Hongkong Xinhe International Investment Company Ltd v Bullseye Mining Ltd [No 4] - [2021] WASC 287

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   HONGKONG XINHE INTERNATIONAL INVESTMENT COMPANY LTD -v- BULLSEYE MINING LTD [No 4] [2021] WASC 287
CORAM:   HILL J
HEARD:   9 AUGUST 2021
DELIVERED          :   20 AUGUST 2021
PUBLISHED           :   23 AUGUST 2021
FILE NO/S:   COR 83 of 2020
BETWEEN:   HONGKONG XINHE INTERNATIONAL INVESTMENT COMPANY LTD
Plaintiff
AND
BULLSEYE MINING LTD
First Defendant
PETER JOSEPH BURNS
Second Defendant
PETER GERARD BURNS
Third Defendant
DARIENA CATHERINE ANN MULLAN
Fourth Defendant

Catchwords:

Practice and procedure - Appeal - Application to set subpoena aside - Whether subpoena serves a legitimate forensic purpose - Whether subpoena is an abuse of process - Turns on own facts

Practice and procedure - Subpoenas to produce documents - Applications to set subpoenas aside - Whether subpoenas serve a legitimate forensic purpose - Whether subpoenas are an abuse of process -Turns on own facts

Legislation:

Rules of the Supreme Court 1971 (WA) O 36B, r 8A, O 60A r 4, r 5

Result:

Plaintiff's appeal allowed in part

First defendant's appeal dismissed

First defendant's application to set aside subpoena to Camm Scalise Pty Ltd dismissed

First defendant's application to set aside subpoena to Anthony Short allowed in part

Plaintiff's applications to set aside subpoenas to Yiyang Qui, Sam Cheng, Holy Investments Pty Ltd, Brett Clark, the National Australia Bank Ltd and the Australia and New Zealand Banking Group Ltd allowed in part

Category: B

Representation:

Counsel:

Plaintiff	:	Mr A Tharby
First Defendant	:	Mr M Goldblatt & Mr A Hershowitz
Second Defendant	:	Ms KM McNally
Third Defendant	:	Ms KM McNally
Fourth Defendant	:	Ms KM McNally

Solicitors:

Plaintiff	:	Bennett + Co
First Defendant	:	Murcia Pestell Hillard
Second Defendant	:	McNally & Co
Third Defendant	:	McNally & Co
Fourth Defendant	:	McNally & Co

Case(s) referred to in decision(s):

Alinta Sales Pty Ltd v Woodside Energy Ltd [2008] WASC 304
Alister v R (1984) 154 CLR 404
Associated Dominions Assurance Society Pty Ltd v John Fairfax & Sons Pty Ltd (1955) 72 WN (NSW) 250
Craig v Johnson [2020] NSWCA 278
CVW Group Holdings Pty Ltd v Addison [2011] WASC 267
Darbyshire v Gilbert [2006] WASCA 13
Green v Fairfax Media Publications Pty Ltd (No 2) [2020] WASC 485
Hancock Prospecting Pty Ltd v Hancock [2013] WASC 290
Hearne v Street [2008] HCA 36; (2008) 235 CLR 125
Hongkong Xinhe International Investment Company Ltd v Bullseye Mining Ltd [2021] WASC 212
HongKong Xinhe International Investment Company Ltd v Bullseye Mining Ltd [No 3] [2021] WASC 260
Priority Networking Pty Ltd v Peterson [2018] WASC 36
Rochfort v Trade Practices Commission (1982) 153 CLR 134
Secretary of the Department of Planning, Industry and Environment v Blacktown City Council [2021] NSWCA 145
Southern Pacific Hotel Services Inc v Southern Pacific Hotel Corporation Ltd [1984] 1 NSWLR 710
Wicks v Bennett (1921) 30 CLR 80

HILL J:

The plaintiff commenced these proceedings in July 2020 seeking orders under s 232 and 233 of the Corporations Act 2001 (Cth) (Act) in relation to the conduct of the affairs of the first defendant by its directors.
The proceedings are listed for a 20-day trial commencing on 6 September 2021. Since the commencement of the proceedings, both the plaintiff and the first defendant have requested the court issue a significant number of subpoenas. As at the date of these reasons, the court has issued 49 subpoenas; 29 at the request of the plaintiff and 20 at the request of the first defendant.
On 9 August 2021, I heard three applications to set aside eight subpoenas that have been issued by the court as well as two appeals from a decision of Acting Registrar Hosking concerning the first defendant’s application to set aside a subpoena issued to their auditor.
For the reasons which follow, I have determined that:
(a)the plaintiff's appeal against the decision of the Acting Registrar to set aside Item 1.2 of the Schedule to the subpoena to BDO Audit (WA) Pty Ltd (BDO) should be allowed and the plaintiff's appeal should be otherwise dismissed;
(b)the first defendant's appeal against the decision of the Acting Registrar should be dismissed;
(c)the first defendant's application to set aside the subpoena to Camm Scalise Pty Ltd should be dismissed;
(d)the subpoena to Mr Short should be set aside in part; and
(e)the subpoenas to Yiyang Qui, Sam Cheng, Holy Investments Pty Ltd, Brett Clark, the National Australia Bank Ltd and the Australia and New Zealand Banking Group Ltd should be set aside in part.

The proceedings

The plaintiff is a substantial shareholder in the first defendant, an unlisted public company which has more than 50 shareholders. The second to fourth defendants are directors of the first defendant. The plaintiff contends that the affairs of Bullseye have been conducted contrary to the interests of the members as a whole and oppressive to the members of the first defendant including the plaintiff.
As at the date of the hearing, the pleadings between the plaintiff and the first defendant are the third amended statement of claim filed 20 January 2021 (statement of claim); the fourth re-amended defence filed 27 April 2021 (defence) and the amended reply filed 21 January 2021 (reply). Particulars have been requested and provided by the first defendant of various paragraphs of its defence on 2 March 2021 and 23 March 2021.
A significant number of matters are pleaded in the statement of claim as comprising the oppressive conduct by the defendants. These matters commence in May 2018 and include allegations that the defendants have:
(a)entered into a series of transactions with related parties that are destructive of shareholder value;
(b)failed to lodge their financial reports or hold their annual general meetings within the timeframes specified in the Act;
(c)rejected funding offers provided by the plaintiff;
(d)refused to register some share transfers and registered others, including some transfers facilitated by the defendants;
(e)failed to preserve the assets of the company; and
(f)failed to keep shareholders informed or properly informed of various matters.
The first defendant has filed a lengthy pleading which denies the plaintiff’s allegations and pleads what it says is the correct factual background to the matters raised by the plaintiff.
The first defendant denies that its affairs have been conducted contrary to the interests of members as a whole or oppressively to the plaintiff or other members.[1] The first defendant denies that the plaintiff is entitled to the relief claimed or any other relief and pleads a significant number of matters in relation to the conduct of Mr Cheng (who represented the plaintiff in many of its dealings with the first defendant), the plaintiff and others in relation to the first defendant.
[1] Defence [159].

Legal principles relevant to setting aside subpoenas

The legal principles that govern this application were not in dispute between the parties and were correctly summarised by Acting Registrar Hosking in her decision at [10] - [16].[2]
[2]Hongkong Xinhe International Investment Company Ltd v Bullseye Mining Ltd [2021] WASC 212.
Relevantly, for the purposes of the applications before me:
(a)Order 36B r 8A(2) of the Rules of the Supreme Court 1971 (WA) (Rules) provides that on a request by a party, the court may set aside a subpoena or part of it;
(b)the court will set aside a subpoena if it has no legitimate forensic purpose. In determining whether a subpoena has a legitimate forensic purpose, the court will consider whether there is a reasonable possibility or 'it is on the cards' that the documents sought in the subpoena will materially assist the claim or the defence of the proceedings or are relevant to an issue in the proceedings.[3] A document may provide material assistance even if it is not admissible in the proceedings;[4]
(c)a legitimate forensic purpose extends to material which may relate to the cross-examination of a witness, including documents which relate only to credit;[5]
(d)in determining whether the documents have apparent relevance to the issues in the proceedings, the court must consider the issues that potentially arise on the pleadings, including the particulars that have been provided;
(e)the court will set aside a subpoena where the subpoena is an abuse of the process of the court. A subpoena may be an abuse of process where it may be characterised as 'fishing', being used for the purpose of obtaining discovery against a third party, or oppressive;
(f)in determining whether a subpoena is properly regarded as fishing, I have had regard to the statement of Owen J in Associated Dominions Assurance Society Pty Ltd v John Fairfax & Sons Pty Ltd:[6]
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 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’.
(g)the fact that documents which are the subject of a subpoena may also be sought in discovery does not, of itself, mean that the subpoena is an abuse of process.[7]
[3] Alister v R (1984) 154 CLR 404, 414 (Gibbs CJ); Secretary of the Department of Planning, Industry and Environment v Blacktown City Council [2021] NSWCA 145 [15].
[4]Green v Fairfax Media Publications Pty Ltd (No 2) [2020] WASC 485 [9].
[5]Darbyshire v Gilbert [2006] WASCA 13 [14].
[6] Associated Dominions Assurance Society Pty Ltd v John Fairfax & Sons Pty Ltd (1955) 72 WN (NSW) 250, 254.
[7]Hancock Prospecting Pty Ltd v Hancock [2013] WASC 290 [49].

