KNT Contracting Pty Ltd v Yeeda Pastoral Company
[2023] WASC 435
•15 NOVEMBER 2023
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: KNT CONTRACTING PTY LTD -v- YEEDA PASTORAL COMPANY [2023] WASC 435
CORAM: LUNDBERG J
HEARD: 13 NOVEMBER 2023
DELIVERED : 15 NOVEMBER 2023
FILE NO/S: ARB 4 of 2023
BETWEEN: KNT CONTRACTING PTY LTD
Plaintiff
AND
YEEDA PASTORAL COMPANY
Defendant
Catchwords:
Arbitration - Ex parte application for subpoenas to be issued to several persons to give evidence to arbitral tribunal - Application made under s 27A of the Commercial Arbitration Act 2012 (WA) - Turns on own facts
Legislation:
Commercial Arbitration Act 2012 (WA), s 27A, s 27B, s 27I
International Arbitration Act 1974 (Cth), s 23
Rules of the Supreme Court 1971 (WA), O 36B
Supreme Court (Arbitration) Rules 2016 (WA), r 17
Result:
Leave granted
Category: B
Representation:
Counsel:
| Plaintiff | : | Mr K Christensen |
| Defendant | : | No appearance |
Solicitors:
| Plaintiff | : | Creevey Russell Lawyers |
| Defendant | : | No appearance |
Case(s) referred to in decision(s):
ASADA v 34 Players and One Support Person [2014] VSC 635
Aurecon Australasia Pty Ltd v BMD Constructions Pty Ltd [2017] VSC 382; (2017) 52 VR 267
Australian Gas Light Company v Australian Competition & Consumer Commission [2003] FCA 1101
AVZ Minerals Ltd v Fat Tail Holdings Pty Ltd [2023] WASC 403
Duckworth v Water Corporation [2012] WASC 30; (2012) 261 FLR 185
Esposito Holdings Pty Ltd v UDP Holdings Pty Ltd [2015] VSC 183
Mountain View Productions LLC v Keri Lee Charters Pty Ltd [2022] FCA 161
Schiavello Construction (Vic) Pty Ltd v Carlisle Homes Pty Ltd [2023] VSC 627
UDP Holdings Pty Ltd v Esposito Holdings Pty Ltd [2018] VSC 316
we-do-IT Pty Ltd v we-do-IT Inc [2023] VSC 611
LUNDBERG J:
A. Introduction
These reasons relate to the plaintiff's application brought by originating summons on 7 November 2023. The summons seeks the leave of the court pursuant to s 27A of the Commercial Arbitration Act 2012 (WA) (CAA) for subpoenas to be issued to three former employees of the defendant, to require those persons to attend to give evidence at a scheduled domestic arbitration before the Honourable John Chaney SC.[1]
[1] The subpoenas do not require that the recipients produce any documentary material.
The summons was supported by an affidavit from a solicitor for the plaintiff, Daniel James Creevey, sworn on 6 November.
As the arbitration is scheduled to commence on 4 December, the court arranged for the summons to be listed on 13 November for hearing. Ahead of that hearing, there were some further communications between my chambers and the plaintiff regarding the summons, following which a brief outline of submissions was filed by the plaintiff on the morning of the hearing. Notice of the hearing was given to the defendant, however, the court was informed the defendant did not propose to appear and so the matter proceeded ex parte, in effect. Applications such as the present will usually be heard on an ex parte basis.[2]
[2] Schiavello Construction (Vic) Pty Ltd v Carlisle Homes Pty Ltd [2023] VSC 627 [15] - [18] (Croft J).
On the basis of the matters deposed to in the supporting affidavit, and having regard to the written and oral submissions advanced on behalf of the plaintiff, I was satisfied that the prerequisites for the making of the order had been met, and that it was appropriate for the court to exercise the power to issue the subpoenas in the circumstances. These are my reasons for granting leave to issue the subpoenas.
B. Legislative framework and principles
Section 27A of the CAA forms part of the regime in pt 5 of the legislation, which is headed 'Conduct of arbitral proceedings'. In general terms, this regime embodies the supportive jurisdiction of the court (as distinct from its supervisory jurisdiction) in respect of domestic arbitral proceedings.[3]
[3] Management of matters brought under the CAA is dealt with under PD 4.1.2.3 (and PD 4.1.2) of the Consolidated Practice Directions.
