Minister for Health v. Thomson

CATCHWORDS

Practice and procedure - subpoena duces tecum - whether non-party is sub~ected to process of discovery - whether subpoena is oppressive and fishlng.

Federal Court Rules

0.27 r.2.

JET CORPORATION OF AUSTRALIA PTY. LIMITED

(in Its capaclty aE Trustee of the

JET CORPORATION AUSTRALIA

TRUST)

and

PETRES PTY. LIMITED

(in its own right and in its capacity

Trustee of the Schutt Unit Trust) and OTFERS

V. NO. G 109 of 1583

Northrop J.

Melbourne

23 May 1985

IN THE FEDERAL COURT OF AUSTRALIA	)
)

VICTORIA	DISTRICT	REGISTRY	)	V.	No.	G 109 of 1983
)

GENERAL DIVISION	)
BETWEEN:

JET CORPORATION OF AUSTRALIA PTY. LIMITED

(in its capacity as Trustee of the

JET CORPORATION

AUSTRALIA

TRUST)

Applicant

and

PETRES PTY. LIMITED

(in Its own right and in Its capacity

Trustee of the Schutt Unit

Trust)

and OTHERS

Respondents

CORAM :	NORTHROP J.
m:	23 MLY 1985

PLACE

: MELBOURNE

MINUTE OF ORDER OF THE COURT

THE COURT ORDERS THAT:

1.	Paragraph (c) of the Schedule to the subpoena dated	27
June 1983 dlrected to Roger Randle be set aside.
2 .	The motion of 14 July 1983 be otherwise refused.

3 . The subpoena dated 2 0 March 1985 dlrected to Roger Randle be set aslde and the applicant pay the costs of

the motlon dated

22 March 1985.

(Settlement and entry

of Orders is dealt with by 0.36 of

the

Federal Court

Rules.)

IN THE FEDERAL COURT OF AUSTRALIA 1

)

VICTORIA DISTRICT REGISTRY	)	V. No. G	109 of 1983
1
GENERAL DIVISION	)
BETWEEN :

JET CORPORATION OF AUSTRALIA PTY. LIMITED

(in Its capaclty as Trustee of the

JET CORPORATION-AUSTPALIA TRUST)

Appllcant

and

PETRES PTY. LIMITED

(In its own right and

in Its capacity as

Trustee of the Schutt Unlt Trust)

and OTHERS

Respondents

CORAM	:	NORTHROP J.
m:	23 MAY 1985

FLACE

: MELBOURNE

REASONS FOR JUDGMENT

When these proceedlngs were commenced

on 27 June

1983, three corporations were

named.

as appllcants, namely,

Jet

Corporatlon

of Australia Fty.

Limlted,

Electrum

Acceptance Fty. Ltd. and Electrum Finance Pty. Ltd. On

June 1983, the then appllcants, pursuant to Order 27 rule

of the Rules

of Court, caused a subpoena for production of

documents to be Issued directed

to Roger Randle,

a partner in

Messrs. Touche Ross & Co., a firm of Accountants.

Hereinafter

this

subpoena

1s referred

to as the

first

subpoena. In the heading of the first subpoena each

the

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three companies was named as an applicant. Neither the firm

nor Mr. Randle was a party to the proceedlngs.

The documents

requlred to be produced, as described in the Schedule to the

flrst subpoena, are as follows:

"(a) the Accountlng Records and books

of each

the three Appllcants;

(b) the audit working papers and related flle

Correspondence and other documents

of the firm

relatlve to the three Applicants for all their

respectlve accounting

periods

TOGETHER

WITH

documents handed into the possesslon of the firm In connection wlth the professlonal work conducted by It for the three Appllcants and each of them;

files

of the

flrm

including worklng

papers,

correspondence, copy

accounts and directors

reports

and

auditors

reports

(lncludlng

drafts) of each of

the Respondents for or to

whom the firm

rendered professional set-vices

for

the

perlods

corresponding

wlth

the

accounting perlods

the

three Applicants

(and each of them) speclfied ln paragraph (b)

of this Schedule."

Note the use of the words "the three Applicants" In each	of
paragraphs (a), (h) and (c).

On 14 July 1983 M u . Randle gave notlce pursuant to Order 27 rule 9 that he would move the Court for an order

setting

aslde

the

first

subpoena.

Because

other

mterlocutory matters, the motion did not come on f o r hearing

until 26 March 1985.

order

made

on 4 October 1983, Electrum

Acceptance Fty. Ltd.

and Electrum Finance Pty. Ltd. were each

struck out

applicants in the proceedlngs. Slnce that

date Jet Corporation

has been the sole appllcant.

- 3 -

On 20

March 1985, the applicant caused a second

subpoena to be issued directed to Mr. Randle. In the heading

of the second subpoena Jet Corporation is named as the

on ly

applicant.

The documents sought to be produced by the second

subpoena are descrlbed

m the Schedule to that subpoena

the Identical form

as in the Schedule to the flrst subpoena.

