arnotts Ltd (No 2); or as formulated by Nicholas J in ICAP Pty Ltd v Moebes at [30] (namely, 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 that the documentation will [materially assist]”), what is ultimately required is an assessment as to the relevance of the documents sought by reference to the issues in the proceedings (see Cosco Holdings Pty Ltd v Federal Commissioner of Taxation (Cth) [1997] FCA 1504; 37 ATR 432 at 439-440 per Spender J; Nicholls v Michael Wilson and Partners Limited [2010] NSWCA 100 per Young JA).

48)   Where there is no legitimate forensic purpose, in that sense, for the issue of a subpoena then it may readily be seen to be a fishing expedition. As to what is meant by a “fishing expedition”, in Associated Dominions Assurance Society Pty Ltd v John Fairfax & Sons Pty Ltd (1952) 72 WN (NSW) 250, at 254, it was said:

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. 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”.

49)   Whether a party has cause to believe that particular documents exist is a relevant factor (in conjunction with the potential relevance of the documents sought and the breadth of the subpoena) in determining whether the subpoena is oppressive and/or constitutes “fishing”.

50)   In Universal Press Pty Limited v Provest Limited [1989] FCA 402, Hill J stated (at [9]-[10]):

Like Clark J, as his Honour then was, in Southern Pacific Hotel Inc v Southern Pacific Hotel Corporation (1984) 1 NSWLR 710 at p 717, I am of the view that there are two separate grounds for setting aside a subpoena that are often confused. The first, to which I have already referred, is the ground that the subpoena is so widely framed as to be burdensome and oppressive and therefore an abuse of process. The second, often linked with the first, is that the subpoena requires the addressee, being a third party to the litigation, to produce all documents which may afford evidence of the matters in dispute between the parties, is thus used as a way of obtaining discovery against a person not party to the litigation and so should be set aside (cf Small’s case supra).

Where the objection to a subpoena is that it is a misuse of the process of the Court for the purpose of discovery, what is usually meant is that it is an abuse of process to require 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: National Employers’ Mutual Association Ltd v Waind & Hill (1978) 1 NSWLR 372 at p 382. It does not follow that a subpoena, issued in circumstances where the person requesting its issue is uncertain whether any documents exist which fall within the description in the subpoena, that description being otherwise precise, will be bad…

51)   It is well recognised 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; Commissioner for Railways v Small (1938) 38 SR (NSW) 564; (1938) 55 WN (NSW) 215; National Employers’ Mutual General Association Ltd v Waind [1978] 1 NSWLR 372 at 382 (Moffitt P, with whom Hutley and Glass JJA agreed)).

52)   In Tyco Australia Pty Ltd v Leighton Contractors Pty Ltd (2005) 142 FCR 428; [2005] FCAFC 115 (Tyco), Hill J considered (at [34]) that it would clearly be an abuse of process for an applicant for pre-action discovery to issue a notice to produce the very documents sought by the action for pre-action discovery and said (at [46]) that such an applicant “will not have given the notice to produce in good faith, but rather, will have acted in a way that is an abuse of process”. In Yes Family Pty Ltd v Sphere Healthcare Pty Ltd [2016] NSWSC 393 just such a conclusion was drawn by Slattery J (see at [28]):

Hill J’s statement of principle in Tyco directly covers the present application. The documents being sought by the subpoenas are identical to the documents sought in the application for preliminary discovery under UCPR, r 5.3. Indeed the documents sought under the subpoenas are somewhat more extensive. The essence of the abuse of process in these circumstances is that the delivery of the documents to Yes Family in response to the subpoenas would set at nought the whole preliminary discovery application, the purpose of which is to determine whether or not Yes Family should have those documents before action. Granting the application would allow Yes Family to bypass the requirements of UCPR, r 5.3. [my emphasis].

