Kestell v Davey - [2022] WASC 32

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   KESTELL -v- DAVEY [2022] WASC 32
CORAM:   SMITH J
HEARD:   27 JANUARY 2022
DELIVERED          :   28 JANUARY 2022
PUBLISHED           :   2 FEBRUARY 2022
FILE NO/S:   CIV 1727 of 2021
BETWEEN:   TIMOTHY ARTHUR KESTELL
Plaintiff
AND
GRANT LAWRENCE BURNAFORD DAVEY
First Defendant
KAYELEKERA RESOURCES PTY LTD
Second Defendant
DAVEY HOLDINGS (AUS) PTY LTD
Third Defendant
DAVEY MANAGEMENT (AUS) PTY LTD
Fourth Defendant

Catchwords:

Practice and procedure - Applications to set aside subpoenas - Whether subpoenas serve a legitimate forensic purpose - Whether subpoenas are an abuse of process - Overlap with discovery and oppression considered - Turns on own facts

Legislation:

Nil

Result:

Defendants' application successful in part
Non-party's application to set aside subpoena granted

Category: B

Representation:

Counsel:

Plaintiff	:	Mr G D Cobby SC
First Defendant	:	Mr M L Bennett
Second Defendant	:	Mr M L Bennett
Third Defendant	:	Mr M L Bennett
Fourth Defendant	:	Mr M L Bennett
Non-party	:	Mr R J Black

Solicitors:

Plaintiff	:	Tottle Partners
First Defendant	:	Bennett + Co
Second Defendant	:	Bennett + Co
Third Defendant	:	Bennett + Co
Fourth Defendant	:	Bennett + Co
Non-party	:	Norton Rose Fulbright

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

Apache Northwest Pty Ltd v Western Power Corporation (1998) 19 WAR 350
Boase v Axis International Management Pty Ltd [No 3] [2012] WASC 498
Burchard v Macfarlane [1891] 2 QB 241
Commissioner for Railways v Small (1938) 38 SR (NSW) 564
Commonwealth v Albany Port Authority [2006] WASCA 185
Goldie v Getley (as executor of the estate of Goldie) [No 2] [2010] WASC 66
Hongkong Xinhe International Investment Company Ltd v Bullseye Mining Ltd [No 4] [2021] WASC 287
Jensen v Nationwide News Pty Ltd [No 6] [2018] WASC 415
National Employers' Mutual General Association Ltd v Waind [1978] 1 NSWLR 372
Perdaman Chemicals and Fertilisers Pty Ltd v The Griffin Coal Mining Company Pty Ltd [No 6] [2012] WASC 450
Rankilor v City of South Perth [2016] WASCA 28
Santos Ltd v Pipelines Authority of SA (1996) 66 SASR 38
Trade Practices Commissioner v Kimberley Homes Pty Ltd (1989) 217 ALR 110
Western Power Corporation v Woodside Petroleum Development Pty Ltd (unreported, WASC, Library No 970332, 27 June 1997)
Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [2012] WASC 37

SMITH J:

(This judgment was delivered extemporaneously on 28 January 2022 and has been edited from the transcript to add refences to authorities).