In partlcular, the words "the three Applicants" were used in

each of paragraphs (a), (b) and (c). On 22 March 1985, Mr. Randle gave notice pursuant to Order 27 rule 9 that he would

move

the

Court

for

an order

settlng

aside

the

second

subpoena. The two motions came on for hearlng on 26	March
1985 and were heard together.

The first ground argued

support of the orders

sought

the

motions

depends

upon

the

existence

proceedings In the Supreme Court

of Victoria.

In January

1985 the Receivers and Managers

of Jet Corporatlon and

of Jet

Corporation Australia Trust by summons Issued

out

the

Supreme Court of Victorla, sought orders under section 329(a)

of the Companies (Victoria) Code.

The orders sought requlre

the members of the firm Touche Ross L Co. to make available

to the Recelvers and Managers for inspection documents whlch

for present purposes can be descrlbed as almost Identical to

the documents sought

to be produced by the

two

subpoenas.

The summons has not been dlsposed

of by

a flnal order.

Counsel for Mr. Randle contended that the subpoenas should be

set aside because they sought productlon

of the very same

documents which were

the

subject

of the

Supreme

Court

proceedings and that the subpoenas constituted

an abuse

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process of the Court in that the applicants sought to achieve

inspection of the same documents as were the subject of

the

Supreme

Court

proceedings.

He contended

that

this

constituted a duplicity of procedures.

That

contention

rejected.

The existence of

proceedings in the Supreme Court cannot dlsplace the practice

and procedures of this Court. Further, the applicants in the

Supreme Court proceedings are different legal persons	to the
appllcant in the proceedings in thls Court.

The grounds taken in support

of the motions can be

Eummarlsed:

1. The subpoenas are oppressive.

2 .

The subpoenas do not speclfy the documents

be produced with reasonable particularlty.

3. In

substance,

the

subpoenas

constitute an

attempt to obtaln discovery against a	person
who is not a party to the procedlngs.

The principles to be applied in declding

issues of

this kind have been expressed in many authorltles.

A number

of those authorlties were

cited by counsel for Mr. Randle. I

do not need to refer

to them all. For present purposes,

references are made

to the

Full

Court decision of

Industries Ltd. v. Hewltt (1978) 45 F.L.R. 174. The leading

- 5 -

judgment was given by Smithers

In considering the well

established rule that a person not a party to an action should not be sublected to a process of discovery, Smlthers J. said at p.188:

"It is, however, of the essence of an

obllgation to make discovery that a duty rests	upon
the party subject thereto to decide for himself

with respect to documents in his

possesslon

whether, in the relevant sense, they relate

to the

lssues in the action.

The subpoena does not in

terms seek to lmpose this task on the

respondents.

It seeks production

of documents the contents

which relate

specified

subjects.

The

respondents do not

have to direct thelr minds to

the issues.

But

said

that

the speclfied

sub~ects

are numerous and are

so comprehensive that

the

task of examlning

documents to test

the

relatlonship of

their contents

to those subjects

does n o t , in the circumstances

of this case, dlffer

In nature from that involved

in making discovery.

No doubt, if the terms of a subpoena are

such

that although purportlng to be a subpoena it is

substance a,notice for discovery, It should be set

aslde. But

I am not satisfied that the subpoena

before the court is

of this kind.

The task it

imposes on the respondents is to identlfy documents

as relating to particular subjects. This is quite

a different task from that of ascertalning issues

and ldentlfying the relationship of documents

thereto.

In considering the questions

of whether a subpoena

1s oppressive and flshing and the need that

In a subpoena the

documents required to

be produced must

speclfled with

reasonable particularlty, Smithers

J. sald at pp.188-9:

"But a degree

of generality in the descriptlon

of the documents may according to clrcumstances	be
compatlble with reasonableness in this respect.

Thus, in

respect of documents concerning the

treatment of

hospital patient, productlon

which is requlred from the hospital,

a description

such as "the hospital records relatlng

to treatment

of Mr. X

between January and July 1977" would

acceptable.

Such

a descrlptlon places upon the

hospital the burden

of searching for the records

but, having regard to modern business organization

and practices, such

a burden is reasonable.

- 6 -

The purpose of the

process of subpoena is

facilitate the proper administration of justice

between parties. For that purpose it is the policy

of the law that strangers

who have documents may

put

to certain

trouble

searching

for

and

gathering together relevant documents and bringing

them to court.

It 1 s according to

the

same

principle that persons who have knowledge of

facts

are put to

the inconvenlence

of being brought to

court and required to give evidence.

Assessment

of the reasonableness of

burdens

involved in complying wlth

a subpoena must take

account,

inter alia, of the

desirability

that

justlce be admlnistered effectively. The capacity

of a	party to collect and produce the documents

referred to is a relevant clrcumstance.

Large

business entities may

be thought

to be hlghly

organized and well staffed. What may be burdensome

to lesser entities may

be of small significance to

a large one.

His Honour then referred to what was said by Jordan C.J.

Commlssioner of Railways v. Small (1938) 38 S.R. (N.S.W.) 564 at pp.573-4 and at p.190 sald:

"It would,

doubt, be

a good reason for

failure to produce	documents that the effort and
expense involved in	doing so was greater than ought

reasonably to be requlred.