Section 27A provides as follows:
27A. Parties may obtain subpoenas
(1)The Court may, on the application of any party, and subject to and in accordance with rules of court, issue a subpoena requiring a person -
(a)to attend for examination before the arbitral tribunal; or
(b)to produce to the arbitral tribunal the documents specified in the subpoena; or
(c)to do both of those things.
(2)A party may only make an application to the Court under subsection (1) with the permission of the arbitral tribunal.
(3)A person must not be compelled under any subpoena issued in accordance with subsection (1) to answer any question or produce any document that the person could not be compelled to answer or produce in a proceeding before the Court.
An application for leave to issue a subpoena must comply with the applicable requirements in Rule 17 of the Supreme Court (Arbitration) Rules 2016 (WA). Rule 17 provides:
17.Subpoenas (WA Act s. 27A)
(1)An application for the issue of a subpoena under the WA Act section 27A must be made by way of an originating summons in the form of Form 15.
(2)The summons must be accompanied by the following -
(a)a draft subpoena in accordance with subrule (3);
(b)an affidavit stating the following -
(i)the names of the parties to the arbitration;
(ii)the name of the arbitrator or the names of the arbitrators constituting the arbitral tribunal conducting the arbitration;
(iii)the place where the arbitration is being conducted;
(iv)the nature of the arbitration;
(v)the terms of the permission given by the arbitral tribunal for the application;
(vi)the conduct money (if appropriate) to be paid to the addressee;
(vii)the witness expenses payable to the addressee.
(3)A draft subpoena must be -
(a)for a subpoena to attend for examination before an arbitral tribunal - in the form of Form 16; or
(b)for a subpoena to produce to the arbitral tribunal the documents mentioned in the subpoena - in the form of Form 17; or
(c)for a subpoena to attend for examination and produce documents - in the form of Form 18.
(4) The Court may -
(a)fix an amount that represents the reasonable loss and expense the addressee will incur in complying with the subpoena; and
(b)direct that the amount be paid by the applicant to the addressee before or after the addressee complies with the subpoena.
(5)An amount fixed under subrule (4) may be in addition to any conduct money or witness expenses referred to in subrule (2)(b).\
(6)A subpoena must be -
(a)for a subpoena to attend for examination before an arbitral tribunal - in the form of Form 16; or
(b)for a subpoena to produce to the arbitral tribunal the documents mentioned in the subpoena - in the form of Form 17; or
(c)for a subpoena to attend for examination and produce documents - in the form of Form 18.
(7)A person served with a subpoena must comply with the subpoena in accordance with its terms.
(8)The RSC Order 36B applies so far as is practicable to a subpoena referred to in this rule.
In the case of an application for leave to issue subpoenas to require testimony only, there are, in effect, four prerequisites to the making of an order under s 27A of the CAA, having regard to the text of the provision and applicable rules. First, it must be established that there is an arbitration agreement in existence.[4] Second, it must be established that an arbitration proceeding has been initiated, including that an arbitrator has been duly appointed, either by the parties or through some other process.[5] Third, the moving party must demonstrate that the appointed arbitrator has granted his or her permission to the making of the application itself.[6] Fourth, the application must comply with the applicable requirements in Rule 17, which includes the provision to the court of a draft subpoena and a compliant affidavit which verifies the matters specified in Rule 17(2)(b).
[4] CAA, s27A(1) permits an application to be made by a 'party', being a 'party to an arbitration agreement' (as further defined in s 2(1) CAA. The term 'arbitration agreement' is defined in s 7 CAA.
[5] CAA, s 27A(1) which requires that there be an 'arbitral tribunal' in existence, but the point is made more obvious by the permission requirement in s 27A(2).
[6] CAA, s 27A(2).
Upon those prerequisites being established to the satisfaction of the court, there remains a discretion for the court to exercise as to whether leave should be given in all the circumstances. The opening language of s 27(1) confirms the existence of the discretion. That discretion is unconstrained by the language of the statute, but must naturally be exercised judicially and having regard to the objects and purposes of the empowering statute.