1.0 The application and the result

1.1 The applications to set aside the subpoenas

The defendants made an application pursuant to O 36B r 8A of the Rules of the Supreme Court 1971 (WA) to set aside four subpoenas issued on 20 October 2021 at the request of the plaintiff to the following non‑parties to the action:
(a)Lotus Resources Ltd;
(b)Stuart Andrew McKenzie, a company secretary of Lotus Resources Ltd, the second defendant and Lily Resources Pty Ltd;
(c)Benjamin Kent Kay, a director of BW Equities Pty Ltd; and
(d)BW Equities Pty Ltd, an equity capital market advisory service, and the underwriter of the share placement of the acquisition of shares in a project in Malawi.
Lotus Resources Ltd also made a separate application to set aside the subpoena issued to it.
Neither Mr Kay nor BW Equities Pty Ltd have made an application to set aside the subpoenas issued to each of them.
Mr McKenzie has complied with the subpoena issued to him. He informed the court by letter addressed to the principal registrar dated 3 November 2021 that he has no documents in his possession that are described in the subpoena. Consequently, it is not necessary to consider the defendants' application insofar as it relates to Mr McKenzie.
The subpoenas to Mr Kay and BW Equities Pty Ltd seek the production of the same categories of documents and these are:
All documents (including emails, text messages and WhatsApp messages) sent to or received from any one or more of:
a)Mr Grant Davey;
b)Kayelekera Resources Pty Ltd ('Kayelekera');
c)Davey Holdings (Aus) Pty Ltd;
d)Davey Management (Aus) Pty Ltd;
e)Lotus Resources Ltd (previously named Hylea Metals Ltd) ('Lotus');
f)Matador Capital Pty Ltd; and
g)Lily Resources Pty Ltd ('Lily');
between 1 January 2019 and 30 June 2020 referring or relating to any one or more of the following:
a)the plaintiff;
b)Lotus;
c)Kayelekera;
d)the acquisition by Lotus of the shares in Lily previously held by Kayelekera; and
e)the shareholding of Kayelekera.
The scope of subpoena issued to Lotus Resources Ltd is similar. It seeks production of all documents, including emails etc sent by Lotus to, or received by Lotus from, any one or more of:
a)Mr Grant Davey;
b)Kayelekera Resources Pty Ltd ('Kayelekera');
c)Davey Holdings (Aus) Pty Ltd;
d)Davey Management (Aus) Pty Ltd;
e)Matador Capital Pty Ltd;
f)Stuart Andrew McKenzie; and
g)Lily Resources Pty Ltd ('Lily');
between 1 September 2018 and 13 August 2021 referring or relating to any one or more of the following:
h)the plaintiff;
i)the acquisition by Lotus of the shares in Lily previously held by Kayelekera; and
j)the shareholding of Kayelekera.

1.2 The grounds relied upon to set aside the subpoenas

The defendants claim that the subpoenas do not serve a legitimate forensic purpose in that the categories of documents sought go well beyond the relevant issues raised in the action. This is because it says the issues in dispute in the pleadings relate to alleged oral agreements between the plaintiff and the first defendant.
The defendants also claim that the subpoenas are an abuse of process on grounds that, to the extent that any of the documents sought are relevant to the pleaded issues, there is an overlap between the documents which are sought in the subpoenas and those documents that will be discovered by the parties. Further, to the extent that the subpoenas extend beyond the documents that would be discovered by the parties, those documents could not be considered apparently relevant and thus amount to a fishing expedition.
Further, the defendants claim that the scope and breadth of the subpoenas are oppressive because the subpoenas cover significant time periods, define the term documents widely and extensively, require production by potentially numerous individuals employed by or acting as agents for corporate entities, and require the producing party to exercise forensic judgment.
Lotus Resources Ltd applies to set aside the subpoena to it on the basis that it is oppressive in its breadth and scope, is an abuse of process and may serve no legitimate forensic purpose.