This is a matter which

would

that

stage

capable

rational

resolution

the

court

according

the

clrcumstances.

So fat- as the effort and expense in

arranging for productlon

of partlcular documents in

any

case

exceeded

what

was reasonable,

thelr

non-production would

be acceptable to the court.

But if a subpoena be wholly set aside

on the

grounds that on its face it is oppressive, then the

subpoena wholly fails and there is the possibility

that although some

or even substantial compliance

might

have

been

undertaken

wlth a minimum of

effort,

the

whole

procedure

may

be needlessly

frustrated.

I propose

to apply those princlples.

The

first

subpoena is considered.

- 7 -

It must. be remembered that the subpoena is directed

to a person engaged

in the accounting profession. Apparently

was

engaged

his professional

capacity

accountantby Jet Corporation and the other companies which,

at one stage, were applicants ln these proceedings. Counsel

for Mr. Randle contended that the wording of paragraph (a) of

the Schedule was too wide, Imprecise and vague and did not

ldentlfy with sufficient partlcularity what was comprehended

by the words "the Accounting Records and books of each of the

three

Appllcants" . He referred

the

word

"of" and

contended that the use

of that word

was ambiguous

the

sense that it was not clear whether	"of" meant "relating to"
or "belonging to".

These

contentions

are

rejected.

Mr. Randle

required to produce the documents described ln the Schedule.

Before they can be produced, they must be in

hls custody ot-

control.

an Accountant, he should be

able to ldentify

what

are

accounting records and books.

In answerlng the

subpoena, the recipient should not expose the wording

of the

subpoena to the

scrutiny

expected

from

barrister

construing the terms of a statute or a will. The whole

document must be considered and must be considered in the

light of the circumstances in which the subpoena

was issued.

In the present case,

a reference to paragraph (b) shows that

documents

relating

the

three

applicants

are

produced, being documents of the

firm. In that context, it

- 8 -

is reasonably clear that in paragraph (a) the word "of" is to be used as meanlng "belonging to", while the word "of In the

phrase

"of

the

fit-m"

paragraph

(b) means

"documents

belonging to the f

irrn".

Counsel for Mr.

Randle attacked paragraph

(b) on

the basis that it is too wide and does not specify

with the

required

degree of particularity,

the

documents

produced.

The language of paragraph (b) is inelegant, but In

my opinlon, its meanlng should

reasonably clear to

Accountant. From the materlal before the Court, the period

during

whlch Mr.

Randle

was

engaged

a professlonal

capacity by Jet Corporation and the other two companies, was very short. Mr. Randle did professional work for those three

companles.

He is required to produce documents coming within

the wide descriptlon contained in paragraph

(b).

Those are

the

extended

working

papers

and

files prepared

the

directlon of Mr. Randle together wlth documents given to the

firm in connection

with that professional work.

In	my opinion, the documents are described with

sufficient partlcularity and

although

there may be many

documents to be produced, It remains the duty of Mr.

Randle

to decide whether the contents

documents within

his

possession come within the description speclfled in paragraph

(b). It is not

for

him to decide whether they relate to

issues

between the parties to the proceedings.

am not

satisfied that paragraph

(b) amounts in substance

to a notice

for discovery.

The documents include documents belonging to

- 9 -

the flrm as well as other documents not belonging to the firm

but handed to the firm m

connection with the professional

work being conducted by the firm.

Paragraph (c) is in a dlfferent

category.

The

documents sought to be produced are

"the accountlng

and/or

audit and/or tax flles of the firm".

By itself, that 1 s

too

wide and oppressive. That would Include all the accounting, audlt and tax files of the fit-m. The word "includlng"

appearlng

after

the

opening

words

1s not a word

limitation, if anythlng, it is a word of extension. The use of that wtjrd suggests that the opening words of paragraph (c)

are unllmited and include all accountlng

flles

and audlt

files and all the tax files

of the firm.

Counsel for Mr. Randle made similar submisslons

wlth

respect to the second subpoena but

with

the added

objection that in that subpoena one applicant only, Jet reference is made to "the three Applicants". In the absence

of submissions on behalf

Mr.

Randle

that

the

first

subpoena had ceased to have any effect by reason of effluxlon

of time, counsel for the applicant announced that the second

subpoena had been sought

as a precaution to protect the

applicant if the first subpoena had in fact been spent.

those circumstances counsel for the applicant announced that

he did not intend to proceed

wlth

the second subpoena. In

- 10 -

the llght

of that

announcement, the court orders that the

second subpoena be set aside and that the applicant pay to

Mr. Randle the costs

of the motion dated 2 2 March 1985.

I have ruled that paragraph (c) of the Schedule to

the first subpoena is too wlde and oppressive. Under Order

27 rule 9(1), the Court is empowered to set aside

a subpoena

wholly or in part.

In the exercise of that power the Court

orders that paragraph

the Schedule to the subpoena

dated 27 June 1583 be set

aside, but otherwise refuses to

make the order sought in the motion dated 14 J u l y 1983.

all the circumstances, there should be	no order for costs of
that motion.

[1985] FCA 208

23 May 1985