Mineral Resources Limited v Vlajsavljevich
[2023] WASC 415
•31 OCTOBER 2023
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: MINERAL RESOURCES LIMITED -v- VLAJSAVLJEVICH [2023] WASC 415
CORAM: ACTING MASTER MCDONALD
HEARD: 2 AUGUST 2023
DELIVERED : 31 OCTOBER 2023
FILE NO/S: CIV 2127 of 2022
BETWEEN: MINERAL RESOURCES LIMITED
Plaintiff
AND
MILE VLAJSAVLJEVICH
Defendant
Catchwords:
Practice and procedure - Interlocutory applications - Application to set aside an order for the examination of recipient of a summons - Applicant not heard prior to order made - Whether in the interests of justice - Whether compliance with subpoena - Application to set aside subpoena - Fishing - Legitimate forensic purpose - Turns on own facts
Legislation:
Rules of the Supreme Court 1971 (WA)
Result:
Application to set aside examination order allowed; Further examination order made
Application to set aside subpoena allowed
Category: B
Representation:
Counsel:
| Plaintiff | : | R Young SC |
| Defendant | : | No appearance |
| Applicant | : | D Sibtain SC & S Pack |
Solicitors:
| Plaintiff | : | Bennett |
| Defendant | : | Adam Rosser Commercial Law |
| Applicant | : | Harmers Workplace Lawyers |
Case(s) referred to in decision(s):
Bell Group NV v Aspinall (1998) 19 WAR 561
Comcare v John Holland Rail Pty Ltd (No 5) [2011] FCA 622
Commonwealth Bank of Australia v Saraceni [2013] WASC 115
Commonwealth of Australia v Albany Port Authority [2006] WASCA 185
Girgis v Poliwka [No 4] [2018] WASC 321
Griffith v Ricketts (1849) 7 Hare 229; 68 ER 122
Hancock Prospecting Pty Ltd v Hancock [2013] WASC 290
Hongkong Xinhe International Co Ltd v Bullseye Ltd [2021] WASC 212
Hongkong Xinhe International Investment Co Ltd v Bullseye Mining Ltd [No 4] [2021] WASC 287
Jones v Dunkel [1959] HCA 8
Palmer v Citic Ltd [No 6] [2023] WASC 188
Penn‑Texas Corp v Murat Anstalt (No 2) [1964] 2 QB 647
Popovic v Panagoulias [2014] WASCA 86
Re Potter; Ex parte Coppin [2013] WASC 462
Re Sinanovic's Application [2001] HCA 40; (2001) 180 ALR 448
Ryan Nominees Pty Ltd v Western Australian Planning Commission [2003] WASCA 134
Savcor Pty Ltd v Cathodic Protection International APS [2005] VSCA 213; (2005) 12 VR 639
Taylor v Taylor (1979) 143 CLR 1
Thomas v SMP (International) Pty Ltd (No 2) [2010] NSWSC 870
Trade Practices Commission v Arnotts Ltd (No 2) [1989] FCA 340; (1989) 21 FCR 306
Wilkshire v Commonwealth (1976) 9 ALR 325
Table of Contents
1. Summary
2. Pleadings
3. Background to the making of the Examination Order
3.1 March subpoena
3.2 Examination Order
4. Application to set aside the Examination Order
4.1 The applicant's submissions
4.2 The plaintiff's submissions
4.3 Preliminary issues arising from the parties' positions
4.3.1 Was the Examination Order made ex parte?
4.3.2 If the Examination Order was not ex parte, was it a case management direction which can be set aside?
4.3.3 Is the Examination Order an interlocutory order which the court has inherent power to revisit and discharge?
4.4 Should the Examination Order be set aside?
4.4.1 Was the Examination Order made in respect of proceedings for contempt?
4.4.2 Were less extraordinary steps available to address any doubt as to compliance?
4.4.3 Did the evidence raise doubt about the applicant's compliance?
5. Disposition in relation to the Examination Order
6. Application to set aside the June subpoena
6.1 June subpoena
6.2 Legal principles
6.3 Applicant's submissions
6.4 Plaintiff's submissions
7. Disposition - application to set aside the June subpoena
7.1 Breadth of the subpoena
7.2 Legitimate forensic purpose
7.3 Conclusion
8. Orders
ACTING MASTER MCDONALD:
Summary
These reasons concern two applications filed by Mr Steven Pigozzo (the applicant) in relation to two subpoenas duces tecum issued to him at the request of the plaintiff on 24 March 2023 (March subpoena) and 27 June 2023 (June subpoena).
On 7 June 2023, Master Sanderson made an order requiring the applicant to attend the court to be examined regarding his compliance with the March subpoena (Examination Order). The applicant seeks to set that order aside.
The applicant also applies for an order setting aside the June subpoena pursuant to the Rules of the Supreme Court 1971 (WA) (the Rules) O 36B r 8A on the grounds that it is too broad, lacks a legitimate forensic purpose and is a 'fishing' exercise.
For the following reasons, I have set aside the Examination Order made on 7 June 2023 in the terms it was made, but on rehearing the application have made a further examination order requiring the applicant to attend the Supreme Court to be examined in relation to his compliance with the March subpoena.
I have also set aside the June subpoena.
Pleadings
The applicant is not a party to this action.
By its statement of claim,[1] the plaintiff pleads that it employed the defendant from about 16 October 2014 to 10 July 2020,[2] and that during his employment, the defendant worked closely with the applicant[3] (who was employed by the plaintiff from about 9 February 2017 and about 20 January 2022).[4]
[1] Statement of Claim filed on 26 October 2022 (Statement of Claim).
[2] Statement of Claim [3].
[3] Statement of Claim [15].
[4] Statement of Claim [14].
The substance of the claim against the defendant is that between July 2017 and October 2018, the defendant, the applicant and Mr Arin Cazgir (of Hub-C Ic Ve Dis Ticaret Danismanlik (Hub-C)) agreed to share the mark up on selected products purchased by the plaintiff from Hub‑C,[5] and that in doing so, the defendant breached various duties, as well as obligations under the Corporations Act 2001 (Cth).
[5] Statement of Claim [17].
By his defence,[6] the defendant admits that he worked closely with the applicant[7] but denies the allegations of the agreement to share a mark-up on selected products from Hub-C[8] or that he breached any duties or obligations.[9]
[6] Defence filed 24 November 2022 (Defence).
[7] Defence [15].
[8] Defence [17].
[9] Defence [18] ‑ [21].
Background to the making of the Examination Order
3.1 March subpoena
By the March subpoena, the applicant was required to produce '[d]ocuments recording correspondence' between him and the defendant from 1 January 2017 to 10 July 2020, other than emails sent or received from email addresses with specified domains, as well as documents recording correspondence between him and Mr Cazgir (within the same date range and subject to the same exception).[10]
[10] Affidavit of Lauren Margaret Brouwer-French affirmed on 7 July 2023 (Ms Brouwer-French's first affidavit) [15], Attach 'LBF-3'.
The applicant through his solicitors advised that he had no documents to produce in response to the subpoena.[11]
[11] Ms Brouwer-French's first affidavit [16], Attach 'LBF-4'.
On 2 June 2023, the plaintiff filed a letter and minute of proposed orders with the court seeking the following order:[12]
Pursuant to Order 36B rule 12 of the Rules of the Supreme Court 1971, alternatively the inherent jurisdiction of the Court, Mr Steven Pigozzo attend the Supreme Court of Western Australia, on a date to be fixed, to be examined by the plaintiff regarding his compliance with [the March subpoena].
[12] Ms Brouwer-French's first affidavit [25]; Attach 'LBF-12'.
The application was supported by an affidavit of Ms Gina Nofal sworn on 1 June 2023 (Ms Nofal's affidavit), which was read at the hearing of this application without objection[13] and from which the following chronology is derived:
[13] ts 36.