Appeal against decision of Acting Registrar in relation to subpoena to BDO

On 8 January 2021, the court issued a subpoena to BDO, the auditors of the first defendant, at the request of the plaintiff. The subpoena sought the production of the following documents:
1.1the timing of the preparation of and audit of the annual financial reports of Bullseye Mining Limited for the financial years ended 30 June 2018, 30 June 2019 and 30 June 2020, respectively;
1.2the ability of Bullseye Mining Limited to continue as a going concern as at the date of signing of the report on the audit of the financial report for the financial years ended 30 June 2019 and 30 June 2020 respectively;
1.3 the preparation of and audit of statements of the remuneration of each director of Bullseye Mining Limited pursuant to s 202B of the Corporations Act for the financial years ended 30 June 2018 and 30 June 2020 respectively;
1.4 exploration and evaluation expenses incurred by Bullseye Mining Limited and exploration commitments contracted for by Bullseye Mining Limited for the financial years ended 30 June 2019 and 30 June 2020 respectively;
1.5 the carrying amount of Bullseye Mining Limited's exploration and evaluation assets net of impairment as at 30 June 2019 and 30 June 2020 respectively as recorded in the annual financial reports of Bullseye Mining Limited for the financial years ended 30 June 2019 and 30 June 2020 respectively;
1.6 correspondence from Bennett + Co to BDO Audit (WA) Pty Ltd in relation to Bullseye Mining Limited's annual financial reports for the years ended 30 June 2019 and 30 June 2020 respectively and Bullseye Mining Limited's Annual General Meetings in relation to the financial years ended 30 June 2019 and 30 June 2020 respectively.
2.File notes made and third party documents obtained or used by BDO Audit (WA) Pty Ltd (ACN 112 284 787) (including by its directors, employees, agents, representatives or advisors) in relation to the matters identified in Item 1.
On 21 January 2021, by letter to the Principal Registrar, the first defendant applied to set aside the subpoena. The application came on for hearing before Acting Registrar Hosking on 17 February 2021. On 28 June 2021, Acting Registrar Hosking delivered her reasons for decision setting aside Items 1.1, 1.2, 1.3 and 1.6 together with Item 2 to the extent that it related to those items. On 7 July 2021, orders were made by Acting Registrar Hosking in these terms.
On 8 July 2021, the plaintiff lodged a notice of appeal against the orders of Acting Registrar Hosking to set aside Items 1.1, 1.2, 1.3 and 1.6 and to the extent that it relates to those items, Item 2 of the schedule to the subpoena. The plaintiff challenged the decision of the Acting Registrar on the ground that the Acting Registrar erred in law and/or fact in finding that these items did not serve any legitimate forensic purpose.
On 14 July 2021, the first defendant lodged its notice of appeal against the orders of Acting Registrar Hosking not to set aside Items 1.4 and 1.5 and, to the extent it relates to those items, Item 2 of the schedule to the subpoena. The first defendant challenged the decision of the Acting Registrar on four grounds. These grounds of appeal essentially raise two issues. First, whether these items were relevant to the pleaded issues in circumstances where the plaintiff had agreed the first defendant was not required to discover these documents and whether the plaintiff's actions in seeking these documents from BDO were oppressive. Second, whether the issues in the proceedings will require an examination of the source documents relating to the first defendant's expenditure on tenements or only the total expenditure.
Under the Rules, the parties were required to lodge any appeal from the decision of the Acting Registrar within 10 days after the date of the order.[8] Both parties filed their appeals within time.
[8]Rules of the Supreme Court 1971 (WA), O 60A r 5.
An appeal from a decision of a registrar is by way of a new hearing of the matter.[9] That is, on an appeal from a registrar, the court may exercise its power regardless of error.[10]

Evidence on the appeal

[9]Rules of the Supreme Court 1971 (WA), O 60A r 6.

[10] CVW Group Holdings Pty Ltd v Addison [2011] WASC 267 [17]; see also Priority Networking Pty Ltd v Peterson [2018] WASC 36 [28].

The evidence before me included two affidavits of Daniel Murdzoski filed 12 February 2021 and 15 February 2021 on behalf of the first defendant as well as an affidavit of Clara Elizabeth Hagan filed 11 February 2021 on behalf of the plaintiff.

Disposition of plaintiff's appeal

Item 1.1

Counsel for the plaintiff submits that the documents sought in Item 1.1 are relevant to the matters pleaded by the plaintiff in [24] - [29] of the statement of claim. At [24] - [29] of the statement of claim, the plaintiff pleads that the first defendant failed to lodge its annual reports for 2018 and 2019 within the timeframes specified by the Act. At [159], the plaintiff pleads that by failing to lodge its annual reports within the statutory time frames, the first defendant deprived its shareholders of their statutory right to receive information about the company.
In its defence, the first defendant admits the allegations in [24] - [29] and does not provide any explanation for the late lodgement of its 2018 and 2019 annual reports. In answer to the pleading in [159], the first defendant pleads that information was provided to its shareholders albeit later than required under the Act and denies that it deprived its shareholders of the right to receive information.
Counsel for the plaintiff submitted the reason or reasons that the annual reports were not filed on time was likely to be relevant to whether the pleaded conduct was oppressive and was relevant to the relief that might be granted by the court in the event the grounds of oppression it pleads are made out. Specifically, the plaintiff contends that in considering what relief is appropriate, the court will take into account whether there was a good or excusable reason for the directors' conduct.
I do not accept these submissions. The issue for determination on the pleadings is whether the late filing of the annual reports in 2018 and 2019 is an instance of oppressive conduct, either by itself or taken with the other matters. In contending the defendants deprived shareholders of their statutory right to receive information about the company, the plaintiff relies on the fact that the 2018 and 2019 annual reports were not filed on time and that this constituted a breach of the Act. They do not refer to or plead the oppression arose because of any reason that these documents were not filed on time. On this basis, I agree with the conclusion of the Acting Registrar that on the current pleadings, the reason for the late lodgement of the annual reports does not arise for consideration.
In relation to the question as to what relief ought be granted if oppression were ultimately found, as was stated by Higgins J in Wicks v Bennett:[11]
It is not too much to say that it is for a plaintiff to state and to prove the facts which constitute his grievance, and it is for the court, having found that there is that grievance, to find the appropriate remedy and to give it. This principle is at the very root of the administration of justice.
[11]Wicks v Bennett (1921) 30 CLR 80, 100.
Given the admissions made by the defendants in their pleadings, the plaintiff will establish the defendants failed to lodge the 2018 and 2019 annual reports in accordance with the Act and that this is a contravention of the Act. The question as to what relief, if any, ought flow from this is a matter of submission.
In my view, the Acting Registrar correctly found that the documents sought by the plaintiff in Item 1.1 were not relevant to the issues in the pleadings and, as a result, should be set aside. For these reasons, I would dismiss the plaintiff's appeal in relation to Item 1.1.

Item 1.2

Counsel for the plaintiff submits that the documents sought in Item 1.2 are relevant to the matters pleaded by the plaintiff in [65] and [65A] (in relation to the first defendant's 2019 annual report) and [158H] - [158M] (in relation to the 2020 annual report) of the statement of claim .
Specifically, the plaintiff pleads that the annual report for 2019, which was lodged on 12 May 2020, disclosed that as at 11 May 2020, BDO had reported a material uncertainty which may cast significant doubt about the first defendant's ability to continue as a going concern. On this basis, at [65A], the plaintiff pleads that as at 11 May 2020, the first defendant was or was likely to be insolvent. The particulars the plaintiff has provided of this allegation refer to:
(a)certain statements in the 2019 annual report, as set out in [65];
(b)subscription agreements for shares in the first defendant which raised $2.1 million, as set out in [95] - [97];
(c)four share placement agreements entered into, as set out in [100A] - [100F]; and
(d)the fact that prospective investors had only provided funds to Bullseye of about $593,611.04 (before deductions) as set out in [65A].
In answer to the allegation in [65.2], the first defendant pleads that:[12]
Bullseye's auditors described events and conditions which, in their view, indicated the existence of a material uncertainty, which they said may cast doubt about the group’s ability to continue as a going concern.
[12] Defence [65.2.1].