Further, the discretion which the statute vests in the court should be exercised having regard to certain matters of principle which have become well-established, and which emerge from the relative roles played by the arbitral tribunal and by the court when the latter is exercising the supportive jurisdiction. Without wishing to be exhaustive,[7] those principles include:
(a)As the court is exercising a jurisdiction intended to support the arbitral process, a degree of deference to the position taken by the arbitral tribunal is warranted. So much is evident from the inclusion within the legislation of the requirement that the arbitral tribunal must grant its permission to the making of an application seeking leave to issue a subpoena. The tribunal will typically be far better placed than the court to assess issues of relevance and oppression which often fall for consideration when assessing whether a subpoena should issue.[8]
(b)The foregoing point may be restated in this way - there is no warrant for the court to undertake a process which would second guess the tribunal's assessment, where the tribunal has already granted its permission to the application. The court's statutory task is not to duplicate the role of the tribunal, nor to approach the matter in a heavy handed manner.[9]
(c)Nonetheless, it is quite clear the court is not to approach the discretion as a mere rubber stamp. The exercise of the court's coercive powers to require that a non-party to the arbitration agreement attend the arbitration hearing and/or produce documents to the tribunal, is a matter of seriousness and should be approached accordingly.[10]
[7] Noting the observations of French J (as his Honour then was) that it is not appropriate to be overly prescriptive in setting out criteria for the grant of leave to issue a subpoena: Australian Gas Light Company v Australian Competition & Consumer Commission [2003] FCA 1101 [8] (French J).
[8] Aurecon Australasia Pty Ltd v BMD Constructions Pty Ltd [2017] VSC 382; (2017) 52 VR 267 [5] (Croft J); and we-do-IT Pty Ltd v we-do-IT Inc [2023] VSC 611 (Croft J).
[9] Aurecon Australasia Pty Ltd v BMD Constructions Pty Ltd [5] (Croft J); Esposito Holdings Pty Ltd v UDP Holdings Pty Ltd [2015] VSC 183; UDP Holdings Pty Ltd v Esposito Holdings Pty Ltd [2018] VSC 316; and ASADA v 34 Players and One Support Person [2014] VSC 635 [63].
[10] Mountain View Productions LLC v Keri Lee Charters Pty Ltd [2022] FCA 161 [12] (Stewart J), which concerned the International Arbitration Act 1974 (Cth).
There are strong indications in the decided cases that, although provisions such as s 27A of the CAA do not expressly include a requirement that the grant of leave must be 'reasonable' in all the circumstances,[11] that nonetheless reasonable grounds must be shown. I refer in this regard to the decisions of Croft J in Aurecon Australasia Pty Ltd v BMD Constructions Pty Ltd[12] and Schiavello Construction (Vic) Pty Ltd v Carlisle Homes Pty Ltd.[13] As these are decisions of a single judge dealing with uniform national legislation, I consider I should follow this approach unless persuaded it is plainly incorrect.[14] This issue was not the subject of argument before me and, in any event, I would be satisfied in the present case that reasonable grounds exist. It is therefore sufficient for present purposes that I assume the existence of this requirement without expressing any concluded view as to its correctness.
[11] Compare the language in s 27B of the CAA (which applies in circumstances where there is a 'person in default' as that term is defined therein, which includes a person who has refused or failed to attend before the arbitral tribunal for examination when required under a subpoena). Compare also s 23(5) of the International Arbitration Act 1974 (Cth) which governs the power to issue subpoenas in international, rather than domestic, arbitral proceedings.
[12] Aurecon Australasia Pty Ltd v BMD Constructions Pty Ltd [7].
[13] Schiavello Construction (Vic) Pty Ltd v Carlisle Homes Pty Ltd [13] – [14].
[14] Duckworth v Water Corporation [2012] WASC 30; (2012) 261 FLR 185 [31] (Edelman J, sitting in this court) and the recent analysis of this principle by Howard J in AVZ Minerals Ltd v Fat Tail Holdings Pty Ltd [2023] WASC 403 [26] – [30].
C. Disposition
The plaintiff's application satisfies the four prerequisites identified earlier in these reasons: at [8]. Although the affidavit filed in support of the application did not attach the arbitration agreement itself, the deponent to the affidavit has deposed to the existence of an arbitration agreement, and to the appointment of Mr Chaney SC as the arbitrator. The affidavit also attached the communication from the arbitrator granting his permission to the present application being brought. The application and affidavit are otherwise compliant with Rule 17.
I was also informed by counsel for the plaintiff that, in addition to the original agreement between the parties which contains an arbitration agreement, the parties and the arbitrator have executed a further agreement to govern the arbitration.