(a)the applicant was served with the March subpoena on 24 March 2023, the day it was issued by the court;[14]
(b)on 18 April 2023, the applicant's solicitors wrote to the court advising that they were instructed by their client that he had no documents to produce pursuant to the March subpoena;[15]
(c)on 1 May 2023, the plaintiff's solicitors wrote to the applicant's solicitors, alleging that the applicant had failed to comply with the subpoena and that the plaintiff's solicitors had evidence of email correspondence that should have been produced;[16]
(d)on 4 May 2023, the applicant's solicitors responded rejecting the assertion of a failure to comply and reiterating that the applicant had no documents to produce in response; contending that the email cited as an example of proof of non‑compliance was to an email address with a domain expressly excluded by the terms of the March subpoena; and, advising that the applicant had conducted a further review of his records for correspondence within the scope of the March subpoena and confirming he had no documents to produce;[17]
(e)on 5 May 2023, the plaintiff's solicitors responded maintaining that the applicant's position as to his compliance was wrong and that he had failed to comply; disputing the accuracy of the applicant's position regarding the email cited as proof of non‑compliance; and advising that if the applicant failed to comply, the plaintiff intended to 'make an application for Mr Pigozzo to be committed for contempt for his refusal and failure to comply with an order of the Court …';[18]
(f)on 10 May 2023, the applicant's solicitors responded by letter advising that to the extent that there were any documents within the scope of the March subpoena, the applicant 'no longer has them, as his email system deleted emails (other than those manually archived) that were more than 12 months old';[19]
(g)on 17 May 2023, the plaintiff's solicitors sent an email advising that the plaintiff intended to apply for leave to examine the applicant on his compliance with the March subpoena;[20] and
(h)on 25 May 2023, the applicant's solicitors sent an email advising that any proposed application to examine him would be resisted, and that he sought to be heard.[21]
3.2 Examination Order
[14] Ms Nofal's affidavit [4], Attach 'GN-1'.
[15] Ms Nofal's affidavit [5], Attach 'GN-2'.
[16] Ms Nofal's affidavit [6], Attach 'GN-3'.
[17] Ms Nofal's affidavit [7], Attach 'GN-4'.
[18] Ms Nofal's affidavit [8], Attach 'GN-5'.
[19] Ms Nofal's affidavit [9], Attach 'GN-6'.
[20] Ms Nofal's affidavit [10], Attach 'GN-7'.
[21] Ms Nofal's affidavit [10], Attach 'GN-7'.
On 7 June 2023, Master Sanderson made the Examination Order.
The order was made on the papers and, as the application was not listed for hearing, the applicant was not heard prior to its determination.[22]
[22] Ms Brouwer-French's first affidavit [27].
The examination was initially listed before a Registrar on 18 July 2023.
The examination was subsequently deferred by my orders of 17 July 2023, until further order of the court.
Application to set aside the Examination Order
In support of the application to set aside the Examination Order the applicant filed two affidavits of Ms Lauren Margaret Brouwer‑French affirmed on 7 July 2023 (Ms Brouwer‑French's first affidavit) and 20 July 2023 (Ms Brouwer-French's second affidavit) which were read without objection.[23]
[23] ts 26.
The plaintiff relies on Ms Nofal's affidavit and the affidavit of Mr Thomas Anthony Coltrona sworn on 28 July 2023 (Mr Coltrona's 'Examination Order' affidavit) in opposition to the application.
4.1 The applicant's submissions
In relation to the Examination Order, the applicant contends that:
(a)because it was made ex parte the court may set it aside;[24] and
(b)if it was not made ex parte, it is a case management direction which the court may set aside or amend pursuant to O 4A r 2(3)(b) of the Rules;[25] or
(c)it is an interlocutory order which the court has an inherent power to revisit and discharge in the interests of justice.[26]
[24] Applicant's 'Examination Order' submissions filed 21 July 2023 [19].
[25] Applicant's 'Examination Order' submissions filed 21 July 2023 [20].
[26] Applicant's 'Examination Order' submissions filed 21 July 2023 [22].
Assuming there is the power to set aside the Examination Order, the applicant submits the Examination Order ought to be set aside for the following reasons:[27]
(a)the Examination Order was an order made in respect of proceedings for contempt of court which the Master has no jurisdiction to make;
(b)the evidence does not raise real doubt about the applicant's compliance with the subpoena and does not justify the making or continuation of the order; and
(c)if there were any doubt, less extraordinary steps are available to address that doubt.
4.2 The plaintiff's submissions
[27] Applicant's 'Examination Order' submissions filed 21 July 2023 [23].
In response to the application, the plaintiff:
(a)disputes that the Examination Order was made ex parte;[28]
(b)submits that the Master had the power to make the Examination Order;[29]
(c)submits that the Master exercised the discretion properly because there are doubts as to the applicant's compliance with the March subpoena;[30] and
(d)states the continuation of the examination (and the refusal of this application) is consistent with case management principles, including the delay in the making of the application.[31]
[28] Plaintiff's 'Examination Order' submissions filed 28 July 2023 [16].
[29] Plaintiff's 'Examination Order' submissions filed 28 July 2023 [12].
[30] Plaintiff's 'Examination Order' submissions filed 28 July 2023 [11], [19] ‑ [20].
[31] Plaintiff's 'Examination Order' submissions filed 28 July 2023 [21] ‑ [22].
The plaintiff's position is analogous to the applicant's, in that it says that the outcome of the application is the same whether the Examination Order was ex parte or not,[32] and if ex parte (which is disputed), whether the order is reviewed de novo or requires additional material evidence based on principles derived from Bell Group NV v Aspinall (1998) 19 WAR 561 or whether it is reviewed in the interests of justice.[33]
[32] Plaintiff's 'Examination Order' submissions filed 28 July 2023 [16]; Applicant's 'Examination Order' submissions filed 21 July 2023 [18] ‑ [19].
[33] Plaintiff's 'Examination Order' submissions filed 28 July 2023 [10], [17]; Applicant's 'Examination Order' submissions filed 21 July 2023 [21] ‑ [22].
Of course, contrary to the applicant, the plaintiff's position is that the application fails and the Examination Order should stand no matter which approach is taken.[34]
4.3 Preliminary issues arising from the parties' positions
[34] Plaintiff's 'Examination Order' submissions filed 28 July 2023 [10].
Having regard to the submissions of the parties, the following preliminary issues arise before determining whether the Examination Order should be set aside:
(1)first, was the Examination Order made ex parte;
(2)secondly, if the Examination Order was made ex parte, am I required to be satisfied that the applicant has demonstrated error on the part of the Master or adduced additional material which throws a new and different light on the situation of the parties;
(3)thirdly, if the Examination Order was not made ex parte, was it a case management direction that can be cancelled; or
(4)fourthly, is it an interlocutory order which the court has inherent power to revisit and discharge?
4.3.1 Was the Examination Order made ex parte?
The applicant cites O 59 r 7 of the Rules, applying O 58 r 23, as the statutory basis upon which an ex parte order may be set aside by the court.[35]
[35] Applicant's 'Examination Order' submissions filed 21 July 2023 [19].
Order 58 of the Rules is concerned with proceedings by originating summons. Pursuant to O 58 r 23, the court may set aside any order which has been made ex parte, which given the context in which the rule appears, must mean orders made ex parte within the proceedings commenced by the originating summons.
Applications made in pending proceedings in chambers must be made in accordance with O 59.[36] If the Rules do not require or authorise an application in chambers to be made in some other manner, applications in chambers must be made, if ex parte, by motion or in any other case, by summons,[37] by way of the prescribed form.[38]
[36] O 4 r 2 of the Rules.
[37] O 59 r 3 of the Rules.
[38] O59 r 4 of the Rules.
Order 59 r 7 of the Rules applies O 58 r 23 (amongst others), with any necessary changes, to an application in chambers under O 59.
However, in this case, the application for the Examination Order was not made by way of chamber summons pursuant to O 59 r 3(1) and r 4 of the Rules, but by way of a letter, presumably pursuant to O 4A r 5A(1) and r 5B.