The first defendant denies that it was or was likely to be insolvent.
In relation to the 2020 annual report, which was lodged on 5 November 2020, the plaintiff pleads at [158K] that the annual report disclosed that BDO had reported a material uncertainty which may cast significant doubt about the first defendant's ability to continue as a going concern. On this basis, at [158M], the plaintiff pleads that as at 5 November 2020, the first defendant was or was likely to be insolvent. The particulars the plaintiff has provided of this allegation refer to:
(a)certain statements in the 2019 annual report as set out in [65] and the 2020 annual report in [158H] - [158K];
(b)subscription agreements for shares in the first defendant which raised $2.1million, as set out in [95] - [97];
(c)four share placement agreements entered into, as set out in [100A] - [100F]; and
(d)the fact that prospective investors had only provided funds to Bullseye of about $1,820,000 (before deductions), as set out in [158M].
In answer to the allegation in [158K], the first defendant's pleading is identical to that in response to the 2019 annual report, namely that:[13]
Bullseye's auditors described events and conditions which, in their view, indicated the existence of a material uncertainty, which they said may cast doubt about the group’s ability to continue as a going concern.
[13] Defence [158K.1].
The first defendant denies that it was or was likely to be insolvent.
Counsel for the plaintiff submitted that the going concern qualification set out by the auditors in the 2019 and 2020 annual reports 'hinges on what the directors are said to have told them'. On this basis, it was contended that if there were communications between the directors and the auditors concerning the first defendant's ability to continue as a going concern, there was a legitimate forensic purpose in the plaintiff seeking this category of documents.
Counsel for the first defendant denied that there was a legitimate forensic purpose for this category. In particular, the first defendant submitted that this category overlapped with the documents sought by the plaintiff in its application for further and better discovery, which I determined on 9 February 2021. Counsel for the first defendant submitted that the rulings made that a number of these categories of documents were not relevant to the issues on the pleadings should be taken into account in determining whether this item of the subpoena should be set aside.
Before turning to specifically consider the documents sought in Item 1.2, it is necessary to first address the first defendant's reliance on my reasons for my decision on the plaintiff's application for further and better discovery. The categories of documents which were the subject of this application were drafted by reference to documents referred to in the 2019 and 2020 annual reports. It was in that context that I expressed the view that the fact that an annual report referred to a document did not mean these documents were relevant to the issues in the proceedings nor that they were required to be discovered by the first defendant. In determining whether documents were required to be discovered, it is necessary for the parties to refer to the pleadings, which define the matters in issue between them.
Similarly in this application, the fact that a document is referred to in the 2019 and 2020 annual reports does not, of itself, mean the plaintiff is entitled to issue a subpoena seeking production of the document. The question, ultimately, is whether the document has apparent relevance to the issues in the proceedings. I note, for completeness, that this is a different and lower threshold than the issue for determination on an application for discovery.
As currently pleaded, the issue for determination is whether the first defendant is or was likely to be insolvent as at 11 May 2021 or 5 November 2021 by reason of the matters set out in [65A] and [158M] of the statement of claim. These matters include the opinion expressed by the auditors in their audit report which forms part of the 2019 and 2020 annual reports and the events and circumstances described by BDO which caused them to form these opinions.
The test of whether the first defendant is solvent at the relevant times is set out in s 95A of the Act, namely that:
(1)A person is solvent if, and only if, a person is able to pay all the person’s debts, as and when they become due and payable.
(2)A person who is not solvent is insolvent.
As noted by the learned authors of Ford, Austin and Ramsay's Principles of Corporations Law, this test is a 'commercial' or 'cash flow' solvency test as distinct from 'balance sheet' solvency which is assessed by consideration of whether there is an excess of assets over external liabilities.[14]
[14] Ford, Austin and Ramsay's Principles of Corporations Law (17^th ed) [25.050].
In the plaintiff's pleading at [65], in relation to the 2019 annual report, the matters pleaded at [65.1] are essentially matters going to 'balance sheet' solvency. The remaining matters pleaded at [65.2] and [65.3] concern 'commercial' or 'cash flow' solvency. Similarly, in relation to the 2020 annual report, the matters pleaded at [158I] are matters going to 'balance sheet' solvency, whereas the remaining matters pleaded at [158J] and [158K] concern 'commercial' or 'cash flow' solvency.
The first defendant's pleading refers to the auditor's opinion as having been based on certain events and circumstances. In these circumstances, bearing in mind the low threshold for apparent relevance, it is my view that there is a reasonable possibility that communications between the first defendant and BDO as to the events and circumstances described in the 2019 and 2020 annual reports concerning the ability of the first defendant to continue as a going concern will assist the plaintiff in its allegation that the first defendant was or was likely to be insolvent as at 11 May 2020 or 5 November 2020.
For these reasons, I consider that the Acting Registrar erred in finding that the documents sought in Item 1.2 do not give rise to a line of inquiry relevant to the matters in issue in the pleadings. Accordingly, I consider that the plaintiff's appeal on this item ought be allowed and Item 1.2 of the schedule should not be set aside.

Item 1.3

Counsel for the plaintiff submitted that the documents sought in Item 1.3 were relevant to the issues raised in [30] - [33] of the statement of claim. In these paragraphs, the plaintiff pleads that:
(a)on 22 March 2019, the plaintiff gave a direction to the first defendant pursuant to s 202B of the Act requiring the first defendant to prepare a statement of the remuneration paid to each of the directors, have it audited and sent it to its shareholders;
(b)on 6 April 2019, the first defendant's solicitors informed the plaintiff that the first defendant continued to liaise with its auditors in respect of the request;
(c)the first defendant has not complied with this direction and, as a consequence has breached s 202B of the Act.
In [159.8], the plaintiff relies upon this contravention of the Act as a ground of oppression.
The first defendant admits the matters referred to in [43(a)] and [43(b)] above. The first defendant denies it breached the Act as similar information has been provided in the first defendant’s annual reports.
Counsel for the plaintiff contended that the reason for the first defendant's failure to comply with the direction from the plaintiff is likely to be relevant to whether the pleaded conduct was oppressive and the relief granted by the court. The plaintiff also submitted that the communications were relevant to whether the directors’ remuneration was unreasonable.
I do not accept these submissions. The issue for determination on the pleadings is whether the failure to comply with the direction from the plaintiff is an instance of oppressive conduct, either by itself or taken with the other matter. In contending the first defendants breached the Act, the plaintiff relies on the fact that a direction was issued and not complied with and that this constituted a breach of the Act. They do not contend that the oppression arose because of any specific reason the direction was not complied with. On this basis, I agree with the conclusion of the Acting Registrar that on the current pleadings, the reason for the failure to comply with the direction does not arise for consideration.
In relation to the question as to what relief ought be granted if oppression were ultimately found, I repeat the matters set out at [23] above.
Finally, the amounts payable to the directors for remuneration are not in dispute on the pleadings (see [66] and [67A], statement of claim and defence). For this reason, the basis upon which the remuneration of each of the directors has been calculated does not arise for determination.
Given the admissions made by the first defendant in its defence, the plaintiff will establish the first defendant failed to comply with the direction issued under s 202B of Act and that this is a contravention of the Act. The question as to what relief, if any, ought flow from this is a matter of submission.
In my view, the Acting Registrar correctly found that the documents sought by the plaintiff in Item 1.3 were not relevant to the issues in the pleadings and, as a result, should be set aside. For these reasons, I would dismiss the plaintiff's appeal in relation to Item 1.3.

Item 1.6

Counsel for the plaintiff submitted that the documents sought in Item 1.6 are relevant to the pleading that the defendants contravened s 250T of the Act in relation to the 2019 and 2020 annual general meetings.
The allegations in respect of the 2019 annual general meeting are set out at [158C] - [158G] of the statement of claim. The plaintiff pleads that the second defendant, as chair of the meeting, did not permit the auditor to answer questions and refused to inform shareholders of certain matters. The plaintiff contends that the refusal to permit the auditor to answer questions was a contravention of s 250T of the Act. This contravention of the Act is relied upon by the plaintiff as a ground of oppression ([159.8]).
In response, the first defendant denies that the second defendant refused to permit the auditor to answer questions and pleads specific matters that occurred at the 2019 annual general meeting in response ([158F.1]).
The allegations in respect of the 2020 annual general meeting are set out at [158V] - [158AD] of the statement of claim. The plaintiff pleads that between 29 October 2020 and 20 November 2020, the plaintiff wrote to the auditor in respect of certain matters. On 27 November 2020, the first defendant responded to the letters but did not provide the plaintiff's solicitors with the auditor's answers. At [158AA] the plaintiff pleads that at the 2020 annual general meeting, the auditor refused to answer the questions asked by the plaintiff on the basis that he had already provided answers to the first defendant. The plaintiff contends that this conduct is a contravention of s 250T of the Act. This contravention of the Act is relied upon by the plaintiff as a ground of oppression ([159.8]).
In response, the first defendant admits letters were sent by the plaintiff's solicitors, denies that the second defendant refused to permit the auditor to answer questions and pleads specific matters that occurred at the 2020 annual general meeting in response ([158AA.1]).
Counsel for the plaintiff submitted that the communications sought in Item 1.6 may disclose why the auditor only responded to certain requests for information. The plaintiff contended that these documents were apparently relevant to the issues raised.
Given the admissions made by the defendants in their pleadings, three issues will require determination at trial. First, the factual issue as to whether the second defendant refused to allow members a reasonable opportunity to answer questions of the auditors. This will require a consideration of what occurred at the annual general meeting. Second, whether the conduct found to have occurred at the annual general meeting is a contravention of s 250T of the Act. Third, whether any facts found in relation to this conduct constitute oppression and, if so, what relief, if any, ought flow from this.
The express terms of s 250T of the Act make plain that the focus of this section is on the conduct that occurs at an annual general meeting. On this basis, I do not consider that any communications between the first defendant and its auditors in relation to the correspondence it had received from Bennett + Co have any apparent relevance to the issues in these proceedings.
In my view, the Acting Registrar correctly found that the documents sought by the plaintiff in Item 1.6 were not relevant to the issues in the pleadings and, as a result, should be set aside. For these reasons, I would dismiss the plaintiff’s appeal in relation to Item 1.6.

Conclusion

For these reasons, I would allow the plaintiff's appeal in relation to Item 1.2 of the Schedule and Item 2 in so far as it relates to Item 1.2, but otherwise dismiss the appeal.