1.3 Legal principles

The legal principles relevant to setting aside subpoenas were recently summarised by Hill J as follows:[1]
[1] Hongkong Xinhe International Investment Company Ltd v Bullseye Mining Ltd [No 4] [2021] WASC 287 [11].
(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. A document may provide material assistance even if it is not admissible in the proceedings;
(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;
(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:
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.
A subpoena is not a different means by which the purposes of O 26 may be achieved and it is inappropriate to use a subpoena issued to a party in proceedings in substitution for an application for discovery or discovery of particular documents.[2]
[2] Rankilor v City of South Perth [2016] WASCA 28 [38].
However, in circumstances where the addressee of the subpoena is not a party to the proceeding, it can be entirely appropriate to issue subpoenas before discovery.[3]
[3] Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [2012] WASC 37.
The authorities establish that it is an abuse of process to compel the production of documents from a third party if the subpoena is used for the purpose of discovery whereby the person to whom the subpoena is addressed will have to make a judgment as to which documents relate to the issues between the parties.[4]
[4] National Employers' Mutual General Association Ltd v Waind [1978] 1 NSWLR 372, 382 (Glass JA, Moffitt P & Hutley JA agreed), applying Burchard v Macfarlane [1891] 2 QB 241 and Commissioner for Railways v Small (1938) 38 SR (NSW) 564.
A subpoena may also be oppressive if the terms of the subpoena are so wide that it imposes on a stranger an obligation to collect and produce documents, many of which can have no relevance to the litigation.[5]
[5] National Employers' Mutual General Association Ltd v Waind [1978] 1 NSWLR 372, 382 (Glass JA, Moffitt P & Hutley JA agreed).
The fact that compliance with subpoenas would be burdensome for a stranger to the litigation is not sufficient to show abuse of process. Rather, it is a burden so unreasonable as to show oppression which is required.[6]
[6] Goldie v Getley (as executor of the estate of Goldie) [No 2] [2010] WASC 66 [53]; Trade Practices Commissioner v Kimberley Homes Pty Ltd (1989) 217 ALR 110, 114 – 115.
Whether to set aside a subpoena on the basis that it is oppressive is to be determined by reference to the breadth of the subpoena, the definition of documents involved, and the type and degree of burden placed on the addressee.[7]
[7] Jensen v Nationwide News Pty Ltd [No 6] [2018] WASC 415 [48]; citing Apache Northwest Pty Ltd v Western Power Corporation (1998) 19 WAR 350, 380 ‑ 381.
Oppression may be made out where a subpoena requires a recipient to undertake a search of an excessively large amount of documents.[8]
[8] Commonwealth v Albany Port Authority [2006] WASCA 185 [23] ‑ [29].

2.0 Disposition

2.1 The pleaded issues in the action[9]

[9] This summary is of the matters pleaded in the plaintiff's statement of claim contained in the amended writ of summons endorsed with statement of claim dated 19 August 2021 and the defence dated 24 September 2021.