That distinction, and its possible consequence, does not appear to have been identified by either party to this application.
Assuming, for present purposes, that the Examination Order was an interlocutory order within the meaning of O 4A r 5A (but not a case management direction), and that the Master was the case manager, then there is no clear express statutory power for an interlocutory order made ex parte upon an application by letter under O 4A r 5A to be set aside.
One possibility is that the same provision concerning ex parte orders made as part of a proceeding commenced by chamber summons may be inferred as having application in respect of interlocutory ex parte orders made pursuant to an application by letter under O 4A.
Such an inference would avoid a potentially absurd result that there is a statutory source of power to set aside an ex parte interlocutory order where an applicant has elected to apply by chamber summons, but there is no correlative power if the same application for the same interlocutory order were instead made by letter.
Ultimately, I do not consider that I must determine this question of statutory construction as a part of this application for two reasons. First, I accept the applicant's alternative proposition (which the plaintiff did not appear to dispute)[39] that the court has inherent jurisdiction to set aside its orders unless that jurisdiction is displaced by statute.[40]
[39] Plaintiff's 'Examination Order' submissions filed 28 July 2023 [10].
[40] Citing Taylor v Taylor (1979) 143 CLR 1, 16.
I do not consider that the terms of O 4A of the Rules, or the specific provisions in O 58 or O 59, have the effect of displacing that inherent jurisdiction in respect of interlocutory orders which are made other than as part of applications commenced by originating or chambers summonses.
Secondly, I am not persuaded the order is properly characterised as ex parte. The applicant submits that the Examination Order is properly considered as ex parte because although he had notice of the plaintiff's application, he was not given an opportunity to be heard before the order was made.[41] As a consequence, the applicant had no real opportunity to tender evidence or advance any arguments in opposition to the application through no fault of his own.
[41] Applicant's 'Examination Order' submissions filed 21 July 2023 [19].
The plaintiff contends that the Examination Order is not ex parte precisely because the applicant had notice of the application.[42]
[42] Plaintiff's 'Examination Order' submissions filed 28 July 2023 [16].
In my view, there is a fine but important distinction to be drawn in the present circumstances between the application that was made, and the making of the Examination Order.
Ex parte refers to something done in judicial proceedings without notice to the party affected.
I accept that the applicant had notice of the application, and although not heard in relation to the application, strictly speaking the application was not made by the plaintiff on an ex parte basis.
The importance of the distinction is that in the event I were to conclude that the Examination Order was made ex parte, the applicant submits that I should apply the principles arising from the Victorian Court of Appeal authority Savcor Pty Ltd v Cathodic Protection International APS [2005] VSCA 213; (2005) 12 VR 639 and perform a de novo review.[43] That submission arises from the decision in Popovic v Panagoulias [2014] WASCA 86 in which the Court of Appeal held:[44]
It was unnecessary in the present case to consider the decision of the Full Court in Bell v Aspinall (1998) 19 WAR 561, in which it was held that in order to enliven the court's jurisdiction to set aside an ex parte order under O 58 r 23, it is necessary for the applicant to adduce additional material which throws a new and different light on the situation of the parties involved. In this case, there was additional material before the primary judge. However, the correctness of the decision in Bell v Aspinall must now be regarded as in doubt. In Savcor Pty Ltd v Cathodic Protection International APS [2005] VSCA 213; (2005) 12 VR 639, the Court of Appeal of Victoria expressly declined to follow it and it is also inconsistent with the approach taken by the Court of Appeal of New South Wales in Arthur Andersen Corporate Finance Pty Ltd v Buzzle Operations Pty Ltd (in liq) [2009] NSWCA 104. In both of those cases, the court took the view that it was unnecessary to demonstrate error on the part of the initial judge or to put additional material before the court. Rather, the matter was to be heard de novo.
As ex parte orders are, by definition, made in denial of basic principles of procedural fairness, that approach would appear to be more consistent with principle than the jurisdictional threshold imposed in Bell v Aspinall on the exercise of the power to set aside such orders. Pending re-consideration of Bell v Aspinall, it would therefore be prudent for judges at first instance to deal with applications under O 58 r 23 on the alternative bases that the position is as stated in Bell v Aspinall and upon a broader review of the issues de novo. If there are circumstances where there would be a different outcome depending on which approach is taken, the issue of principle can then be resolved by this court.
[43] Applicant's 'Examination Order' submissions filed 21 July 2023 [21].
[44] Popovic v Panagoulias [54] ‑ [55].
In response, the plaintiff, citing Bell Group NV v Aspinall,[45] contends that the applicant must lead further evidence beyond that adduced at the original hearing to show the order ought not to have been made.[46]
[45] Bell Group NV v Aspinall at (569).
[46] Plaintiff's 'Examination Order' submissions filed 28 July 2023 [17].
In any event, the applicant submits the Examination Order should be set aside regardless of which approach is adopted.[47]
[47] Applicant's 'Examination Order' submissions filed 21 July 2023 [21].
Having found the application was not strictly ex parte I do not need to determine whether the correct approach to setting aside an ex parte order is that set out in Bell Group NV v Aspinall or whether the law in Western Australia is presently unsettled as suggested by the Court of Appeal in Popovic v Panagoulias.[48]
[48] Popovic v Panagoulias [54] - [55].
If I am wrong and the Examination Order was made ex parte, applying the dual approach recommended in Popovic v Panagoulias, if something more were required as suggested by authorities such as Bell Group NV v Aspinall, the applicant has adduced evidence in this application beyond the evidence that was before the Master to show why an order ought not have been made.
The most obvious example is the letter regarding the applicant's actions in response to the subpoena and evidence relevant to the issue of why no documents have been produced in response.[49]
4.3.2 If the Examination Order was not ex parte, was it a case management direction which can be set aside?
[49] Ms Brouwer-French's first affidavit [35], Attach 'LBF-19'.
At the hearing of the application, senior counsel for the applicant maintained the alternative position that the Examination Order was capable of being characterised as a case management direction that can be set aside pursuant to the power conferred by O 4A r 5A(1)(b) of the Rules.[50]
[50] ts 33 ‑ 34.
A case management direction is defined as 'any procedural direction that in the Court's opinion it is just to make in a case to facilitate the attainment of the objects referred to in Order 1 rule 4B(1)'.[51]
[51] O 4A r 1 and r 2(1) of the Rules.
Given the nature and effect of the Examination Order, I am not persuaded that it is a case management direction within the meaning of the definition. I am reinforced in that view by having regard to the types of case management directions outlined at O 4A r 2(2). Based on its operation and effect, the Examination Order is not within a class like those other express case management directions.
I am not persuaded that the Examination Order is a case management direction that can be set aside pursuant to r 5A(1)(b).
4.3.3 Is the Examination Order an interlocutory order which the court has inherent power to revisit and discharge?
I accept that the Examination Order is an interlocutory order.
In Commonwealth of Australia v Albany Port Authority [2006] WASCA 185, Steytler P outlined the circumstances in which a court is empowered to discharge or vary orders made on a prior interlocutory application. Steytler P cited Kirby J in Re Sinanovic's Application [2001] HCA 40; (2001) 180 ALR 448, who stated '[a]s a general rule, interlocutory orders may be varied or set aside in appropriate circumstances where the interests of justice so require.'
The distinction between orders that are only procedural and those that have substantive effect is also relevant to whether there is a right to review and set aside such orders. A superior court has power to review or recall an interlocutory order, perfected or otherwise, by reason of its inherent jurisdiction to regulate or control its own practices and procedures, provided in so doing the court does not interfere with substantive as opposed to procedural rights already conferred on a party.[52]
[52] Commonwealth of Australia v Albany Port Authority [25] citing Wilkshire v Commonwealth (1976) 9 ALR 325, 332.
The Examination Order made in this case is procedural in nature and does not determine the party's substantive rights in the proceedings.