Disposition of first defendant's appeal

Items 1.4 and 1.5 relate to the exploration and evaluation expenses of the first defendant and the carrying amount of its exploration and evaluation assets in the 2019 and 2020 financial accounts.
The plaintiff's allegations concerning the first defendant’s mining tenements are set out in [72] - [77] of the statement of claim. Relevantly, at [73], the plaintiff pleads that for the year ended 30 June 2019, the first defendant's exploration commitments in respect of its tenements were $2,122,399 but its expenditure on exploration was only $570,521. This is particularised by reference to the first defendant's 2019 annual report. In respect of the financial year ended 30 June 2020, at [74], the plaintiff pleads that the first defendant's exploration commitments were $2,202,900 but that its expenditure on exploration was only $692,251. This is particularised by reference to the first defendant’s 2019 and 2020 annual reports. The plaintiff contends that by reason of this conduct, the first defendant has failed to conduct its principal activities in the interests of members and jeopardised the value of its assets [77], which is relied upon as a ground of oppression ([159.12]).
In its defence, the first defendant denies the allegations in [73] and [74]. The first defendant pleads that the expenditure year for each mining tenement depends on the date each tenement was granted, that the amounts disclosed in the financial reports were the projected exploration commitments and did not take into account the pro rata relief to which the first defendant would be entitled to as a consequence of the lodgement of applications for forfeiture. The defence refers to the '2019 expenditure year' and the '2020 expenditure year'. These terms are not defined in the defence and it is unclear to what period they refer. The defence then sets out what the first defendant contends the minimum expenditure commitment was for each expenditure year. The first defendant denies the allegations in [77] and [159.12].
Counsel for the first defendant referred to the conferral between the parties in relation to the extent of the parties’ discovery obligations in respect of the tenements. On 17 December 2020, orders were made by consent that the first defendant was required to discover only four categories of documents in relation to the mining tenements, none of which included the expenses incurred by the first defendant or the carrying amount of the assets. On this basis, the first defendant submitted that the plaintiff's conduct was attempting to 'circumvent the discovery process' and is an abuse of process.
The fact that the documents in these categories might also have been sought in discovery but were not, does not of itself mean that the subpoena is an abuse of process. Given the test for relevance is different on an application for discovery than on an application to set aside a subpoena, even if the documents had been sought in discovery and refused, this would not, of itself, mean the subpoena was an abuse of process. There is no evidence before me that the plaintiff agreed these documents were not relevant. The evidence in relation to the conferral between the parties in relation to the categories of discovery to be ordered indicates that the plaintiff sought documentation in relation to exploration commitments referred to in Note 27(a) of the 2020 annual report,[15] and agreed not to press the category at that time.[16] For this reason, I do not accept that the plaintiff agreed these documents were not required to determine the matter or that its actions in subpoenaing these documents were an attempt to circumvent the discovery process and were oppressive.
[15] Affidavit of Clara Elisabeth Hagan filed 11 February 2021 'CEH-12'.
[16] Affidavit of Clara Elisabeth Hagan filed 11 February 2021 'CEH-14'.
On the pleadings, the issues that will require determination are: first, what the first defendant's exploration commitments were for each financial year and what its expenditure was; second, whether the first defendant has failed to conduct its principal activities in the interests of members and jeopardised the value of its assets; and third, whether any conduct that is found is oppressive.
Given the issues that will require determination in relation to the tenements include a determination of the exploration and expenditure commitments and expenses, I consider that documents sought in Item 1.4 have apparent relevance to this issue. In this regard, in order to determine the expenditure commitments of the first defendant in a financial year and whether these commitments have or have not been met, it is likely that there will need to be some consideration of the source documents so that these figures can be calculated.
In respect of the documents sought in Item 1.5, the plaintiff contends that the first defendant's conduct has jeopardised the value of its assets. Communications in relation to the carrying amount of the first defendant's assets net of impairment may give rise to a line of inquiry in relation to this issue. Bearing in mind the low threshold for apparent relevance, I am satisfied that the documents sought in this category are apparently relevant to the issues in dispute.
For these reasons, I would dismiss the first defendant's appeal in relation to Items 1.4 and 1.5 of the Schedule.

First defendant's applications to set aside subpoenas

Application to set aside subpoena to Camm & Associates

On 21 June 2021, the court, at the request of the plaintiff, issued a subpoena to Camm Scalise Pty Ltd trading as Camm & Associates. The subpoena sought production of communications between Camm & Associates and the second to fourth defendants sent or received between January 2019 and June 2020 in relation to:
(a)the transfer or proposed transfer of shares in the first defendant; and
(b)payment in respect of such transfers or proposed transfers.
On 9 July 2021, the first defendant's solicitors applied to set aside the subpoena on the grounds that there was no legitimate forensic purpose for the subpoena and that it was oppressive and an abuse of process.
The application is opposed by the plaintiff who relied upon an affidavit of Peter Glenn Klauz filed 4 August 2021, a graduate employed by Bennett + Co, the solicitors for the plaintiff.
Before turning to consider whether there is a legitimate forensic purpose for the subpoena, it is necessary to address a preliminary issue. Both the letter dated 9 July 2021 and the outline of submissions filed by the first defendant on 26 July 2021 contend that Camm & Associates was engaged by the first defendant. Counsel for the first defendant submitted that most, or at the very least some, of the communications which fall within the scope of the subpoena would contain legal advice over which the first defendant has a claim of legal professional privilege. On this basis, the first defendant submitted the court should be cautious in allowing a subpoena which indirectly required the production of legal advice.

There is no evidence before the court that the first defendant (or any of the defendants) retained Camm & Associates. The only evidence of the role of Camm & Associates is contained in the annexures to the affidavit of Mr Klauz. Relevantly, these annexures include an email from Peter Burns to Austin Huang dated 20 February 2019.[17] In this email, Mr Burns refers to the request by Mr and Ms Huang for the details of the buyer for their shares in the first defendant. Mr Burns states that 'The facilitator is K&L Gates Lawyers (Eric Fethers)'. Subsequently, on 25 February 2019, Mr Burns informed Mr Huang that Mr Fethers was no longer acting and that Richard Camm solicitor was now acting.
[17]Affidavit of Peter Glen Klauz filed 4 August 2021, 'PGK-1'.
In my view, the contents of this email do not support an inference being drawn that Camm & Associates was retained by the first defendant. It is not immediately apparent from this exchange who Camm & Associates was retained by or what their role was. For these reasons, I do not consider that this subpoena should be set aside on the basis that a claim for legal professional privilege can be made over all documents the subject of the subpoena.
I turn then to consider whether there is a legitimate forensic purpose for the subpoena. The plaintiff says that the documents sought in the subpoena are relevant to the allegations in [126A] - [126C] of the statement of claim. In these paragraphs, the plaintiff alleges that since in or about February 2019, the directors of the first defendant have facilitated the sale or purchase of shares in the first defendant from shareholders wishing to sell their shares to relatives of or persons otherwise associated with the directors or shareholders identified by the directors as supportive of the directors (including new shareholders). This occurred in circumstances where the sellers and buyers were not known to each other, the sellers and purchasers signed the share transfers at materially different times, and on a number of occasions, the transfers were registered on a date materially different to the dates they were signed. Particulars have been provided of a number of specific transactions. The plaintiff contends that this conduct, together with the refusal of the first defendant to register other share transfers to prospective members, is oppressive ([159.5]).
The first defendant denies these allegations ([126A] - [126C], [159.5]).
In my view, three issues arise for determination in relation to these paragraphs: first, whether the directors of the first defendant facilitated the sale or purchase of shares in the first defendant; second, whether the purchasers were relatives of the second to fourth defendants or otherwise associated with them, or had been identified as being supportive of them; and third, whether any conduct found to have occurred is oppressive.
The evidence before me is that Camm & Associates had a role in facilitating the sale and purchase of shares in the first defendant and may have documents in their possession which have apparent relevance to these issues. On this basis, given the low threshold, I consider that there is a legitimate forensic purpose for the subpoena and do not consider it should be set aside.
Counsel for the first defendant also objected to the scope of the subpoena. The first defendant submitted that the scope of the subpoena should be limited to the transactions particularised in [126A] and [126B] of the statement of claim and contended that any broader scope was fishing.
I do not accept that submission. The allegation in the statement of claim is that the directors of the first defendant facilitated the sale and purchase of shares. In support of this allegation, the plaintiff has particularised a number of transactions which it contends supports this allegation. These transactions commence in February 2019 and finish at the end of April 2020.
In my view, it is not accurate to describe the breadth of the subpoena as fishing. In this case, the plaintiff has some evidence that the directors have facilitated the sale and purchase of shares over this time period and are seeking further documents to determine whether there are other transactions that it is not currently aware of. In the interests of fairness, the litigation should be conducted on the footing that all relevant documentary evidence is available,[18] subject to the case management principles set out in O 1 r 4A and 4B of the Rules. I do not consider that the date range of the subpoena, which extends the known period by approximately one month either side is unnecessarily wide.
[18]Alinta Sales Pty Ltd v Woodside Energy Ltd [2008] WASC 304 [26] (Beech J).
For these reasons, I consider that the first defendant's application to set aside the subpoena directed to Camm & Associates should be dismissed.

Application to set aside subpoena to Anthony Short

On 21 June 2021, the court, at the request of the plaintiff, issued a subpoena to Mr Short. The subpoena sought production of two categories of documents. First, any agreement(s) for the provision of services provided by Mr Short to the first defendant in 2020 and 2021. Second, any communications from 1 January 2020 between Mr Short and any of the second to fourth defendants, the auditors, share register and the tenement managers of the first defendant in relation to the negotiation of, entry into, or extension or variation of, any agreement or proposed agreement:
(a)for the subscription of shares in Bullseye by Mr D Campbell, Mr C McKenna, Mr J McKenna and/or Mr B Garrity;
(b)for the issue of convertible notes in Bullseye;
(c)between the first defendant and 'Troy Gold' or 'Tipbot Limited';
(d)between Bullseye and Blue Cap Mining Pty Ltd;
(e)between the first defendant and Mr Desmond Mullan;
(f)for the transfer or proposed transfer of shares in the first defendant; and
(g)prospecting licence 77/4034.
On 9 July 2021, the first defendant's solicitors applied to set aside the subpoena. The grounds on which the first defendant seeks to set aside the subpoena are that there is no legitimate forensic purpose for the subpoena and it is oppressive and an abuse of process.
The first defendant filed an affidavit of Mr Short on 29 July 2021 in support of its application to set aside the subpoena. In his affidavit, Mr Short deposes that in about March 2020, the first defendant retained Fay Holdings Pty Ltd, a company owned by him and his wife jointly, to provide corporate advisory and capital raising services. In about August 2020, he was personally engaged to assist the first defendant in providing instructions to its solicitors for the defence of these proceedings. Mr Short annexed a company search of Fay Holdings and two redacted retainer agreements; one unsigned (covering the period March to August 2020) and one signed (covering the period after 8 August 2020).[19] Mr Short's evidence is that it would be a 'significant and onerous task' to go through all of his records to identify the documents sought in the subpoena.[20] In addition, he deposed that any communications that fall within the scope of the subpoena will already be in the possession of the first defendant as the scope is limited to communications between Mr Short and the directors of the first defendant or its agents.[21]
[19]Affidavit of Anthony Nelson Short filed 29 July 2021, 'AS-2'.
[20] Affidavit of Anthony Nelson Short filed 29 July 2021 [9].
[21] Affidavit of Anthony Nelson Short filed 29 July 2021 [11].
Before addressing the specific items sought in the subpoena, it is necessary to address a preliminary issue raised by the first defendant as to the recipient of the subpoena. The first defendant contends that the plaintiff has subpoenaed the wrong party. This is on the basis that Mr Short was not personally retained to provide corporate advisory and capital raising services; the first defendant retained his company, Fay Holdings. The only personal retainer between the first defendant and Mr Short is his retainer to provide instructions to the first defendant’s legal representatives for the conduct of the litigation.
The first defendant submitted that the plaintiff should subpoena documents from the employer (Fay Holdings) and not from the employee (Mr Short).[22] Fay Holdings had not authorised production of any documents and opposes their production.[23] I note that there is no evidence before me as to this position.
[22]Rochfort v Trade Practices Commission (1982) 153 CLR 134; First defendant's submissions [31].
[23] First defendant's submissions [33].
The plaintiff rejected this submission. It contended that it was open to the plaintiff to subpoena documents from Mr Short directly, a director of Fay Holdings, without first issuing a subpoena to the company.[24] Counsel for the plaintiff submitted that, given the nature of Fay Holdings, Mr Short is likely to hold relevant documents in his own right.
[24] Southern Pacific Hotel Services Inc v Southern Pacific Hotel Corporation Ltd [1984] 1 NSWLR 710.
For the following reasons, I do not consider that the matters raised by the first defendant as to the recipient of the subpoena are a sufficient reason to set it aside. First, Mr Short and his wife are directors of Fay Holdings and each owns one issued share. Fay Holdings is a small company with no employees. Second, the mandates were prepared by Mr Short and signed only by him. Third, on this evidence, I accept it is likely that:
(a)Mr Short holds relevant documents, some of which may strictly be company documents and some of which may be his own;
(b)relevant documents are likely to be in his possession, control or power and that he has express or implied authority to produce the documents.
I turn then to consider the specific items sought in the subpoena.