53)   More recently, it has been said that a subpoena will be an abuse of process where it is used as a means of obtaining disclosure of documents which, in accordance with para 4 of Practice Note SC Eq 11, could only be obtained before the service of evidence in exceptional circumstances necessitating disclosure (see New Price Retail Services Pty Ltd v Hanna [2012] NSWSC 422 at [19]; considered in The Owners - Strata Plan No 76902 v Roads and Maritime Services [2017] NSWSC 528 per Ball J).

54)   That said, in Tyco, Hely J said (at [54]):

… 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 those documents is sought under O 15A, r 6. But it does not follow, for example, that a subpoena sought to be issued by an applicant for preliminary discovery against a third party would necessarily be an abuse, depending upon the scope and purpose of the subpoena. [my emphasis]

88. When a paragraph amounts to no more than a fishing expedition, it is to be disallowed: Commissioner for Railways v Small (1938) 38 SR 564 at 574‑575.

89. As did her Honour in Rinehart after setting out the legal principles quoted above. I also now turn, with those principles in mind, to the respective submissions made by the Gertos’ interests and the RMS.

Structuring of the answers to the elements requiring to be addressed

90. As there are a significant number of paragraphs in various Notices to Produce and Subpoenas that are the subject of these set aside applications, it is convenient to set out, now, how I have structured my responses. I have done this to provide some brevity to what might otherwise be a disproportionately lengthy judgment.

91. As a consequence, I have prepared three separate rulings which, between them, can provide (as noted later as relevantly applicable) a sufficient ruling on each of the paragraphs which I am required to address. To do this, I set out below each of these rulings. At the appropriate location following each of the paragraphs specifically addressed, commencing at [34] and running through to [157], I nominate which ruling is to apply.

92. In a limited number of instances, a differential ruling is required with respect to elements of the paragraph. Where this occurs, I have inserted an appropriate annotation. Otherwise, I have simply indicated which ruling is to apply by reference to the three rulings set out below. The terms of these rulings are:

Ruling 1

I am unable to discern any legitimate forensic purpose for this paragraph for the purposes of either separate question.

The documents sought by this paragraph cannot provide direct proof of any factual matter in contest in the separate question proceedings between the RMS and the Gertos’ interests.

Nothing in this paragraph relates to the first of the questions set down for determination in the separate question hearing. In addition, nothing in this paragraph relates to any issue arising from the Applicant's presently pleaded Points of Claim or from the second of the questions to be dealt with in the separate question hearing.

There is, in my assessment, no relevance of what is sought in this paragraph to the issues in these separate question proceedings (see Rinehart v Rinehart [2018] NSWSC 1102 at [47]). It is to be observed that, should the second of the separate questions be answered adversely to the Applicant in each proceedings, the matters pressed in this paragraph might, potentially, become relevant in any subsequent proceedings pleaded on some alternative basis for compensation pursuant to the Land Acquisition Act. That, however, would necessarily await any continuation of these proceedings on some future, alternatively pleaded basis.

This paragraph (and its equivalent paragraph in other notices to produce or subpoenas) is rejected.

Ruling 2

I am satisfied that there is a legitimate forensic purpose in the RMS seeking the production of documents of the kind set out in the paragraph in order to permit the RMS to be able to challenge the basis upon which the Gertos’ interests contended that the contracts for sale evidence an arm's-length transaction between the vendor and purchaser in each instance. There is sufficient adjectival relevance to the issue of making findings on the matters inherently engaged by either of the matters to be canvassed in the separate questions hearing.

This paragraph (and its equivalent paragraph in other notices to produce or subpoenas) is permitted.

Ruling 3

This paragraph amounts to no more than a fishing expedition: Commissioner for Railways v Small (1938) 38 SR 564 at 574-575.

This paragraph (and its equivalent paragraph in other notices to produce or subpoenas) is rejected.