In Re Potter; Ex parte Coppin[2013] WASC 462, Beech J (as his Honour then was) said:[53]
In my view, if a person fails to attend a hearing, and the hearing proceeds in the party's absence, subject to a statutory provision to the contrary, the court will generally have an implied or inherent power to set aside orders made in the absence of the party if it is in the interests of justice to do so. … The source and basis of the power to set aside an order made in a party's absence is the court's overriding duty to do justice.
[53] Re Potter; Ex parte Coppin [47].
In this case, there was no hearing to attend. Nevertheless, the court has the power to discharge an interlocutory order in its inherent jurisdiction and where a party has not had the opportunity to be heard, the overriding consideration is whether it is in the '… "interests of justice" in the particular case',[54] to set aside the order.
[54] Girgis v Poliwka [No 4] [2018] WASC 321 [38] citing Commonwealth Bank of Australia v Saraceni [2013] WASC 115 [9] - [10]. See also Re Potter; Ex parte Coppin [42]; Commonwealth of Australia v Albany Port Authority [23] ‑ [24]; Ryan Nominees Pty Ltd v Western Australian Planning Commission [2003] WASCA 134 [3].
I adopt and apply the principles arising from decisions of this court that the power to discharge an interlocutory order should be exercised with care and only in rare cases.[55]
[55] See, eg, Commonwealth Bank of Australia v Saraceni [9] - [11].
In circumstances where:
(a)the letter containing the application was filed with the court on Friday, 2 June 2023;
(b)the application by the plaintiff included material indicating the applicant sought to be heard in relation to the order sought;[56]
(c)the application was determined on the papers without any indication to the parties of the intention to adopt that course;
(d)the applicant was not provided with any express opportunity to file evidence or submissions before a decision was made; and
(e)the Examination Order was made on Wednesday, 7 June 2023,
I am persuaded that the inherent jurisdiction provides the source and basis to set the Examination Order aside if in the interests of justice.
4.4 Should the Examination Order be set aside?
[56] Ms Nofal's affidavit [10], Attach 'GN-7'.
Both the plaintiff and the applicant accept that although the Rules do not expressly contemplate the power to examine the addressee of a subpoena, the court has the power to permit the examination of a person on whom a subpoena has been served.[57]
[57] Trade Practices Commission v Arnotts Ltd (No 2) [1989] FCA 340; (1989) 21 FCR 306; Applicant's 'Examination Order' submissions filed 21 July 2023 [27]; Plaintiff's 'Examination Order' submissions filed 28 July 2023 [14].
A preliminary issue in this context is whether there is a 'right' as contended by the plaintiff, citing Griffith v Ricketts (1849) 7 Hare 229; 68 ER 122; Penn‑Texas Corp v Murat Anstalt (No 2) [1964] 2 QB 647 (CA),[58] to an examination of a subpoenaed party to test the sufficiency of that party's answer to a subpoena.
[58] Plaintiff's 'Examination Order' submissions filed 28 July 2023 [20.3].
If what is being submitted is that the power to conduct an examination of the recipient of a subpoena duces tecum who produces no documents arises as of right, I am not persuaded that such a rule applies in this jurisdiction in the context of modern case management principles, particularly so where the recipient has adduced evidence as to his or her manner of compliance and further, adduced evidence which permits the court (and the requesting party) to understand why no documents have been produced.
I am reinforced in that view by the decision in Trade Practices Commission v Arnotts Ltd (No 2), in which Beaumont J appears to have proceeded on the basis that the question involves the exercise of discretion rather than the application of a 'right' by the party issuing the subpoena.[59]
4.4.1 Was the Examination Order made in respect of proceedings for contempt?
[59] Trade Practices Commission v Arnotts Ltd (No 2) at (312).
Turning to the reasons cited by the applicant in opposition to the Examination Order, the applicant contends that the Examination Order was made 'in respect of proceedings for contempt of court', as to which the Master has no jurisdiction.[60]
[60] Applicant's 'Examination Order' submissions filed 21 July 2023 [23(a)].
The Master does not have jurisdiction in respect of proceedings for contempt of court.[61]
[61] O 60 r 1(3)(b) of the Rules.
However, I do not consider that the application for the Examination Order is properly characterised as a proceeding for contempt, notwithstanding the plaintiff's solicitors referred to possible contempt proceedings in conferral prior to the application.[62]
[62] Ms Nofal's affidavit [8], Attach 'GN-5'.
The substantive order sought by the application is for the applicant to attend to be examined by the plaintiff regarding his compliance with the March subpoena. This is so, notwithstanding the reference in the application to O 36B r 12 of the Rules, which senior counsel for the plaintiff properly conceded at the hearing could not have been a proper source of power for the order that was being sought.[63]
[63] ts 37 - 38.
In my view, when properly construed by reference to the Rules, the reference to O 36B r 12 in the initial application could only ever have been to the possibility of contempt proceedings at some future time.[64]
[64] ts 37.
There does not otherwise appear to be any dispute between the parties that the court otherwise has an inherent jurisdiction to make an order that the recipient of a subpoena duces tecum attend to be examined, as part of the court's powers to control its own processes.
4.4.2 Were less extraordinary steps available to address any doubt as to compliance?
Another basis raised by the applicant in opposition to the Examination Order is the fact that 'less extraordinary' steps were available to address any subsisting doubt regarding his compliance with the subpoena.[65]
[65] Applicant's 'Examination Order' submissions filed 21 July 2023 [34].
I do not consider that this argument has any real force. The plaintiff has brought the application following detailed written conferral between the parties, annexed to the several affidavits read in the application. At no time has the applicant offered to attest to any of the matters identified in that conferral by a statutory declaration or on affidavit.
There is also cause to doubt whether the applicant would have acceded to a request to give any explanation by way of affidavit, in circumstances where he has, as he is entitled, not gone into evidence on affidavit as part of this application.
4.4.3 Did the evidence raise doubt about the applicant's compliance?
In my view, the most significant issue in the exercise of any discretion in this case is whether, based on the evidence that is now before the court, there are doubts as to the applicant's compliance which warrant the making of an order for examination.
A critical aspect of the applicant's position is his contention that even if there was a sufficient basis for the making of the Examination Order (which, he submits, there was not), the evidence establishes that the applicant has complied with his obligations in respect of the March subpoena and there is no proper basis for his examination. He submits that a cogent explanation has been given for the absence of any documents, and there is otherwise no evidence to cast any doubt on the veracity of the explanation that has been given.[66]
[66] Applicant's 'Examination Order' responsive submissions filed 2 August 2023 [8].
That explanation is said to arise from Ms Brouwer‑French's first affidavit filed in support of the application. Ms Brouwer‑French is a solicitor employed by Harmers Workplace Lawyers who assists in the day‑to‑day conduct of other legal proceedings involving the applicant, on his behalf.[67]
[67] Ms Brouwer-French's first affidavit [1] ‑ [2].
Ms Brouwer-French's affidavit was read without objection, and she was not cross‑examined at the hearing of the application.[68]
[68] ts 26.
Ms Brouwer-French deposes that she is instructed and verily believes that the applicant does not have the documents that are the subject of the March subpoena in his possession, custody, or control.[69]
[69] Ms Brouwer-French's first affidavit [17].
Ms Brouwer-French attaches a letter sent by the plaintiff's solicitors dated 1 May 2023, in which the plaintiff's solicitors provide a copy of correspondence forwarded by the applicant to his email address that the plaintiff says fall within the scope of the subpoena and was not produced.[70]
[70] Ms Brouwer-French's first affidavit [18], Attach 'LBF-5'.
In response, the applicant's solicitors, by letter dated 4 May 2023, reject the assertion that there has been a failure to comply on the basis that the purported correspondence is an email to an email address expressly excluded by the subpoena.[71]
[71] Ms Brouwer-French's first affidavit [19], Attach 'LBF-6'.