The first defendant is and has been at all material times the sole director of the second defendant, the third defendant and the fourth defendant.
In essence, the dispute between the parties is whether the plaintiff is entitled to 50,954,438 shares in Lotus Resources Ltd, or alternatively 22.5% of the issued shares in the second defendant. The defendants deny the plaintiff is entitled to any shares. They pleaded in their defence dated 24 September 2021 that he repudiated an oral agreement made between him and the first defendant on 11 June 2019, or alternatively that the agreement was varied, and the variation remains unenforceable. In the alternative, the defendants plead that if the agreement as varied remains enforceable, the plaintiff has a beneficial interest over 22.5% of the issued capital of the second defendant.
In August 2018, the plaintiff commenced discussions with representatives of Paladin Energy Ltd with respect to the possible acquisition and partial on‑sale of an interest then indirectly held by Paladin Energy Ltd in a uranium project in Malawi (the project).
In or about September 2018, the plaintiff and the first defendant commenced discussions with respect to the possible acquisition of the project. Whether they reached an oral agreement or an agreement to agree at that time, and if an agreement was reached, the terms of that agreement, are in dispute.
Sometime between September 2018 and December 2018, preliminary due diligence information and detailed due diligence was undertaken to assess the proposed acquisition. The involvement by the plaintiff in the due diligence work that was undertaken is in dispute.
In or about late November 2018 or early December 2018, the plaintiff and the first defendant reached an oral agreement about a suitable company to fund the acquisition of the shares in the project held by Paladin Energy Ltd. The terms of this agreement are in dispute. The plaintiff claims that, on acquisition, the listed company would be entitled to a portion, but not all, of Paladin Energy Ltd's shares in Paladin Africa Ltd. The plaintiff also claims that the remaining portion of those shares would be divided between the plaintiff and the first defendant or their respective nominees in equal shares after providing, if necessary, shares for any third parties who became involved in the work required to secure the acquisition and on‑sale of Paladin Energy Ltd's interest in the project. The defendants deny this was a term of this agreement and claim one of the terms was that, in the event that the acquisition was for only part of Paladin Energy Ltd's shares in Paladin Africa Ltd, the remainder of those shares would be distributed between all parties that contributed to the acquisition of the project (potentially including the plaintiff and the first defendant) in proportions equivalent to their contributions to the acquisition and subsequent execution of the project.
It is agreed that on 13 December 2018, the plaintiff and the first defendant agreed that they would use Matador Capital Pty Ltd (a company that the first defendant is and has been at all material times the sole director of) for the purpose of furthering their negotiations with Paladin Energy Ltd, and in particular for the purpose of entering into an exclusive agreement with Paladin Energy Ltd with respect to the project.
It is also agreed that on or about 3 January 2019, Matador made a written agreement with Paladin Energy Ltd pursuant to which Paladin Energy Ltd granted Matador exclusive rights for a period to acquire an 85% direct or indirect interest in the project. The defendants plead that it was an express term of this agreement that Matador, or an associated entity, pay Paladin Energy Ltd a non‑refundable exclusivity fee of $200,000, and that the plaintiff did not make any financial contribution during the detailed due diligence process nor cover the costs required through the exclusivity period.
The plaintiff pleads that on or about 31 January 2019, he and the first defendant orally agreed to vary the remaining proportions of Paladin Energy Ltd's shares in Paladin Africa Ltd to be divided between them or their respective nominees as to a three-quarter share to the first defendant or his nominee and a one quarter share to the plaintiff or his nominee. The defendants deny that there was any variation to the terms of the agreement made on 3 January 2019.
In or about May 2019, negotiations commenced between the plaintiff, the first defendant and representatives of Lotus Resources Ltd with respect to the possible acquisition by Lotus Resources Ltd of an indirect interest in the project. At this time, the plaintiff was a director of Lotus Resources Ltd.
On 5 June 2019, a company that was subsequently renamed Lily Resources Pty Ltd was formed. The first defendant is the sole director of Lily Resources Pty Ltd. The issued capital of Lily Resources Pty Ltd comprised of 4,256 fully paid ordinary shares and at 2 August 2021, its issued capital was held by Lotus Resources Ltd in the proportion of 76.5%, being 3,256 shares, and 23.5% by the second defendant, being 1,000 shares.
On or about 11 June 2019, the plaintiff and the first defendant reached an oral agreement about the plaintiff's entitlement to issued share capital in respect of the acquisition of the project.
The terms of this agreement reached on 11 June 2019 are in dispute. The plaintiff claims that it was a term of the agreement that he or his nominee would be entitled via Lily Resources Pty Ltd to an interest equivalent to at least 3.5 percentage points of the 85% interest held by Paladin Africa Ltd in the project, subject to the acquisition proceeding. The defendants plead that there was an oral agreement that the plaintiff or his nominee would be entitled to a 17.5% share of the issued capital of the first defendant on specified conditions, which included:[10]
[10] Defence dated 24 September 2021, par 19.
19.1Mr Kestell facilitating the issue of Lotus options to interested persons in accordance with an oral agreement reached between Mr Davey and Mr Kestell;
19.2Lotus re-complying pursuant to the Australian Securities Exchange Ltd's listing rules, so as to have its securities listed for quotation, following the acquisition of PEL's [Paladin Energy Ltd] shares in PAL [Paladin Africa Ltd];
19.3an agreement being executed between Lily and PEL for the acquisition of PEL's shares in PAL;
19.4Lily acquiring PEL's shares in PAL (Acquisition);
19.5following Acquisition, Mr Kestell being actively involved in executing the Project including, but not limited to, complying with his obligations as a director of Lotus;
19.6at an appropriate time, Mr Kestell resigning from the Board of Lotus to allow an experienced uranium board and management team to take over the company;
19.7following Acquisition, Mr Kestell publicly acknowledging that the shareholders of Lotus had given support and approval for Mr Kestell's participation in KRPL [second defendant] and the sale of the Project to Lotus; and
19.8following Acquisition, Mr Kestell actively managing the existing shareholders of Lotus who were on the share register prior to 24 June 2019 through organising them lines if they wish to sell shares in Lotus and managing those lines of shareholders until all holders of shares in KRPL decided to sell all of their shares in KRPL.
The plaintiff pleads that on or about 26 June 2019, the agreement reached on 11 June 2019 was varied by further oral agreement between him and the first defendant and the material express term of this variation was that, subject to the acquisition proceeding, the plaintiff or his nominee would be entitled via the first defendant's holding in Lily Resources Pty Ltd to an interest equivalent to 4.5% of the project. The defendants deny that this was the term of the variation and say the material term was to increase the plaintiff's interest in the first defendant from 17.5% to 22.5%, subject to the conditions pleaded in par 19 of the defence.