Item 1

Counsel for the plaintiff contended that the mandate agreements by which Mr Short has been engaged by Bullseye (whether personally or through Fay Holdings) are or may be relevant to the assessment of:
(a)whether the directors' remuneration was 'reasonable in the circumstances', as there was significant overlap between the services to be provided by Mr Short and the directors;
(b)the exclusion of the plaintiff from investment opportunities;
(c)the use of company funds to defend these proceedings; and
(d)the current circumstances of the first defendant.
The first defendant denies that the mandates are relevant to any matter in issue in the proceedings and, accordingly, submits that this item ought to be set aside.

Directors' remuneration

As noted above, the plaintiff's pleaded case in relation to the remuneration of the directors concerns the remuneration of the first defendant's directors (the second to fourth defendants) for the 2018, 2019 and 2020 financial years. The plaintiff contends that the payments to the second to fourth defendants are payments to related parties which required shareholder approval. Shareholder approval has not been obtained. In its defence, the first defendant pleads that shareholder approval was not required as the payments were reasonable, including on the basis of the circumstances of the first defendant and the directors.
At trial, it will be necessary to consider the circumstances of each of the directors, including the role each performs and the responsibilities encompassed within that role.[25]
[25]Corporations Act 2001 (Cth) s 211(1)(b)(ii).
On this basis, I accept that a subpoena seeking production of documents which are apparently relevant or give rise to a line of inquiry concerning the role performed by each director, whether any included an obligation to raise capital, and if so, whether others were retained to fulfil this role, has a legitimate forensic purpose.
The evidence before the court is that Mr Short (through Fay Holdings) was initially retained by the first defendant in March 2020 to provide corporate advisory services and subsequently retained in August 2020, in his personal capacity, to provide litigation management services to the first defendant.
In my view, any retainers entered into between the first defendant and Mr Short prior to 30 June 2020 may give rise to a line of inquiry as to whether any role he was performing was similar to a role to be performed by one of the directors and relevant to an assessment of their remuneration. However, any retainer entered into after this date is not relevant to the question of whether the remuneration of the second to fourth defendants in the 2018, 2019 and 2020 financial years was reasonable and whether there is overlap between the services performed.

Exclusion from investment opportunity in the first defendant

The statement of claim pleads that the first defendant did not respond to a funding offer made by the plaintiff in October 2018, which it relies upon as a ground of oppression (see [83] - [87], [159.7]). In response, the first defendant admits the offer was made and say that at the time of the offer, the first defendant was negotiating a sale of the plaintiff's shareholding with the plaintiff, which in April 2019 was not accepted. The first defendant in its defence contends that the proposal was not renewed by the plaintiff after 1 March 2019 and it assumed the proposal had lapsed ([83] - [87]).
On the pleadings, the issue for determination is whether the first defendant’s failure to respond to an offer made in October 2018 is oppressive. The statement of claim does not plead that the plaintiff has been excluded from other investment opportunities in the first defendant. For this reason, I do not consider that the retainers give rise to a line of inquiry which are relevant to the determination of this issue.

Use of company funds

The plaintiff pleads the use of company funds to defend these proceedings as a ground of oppression ([159.10]). The only other reference to the use of funds for legal representation in the statement of claim is at [151] which refers to the application for a copy of the share register which was opposed by the first defendant.
Neither of these paragraphs refer to the use of company funds to retain Mr Short to provide instructions in the defence of the proceedings. For this reason, I do not consider that his retainer gives rise to a line of enquiry which is relevant to a matter in issue on the use of company funds to defend these proceedings.

Current circumstances of the first defendant

Counsel for the plaintiff contends that the defendants have indicated they will adduce evidence at trial as to the current circumstances of the first defendant.
While I accept that the current circumstances of the first defendant is relevant to the question as to what relief, if any, ought be granted if the plaintiff succeeds in its claim,[26] it is not clear as to why the retainer of Mr Short by the company has apparent relevance to this issue. For this reason, I do not consider that his retainers are relevant to a matter in issue on the current circumstances of the first defendant.

Conclusion

[26] HongKong Xinhe International Investment Company Ltd v Bullseye Mining Ltd [No 3] [2021] WASC 260 [70] - [74].

For the reasons set out above, I consider that Item 1 should be set aside in part. This item should be limited to any agreement with the first defendant or its subsidiaries for the provision of services provided by Mr Short to the first defendant until 30 June 2020.

Item 2

Counsel for the plaintiff contends that Item 2 seeks communications with specific persons or entities in relation to certain transactions which are pleaded in the statement of claim. The plaintiff contends that the issues in the proceedings will include consideration of whether the conduct of Bullseye’s affairs has been oppressive.
The first defendant submits that this item of the subpoena is not limited to the specific transactions pleaded in the statement of claim but seeks production of documents in relation to any agreement or proposed agreement with named parties. On this basis, counsel for the first defendant contended it was ‘fishing’.
The documents which are the subject of the subpoena extend beyond the particular transactions which are pleaded in the statement of claim and seek production of 'proposed agreements'. There is no evidence before the court that there are other agreements, apart from the agreements pleaded, between the first defendant and the parties named in 2.7 to 2.11 and 2.13 of the subpoena. I do not accept that documents in relation to any agreement or proposed agreements other than those pleaded in the statement of claim will assist the plaintiff's case as pleaded. In so far as the subpoena extends beyond the agreements pleaded in the statement of claim, I consider the subpoena has no legitimate forensic purpose.
However, as corporate adviser to the first defendant since about March 2020, it is on the cards that Mr Short will have documents that concern the negotiation, entry into or extension or variation of the agreements pleaded in the statement of claim with the parties named in 2.7 to 2.11 and 2.13 of the subpoena. While Mr Short was not retained at the time of entry into many of these agreements, this does not, of itself, mean that he will not have any relevant documents in his possession. I accept that it is possible that he reviewed a number of these agreements in the course of his retainer and communicated with the directors or other parties about these agreements. For this reason, I consider that the subpoena, in so far as it related to agreements or transactions pleaded in the statement of claim, has a legitimate forensic purpose.
For these reasons, Item 2 of the subpoena, in so far as it extends beyond the pleaded transactions in the statement of claim, should be set aside.

Plaintiff's applications to set aside subpoenas

On 14 June 2021, the court, at the request of the first defendant, issued two subpoenas to the National Australia Bank and the Australia and New Zealand Banking Group. On 16 June 2021, the court, at the request of the first defendant, issued a further four subpoenas to Mr Yiyang Qiu, Mr Sam Cheng, Holy Investments Pty Ltd and Mr Brett Clark.
On 11 July 2021, the plaintiff applied to set aside each of these subpoenas on the basis that there was no legitimate forensic purpose for the subpoenas and that each constituted an abuse of process. Several grounds are advanced as to the basis upon which it is contended that the subpoenas are an abuse of process, namely that:
(a)the subpoenas were issued prior to the delivery of the court's reasons for decision on the application to strike out [160] of the first defendant's defence;
(b)the subpoenas are an impermissible fishing exercise;
(c)the subpoenas circumvent the discovery process in both these proceedings and in the counterclaim by the first defendant against the plaintiff, Mr Huang, Mr Cheng, Mr Clark and others in separate District Court proceedings;
(d)the subpoenas, at least in part, repeat subpoenas previously issued to some of the parties; and
(e)they are disproportionate to the matters in issue.
The application is opposed by the first defendant who filed two affidavits of Bernard Arthur John Cummins, a partner of the first defendant's solicitors, on 5 August 2021 and 9 August 2021, and an affidavit of Mark Daniel Williams, a solicitor employed by the first defendant's solicitors, filed 5 August 2021.
The first defendant contends that the subpoenas are relevant to the issues pleaded in [160] of the first defendant's defence. This paragraph includes allegations:
(a)as to what is termed the 'Doonbeg Mandate', including that the plaintiff and a number of other shareholders of the first defendant referred to as the 'Chinese Group', were acting in concert to control or influence the composition of the board of the first defendant and the conduct of its affairs. The Doonbeg Mandate is pleaded to have arisen in or about November 2018 and concluded in or about June 2019;[27]
(b)that the purpose of a takeover offer by Red 5 Limited and its extensions was to cause uncertainty and facilitate the acquisition of shares in the first defendant at a reduced price. The takeover offer was foreshadowed in December 2017, opened in February 2018 and closed in April 2019;[28]
(c)that the filing of forfeiture applications in respect of a number of the first defendant's tenements was to cause harm and injury to the first defendant and facilitate the 'Chinese Group' gaining control of the first defendant.[29]
[27] Defence [160.1] - [160.25].
[28] Defence [160.26] - [160.36].
[29] Defence [160.37] - [160.40].