By letter of 5 May 2023, the plaintiff's solicitors dispute the reason given for non‑production on the basis that email addresses with a domain other than those excluded by the subpoena were used for the purpose of the communication.[72]
[72] Ms Brouwer-French's first affidavit [20], Attach 'LBF-7'.
By letter dated 10 May 2023, the applicant's solicitors repeat the assertion that the applicant has no documents to produce in response to the subpoena and '[t]o the extent there are any documents that would fall within the scope of the documents sought by the Subpoena, we are instructed that Mr Pigozzo no longer has them, as his email system deleted emails (other than those manually archived) that were more than 12 months old.'[73]
[73] Ms Brouwer-French's first affidavit [21], Attach 'LBF-8'.
The plaintiff then made the application to the Supreme Court for the Examination Order on 2 June 2023.[74]
[74] Ms Brouwer-French's first affidavit [25], Attach 'LBF-12'.
By letter dated 7 July 2023, Ms Brouwer-French, based on the applicant's instructions,[75] provided the following detail of the steps taken by the applicant to comply with the subpoena.[76] Those instructions:
(a)state the applicant's 'email system deleted emails (other than those manually archived) that were more than 12 months old';
(b)set out the method by which the applicant undertook management of his email system following a notification by the service provider that he was running out of storage space, including his permanent deletion of emails that he had not otherwise identified for archival;
(c)state that the applicant had used the search function in his email account to search for the given name and surname of both the defendant and Mr Cazgir, and discovered no emails within the scope of the March subpoena; and
(d)state that the applicant searched his text messages and WhatsApp messages and discovered no communications within the scope of the March subpoena.
[75] Ms Brouwer-French's first affidavit [34].
[76] Ms Brouwer-French's first affidavit [35], Attach 'LBF-19'.
Ms Brouwer-French's affidavit also:
(a)cited various ongoing proceedings between the applicant and the plaintiff and the plaintiff's managing director in this court and other courts and commissions;[77] and
(b)set out factual matters to explain the delay in making the application to set aside the Examination Summons.[78]
[77] Ms Brouwer-French's first affidavit [2], [7] ‑ [11].
[78] Ms Brouwer-French's first affidavit [38] ‑ [43].
To demonstrate doubts as to compliance, the plaintiff points to the fact that known documents falling within the scope of the subpoena were not produced as well as the initial failure of the applicant to disclose that his system deleted emails older than 12 months.[79]
[79] Plaintiff's 'Examination Order' submissions [20.2], [22].
At the hearing of the application, senior counsel for the plaintiff sought to identify what were said to be inconsistencies between the responses proffered on behalf of the applicant across correspondence that constituted the conferral between the parties.[80] Specifically, the instructions given by the applicant that in respect of any documents that would fall within the scope of the subpoena, he 'no longer has them as his email system deleted emails other than those manually archived that were more than 12 months old'.[81] The same explanation is given by letter dated 7 July 2023.[82]
[80] ts 38 ‑ 44.
[81] Ms Brouwer-French's first affidavit, Attach 'LBF-8'.
[82] Ms Brouwer-French's first affidavit, Attach 'LBF-19'.
Senior counsel for the plaintiff sought to draw and emphasise the distinction between the applicant referring to deletion of emails (other than those manually archived) by his 'email system', and the much more detailed explanation of how the applicant managed his emails which evidenced that the deletion of emails was not automated but the result of the applicant 'hard' deleting emails that he did not archive.[83]
[83] Ms Brouwer-French's first affidavit, Attach 'LBF-19'; ts 39 ‑ 40.
The court, in its inherent jurisdiction, has the power to order the examination of a person upon whom a subpoena has been served for the limited purpose of answering questions about their compliance with a subpoena.[84] That arises out of the court's ability to control its processes to the extent of being satisfied that there has been compliance with the court's order.
[84] Trade Practices Commission v Arnotts Ltd (No 2).
If there is doubt as to whether there has been compliance, the court should then consider whether there is utility of the proposed examination in the exercise of discretion. In Trade Practices Commission v Arnotts Ltd (No 2), Beaumont J made orders permitting the examination of a subpoenaed party who appeared in response to a subpoena and who stated he had no documents to produce. In terms of the limits of any examination Beaumont J referred to Mr Justice Moffitt's description in H Glass, Seminars on Evidence (1970), namely:[85]
In exercising such a discretion the court would not infringe the privilege of a person not to incriminate himself, having regard to the fact that deliberate non-compliance with a subpoena is a contempt of court with penal consequences … Any such discretion could not extend as far as conducting a discovery process … The precise limits of questions of a person subpoenaed to produce documents are debatable, but it seems that a Judge could ask and possibly permit to be asked, questions informally or on oath to ensure that the party understood the terms of the subpoena and the documents referred to and his obligation thereunder, including his obligation regarding documents in his possession or power and relating to search … It would seem, however, that questions could not extend to establishing proof that the person was in contempt of court, nor could they be of the search and inquiry type such as to the person's knowledge as to the location of documents not in his present possession or control, or as to the nature of other documents in his possession not within the scope of the subpoena, or as to his system of books or the like, so that this material could be used to search for other evidence or to enable a different subpoena to be framed.
[85] Trade Practices Commission v Arnotts Ltd (No 2) at (312).
Senior counsel for the plaintiff accepted that an examination could not be a roving exercise of cross‑examination but maintained that an examination would permit the applicant to be questioned as to whether he understood the scope of the subpoena, whether he understood what fell within the scope of the subpoena, and his explanation as to why there are no documents returnable.[86]
[86] ts 40.
At the hearing, senior counsel for the applicant refuted that an examination could encompass that third limb, drawing a distinction between the requirement to doubt compliance with the subpoena and the reason for doubting the explanation as to why the search has produced no documents.[87]
[87] ts 47.
Disposition in relation to the Examination Order
I accept that the evidence identified by the plaintiff demonstrates some inconsistencies in the explanations given by the applicant as to why he has no documents to produce. I also accept that it is not unremarkable that the explanations proffered on the applicant's behalf have altered and become more detailed and nuanced over time. This could be expected in circumstances where the dispute has progressed farther than may have initially been anticipated and the applicant is effectively obliged to provide greater detail or specificity.
The issue is whether the reasons given by the applicant for not having any documents to produce give rise to real or serious doubt as to whether there may be documents that could be produced in response to the subpoena.
Significantly, in my view, in response to the plaintiff providing an example email that includes email addresses not excluded by the subpoena,[88] the applicant's solicitors assert that it is an email sent to an excluded address and therefore is expressly excluded.[89] This appears to indicate some ambiguity about the terms of the subpoena, namely whether documents with an excluded email address are not within the scope of the subpoena even if the email includes non-excluded email addresses.
[88] Ms Nofal's affidavit [6], Attach 'GN-3'.
[89] Ms Nofal's affidavit [7], Attach 'GN-4'.
When the plaintiff writes again and specifically refers to the non‑excluded email address that appears in the email communication,[90] the applicant's solicitors respond on 10 May 2023, rejecting the assertions made. It is not clear if the applicant is rejecting the assertion that the email uses the non‑excluded addresses or the assertion that it is not excluded by the terms of the subpoena.
[90] Ms Nofal's affidavit [8], Attach 'GN-5'.
In my view, the original explanation for not producing the email failed to explain why it was not produced and gives rise to some doubt as to how documents were filtered.
In any event, the applicant's solicitors subsequently advise that the reason the applicant has no documents to produce is that 'his email system deleted emails (other than those manually archived) that were more than 12 months old'.[91]
[91] Ms Nofal's affidavit [9], Attach 'GN-6'.
That explanation, according to the plaintiff, is internally inconsistent or incongruent with the more detailed explanation provided as part of this application, which as I have stated earlier, is to be expected and I do not draw any adverse inference by the fact that once an application for an Examination Order has been made, more detailed instructions would follow. I do agree however, that in the context of referring to the applicant's email system deleting emails when others are 'manually archived', it could be construed that the deletion of emails was not done manually.