On 21 June or 24 June 2019, Paladin Energy Ltd, Lotus Resources Ltd and Lily Resources Pty Ltd entered into a written agreement whereby Paladin Energy Ltd would sell its Paladin Africa Ltd shares to Lily Resources Pty Ltd, in which Lotus Resources Ltd had a call option to acquire 1,000 shares in Lily Resources Ltd held by the first defendant.
On or about 13 March 2020, Lily Resources Ltd acquired Paladin Energy Ltd's shares in Paladin Africa Ltd.
The plaintiff pleads that in or about April or May 2020, the first defendant repudiated the agreement made on 11 June 2019. The defendants deny this occurred and say that between 31 March 2020 and 11 April 2020, the plaintiff evinced an intention not to perform the terms of the 11 June 2019 agreement.
What emerges from the parties' pleaded cases is that there are issues which relate to the actions of Lotus Resources Ltd, including its agents who carried out work to assist in the acquisition of the interest in the project, which involved negotiations between the plaintiff, the first defendant and representatives of Lotus Resources Ltd from May 2019. No issues appear to be raised in the pleadings which relate to the involvement of Lotus Resources Ltd prior to that date. However, it is clear from the pleadings that there is at least an issue about the ongoing involvement of Lotus Resources Ltd in the process of the acquisition of the project from at least that date.