While at the time the subpoenas were issued, the plaintiff's application to strike out [160] of the defence had not been determined, this was not the position at the date of the hearing of this application. On 2 August 2021, the court delivered reasons for its decision dismissing the strike out application, seven days prior to the hearing of this application.[30]
[30] HongKong Xinhe International Investment Company Ltd v Bullseye Mining Ltd [No 3].
The first defendant denies that these subpoenas are a 'fishing' exercise and referred me to the statutory declaration of Frank Torre and its attachments.[31] Counsel for the first defendant submitted that these documents were evidence that the first defendant had reasonable grounds to believe that each of the recipients of the subpoenas had relevant documents of the items sought in each subpoena.
[31] Affidavit of Bernard Arthur John Cummins filed 5 August 2021, 'BAJC-14' - 'BAJC-47'.
The first defendant also denies that these subpoenas are an attempt to circumvent the discovery process. In relation to Mr Huang, the first defendant contends that the relationship between the plaintiff and Mr Huang is not clear. While Mr Huang has deposed the plaintiff's affidavits of discovery, this, of itself, did not mean that Mr Huang has discovered all of the documents in his possession through this process. In relation to the counterclaim in the District Court proceedings, the first defendant relies on the findings in HongKong Xinhe International Investment Company Ltd v Bullseye Mining Ltd [No 3] that the pleading of similar issues in [160] of its defence in these proceedings and the counterclaim in the District Court proceedings was not, of itself, an abuse of process.
The first defendant denies that the issue of subpoenas to Mr Huang, Mr Cheng, Holy Investments and Mr Clark, which are in part identical to previous subpoenas issued on 15 January 2021, are an abuse of process. Previously, no documents were produced by any party in answer to the subpoena. Counsel for the first defendant emphasised the pleadings have been amended since that date, particularly in relation to the Doonbeg Mandate.
The first defendant also denied that the subpoenas were disproportionate to the issues in the proceeding and contended that they are 'of critical importance' to the question of relief. In any event, the first defendant said there was no evidence from any of the recipients of the subpoenas that the subpoenas were burdensome.
A number of the matters raised by the plaintiff apply to all of the subpoenas. For that reason, I will address the common issues before addressing the subpoenas on an individual basis.

Issues common to all subpoenas

The issues that are common to all of the subpoenas are:
(a)whether the issue of the subpoenas prior to the delivery of the court’s reasons for decision on the application to strike out [160] of the first defendant’s defence is an abuse of process;
(b)whether the subpoenas circumvent the discovery process in the counterclaim by the first defendant against the plaintiff, Mr Huang, Mr Cheng, Mr Clark and others in separate District Court proceedings;
(c)the issue of subpoenas to parties who have already been served with subpoenas; and
(d)whether the subpoenas are disproportionate to the matters in issue.
For the following reasons, I do not consider that any of these matters provide a basis on which to set aside the subpoenas, if they are otherwise issued for a legitimate forensic purpose.
First, while the subpoenas were issued prior to the determination of the plaintiff's strike out application, this application has now been determined and [160] has not been struck out. If it had been, there would be no legitimate forensic purpose for the subpoenas and they would be set aside. Given the impending trial date, I do not consider the issue of the subpoenas at the time they were issued is, of itself, an abuse of process.
Second, as set out in my earlier reasons for decision, the fact that both these proceedings and the District Court proceedings raise similar issues is not, in itself, an abuse of process. If documents are obtained on subpoena, they will be subject to the substantive obligation that the documents can only be used for the purpose of these proceedings.[32] If the first defendant wishes to use any documents it obtains on subpoena for the purposes of the District Court proceedings, it will be necessary for an application for leave to use these documents to be made.
[32]Hearne v Street [2008] HCA 36; (2008) 235 CLR 125 [96].
In considering whether the issue of a second subpoena to a party is an abuse of process, it is relevant to consider, in addition to the matters which generally apply, whether there is a high likelihood that any documents that will be produced in response to it were produced in answer to an earlier subpoena.[33] In this case, no documents were produced in answer to the earlier subpoenas. Since the time these subpoenas were issued, [160] has been amended. In addition, the subpoenas are not in the same terms as the earlier subpoenas. For these reasons, I do not consider that this, by itself, is a sufficient reason to set aside the subpoenas if the items sought are for a legitimate forensic purpose.
[33]Craig v Johnson [2020] NSWCA 278 [15] - [16].
In each of the subpoenas, the specified categories are wide and may give rise to questions of oppression. However, this is an issue that the recipients of the subpoenas can no doubt raise for themselves if, in fact, the volume of documents is such that it will be oppressive for them to be required to identify them for the period in which they are sought. At present, there is no evidence before the court as to whether the documents that may fall within the terms of the subpoena are of such a number that they are disproportionate to the issues in dispute. Accordingly, I decline to set aside the subpoenas on this basis.
I turn then to consider each of the subpoenas and whether there is a legitimate forensic purpose for the documents sought in each. In doing so, I note that the schedules to the subpoenas (apart from the ones sought to be issued to the banks) are lengthy and involve similar categories of documents. For this reason, I have not reproduced the precise terms of each item but have summarised them below.