However, it is not necessarily the fact that the initial explanation suggests an automatic deleting system whereas the second explanation indicates the applicant selected which emails to delete, which raises real or sufficient doubt as the veracity of the explanation for not producing documents. An automatic deletion of all emails older than 12 months would provide a valid reason why there are no documents to produce.
Rather, despite the detail subsequently given by the applicant through his solicitors that on a regular basis he actively managed his email account by archiving those emails he identified as wanting to keep, retaining personal emails of high importance, deleting particular folders of emails to which specific types of emails are automatically directed to by Gmail, deleting sent emails and permanently deleting emails in the bin,[92] the explanation still remains at a high level of abstraction. It does not adequately explain why documents between the applicant and defendant over a three and a half year period would have been included in folders that were caught by the applicant's system of deletion, whether hard copies exist, or whether there were any contemporaneous text messages etc.
[92] Ms Brouwer-French's first affidavit [3], Attach 'LBF-19'.
In my view, the initial explanation given in relation to the example email provided as not being within the scope of the subpoena gives rise to some ambiguity as to the subpoena's terms. That together with the explanation that emails 12 months and older are deleted other than those archived and the subsequent clarification of which emails are marked for deletion by the applicant without any reference to why the subpoenaed documents would be so caught, gives rise to some doubt as to whether there has been compliance with the March subpoena.
Where there is doubt as to whether there has been compliance, the court should then consider, in the exercise of its discretion, whether there is utility of the proposed examination.
The applicant has provided an explanation as to why he has no documents to produce. I accept that plaintiff's counsel could conceivably put further questions to the applicant about his systems concerning management of his emails (drawing an analogy with the 'system of books' referred to in Trade Practices Commission v Arnotts Ltd (No 2)). I accept those questions would be so limited, both in scope and in relevance, to the issue of whether the recipient understood the scope of the subpoena and what fell within it.
Counsel for the parties addressed the issue of the possibility of questions being put to the applicant which would require answers that would be self-incriminating.[93]
[93] ts 27, 29, 37 ‑ 38.
In substance, I accept the plaintiff's submission that the issue of whether any question will be self‑incriminating is an issue to be determined when the specific question is asked, rather than when the examination order is made.[94]
[94] ts 37.
The plaintiff places emphasis on the fact that the applicant has not provided the explanations under oath or affirmation, in circumstances where he has not given an affidavit in this application. I accept that the examination would therefore necessarily have some utility in that it would require the applicant to give answers under oath or affirmation in relation to matters which have otherwise been addressed by evidence adduced in this application on his behalf.
Relatedly, as senior counsel for the applicant correctly observes, there is no Jones v Dunkel[95] inference capable of being drawn against the applicant where the plaintiff has not adduced evidence impugning the explanation that has been proffered on the applicant's behalf, such that there is anything for him to rebut.[96]
[95] Jones v Dunkel [1959] HCA 8.
[96] ts 29; Applicant's 'Examination Order' responsive submissions filed 2 August 2023 [6] ‑ [7].
Another discretionary consideration raised by the applicant's counsel is that the continuation of the Examination Order would permit counsel for a party in one proceeding (the plaintiff) having the opportunity to examine another party (the applicant) as a witness in a separate proceeding.[97] I do not give this consideration great weight given (as the applicant otherwise contends) any examination in this context would be narrow and limited. On that basis, I am not persuaded that the examination would afford any substantial forensic advantage to the plaintiff in any separate proceeding.
[97] ts 35.
Having weighed the above matters, I consider it is in the interests of justice to revisit the application for an examination order. This is not a case in which the parties had the opportunity to put forward their respective positions, the dispute was heard at a contested hearing and determined, and a party now seeks to effectively reopen the dispute again to make some new or additional argument.
By contrast, this was a seemingly rare instance in which the application was determined on the papers in circumstances where the applicant had made plain, in conferral material that was annexed to the supporting affidavit, that he disputed the plaintiff's position and sought to be heard.
Having heard from the applicant, I am of the view there is doubt about whether there has been compliance with the March subpoena in light of the initial explanation for not providing emails with non‑excluded emails addresses together with the subsequent explanation of the management of the applicant's emails, which does not specifically address which emails were identified for archiving and deleting other than in a general way. I am of the view there is utility in the examination of the applicant in respect of his compliance with the March subpoena.
For those reasons, I am satisfied it is appropriate to order the applicant be examined in relation to his compliance with the March subpoena. In light of senior counsel's concession that the reference to O 36B r 12 of the Rules did not provide the basis for the Examination Order and should not have been included in the original Examination Order, the original order will be set aside and the order will be remade in the following terms:
Pursuant to the inherent jurisdiction of the court, Mr Steven Pigozzo attend the Supreme Court of Western Australia, on a date to be fixed, to be examined by the plaintiff regarding his compliance with a subpoena issued to him by the court, at the request of the plaintiff, on 24 March 2023.
Application to set aside the June subpoena
In support of the application to set aside the June Subpoena, the applicant relies on the affidavit of Justin Matthew Handisurya affirmed on 25 July 2023 (Mr Handisurya's affidavit). The plaintiff relies on the affidavit of Mr Thomas Anthony Coltrona sworn on 20 July 2023 (Mr Coltrona's 'Subpoena' affidavit) in opposition to the application. The affidavits were read with without objection.[98]
6.1 June subpoena
[98] ts 26, 36.
The June subpoena required the applicant to produce the following three categories of documents:[99]
1. Documents recording or evidencing agreements or arrangements between Ms Pamela Vlajsavljevich [Ms Vlajsavljevich] and Steven Pigozzo, or any related entities, in the period 30 June 2016 to 30 June 2021 (Period) including, but not limited to, in relation to any consulting services provided by [Ms Vlajsavljevich] to Steven Pigozzo (Pigozzo Agreements).
2. Invoices issued by [Ms Vlajsavljevich] to Steven Pigozzo in the Period.
3. Documents recording or evidencing payments made to [Ms Vlajsavljevich] by Steven Pigozzo in the Period.
[99] Mr Handisurya's affidavit [7(a) ‑ (c)].
The June subpoena contains a fourth category, which requires the applicant to produce documents recording or evidencing the purpose of eight payments to Ms Vlajsavljevich by the applicant of specified amounts on specified dates between 8 May 2019 and 29 September 2021.[100]
[100] Mr Handisurya's affidavit [7(d)].
Ms Vlajsavljevich is not referred to in the statement of claim or the defence filed in the proceedings.
The statement of claim does not assert that Ms Vlajsavljevich was a party to the agreement that is alleged to have included the defendant, the applicant and Mr Cazgir.
The statement of claim and defence do not refer to the provision of any consulting, or other business-like, services by Ms Vlajsavljevich to the applicant.
6.2 Legal principles
The relevant principles are not in dispute and were recently referred to by Hill J in Hongkong Xinhe International Investment Co Ltd v Bullseye Mining Ltd [No 4] [2021] WASC 287.[101] I adopt the principles as summarised by Hill J for the purposes of this application. Those principles are:[102]
[101] Adopting the principles set out in Hongkong Xinhe International Co Ltd v Bullseye Ltd [2021] WASC 212 [10] ‑ [14].
[102] Hongkong Xinhe International Investment Co Ltd v Bullseye Mining Ltd [No 4] [10] - [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 (Alister v R (1984) 154 CLR 404 414; Secretary of the Dept of Planning, Industry and Environment v Blacktown City Council [2021] NSWCA 145 [15]). A document may provide material assistance even if it is not admissible in the proceedings (Green v Fairfax Media Publications Pty Ltd (No 2) [2020] WASC 485 [9])
(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 (Darbyshire v Gilbert [2006] WASCA 13 [14]);
(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 (Associated Dominions Assurance Society Pty Ltd v John Fairfax & Sons Pty Ltd (1955) 72 WN (NSW) 250 254):
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 (Hancock Prospecting Pty Ltd v Hancock [2013] WAC 290 [49]).