2.2 The Lotus subpoena

Lotus Resources Ltd is a publicly listed company. Importantly, for part of the nominated period in the subpoena, the plaintiff was a director. Consequently, the categories of documents sought which refer to or relate to him are likely to generate a number of documents that do not relate to the issues in the proceedings.
Lotus Resources Ltd claims the subpoena to it is oppressive. Mr Black, in an affidavit sworn by him on 13 January 2021, states:
(a)the director of Lotus Resources Ltd informed him that an initial search had been conducted for emails with reference to the relevant time period and the nominated entities, which returned a total of 153,353 documents, of which 108,408 were unique; and
(b)Lotus Resources Ltd's instructing solicitors conducted some preliminary keyword searches relating to the topics nominated in the subpoena, which returned 100,109 results.
Senior counsel for the plaintiff submitted that the statements made by Mr Black in his affidavit in respect of the searches conducted should not be accepted by the court as having probative force because there is no information provided in respect of what was imputed to run the searches.
As counsel for Lotus Resources Ltd points out, this submission should not be accepted for two reasons.
First, the parameters imputed in the search were run by Norton Rose Fulbright.
Second, if a person has made an application to set aside a subpoena on grounds of oppression on the basis that if the subpoena is complied with, the person would have to undertake a search of an excessive number of documents, the person should not be required to identify with absolute certainty the number of documents that they may be required to produce.
Lotus Resources Ltd also says, given that the Lotus subpoena as currently drafted extends beyond emails to all documents, the number of documents required to be reviewed is almost certain to be well in excess of 100,109 documents, which it says is an excessively large number of documents for a non-party to the proceedings to review, and would require it to incur considerable time and expense to collate, review and produce. It estimates that the expense would be no less than $250,000 to comply with the subpoena.
It says the extraordinary number of documents that it would be required to review is a direct result of:
(a)the breadth of the authors and recipients of documents, which include all documents between Lotus and any one or more of the nominated entities. Further, the 108,408 documents were collated from 24 separate Lotus email accounts;
(b)the nominated period extending almost three years; and
(c)the breath of the topics, one of which is the plaintiff. Because the plaintiff was a director during part of that period there, there is likely to be a significant number of documents which relate to him in his capacity as a former director, which may bear no relevance to the matters in issue in the proceedings. It is difficult to dispute this contention insofar as the subpoena seeks all documents, including messages to Lotus or received by Lotus by Mr McKenzie between 1 September 2018 and 13 August 2021 referring to and relating to the plaintiff. The scope of this subject matter is so wide that it would cover all correspondence between Mr McKenzie and the plaintiff in the period that the plaintiff was a director, that is from 1 September 2018 to 31 May 2020, which is a period of one year and nine months and would cover all correspondence in that period. Some of this correspondence would be clearly unrelated to any issue that could be raised in the action.
Lotus Resources Ltd also says that the nominated topics would require it to form a judgment of relevance to the proceedings that it is not in a position to make and is not appropriate for a subpoena. This is a factor that I do not find necessary to decide because I am of the opinion, for the reasons set out below, that the subpoena should be set aside on grounds of oppression.
Lotus Resources Ltd also claims that the subpoena is abuse of process and may serve no legitimate forensic purpose on grounds that, to the extent that the subpoena requires it to produce documents that are discovered by the parties, it will not add to the relevant evidence in the case. Consequently, it is said that the Lotus subpoena will serve no legitimate forensic purpose.
Following the service of the subpoena, as a result of conferral between the plaintiff's instructing solicitors and Lotus Resources Ltd's instructing solicitors, the plaintiff put to Lotus Resources Ltd that the categories of documents sought by the plaintiff could be narrowed by reducing the date range to a period of two years and three months from 1 September 2018 to 31 December 2020 and reducing the keywords to five words being, 'Tim, Kestell, stake, bare trust, and honour'.
As a result of conferral, a revised search was conducted which resulted in a potential range of relevant documents being reduced between 6,063 and 37,095 (attachments and email chains are included), being unique documents (no duplicates) and a cost of $25,000 to comply.
Lotus Resources Ltd says it is not possible to amend a subpoena solely by agreement between the issuing party and the recipient. Only the court can amend a subpoena, but it is not the task of the court to redraw the subpoena in order to make it unobjectionable. The power to amend should be exercised only where the amendment is obvious, readily cures the ambiguity and the subpoena is not otherwise oppressive.[11]
[11] Perdaman Chemicals and Fertilisers Pty Ltd v The Griffin Coal Mining Company Pty Ltd [No 6] [2012] WASC 450 [13] – [14] (Edelman J); citing Santos Ltd v Pipelines Authority of SA (1996) 66 SASR 38 (Debelle J, Cox & Prior JJ agreeing); Western Power Corporation v Woodside Petroleum Development Pty Ltd (unreported, WASC, Library No 970332, 27 June 1997) 16 – 17 (Wheeler J).
Further, Lotus Resources Ltd submit that even if the subpoena was amended or reissued with the reduced scope contemplated by the plaintiff in the correspondence, it would still require the review of 37,095 relevant documents, which is oppressive.
I do not agree that the subpoena is an abuse of process because there may be some overlap between the documents produced pursuant to the subpoena and those discovered by the defendants. It is clear from the subpoena that there is likely to be many documents that would not be in the possession of the parties.
As the defendants point out in their written submissions, the issues in dispute in the action are about oral agreements made between the plaintiff and the first defendant. However, the case is also about what the terms of the agreements were and the performance of the terms of those agreements. If the defendants' case is accepted, an issue arises as to whether the plaintiff performed the conditions precedent to the agreement made on 11 June 2019, which conditions required the plaintiff to perform certain duties involving Lotus Resources Ltd.
Notwithstanding that I am satisfied that there are likely to be some, if not many, documents that may be relevant to the issues raised by the parties that are not in possession of the parties, I am of the opinion that the subpoena should be set aside on grounds that it is oppressive.
The reason why I have reached this opinion is as follows. First, the pleaded issues are not complicated. In a strategic conference on 11 November 2021, senior counsel for the plaintiff indicated to the court that a trial of the action would be short and should occupy three or four days of court time. Counsel for the parties now agree five days would be sufficient. It is difficult to see how requiring an unrelated party to the proceedings to produce approximately 100,000 documents that many of these documents could be relevant to the issues raised by the parties in their cases as those issues are currently pleaded in the parties respective pleadings.
Second, the scope of the categories of documents sought in the subpoena are so broad that it can only be described as a fishing expedition. The scope is such that it constitutes casting a net in a very large pool of documents in an attempt to locate a small proportion of those documents that support the plaintiff's case or assist in destroying the defendants' case. In reaching this view, I rely specifically on the category which relates to documents to be produced either sent by Lotus or received by Lotus by Mr McKenzie to the plaintiff.
Third, the burden on Lotus Resources Ltd to produce the documents sought is not reasonable given the number of documents answering the description in the subpoena. The work required to comply with the subpoena appears to be significantly disproportionate to the factual and legal complexity of the matters raised in the pleadings. As the pleadings currently stand, the issues pleaded are not particularly complex and the resolution of the issues in dispute in a trial should not take up a significant amount of time.
As to the cost of compliance, there may be some force in the plaintiff's argument that it would not be reasonable for solicitor/client costs to be charged to assess whether documents are relevant. However, I do not find it necessary to express a conclusive view on this issue or whether this amount is a reasonable estimate because I have formed the opinion that the subpoena issued to Lotus Resources Ltd should be set aside.
I agree that it is not appropriate for this court to make amendments to the subpoena. However, if the plaintiff intends to issue a fresh subpoena to Lotus Resources Ltd, I am of the opinion that there should be further conferral between the plaintiff and Lotus Resources Ltd in an endeavour to reach agreement about a narrowed scope of categories of documents.