As to the exercise of the court's discretion, and the existence of reasonable grounds, the following factors weighed in favour of the granting of leave:
(a)the court has been informed that the subpoena recipients do not oppose the subpoenas being issued;[15]
(b)although the court has not been provided with the extant pleadings in the arbitral proceedings, the supporting affidavit and the submissions advanced by the plaintiff were to the effect that a broad range of matters are in issue on the pleadings, focused upon the provision of services by the plaintiff to the defendant (including as the mustering of cattle on the pastoral station in question) and whether that work was in fact carried out and, I surmise, the value to be paid for those services;[16]
(c)the three intended subpoena recipients are former employees of the defendant who arguably had an involvement in matters connected with the supply of services by the plaintiff to the defendant at relevant times, and so will at least arguably be in a position to testify as to matters which are relevant to the dispute between the parties, having regard to the breadth of the matters in issue as indicated above;[17]
(d)further to the preceding sub-paragraph, the three intended subpoena recipients all occupied positions within the defendant's organisation (as station manager and as chief executive officers) from which the court can infer those witnesses will be in a position to assist the tribunal in its fact finding task;[18] and
(e)the court has been informed that the plaintiff has attended to, or will attend to, the provision of appropriate conduct money for the attendance of the witnesses, noting that one of them will be appearing by video in any event.
[15] Plaintiff's submissions [7].
[16] Supporting affidavit [6]; and Plaintiff's submissions [5], [8] and [9].
[17] Plaintiff's submissions [6].
[18] Plaintiff's submissions [6].
Although there was no opposition to the application, as the matter proceeded ex parte in effect, I have given consideration to whether there are arguments which could be made in opposition to the grant of leave.
At least one of those arguments, at an evidentiary level, may have been that the plaintiff failed to adduce direct evidence as to the roles played by the intended subpoena recipients, but rather advanced submissions to explain those matters. Additionally, the plaintiff failed to adduce a copy of the arbitration agreement or copies of the pleadings.
These evidentiary or procedural points would not be sufficiently compelling to justify a refusal of the grant of leave, in my view. The affidavit filed by the plaintiff was compliant with Rule 17, which does not expressly require that the arbitration agreement or the pleadings be adduced on an application such as this. There may of course be cases where it is necessary for an applicant to do so. In the absence of opposition, and given the compliance with the Supreme Court (Arbitration) Rules 2016 (WA), the present matter is not a case where such matters were required to be adduced on affidavit.
As to the roles played by the intended subpoena recipients and the relevance of their evidence, it might generally be preferable for such matters to be explained in the supporting affidavit. However, I am prepared to accept the plaintiff's submissions on these matters, having regard to the permission granted by the appointed arbitrator and adopting an appropriate degree of deference to the position of the arbitrator in this regard, who will have been well placed to assess the potential relevance of the evidence of the defendant's former station manager and the two former chief executive officers of the defendant, in this regard.
In the foregoing circumstances, and subject to the matter I will mention at [21] below, I considered it was appropriate to grant leave to the plaintiff for the issue of the subpoenas which had been provided to the court in draft form. To the extent required, I was also satisfied there were reasonable grounds for the subpoenas to be issued.[19]
[19] As explained at [11] above.
D. Conclusion
For the foregoing reasons, I made orders for the grant of leave on 13 November 2023 for subpoenas in accordance with Form 16 to be issued. The orders are set out below (with various details redacted):
1.Leave is granted to the plaintiff to issue three subpoenas to the persons identified below, to attend to give oral evidence at 9.00am on Monday, 4 December 2023 until Friday, 8 December 2023 at the arbitration before the Honourable John Chaney SC (the Arbitrator) at Levels 25 and 12, 77 St Georges Tce, Perth in Western Australia, in terms of the draft subpoenas filed herein:
(a)[Recipient A], of [address];
(b)[Recipient B], of [address]; and
(c)[Recipient C], of [address].
2.Leave is granted to [Recipient A] to appear at the arbitration hearing before the Arbitrator by way of video conference.
Finally, it should be made clear that the terms of Order 36B of the Rules of the Supreme Court 1971 (WA) apply to the subpoenas in respect of which leave has been granted (as I indicated during the course of the hearing on 13 November 2023).[20] This includes the right of a subpoena recipient, a party, or any other person with a sufficient interest, to apply pursuant to O 36B r 8 to set aside the subpoenas once they have been served.
[20] Supreme Court (Arbitration) Rules 2016 (WA), rule 17(8).
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
IHN
Associate to the Honourable Justice Lundberg
15 NOVEMBER 2023
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