The fact that it is a non-party that seeks to challenge the subpoena does not preclude a challenge on the basis of relevance or on the basis that it lacks a legitimate forensic purpose.[103]
[103] Hancock Prospecting Pty Ltd v Hancock [2013] WASC 290 [37] ‑ [38].
To the extent the subpoenaed documents are sought for the purposes of cross‑examination of witnesses and relate to credit, Bromberg J in Comcare v John Holland Rail Pty Ltd (No 5) [2011] FCA 622 referred to the observations of Pembroke J in Thomas v SMP (International) Pty Ltd (No 2)[2010] NSWSC 870. After a review of recent decisions dealing with the extent to which subpoenas directed to the credit of a witness are justifiable, Pembroke J said:[104]
[104] Thomas v SMP (International) Pty Ltd (No 2) [19] cited in Comcare v John Holland Rail Pty Ltd (No 5) [35].
There is, I think, a common thread in each of these decisions which I will endeavour to explain:
(a)As a general principle, the production of documents intended to be used solely to impeach the credit of a witness may be a legitimate forensic purpose: Fried (supra) at [24]. It is not therefore an objection, by itself, that the subpoena seeks documents relating only to credit: Liristis (supra) at [5]; R v Saleam (1989) 16 NSWLR 14 at 19 (Hunt J). On the other hand, in order to support the subpoena, it is not sufficient, by itself, merely to say that the documents relate to the credit of a witness;
(b)In all cases, there must be some actual identifiable basis – reasonably precise and tolerably clear – that indicates what the legitimate forensic purpose really is. The forensic purpose requires realistic consideration of the potential strategic and evidentiary use of the documents in the context of the legal and factual issues that are required to be determined;
(c)If the subpoena is legitimate, two features of its intended forensic purpose will usually demonstrate its legitimacy. First, the particular credit issue will be capable of reasonable articulation, making due allowance for the necessity for some generalisation depending on the stage that the hearing has reached. Second, the probable connection between the documents sought to be produced and that credit issue, will be apparent;
(d)A credit issue of doubtful plausibility is unlikely to be sufficient to justify the subpoena. The same result will follow if the supposed connection between the credit issue and the documents sought, is strained, opaque or speculative;
(e)The court will exercise particular caution when a subpoena is sought to be justified solely on the credit basis: Fried (supra) at [27]. The judge must be satisfied about the utility of the production of the documents, and the fairness to the witness, having regard to the potential for abuse and the need to control and confine cross examination within manageable limits;
(f)A subpoena that does little more than speculatively trawl for documents that may possibly be used to impugn a witness's credit has never been justifiable: Fried (supra) at [29].
6.3 Applicant's submissions
The applicant applies to set aside the June subpoena on the basis that the categories of documents sought are broad and have no apparent connection to the allegations or period at issue in the plaintiff's pleaded case in the proceedings.[105]
[105] Applicant's 'Subpoena' submissions filed 25 July 2023 [2].
The applicant alleges that the subpoena is, in substance, a 'fishing exercise'.[106] Specifically:
(a)the date range of the documents sought go beyond any period of relevance to the plaintiff's case;[107]
(b)the subpoena is concerned with what has passed between the applicant and Ms Vlajsavljevich where the pleaded case does not plead that Ms Vlajsavljevich was involved;[108]
(c)the first category of documents seeks documents recording or evidencing any agreement or arrangement between the applicant and Ms Vlajsavljevich unconstrained by subject matter;[109]
(d)the first, third and fourth categories are vague and uncertain in referring to documents 'evidencing' certain things, such as agreements or arrangements and are not only in relation to the applicant and Ms Vlajsavljevich but also 'related entities' and the purpose of specified payments.[110]
[106] Applicant's 'Subpoena' submissions filed 25 July 2023 [19].
[107] Applicant's 'Subpoena' submissions filed 25 July 2023 [20].
[108] Applicant's 'Subpoena' submissions filed 25 July 2023 [21].
[109] Applicant's 'Subpoena' submissions filed 25 July 2023 [24].
[110] Applicant's 'Subpoena' submissions filed 25 July 2023 [25].
The applicant submits the subpoena is seeking to 'fish' to see if there were any other arrangements, whether there was any overlap between any arrangements and the one pleaded and investigate whatever dealings existed between the applicant and Ms Vlajsavljevich. There could be no legitimate purpose for such a far‑reaching inquiry.[111]
6.4 Plaintiff's submissions
[111] Applicant's 'Subpoena' submissions filed 25 July 2023 [19], [22].
In response to the application, the plaintiff relies on Mr Coltrona's 'Subpoena' affidavit as proof that:
(a)the plaintiff has received bank statements identifying that the applicant paid the defendant and Ms Vlajsavljevich $63,727.57 from 12 April 2018 to 19 December 2018[112] and $210,044.47 between 8 May 2019 and 29 September 2021;[113] and
(b)the defendant's solicitor advised that, if asked, the defendant would give evidence to the effect that the payments from the applicant to him were to compensate Ms Vlajsavljevich for consulting services (performed with some assistance from him), which to his knowledge were unrelated to sales by Mr Cazgir or Hub‑C to the plaintiff.[114]
[112] Mr Coltrona's 'Subpoena' affidavit [10.1]; Plaintiff's 'Subpoena' submissions filed 25 July 2023 [12.1].
[113] Mr Coltrona's 'Subpoena' affidavit [10.2]; Plaintiff's 'Subpoena' submissions filed 25 July 2023 [12.2].
[114] Mr Coltrona's 'Subpoena' affidavit [12]; Plaintiff's 'Subpoena' submissions filed 25 July 2023 [14].
In its written submissions, the plaintiff relies on these matters to submit that the documents sought by the subpoena in relation to the payments made between 8 May 2019 and 29 September 2021 will support or deny the defendant's contention that the payments were unrelated to Hub‑C, and that is the subpoena's legitimate forensic purpose.[115]
[115] Plaintiff's 'Subpoena' submissions filed 28 July 2023 [4], [16].
At the hearing, senior counsel for the plaintiff put the position a different way. Senior counsel submitted that the legitimate forensic purpose was that the documents will 'identify whether or not the Hub‑C arrangement is supported'.[116]
[116] ts 56.
The fact that the defendant limited his explanation to that which was in 'his knowledge' is said to be significant in that it does not amount to a denial the payments were unrelated to the Hub‑C arrangement.[117] The documents sought are said to give rise to a line of inquiry in either supporting the Hub‑C arrangement or undermining the plaintiff's case. For that reason, the plaintiff claims there is a legitimate forensic purpose in seeking the documents.[118] Further, the documents could be sought for the purpose of testing the explanation given by the defendant and testing the credit of the witness.[119]
[117] ts 57.
[118] Plaintiff's 'Subpoena' submissions filed 25 July 2023 [17].
[119] Plaintiff's 'Subpoena' submissions filed 25 July 2023 [16].
Disposition - application to set aside the June subpoena
7.1 Breadth of the subpoena
It is pleaded that Hub-C became an approved vendor of the plaintiff on 12 April 2017.[120] The issue on the pleadings relevant to this application is the allegation that '[b]etween July 2017 to October 2018', the defendant, the applicant and Mr Cazgir agreed to share the mark up on selected products purchased by the plaintiff from Hub‑C.[121] The plaintiff particularises a '[p]artners share follow‑up Australia.xlsx attached to an email from Mr Cazgir to Mr Vlajsavljevich and Mr Pigozzo dated 22 October 2018.'[122] The existence of the Hub‑C agreement is a contested issue.[123]
[120] Statement of Claim [16].
[121] Plaintiff's 'Subpoena' submissions filed 28 July 2023 [2].
[122] Statement of Claim [17].
[123] Defence [17].
The applicant submits that the subpoena is demonstrably broad where it seeks documents, by categories one to three, for the period 30 June 2016 to 30 June 2021, and by category four, for the period 8 May 2019 and 29 September 2021, which go well beyond any alleged agreement between July 2017 and October 2018 between the applicant and defendant.[124]
[124] Applicant's 'Subpoena' submissions filed 25 July 2023 [20].