Rulings concerning paragraphs in the Notice to Produce to Marsden Developments

Paragraph 1 of the Notice to Produce to Marsden Developments

93. Paragraph 1 sought production of documents in the following terms:

Documents dated between 9 February 2013 and 28 June 2016 relating to the marketing of the properties identified by folio identifiers 2/72951 and A/359751 (known as 160-162 Parramatta Road, Annandale), 1/82718 and B/359751 (known as 164 Parramatta Road, Annandale), and 1/776389 (known as 166-172 Parramatta Road, Annandale) (together, the Properties) for sale, including:

(a)   Real estate brochures:

(b)   Real estate listings (online or hard copy); and

(c)   Private or public advertisements

94. Ruling 1 applies - the paragraph is rejected.

Paragraph 2 of the Notice to Produce to Marsden Developments

95. Paragraph 2 sought production of documents in the following terms:

Documents evidencing communication with any real estate agent in relation to the actual or prospective sale of the Properties between 9 February 2013 and 28 June 2016.

96. Ruling 1 applies - the paragraph is rejected.

Paragraph 3 of the Notice to Produce to Marsden Developments

97. Paragraph 3 sought production of documents in the following terms:

Any Documents comprising communication with any person as to the actual or prospective sale price for one, any or all of the Properties, including:

(a)   Any communications with the purchasers of the Properties or any agents for the purchasers of the Properties

(b)   Any valuation reports obtained prior to 28 June 2016 in respect of each or any of the Properties

(c)   Any Documents from real estate agents, town planners, property developers, architects or other consultants;

(d)   Any other Documents referring to the actual or potential sale price    for or value of each of the Properties, either individually, or together.

98. As to (a) and (b), Ruling 2 applies - the paragraph is permitted.

99. As to (c) and (d), Ruling 1 applies - the paragraph is rejected.

Paragraph 4 of the Notice to Produce to Marsden Developments

100. Paragraph 4 sought production of documents in the following terms:

Documents relating to the preparation of plans by CMT Architects Australia Pty Ltd (CMT Architects) for the potential or planned development of the Properties (or any one of them), including as a “Medical Hub”, as referred to at page 11 of the Valuation Report of Mr Kent Wood dated 27 February 2018, including:

(a)   A copy of the plans

(b)   Any advice provided by CMT Architects as to the feasibility of the proposed development;

(c)   Instructions provided to CMT Architects;

(d)   Fee proposal from CMT Architects outlining the scope of works to be undertaken.

101. Ruling 2 applies - the paragraph is permitted.

Paragraph 5 of the Notice to Produce to Marsden Developments

102. Paragraph 5 sought production of documents in the following terms:

Any Documents comprising correspondence with CMT Architects from 9 February 2013 to 28 June 2016 relating to the Properties (or any one of them) and their development.

103. Ruling 3 applies - the paragraph is rejected.

Paragraph 6 of the Notice to Produce to Marsden Developments

104. Paragraph 6 sought production of documents in the following terms:

Any Documents concerning the sale of the Properties (or the sale of any one of them), including any correspondence with:

(a)   Gertos Holdings Pty Ltd (Gertos Holdings);

(b)   G Capital Corporation Pty Ltd (G Capital);

(c)   Gertos Holdings and G Capital together;

(d)   Mr Bill Gertos (director of Gertos Holdings and G Capital) in his personal capacity or as a director of a company;

(e)   Mrs Shaunya Gertos (100% shareholder of each of G Capital, Gertos Holdings and Marsden Developments Pty Ltd (Marsden Developments) (together, the Vendors));

(f)   Any party representing the Vendors (or any one of them), including:

(i)   Any partner, solicitor or principal employee of Rigelsford Jensen & Co (solicitors of G Capital, Gertos Holdings and Marsden Developments);

(ii)   Any agent or principal employee of Sydney China Connect Pty Ltd (the real estate agent of G Capital).

(g)   Regency Capital Pty Ltd (Regency Capital);

(h)   London Capital Holdings Pty Ltd (London Capital);

(i)   Portman Securities Pty Ltd (Portman Securities);

(j)   Regency Capital, London Capital and Portman Securities (together, the Purchasers) as a group;

(k)   Mr Mario Pamboris (the director of each of the Purchasers), in his personal capacity or as a director of a company; and

(l)   Any party representing the Purchasers, including any partner, solicitor or principal employee of Jordan Djundja Lawyers, solicitor for the Purchasers or their real estate agent.