Application to set aside subpoena to Yiyang Qiu

Mr Qui's English name is Luke Huang. As Mr Qui is referred to by his English name in the pleadings, I have used his English name in these reasons for decision.
Mr Huang is the son of the director of the plaintiff. The plaintiff pleads that he has been the plaintiff's representative in its dealings with the first defendant since 26 January 2018.[34] In answer to this, the first defendant pleads that Mr Huang also acted on behalf of Mr Wu in relation to his dealings with Bullseye.[35] This allegation is not addressed in the plaintiff's reply and accordingly, is an issue in the proceedings.
[34] Statement of claim [3].
[35] Defence [3.3].
I deal first with the plaintiff's objection to the subpoena on the basis that it circumvents the discovery process. While Mr Huang deposed to the affidavits of discovery of the plaintiff, he did so on behalf of the plaintiff. The affidavit of discovery does not disclose the basis on which it is contended that Mr Huang is the plaintiff's representative nor the terms on which he is engaged.
In circumstances where:
(a)the plaintiff alleges that Mr Huang acted for the plaintiff in its dealings ‘with’ the first defendant, rather than 'in relation to' the first defendant; and
(b)the first defendant contends that Mr Huang acted for a person other than the plaintiff in relation to dealings with the first defendant,
I do not accept the plaintiff's submission that Mr Huang 'would not have any relevant documents in his own right or in another capacity'. In my view, on the pleadings, there is a basis on which it can be said that Mr Huang may have relevant documents in his own right relevant to the issues in the proceeding.
I turn then to the specific items sought in the subpoena.
Item 1 seeks documents in the period 17 September 2018 to 31 May 2019 which 'relate to, or are in connection with' the acquisition of shares in the first defendant. Item 2 seeks documents between 1 November 2018 and 31 May 2019 which evidence or refer to the negotiations or communications in connection with the acquisition of shares in the first defendant.
The first defendant says that these items specifically relate to its pleading in relation to the 'Doonbeg Mandate', which is said to have been entered into on or about 19 November 2018.[36] In its reply, the plaintiff does not specifically respond to these paragraphs of the defence. On this basis, these matters are in issue between the parties and will require to be determined at trial.
[36] Defence [160.3].
The plaintiff objects to these items on the basis that the subpoena is a 'super-trawler' subpoena seeking to fish for documents to support its case. Counsel for the plaintiff drew to my attention the amendment to the first defendant's pleaded case in relation to the Doonbeg Mandate. Originally, the first defendant contended that this was a written agreement but now contends that it was 'partly written and partly oral, alternatively partly written and partly by conduct, alternatively, oral, alternatively, is to be inferred from conduct'.
Counsel for the first defendant accepted that the first defendant had amended its pleading but rejected that the subpoena was fishing for documents. In support of this submission, counsel for the first defendant referred me to the statutory declaration of Frank Torre,[37] who the first defendant proposes to call as a witness at trial.[38] The statutory declaration refers to a mandate Mr Torre and his cousin, Anthony Torre, received through Mr Brett Clark of Doonbeg Capital to buy shares in the first defendant. For the purposes of this application, it is not necessary to set out the details of this evidence. It is sufficient to say that on the basis of this evidence, I consider there is a basis on which the court can be satisfied that Mr Huang is likely to have documents in his possession which tend to support the case of the first defendant.
[37] Affidavit of Bernard Arthur John Cummins filed 5 August 2021, 'BAJC-14'.
[38] Witness outline of Frank Andrew Torre filed 13 April 2021.
On the pleadings, there is a dispute between the parties as to whether Holy Investments and Doonbeg Capital entered into an agreement to purchase shares in Bullseye and what was done in performance of any such mandate. In these circumstances, the documents sought from Mr Huang in Items 1 and 2 give rise to a line of inquiry which is relevant to the matters in issue in the pleadings. However, in my view, the time period over which these documents are sought in Item 1 is too wide. The pleaded case is that the agreement was entered into in November 2018. While I accept that there may be relevant documents that exist prior to this date, I do not consider the time period should be extended back to 17 September 2018. In my view, consistent with the other subpoenas, the time period in Item 1 should be restricted to 1 October 2018 to 31 May 2019.
Item 3 seeks documents between 1 November 2017 and 12 April 2019 concerning the off-market takeover offer for shares in the first defendant which was announced in February 2018 and closed on 12 April 2019.
The first defendant's allegations in respect of the Red 5 Limited takeover offer are pleaded at [160.26] to [160.36] of the first defendant’s defence. These paragraphs allege that on 7 December 2017, Red 5 Limited wrote to the first defendant regarding its intention to make an off market takeover bid, that the takeover was extended on a number of occasions and that the purpose of the extensions of the takeover bid was to cause uncertainty amongst the first defendant's shareholders and facilitate the acquisition of shares in the first defendant by the plaintiff and Mr Wu at a reduced price. In its reply, the plaintiff does not specifically respond to these aspects of the defence. On this basis, these matters are in issue between the parties and will need to be determined at trial.
In support of this submission, counsel for the first defendant referred me to the statutory declaration of Frank Torre. [39] The statutory declaration refers to a conversation between Mr Torre and Mr Clark in relation to the Red 5 Limited takeover offer.[40] For the purposes of this application, it is not necessary to set out the details of this evidence. It is sufficient to say that on the basis of this evidence, I consider there is a basis on which the court can be satisfied that Mr Huang is likely to have documents in his possession which tend to support the case of the first defendant.
[39] Affidavit of Bernard Arthur John Cummins filed 5 August 2021, 'BAJC-14'.
[40]Affidavit of Bernard Arthur John Cummins filed 5 August 2021, 'BAJC-14' pages 74 - 76.
In these circumstances, I consider that the documents sought from Mr Huang in Item 3 give rise to a line of inquiry which is relevant to the matters in issue in the pleadings. However, in my view the time period over which these documents are sought is too wide. The pleaded allegations against the plaintiff concern the extension of the takeover bid rather than the making of the takeover bid. While I accept that there may be relevant documents that exist prior to this date of the first extension, I do not consider the time period should commence in 1 November 2017. The first extension of the offer occurred in May 2018. In my view, the time period in Item 3 should be restricted to 1 April 2018 to 12 April 2019.
Item 4 seeks documents in the period 1 November 2017 to 31 July 2018 concerning a contract between the first defendant and Red 5 Limited to have its ore processed by Red 5 Limited. The first defendant says that this item relates to [160.34] of its defence which pleads that Red 5 Limited entered into an agreement with the plaintiff and Mr Wu whereby once the plaintiff and Mr Wu had control of the board of the first defendant, they would procure the first defendant to enter into a contract with Red 5 Limited to have its ore processed by Red 5 Limited. In its reply, the plaintiff does not specifically respond to this aspect of the defence. On this basis, this matter is in issue between the parties and will require determination at trial.
The plaintiff contends that this item is fishing as the first defendant has not discovered any such document and refuses to give inspection of the document referred to in its pleading. Counsel for the first defendant accepts that it had not provided discovery of this document but rejected the assertion the subpoena was a fishing exercise. In support of this submission, counsel referred me to the evidence proposed to be given by Warren Hoy,[41] who the first defendant proposes to call as a witness at trial.[42] Mr Hoy refers to a conversation he had with Mr Cheng. There is no evidence of any relevant conversation about this matter with Mr Huang. For the purposes of this application, it is not necessary to set out the details of this evidence. It is sufficient to say that on the basis of this evidence, I do not consider there is a basis on which the court can be satisfied that Mr Huang is likely to have documents in his possession which tend to support the case of the first defendant.
[41] Affidavit of Mark Daniel Williams filed 5 August 2021 [6].
[42] Witness outline of Warren James Hoy filed 13 April 2021.
While I accept that, on the pleadings, there is a dispute between the parties as to whether the plaintiff and Red 5 Limited entered into an agreement in the terms pleaded in [160.34], there is nothing in the pleaded case nor the evidence to which the first defendant referred that suggests that Mr Huang is likely to have documents in his possession. For this reason, I consider that this item ought be set aside.
Item 5 seeks documents in the period 1 January 2020 to 31 March 2020 in relation to, or in connection with, Sam Cheng or Golden Soak Enterprises lodging or procuring the lodgement of applications for forfeiture against mining tenements held by the first defendant. The first defendant says that that this item relates to [160.37] to [160.40] of its defence. These paragraphs plead that between February and March 2020 applications for forfeiture were lodged by Golden Soak against the first defendant's mining tenements. The first defendant contends that it should be inferred that Mr Cheng procured the Golden Soak applications with the support of the plaintiff, Mr Wu and Mr Huang and the remainder of the 'Chinese Group' to cause harm and injury to the first defendant. The particulars that are given of this allegation refer to a number of matters. No specific particulars are pleaded in respect of Mr Huang.
While I accept on the pleadings there is dispute between the parties as to whether the Golden Soak applications were procured by Mr Cheng, there is nothing in the pleaded case that suggests that Mr Huang is likely to have documents in his possession related to this issue. For this reason, I consider that this item ought be set aside.
Item 6 seeks documents between Mr Huang and the plaintiff or his father in respect of a letter from the plaintiff’s solicitors to the first defendant's solicitors on 15 December 2020. The first defendant says that this item relates to the allegations at [160.48] - [160.49] of the defence and [33] of the reply. These paragraphs refer to the letter dated 15 December 2020 whereby the plaintiff offered to provide funding to the first defendant of up to $15 million as a working capital facility. In its reply, the plaintiff pleads what its understanding was as to the position at that date, particularly in relation to the Blue Cap Mining facility. That is, on the pleadings, the plaintiff has raised an issue as to its understanding of certain arrangements. In circumstances where Mr Huang is the representative of the plaintiff in its dealings with the first defendant, I consider it is possible that Mr Huang may have documents in his possession which give rise to a line of inquiry which is relevant to the matters in issue in the pleadings. For this reason, Item 6 should not be set aside.
Item 7 seeks documents between Mr Huang and Resource Development Group Ltd (RDG) 'in relation to, or in connection with' a transaction between the first defendant and RDG with respect to the North Laverton Gold Project of the first defendant. The first defendant says that that this item relates to the allegations at [88.10] - [88.11] of the defence. These paragraphs plead that Mr Huang, representing the plaintiff, contacted Mr Ellison on the morning of 1 September 2018 and that he and Mr Cheng attempted to contact directors of RDG over the weekend of 1 and 2 September 2018. These matters are specifically denied by the plaintiff in its reply. Accordingly, these matters are in issue and will need to be determined at trial.
On the issues as pleaded, I accept that Mr Huang may have documents in his possession concerning communications between him and RDG which give rise to a line of inquiry relevant to the matters in issue on the pleadings. However, in my view these documents should be restricted to documents which evidence or refer to the communications during the time period alleged in the pleadings - namely 1 and 2 September 2018. For this reason, I consider that Item 7 should be restricted to documents which evidence or refer to communications on 1 or 2 September 2018.
Item 8 seeks documents which evidence or refer to communications between Mr Huang and the plaintiff in connection with a letter dated 3 September 2018 which the plaintiff wrote to shareholders of Bullseye. The first defendant says that this item relates to the allegation at [88.7] of its defence. This paragraph alleges that by letter dated 3 September 2018, the plaintiff wrote to shareholders of Bullseye making a number of false claims. In its reply, the plaintiff admits the letter was sent but otherwise denies the allegations. That is, on the pleadings, the issues between the parties are whether each of the statements pleaded at [88.7.1] - [88.7.8] are true or false.

Counsel for the plaintiff submitted that there was nothing in the pleading which put in issue the internal communications within the plaintiff or its communications with Mr Huang. Counsel for the first defendant referred me to an email exchange on 30 August 2018 between Mr Huang and Mr Ellison of RDG in respect of a revised term sheet with the first defendant.[43] On this basis, I accept that Mr Huang may have documents in his possession which give rise to a line of inquiry as to whether the statements made by the plaintiff are true or false, including his communications with the plaintiff. However, in my view these documents should be restricted to documents to a confined time period namely 15 August 2018 and 3 September 2018.
[43]Affidavit of Bernard Arthur John Cummins filed 5 August 2021,'‘BAJC-12' - 'BAJC-13'.
Item 9 seeks documents in the period 1 November 2018 to 1 May 2019 referring to negotiations or discussions 'in relation to, or in connection with' the sale of shares in the first defendant by the plaintiff, Wu Qiyuan or Fountain Enterprises to Mr Desmond Mullan or his associates. The first defendant says that these documents are relevant to matters raised in Mr Huang's witness outline concerning Mr Huang's knowledge of these negotiations. These negotiations are specifically pleaded at [84.3] of the first defendant's defence. The plaintiff does not respond to this paragraph in its reply and accordingly, this matter is in issue in the proceedings.
As noted above at [11(c)], there is a legitimate forensic purpose in subpoenaing documents for the purpose of cross examination. In these circumstances I accept that there is a genuine forensic purpose in Item 9 and accordingly it should not be set aside.