2.3 Mr Kay and BW Equities Pty Ltd

In the absence of any application by either Mr Kay or BW Equities Pty Ltd, or any other information in respect of which an argument could properly be raised by either of them or the defendants that Mr Kay or BW Equities Pty Ltd would have to review an excessively large number of documents, and considerable time and expense to collate, review and produce, or to form a judgment on the relevance of documents to the issues between the parties, I am not satisfied that either of these subpoenas should be set aside.
As counsel for the defendants pointed out, the role of Mr Kay and BW Equities Pty Ltd was to undertake the underwriting of the share placement of the acquisition of shares in the project. It is apparent from the matters pleaded by the parties and the affidavit of the plaintiff affirmed on 10 November 2021 that Mr Kay and BW Equities Pty Ltd were engaged as a corporate advisor responsible for a capital raising in two separate placements in a rights issue over a 10 month period as part of the acquisition. The process of the acquisition and the agreements in respect of the rights of the plaintiff and the defendants, particularly the first defendant, to the benefit of the acquisition of shares in the project are at the heart of the material issues pleaded in the action. When the categories of documents to be produced are reviewed in this context, on the face of the subpoenas, I am not satisfied that the documents sought would extend to matters beyond any pleaded issue or evidential issue or matters going to credit that could be raised in the action. The subject matter of the subpoenas is confined to the plaintiff, Lotus Resources Ltd, the second defendant, the acquisition by Lotus Resources Ltd of its shares in Lily Resources Pty Ltd previously held by the second defendant, and the shareholding of the second defendant.
Importantly, of the seven persons who are identified in the subpoenas to Mr Kay and BW Equities Pty Ltd as persons who either sent or received documents, three of those persons are corporations, Lotus Resources Ltd, Matador Capital Pty Ltd and Lily Resources Pty Ltd, and are not parties to the proceedings. Although they are not parties, particular conduct of each of these three corporations during the course of the dispute between the parties are pleaded as relevant facts relating to the issues in dispute between the parties.
Consequently, I am satisfied that the categories of documents sought in these subpoenas meet the test for determining whether a subpoena has a legitimate forensic purpose. In particular, I am satisfied that there is a reasonable possibility that the documents sought in the subpoenas will materially assist the claim or defence of the proceedings or be relevant to an issue in the proceedings.
I am not persuaded by the argument that the documents sought in these subpoenas will extend to all relevant documents that will be discovered by the parties. The test for relevance in seeking production of documents in a subpoena is different to and has a lower threshold than the issue of relevance in determining an application for discovery.[12] The test for relevance in determining an application for production of documents by subpoena is apparent relevance.
[12] Boase v Axis International Management Pty Ltd [No 3] [2012] WASC 498 [10] ‑ [11] and [19] (Beech J); Hongkong Xinhe International Investment Company Ltd v Bullseye Mining Ltd [No 4] [2021] WASC 287 [36] (Hill J).

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
EC
Associate to the Honourable Justice Smith
2 FEBRUARY 2022