105. Ruling 2 applies - the paragraph is permitted.

Paragraph 7 of the Notice to Produce to Marsden Developments

106. Paragraph 7 sought production of documents in the following terms:

Documents relating to any other offer made to purchase the Properties by any person other than the Purchasers.

107. Ruling 1 applies - the paragraph is rejected.

Paragraph 8 of the Notice to Produce to Marsden Developments

108. Paragraph 8 sought production of documents in the following terms:

In relation to paragraph 2 of the affidavit of Mr Timothy Mills sworn on 1 August 2018, Documents establishing, identifying and evidencing:

(a)   The trust that is the ultimate owner of Marsden Developments;

(b)   The beneficiaries of the trust described in (a) above;

(c)   The trustee for the trust described in (a) above.

109. Ruling 2 applies - the paragraph is permitted.

Paragraph 9 of the Notice to Produce to Marsden Developments

110. Paragraph 9 sought production of documents in the following terms:

In relation to the $50,000 deposit paid by each of the Purchasers under the contracts for sale of the Properties dated 28 June 2016:

(a)   A copy of the deposit cheque(s), bank transfers or other records evidencing payment of the deposit, received by Marsden Developments or its representatives;

(b)   Any Documents evidencing the investment, withdrawal, transfer or payment of those deposit funds from the trust account(s) into which the deposit funds were paid.

111. Ruling 2 applies - the paragraph is permitted.

Paragraph 10 of the Notice to Produce to Marsden Developments

112. Paragraph 10 sought production of documents in the following terms:

Documents evidencing any current or previous transactions, trust arrangements or corporate structures in place between the Vendors, their former or current principals or subsidiaries and the Purchasers, their principal or subsidiaries (individually or as a group), including Documents evidencing prior transactions between Mr Constantine Savell, as an individual or as a director of a company and Mr Mario Pamboris, as an individual or as a director of a company.

113. Ruling 2 applies - the paragraph is permitted.

Paragraph 11 of the Notice to Produce to Marsden Developments

114. Paragraph 11 sought production of documents in the following terms:

Documents showing all real property currently or previously owned by Marsden Developments, and the value of such property.

115. Ruling 1 applies - the paragraph is rejected.

Paragraph 12 of the Notice to Produce to Marsden Developments

116. Paragraph 12 sought production of documents in the following terms:

Documents relating to all real property transactions involving Marsden Developments, or its director (in his personal capacity or as a director of another company) from 22 August 2013 to date.

117. Ruling 1 applies - the paragraph is rejected.

Paragraph 13 of the Notice to Produce to Marsden Developments

118. Paragraph 13 sought production of documents in the following terms:

Documents relating to the appointment of Mr Mario Pamboris as a director of Marsden Developments on 22 October 2009.

119. Ruling 1 applies - the paragraph is rejected.

Paragraph 14 of the Notice to Produce to Marsden Developments

120. Paragraph 14 sought production of documents in the following terms:

Documents relating to the removal of Mr Mario Pamboris as a director of Marsden Developments on 23 August 2013.

121. Ruling 1 applies - the paragraph is rejected.

Paragraph 15 of the Notice to Produce to Marsden Developments

122. Paragraph 15 sought production of documents in the following terms:

Documents relating to any purchase or sale of shares by Mr Mario Pamboris in Marsden Developments including, but not limited to, Documents with respect to:

(a)   the date of the transaction;

(b)   number of shares purchased or sold;

(c)   the identity of the other party involved in the transaction; and

(d)   consideration paid for the shares

123. Ruling 1 applies - the paragraph is rejected.

Paragraph 16 of the Notice to Produce to Marsden Developments

124. Paragraph 16 sought production of documents in the following terms:

Documents showing correspondence between G Capital, Gertos Holdings and Marsden Developments, individually or together, their directors or representatives (including their solicitors) and the Office of State Revenue regarding stamp duty owed under the contracts for sale of the Properties dated 28 June 2016 or any one of the contracts.