Application to set aside subpoena to Sam Cheng

A significant number of the items in this subpoena concern the Doonbeg Mandate. Item 1 seeks documents in the period 1 October 2018 to 31 May 2019 which 'relate to, or are in connection with' the acquisition of shares in the first defendant. Item 3 seeks documents on the same date range which evidence or refer to the negotiations or discussions for an agreement between Holy Investments and Doonbeg Capital Pty Ltd to acquire shares in the first defendant. Item 4 seeks documents in the same date range which evidence or refer to entry into the mandate. Item 5 seeks documents in the same date range which evidence or refer to communications between Holy Investments, or Sam Cheng, and Doonbeg Capital or Brett Clark in relation to the acquisition of shares in the first defendant. Item 6 seeks documents in the same date range that evidence or refer to the identity of the purchaser in whose name any shares in the first defendant would be acquired pursuant to the mandate. Items 7 and 8 seek banking and financial records of payments made by Holy Investments or Sam Cheng or payments received by these parties for the purpose of or in connection with the acquisition of shares in the first defendant. Item 9 seeks documents in the period 19 November 2018 to 31 May 2019 which evidence or refer to any negotiations or communications between named parties concerning the acquisition of shares in the first defendant. Item 11 seeks documents in the same date range as Item 9 which evidence or refer to any negotiations for the purchase of shares in the first defendant.
As noted above at [134] - [135], there is a dispute on the pleadings as to whether Holy Investments and Doonbeg Capital entered into an agreement and, if so, what was done in performance of the mandate. The first defendant pleads that Mr Cheng is the sole director and secretary of Holy Investments. On this basis, I consider Mr Cheng is likely to have documents in his possession which tend to support the case of the first defendant.
For the same reasons as set out above at [134] - [137], I consider that the documents sought from Mr Cheng in these items give rise to a line of inquiry which is relevant to the matters in issue in the pleadings. Accordingly, these items should not be set aside.
Item 2 seeks documents between 1 November 2017 to 31 July 2018 'referring to, evidencing, or in connection with' the contract between the first defendant and Red 5 Limited for the first defendant to have its ore processed by Red 5 Limited. As mentioned above at [143] in relation to the subpoena to Mr Huang, this matter is in issue between the parties and will require determination at trial. As set out in [144], counsel for the first defendant referred me to evidence proposed to be given by Warren Hoy, who refers to a conversation he had with Mr Cheng. On this basis, I consider there is a basis on which the court can be satisfied that Mr Cheng is likely to have documents in his possession which tend to support the case of the first defendant. For this reason, I consider Item 2 ought not be set aside.
Item 10 seeks documents between 1 January 2018 and 28 February 2019 in respect of the purchase of shares in the first defendant from Judith Black, including the payment for these shares. In [160.3.5.7] of the defence, the first defendant pleads that pursuant to Mr Torre's engagement by Doonbeg Capital, Mr Torre arranged the purchase of shares in the first defendant including from Judith Black. In its reply, the plaintiff does not specifically respond to this paragraph of the defence. Accordingly, this matter is in issue between the parties and will require to be determined at trial.
Counsel for the first defendant referred me to the statutory declaration of Frank Torre, [44] who the first defendant proposes to call as a witness at trial.[45] The statutory declaration refers to the purchase of shares by Mr Torre of shares from Judith Black in February 2019.[46] For the purposes of this application, it is not necessary to set out the details of this evidence. It is sufficient to say that on the basis of this evidence, I consider there is a basis on which the court can be satisfied that Mr Huang is likely to have documents in his possession which tend to support the case of the first defendant.
[44] Affidavit of Bernard Arthur John Cummins filed 5 August 2021, 'BAJC-14'.
[45] Witness outline of Frank Andrew Torre filed 13 April 2021.
[46] Affidavit of Bernard Arthur John Cummins filed 5 August 2021 'BAJC-14', page 77.
On the pleadings, there is a dispute between the parties as to whether Mr Torre purchased shares from Ms Black. In these circumstances, the documents sought from Mr Huang in Item 10 give rise to a line of inquiry which is relevant to the matters in issue in the pleadings. However, in my view the time period over which these documents are sought, namely 1 January 2018 to 28 February 2019 is too wide. The evidence before the court is that a written agreement was entered into on 11 February 2019. In my view, the time period for Item 10 should be restricted to 1 January 2019 to 28 February 2019.
Item 12 seeks all banking and financial records and documents evidencing or recording or referring to the amount of cash held by Sam Cheng in the financial year 1 July 2018 to 30 June 2019. The first defendant says that these documents are relevant to the allegation at [160.8] of the defence. This paragraph pleads that the plaintiff and Mr Wu provided Holy Investments with the funds to enable fees and costs to be paid to Doonbeg Capital. The first defendant contends that Holy Investments is 'the alter [e]go' of Mr Cheng and his bank account may have been used for the purposes of the transfer of the funds, as Mr Torre was informed that the funds for the mandate came from two sources.[47]
[47] Affidavit of Cummins filed 5 August 2021 'BAJC-45'.
While I accept, on the basis of these matters, that Holy Investments may have relevant documents, I do not consider there is a basis on the pleadings or the evidence before the court on which the court can be satisfied that Mr Cheng is likely to have documents in his possession documents which tend to support the case of the first defendant. For this reason, I consider that Item 12 ought be set aside.
Item 13 seeks documents in the period 1 January 2020 to 31 March 2020 in relation to the lodgement of applications for forfeiture against the mining tenements of the first defendant. For the reasons set out at [146] - [147], I accept that on the pleadings, there is dispute between the parties as to whether the Golden Soak applications were procured by Mr Cheng. In these circumstances, I consider that the documents in Item 13 give rise to a line of inquiry which is relevant to the issues in the pleadings. This item ought not be set aside.

Application to set aside subpoena to Holy Investments Pty Ltd

The subpoena to Holy Investments is in almost identical terms to the subpoena issued to Sam Cheng. The primary difference is Item 2.
For the reasons I have set out above at [155] - [164], I do not consider that any of the other items ought be set aside although the time period in Item 9 should be restricted to 1 January 2019 to 28 February 2019.
Turning then to Item 2, this item seeks documents between 1 October 2018 and 31 May 2019 in relation to the Doonbeg Mandate. As set out above, there is a dispute on the pleadings as to whether Holy Investments and Doonbeg Capital entered into an agreement and, if so, what was done in performance of the mandate. For this reason, I consider that the documents sought in Item 2 give rise to a line of inquiry which is relevant to the matters in issue on the pleadings. Accordingly, Item 2 of the schedule to the subpoena ought not be set aside.

Application to set aside subpoena to Brett Clark

Many of the items in this subpoena are similar or identical to the terms of the subpoena issued to Mr Cheng. There are three new Items (8, 9 and 10) which all relate to the Doonbeg Mandate.
In its defence, the first defendant contends that Mr Clark, as managing director of Doonbeg Capital, entered into the agreement with Holy Investments. On this basis, I consider that Mr Clark is likely to have documents in his possession which tend to the support the case of the first defendant.
In respect of Items 1 to 7, for the reasons set out above, at [155] - [164], I consider that none of these items ought be set aside although the time period in Items 4 and 5 should be restricted to 1 October 2018 to 31 May 2019.
In relation to Items 8 to 10, these items concern communications between Mr Clark and Frank Torre (Item 8), Anthony Torre (Item 9) and payments to Anthony and Frank Torre (Item 10). The first defendant referred to the statutory declaration of Frank Torre and the mandate that Frank and Anthony Torre are said to have received from Mr Clark. These matters are particularised in the particulars to [160.3] of the first defendant's defence. For the purposes of this application, it is not necessary to set out the details of this evidence. It is sufficient to say that on the basis of this evidence, I consider there is a basis on which the court can be satisfied that Mr Clark is likely to have documents in his possession which supports the case of the first defendant. On this basis, I consider that Items 8 to 10 ought not be set aside.

Application to set aside subpoena to National Australia Bank

Items 1 to 3 of this subpoena concern bank statements between the period 17 September 2018 to 31 May 2019 relating to accounts held in the name of Holy Investments (Item 1), Sam Cheng, whether individually or jointly with others (Item 2) and National Australia Bank (Item 3). The first defendant contends the bank statements sought are relevant to the source of funds to pay for the services provided under the Doonbeg Mandate, including for the payment of shares acquired pursuant to it. The first defendant says these documents are relevant to [160.3.5.32] - [160.3.5.34], [160.8] and [160.17] of the defence, which particularise various payments and invoices issued as between Holy Investments and Frank Torre.
As set out at [162] - [163] above, while I accept that there is a basis on the pleadings to seek production of the bank records of Holy Investments, I do not consider there is any pleaded issue in respect of the bank account of Mr Cheng. In so far as the first defendant seeks banking records of Mr Cheng, I consider this is fishing. For these reasons, Item 2 of the subpoena will be set aside but Item 1 ought not be set aside.
In respect of Item 3, there is evidence before me that funds were transferred from this account to Mr Torre for his work on the mandate.[48] On this basis, given the relatively low threshold, I accept that the records of this account may give rise to a line of inquiry and this Item should not be set aside.

Application to set aside subpoena to ANZ

[48] Affidavit of Bernard Arthur John Cummins filed 5 August 2021, 'BAJC-47' page 240.

The two items sought in this subpoena concern bank statements between the period 17 September 2018 to 31 May 2019 relating to accounts held in the name of Mr Clark, whether individually or jointly with others (Item 1) and Doonbeg Capital (Item 2).
For the reasons set out at [172], while I accept there is a basis on the pleadings for the first defendant to seek production of the bank records of Doonberg Capital, I do not consider there is any pleaded issue in respect of the bank account of Mr Clark. Insofar as the first defendant seeks these records, I consider this is fishing. Accordingly, for these reasons, Item 1 of the subpoena will be set aside.

Conclusion

For these reasons:
(a)the plaintiff's appeal against the decision of the Acting Registrar to set aside Item 1.2 of the Schedule to the subpoena to BDO Audit (WA) Pty Ltd (BDO) should be allowed and the plaintiff's appeal should be otherwise dismissed;
(b)the first defendant's appeal against the decision of the Acting Registrar should be dismissed;
(c)the first defendant's application to set aside the subpoena to Camm Scalise Pty Ltd should be dismissed;
(d)the subpoena to Mr Short should be set aside in part; and
(e)the subpoenas to Yiyang Qui, Sam Cheng, Holy Investments Pty Ltd, Brett Clark and the National Australia Bank Ltd and the Australia and New Zealand Banking Group Ltd should be set aside in part.
Finally, as a general comment, while I have declined the plaintiff's application to set aside the subpoenas to Yiyang Qui, Sam Cheng, Holy Investments Pty Ltd, and Brett Clark in their entirety, I accept that the specified categories that remain are wide and may give rise to questions of oppression. At present, there is no evidence before the court as to whether this is the case. However, that is an issue that these parties can no doubt raise for themselves, if in fact the volume of communications is such that it will be oppressive for them to be required to identify them for the period in which they are sought.
I will hear from the parties as to the precise orders to give effect to these reasons and as to the costs of the applications.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
HW
Research Associate to the Honourable Justice Hill
23 AUGUST 2021