In response, the plaintiff contends that the pleading does not suggest that the alleged agreement ended in October 2018, or that fruits from the alleged agreement ended by October 2018.[125]
[125] Plaintiff's 'Subpoena' submissions filed 25 July 2023 [20].
While the latter is at least capable of acceptance (where the statement of claim is otherwise silent in that respect), the former is not.
The terms of the statement of claim as presently pleaded are clear.[126] There is no reasonable basis to read the terms as alleging that the agreement extended beyond October 2018, or up to and including June 2021.
[126] Statement of Claim [17].
As senior counsel for the applicant submitted at the hearing of the application, there is nothing in the Statement of Claim that suggests the alleged arrangement was implemented at other times.[127]
[127] ts 52.
Further, the explanation nor the evidence of the payments made does not substantiate the request for documents from June 2016 before Hub‑C became an approved vendor in April 2017 and well before there was any alleged agreement between the applicant, Mr Cazgir and the defendant.
The plaintiff submits that the date range in categories one to three was chosen as it corresponds to the financial years in which the applicant commenced employment (and Hub‑C became an approved vendor) and the applicant ceased employment.[128] However, that does not address how documents from June 2016 to June 2021 could be relevant to proving or disproving an agreement that is expressly pleaded within the duration July 2017 to October 2018. By that pleading, the plaintiff must be alleging that the agreement was formed no earlier than July 2017.
[128] Plaintiff's 'Subpoena' submissions filed 25 July 2023 [21] ‑ [22].
In the absence of any justification by reference to the issues as pleaded, I accept the applicant's submission that the date ranges contained in the subpoena are arbitrarily and unduly broad.
The applicant also submits that the subpoena is impermissibly broad because it contains vague phrases which require evaluative judgments.[129] Aside from the use of phrases such as 'recording or evidencing', the applicant criticises the lack of particularity in phrases such as 'arrangements' in category one.[130]
[129] Applicant's 'Subpoena' submissions filed 25 July 2023 [25].
[130] Applicant's 'Subpoena' submissions filed 25 July 2023 [24].
In response, the plaintiff submits that when the subpoena is read by the recipient, who has knowledge of the terms of the dispute and the issues arising, it is sufficiently clear that the subpoena only seeks any 'commercial' agreements or arrangements.[131]
[131] Plaintiff's 'Subpoena' submissions filed 25 July 2023 [25] ‑ [26].
It is not acceptable that a recipient should be obliged to read important qualifying adjectives into a subpoena to determine the scope of their obligation and to ensure their compliance. This is particularly so in circumstances where even the adjective 'commercial', which the plaintiff suggests should be inferred, involves a form of evaluative judgment, and is capable of being construed differently by different people.
Even if the terms 'any agreements or arrangements' could be so qualified, the invoices sought in category two and documents recording or evidencing payments made in category three are not limited by any arrangement, or to any subject matter.
I agree with the applicant's submission that because of the language employed in the subpoena and the date range to which the categories apply, the subpoena is unduly broad and oppressive. I form that view where, upon examination, there is very little evidence to infer that the plaintiff has sought to particularise the categories in ways which would meaningfully reduce the scope of the subpoena.
7.2 Legitimate forensic purpose
I accept the plaintiff's contention that just because Ms Vlajsavljevich is not expressly referred to in the pleading does not mean that a subpoena issued to the applicant could not have a legitimate forensic purpose in establishing, or not establishing, the existence of the alleged agreement between the applicant and the defendant, as Ms Vlajsavljevich's husband.
Put another way, I do not consider that the subpoena could never have a legitimate forensic purpose simply because Ms Vlajsavljevich is not pleaded as being a party to the agreement between her husband, the applicant and Mr Cazgir.
However, categories one to three of the subpoena seek documents recording or evidencing agreements or arrangements together with invoices and payments in the period 30 June 2016 to 30 June 2021. Documents relating to arrangements, payments or invoices between the applicant and Ms Vlajsavljevich prior to the existence of the agreement might be relevant to an earlier or different agreement to that pleaded, but not to the Hub‑C agreement.
The further evidence relied on by the plaintiff in opposition to this application are the bank statements relating to payments made between 8 May 2019 and 29 September 2021.[132] The plaintiff submits these demonstrate that not insignificant payments were made by the applicant to the defendant and Ms Vlajsavljevich. The plaintiff submits in light of the explanation given by the defendant through his solicitors that Ms Vlajsavljevich, with some assistance from himself, performed consulting services for Mr Cazgir and the applicant unrelated to the Hub‑C arrangement, gives rise to a line of inquiry that may undermine the plaintiff's case that there was a Hub‑C agreement.[133]
[132] Mr Coltrona's 'Subpoena' affidavit [10.2].
[133] ts 58.
It is unclear on the current pleadings how proving or disproving the veracity of the defendant's explanation for the payments made by the applicant to Ms Vlajsavljevich between 8 May 2019 and 29 September 2019 would necessarily establish or undermine the truth of the alleged arrangement as between the applicant and the defendant between July 2017 and October 2018.
While the pleading remains in its current form, the subpoena is capable of being characterised as an attempt to 'fish' for evidence which might substantiate an extension of the duration of the presently alleged agreement, rather than proving or disproving the existence and nature of the currently pleaded agreement.
The plaintiff also submits that the documents sought in category four would permit the testing of the credit of the defendant in light of his explanation for the payments. Given my conclusions as to the breadth of the subpoena, I think caution should be exercised before allowing the plaintiff to obtain documents with limited connection to the pleaded case on the basis that they go to the credit of witnesses in light of instructions given by the defendant to his solicitors communicated as part of conferral.
I also adopt the observations made in Palmer v Citic Ltd [No 6] [2023] WASC 188 by Lundberg J that weight should be given to the size and nature of the matters which arise in the proceedings, when assessing whether the scope of the subpoena exceeds its proper boundaries.[134]
[134] Palmer v Citic Ltd [58].
The issue raised on the pleadings, is relatively narrow. In allowing the plaintiff to test the defendant's explanation for payments made in 2019, well after the period of the alleged agreement, lacks sufficient connection to the matters in issue, would allow the plaintiff to trawl for any other potential causes of action and thereby gives rise to the potential for abuse.
The subpoena is articulated in unnecessarily broad terms and goes beyond a legitimate inquiry and should be set aside. There may be a subset of documents that might be caught within the scope of the subpoena which have a legitimate forensic purpose when properly articulated. It will be a matter for the plaintiff to consider the terms of any fresh subpoena, having regard to the pleadings and any amendments to its statement of claim that may put the matter beyond doubt.
7.3 Conclusion
I am persuaded that the application to set aside the June subpoena should be granted.
I do not consider that this is a case in which the court can or should make minor amendments to resolve the issues that have been identified.
Orders
Subject to hearing from the parties, I propose to make the following orders:
(1)Mr Steven Pigozzo's application, by letter dated 7 July 2023, to set aside the order of Master Sanderson made 7 June 2023 is granted.
(2)The order of Master Sanderson made on 7 June 2023 be set aside.
(3)Pursuant to the inherent jurisdiction of the court, Mr Steven Pigozzo attend the Supreme Court of Western Australia, on a date to be fixed, to be examined by the plaintiff regarding his compliance with a subpoena issued to him by the court, at the request of the plaintiff, on 24 March 2023.
(4)The examination of Mr Pigozzo pursuant to Order 3, be listed before a Registrar.
(5)Mr Pigozzo's application, by letter dated 11 July 2023, to set aside the subpoena issued to him on 27 June 2023 is granted.
(6)The subpoena issued to Mr Pigozzo on 27 June be set aside.
The applicant's and the plaintiff's solicitors should confer in relation to the terms of the orders and orders as to costs and if not agreed provide competing Minutes within seven days.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
TM
Associate to Acting Master McDonald
31 OCTOBER 2023
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