125. Ruling 1 applies - the paragraph is rejected.

Paragraph 17 of the Notice to Produce to Marsden Developments

126. Paragraph 17 sought production of documents in the following terms:

Documents comprising:

(a)   Any business plans prepared by the Vendors from 22 August 2013 to 28 June 2016 that mention any development plans or the proposed sale of the Properties or any one of them;

(b)   Any minutes of board meetings of any of the Vendors from 22 August 2013 to 28 June 2016 that mention any development plans or the proposed sale of the Properties or any one of them; or

(c)   Any resolutions of any of the Vendors made in relation to any development plans or the sale of the Properties or any one of them.

127. Ruling 2 applies - the paragraph is permitted.

Paragraph 18 of the Notice to Produce to Marsden Developments

128. Paragraph 18 sought production of documents in the following terms:

In relation to the compensation received by Portman Securities from the Respondent for the compulsory acquisition of 166-172 Parramatta Road, Annandale, any Documents evidencing correspondence with:

(a)   Any of the Purchasers separately;

(b)   The Purchasers as a group;

(c)   Any party representing the Purchasers (or any one of them), including their solicitors;

(d)   Mr Mario Pamboris in his personal capacity or as a director of a company;

(e)   Gertos Holdings or G Capital separately;

(f)   Gertos Holdings and G Capital together;

(g)   any party representing the Vendors (or any one of them), including their solicitors and real estate agent;

(h)   Mr Bill Gertos in his personal capacity or as a director of a company;

(i)   Mrs Shaunya Gertos in her personal capacity or as a shareholder of a company,

relating to the distribution of that compensation.

129. In relation to (a) to (d), Ruling 2 applies - the paragraph is permitted.

130. In relation to (e) to (i), Ruling 1 applies - the paragraph is rejected.

Rulings concerning paragraphs specific to the Subpoena to Mario Pamboris

Paragraph 4 of the Subpoena to Mario Pamboris

131. Paragraph 4 sought production of documents in the following terms:

Documents relating to the offer of $63,000,000 that was allegedly made to Regency Capital Pty Ltd (Regency Capital), London Capital Holdings Pty Ltd (London Capital) and/or Portman Securities Pty Ltd (Portman Securities), (together, the Purchasers) for the purchase of the Properties, as referred to in the Valuation Report of Kent Wood dated 27 February 2018, or any other offer made by any other person to purchase the Properties.

132. Ruling 2 applies - the paragraph is permitted.

Paragraph 9 of the Subpoena to Mario Pamboris

133. Paragraph 9 sought production of documents in the following terms:

Documents evidencing any current or previous transactions, trust arrangements or corporate structures in place between any company of which you are or were previously a director, such company’s subsidiaries, or you individually, and the Vendors, their former or current principals or subsidiaries (individually or as a group), including:

(a)   Documents relating to prior transactions between Mr Bill Gertos, as an individual or as a director of a company, and you, as an individual or as a director of a company; and

(b)   Documents relating to prior transactions between Mr Constantine Savell, as an individual or as a director of a company, and you, as an individual or as a director of a company.

134. Ruling 3 applies - the paragraph is rejected.

Paragraph 12 of the Subpoena to Mario Pamboris

135. Paragraph 12 sought production of documents in the following terms:

Documents relating to taxation or accounting advice relating to the prospective or actual purchase or sale of the Properties provided to:

(a)   The Vendors separately or as a group;

(b)   The Purchasers separately or as a group;

(c)   Mr Bill Gertos in his personal capacity or as a director of a company;

(d)   Mr Constantine Savell in his personal capacity or as a director of a company;

(e)   Mrs Shaunya Gertos in her personal capacity or as a shareholder of a company;

(f)   Mr Mario Pamboris in his personal capacity or as a director of a company, including all file notes, records of telephone calls and text messages drafted in the course of the provision of the advice.

