Harrison v Kerrili Pty Ltd

[2006] VSC 310

IN THE SUPREME COURT OF VICTORIA	Not Restricted
AT MELBOURNE COMMON LAW DIVISION MAJOR TORTS LIST

No. 9864 of 2005

GERALD AND DOREEN HARRISON	Plaintiffs
V
KERRILI PTY LTD (ACN 097 980 222)	Defendant

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JUDGE:	BONGIORNO J
WHERE HELD:	Melbourne
DATE OF HEARING:	26 May 2006
DATE OF JUDGMENT:	26 May 2006
CASE MAY BE CITED AS:	Harrison v Kerrili Pty Ltd
MEDIUM NEUTRAL CITATION:	[2006] VSC 310

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr Craig Harrison	Slater & Gordon
For the Defendant	Mr Cameron Macaulay SC	Monahan + Rowell
with Ms Sharon Burchell
For Long Term Financial	Mr Benjamin Fitzmaurice	Minter Ellison
Services Pty Ltd and Chang  Su Yi
For Money for Living (Aust)	Ms Usha Praser
Pty Ltd (in administration)
Anthony Healy (in person) HIS HONOUR:

1. This application is an application brought on behalf of three subpoenaed parties to set aside subpoenas which were issued at the instance of the defendant in this proceeding seeking the production of certain named and enumerated documents which relate to the on-selling of the properties to third party investors, and those investors mortgaging those properties for the purpose of raising finance.

2. The subpoenas are specific in their terms. They go to specific documents or classes of documents which are more than adequately described. The basis upon which they are sought to be set aside as enunciated by Mr Fitzmaurice for two of the subpoenaed parties and by the third subpoenaed party in person, is that these subpoenas have been issued in abuse of the process of the court in as much as they constitute an attempt at discovery.

3. Mr Fitzmaurice of counsel for the two named parties, Long Term Financial Services Pty Ltd and Mr Chang Su Yi, based his argument essentially on the proposition that as the defendant has an application before this court pending to join those parties and many others as defendants in the proceeding for the purpose of taking advantage of the proportionate liability provisions of the Wrongs Act 1958, these subpoenas were an attempt to obtain documents under compulsory process. Some of these documents would have been discoverable in that proceeding when it gets off the ground.

4. Mr Fitzmaurice's argument on its face has attraction until one looks at the issues in the case between the plaintiff and the defendants. Mr Macaulay of Senior Counsel put his argument to support the subpoenas on the basis that Paragraph 23 of the plaintiffs’ Statement of Claim, the plaintiffs being the lead plaintiffs in a group proceeding, particularised the damage which they claimed in terms which raises issues concerning the on-selling of these properties to third party investors, the solvency of those investors, the steps which those investors took, the steps which Diakou Faigen took in relation to the investors, and the steps which the mortgagees of the properties from whom the investors borrowed money took.

5. They also raise issues of the capacity of those investors to be the source of compensation for the plaintiffs at the suit of the plaintiffs, thereby giving the defendants the possibility of establishing a failure by the plaintiffs to mitigate their loss.

6. Mr Fitzmaurice referred to a number of cases which make clear the proposition that the use of a subpoena in circumstances where discovery would have been the appropriate interlocutory remedy is an abuse of process. He referred to BLSRT Pty Ltd v. Manpo Holdings (Australia) Limited,[1] a decision of Beach J of this court, Kennedy Taylor (Vic) Pty Ltd v. Grocon,[2] a decision of Gillard J also of this court, and Pico Holdings Inc v. Voss and the NAB Ltd,[3] also a decision of Gillard J, and a reference by Tadgell JA in a Court of Appeal case Australian Hospital Care (Pindara) Pty Ltd & Anor v. Paul Joseph Duggan & Others [4].

   [1] (1998) VSC 46

   [2] (1999) VSC 242

   [3] (2002) VSC 269

   [4]              Unreported, Supreme Court of Victoria, Court of Appeal, Tadgell and Ormiston JJA, 23 April 1999

7. The proposition for which those cases are authority is undoubted but applying it in this case it leads to the conclusion that these subpoenas are valid and should be upheld and must be complied with.