136. As to (a), (c), (d) and (e), Ruling 1 applies - the paragraph is rejected.

137. As to (b) and (f), Ruling 2 applies - the paragraph is permitted.

Paragraph 16 of the Subpoena to Mario Pamboris

138. Paragraph 16 sought production of documents in the following terms:

Your personal income tax returns for the 2014, 2015, 2016, 2017 and 2018 financial years.

139. Ruling 2 applies - the paragraph is permitted.

Paragraph 17 of the Subpoena to Mario Pamboris

140. Paragraph 17 sought production of documents in the following terms:

Documents showing any assets owned or beneficially owned by you for the period 22 August 2013 to date.

141. Ruling 2 applies - the paragraph is permitted.

Paragraph 18 of the Subpoena to Mario Pamboris

142. Paragraph 18 sought production of documents in the following terms:

Bank statements for all bank accounts held by you, individually or jointly, for the period 22 August 2013 to date.

143. Ruling 2 applies - the paragraph is permitted.

Paragraph 19 of the Subpoena to Mario Pamboris

144. Paragraph 19 sought production of documents in the following terms:

Documents relating to any applications for finance, executed loan documents, loan agreements, mortgages, charges or other security and any other Documents relating to funding and financing, lending or security or borrowing of monies for the purchase of the Properties.

145. Ruling 2 applies - the paragraph is permitted.

Paragraph 20 of the Subpoena to Mario Pamboris

146. Paragraph 20 sought production of documents in the following terms:

Documents relating to correspondence with any potential lender or any other financial institution in relation to the borrowing, lending or provision of funding for the purchase of the Properties.

147. Ruling 2 applies - the paragraph is permitted.

Rulings concerning paragraphs specific to the Subpoena to Con Savell

Paragraph 11 of the Subpoena to Con Savell

148. Paragraph 11 sought production of documents in the following terms:

Documents identifying the companies of which you are the director, secretary and/or shareholder.

149. Ruling 3 applies - the paragraph is rejected.

Paragraph 12 of the Subpoena to Con Savell

150. Paragraph 12 sought production of documents in the following terms:

Documents showing all real property currently or previously owned by you (personally or as a director of a company), and the value of such property.

151. Ruling 3 applies - the paragraph is rejected.

Rulings concerning paragraphs specific to the Subpoena to Regency Capital

Paragraph 16 of the Subpoena to Regency Capital

152. Paragraph 16 sought production of documents in the following terms:

Documents relating to the financial position and financial performance of Regency Capital from 23 May 2016 to date.

153. Ruling 2 applies - the paragraph is permitted.

Paragraph 17 of the Subpoena to Regency Capital

154. Paragraph 17 sought production of documents in the following terms:

Documents showing the income and expenditure of Regency Capital for the period 23 May 2016 to date.

155. Ruling 2 applies - the paragraph is permitted.

Paragraph 18 of the Subpoena to Regency Capital

156. Paragraph 18 sought production of documents in the following terms:

Monthly and annual Profit and Loss statements of Regency Capital for the period 23 May 2016 to date.

157. Ruling 2 applies - the paragraph is permitted.

Costs

158. It is not possible to assess, in any strictly numerical fashion, how success or failure can be apportioned between the Gertos’ interests and the RMS on this set aside application (as each side has obtained the result that it sought on a number of the elements in contention but has failed on the others). As a consequence, on balance, I am satisfied that there should be no order for costs with respect to these interlocutory proceedings.

Order

159. It follows that the appropriate order is:

1. No order as to costs of these interlocutory proceedings.

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Annexure A

Annexure A - Applicant's Points of Claim (136 KB, pdf)

Annexure B

Annexure B - table of common elements - FINAL (51.1 KB, pdf)

Annexure C

Annexure C - table of elements specific - FINAL (34.4 KB, pdf)

Decision last updated: 01 November 2018