Pathway Investments Pty Ltd v National Australia Bank Limited
[2012] VSC 429
•18 September 2012
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
COMMERCIAL COURT
No. 6249 of 2010
| PATHWAY INVESTMENTS PTY LTD (ACN 072 420 065) | First Plaintiff |
| DOYSTOY PTY LTD (ACN 130 593 609) | Second Plaintiff |
| v | |
| NATIONAL AUSTRALIA BANK LIMITED (ACN 004 044 937) | Defendant |
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JUDGE: | PAGONE J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 4 September 2012 | |
DATE OF RULING: | 18 September 2012 | |
CASE MAY BE CITED AS: | Pathway Investments Pty Ltd v National Australia Bank Limited | |
MEDIUM NEUTRAL CITATION: | [2012] VSC 429 | |
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PROCEDURE – Compliance with subpoena – Objection by the Australian Prudential Regulation Authority to produce protected documents – Whether production of protected documents under the subpoena is prohibited by the Australian Prudential Regulation Authority Act 1998 (Cth) – Leave sought to rely on additional ground of objection – Additional ground of objection ought specifically to have been stated – Whether prohibition in the Act justifies the Court excusing the Australian Prudential Regulation Authority from compliance with the subpoena – Supreme Court (General Civil Procedure) Rules 2005 (Vic) O 42A – Australian Prudential Regulation Authority Act 1998 (Cth) ss 56, 56(2), 56(5), 56(8).
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr MBJ Lee S.C. with Mr WAD Edwards | Maurice Blackburn Lawyers |
| For the Defendant | Mr RG Craig | Freehills Lawyers |
| For APRA | Mr RM Niall S.C. with Mr RET Wodak |
HIS HONOUR:
The Australian Prudential Regulation Authority (“APRA”) has objected to the production of documents sought by subpoena by the plaintiffs. The subpoena requires APRA to produce documents relating to meetings with the National Australia Bank or the accounting firm Ernst & Young in the period between 1 January 2008 and 31 July 2008 dealing with the Asset-Backed Commercial Paper Conduits sponsored by the National Australia Bank. The subpoena was issued to APRA on 7 August 2012 pursuant to Order 42A of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) which provides a process for production of documents to the Prothonotary in addition to the process in Order 42. The latter, however, applies to a subpoena to produce under Order 42A as far as practicable.[1]
[1]Supreme Court (General Civil Procedure) Rules 2005 (Vic) O 42A.01(2).
The addressee of a subpoena issued under Order 42A may object to producing a document identified in the subpoena by notifying the Prothonotary in writing of the objection and stating the grounds of that objection before the day specified in the subpoena.[2] Order 42A.09 requires the Prothonotary then to refer the subpoena to a Judge for the hearing and determination of the objection.[3]
[2]Supreme Court (General Civil Procedure) Rules 2005 (Vic) O 42A.07.
[3]Supreme Court (General Civil Procedure) Rules 2005 (Vic) O 42A.09(1).
On 17 August 2012 APRA wrote to the Prothonotary referring to the subpoena it received from the plaintiffs. That letter has been treated by the Prothonotary, and by the plaintiffs, as an objection and as APRA’s statement of the grounds of the objection. It is a short letter and relevantly said:
Documents which may fall within the scope of the Schedule to the Subpoena are protected documents under section 56(1) of the Australian Prudential Regulation Authority Act 1998 (Cth) (the Act).
Pursuant to section 56(2) of the Act, APRA is precluded from producing such documents.
The letter does not expressly state that it objects to the production nor does it separately provide a statement of the grounds upon which the objection is based, although it is plain than an objection was intended and that it is possible to infer grounds of objection. A more rigorous attempt by those acting for APRA to comply carefully and clearly with the rules might, however, have precluded unnecessary arguments about whether matters sought to be raised at the hearing fell fairly within the brief letter and the ground of objection to be inferred in it.
APRA maintained grounds of objection at the hearing which the plaintiffs contended had not been raised in the letter of 17 August 2012. In the end senior counsel for APRA sought leave to rely on the additional ground that s 56(8) of the Australian Prudential Regulation Authority Act 1998 (Cth) (the “APRA Act”) contained a prohibition which justified the Court excusing APRA from compliance with the subpoena. Counsel for the plaintiffs argued against the grant of leave for the additional ground to be relied upon, but could point to no prejudice to leave being granted. It may be arguable (if only just) that the s 56(8) point sought to be relied upon by APRA was encompassed by the ground as stated in APRA’s letter as another basis for the basic proposition advanced by APRA that the production of the documents under the subpoena is prohibited by the APRA Act. However reliance upon s 56(8) is distinct from the grounds based upon ss 56(1) or 56(2) and it ought separately, specifically and clearly to have been stated. It is not easily encompassed within the grounds in the language of the letter from APRA to the Prothonotary, but I granted leave at the hearing for APRA to rely upon it as an additional ground. The plaintiffs were on notice of the ground from submissions which had been filed by APRA and they did not need, or seek, an adjournment to deal with the additional ground. The ground relying upon s 56(8) involved an important question of law of general application and, if well founded, would prevent the disclosure which the subpoena otherwise compelled: to preclude APRA from relying upon the ground could, therefore, result in permitting something expressly prohibited by the APRA Act.
APRA’s objection to the production of documents is, in essence, that the APRA Act prevents the production sought by subpoena or that the APRA Act evinces an intention that such production should not be required. APRA relied upon two grounds for that contention derived from the provisions of s 56 of the APRA Act. The first was based upon s 56(2) which creates an offence punishable by two years imprisonment for an officer of APRA to disclose protected information or produce a document that is a protected document to any person or “to a court”. Section 56(2) provides:
A person who is or has been an officer is guilty of an offence if:
(a) the person directly or indirectly:
(i)discloses information acquired in the course of his or her duties as an officer to any person or to a court; or
(ii) produces a document to any person or to a court; and
(b)the information is protected information, or the document is a protected document; and
(c)the disclosure or production is not in accordance with subsection (3), (4), (5), (5AA), (5A), (5B), (5C), (6), (7), (7A), (7B) or (7C).
Section 56(8) contains a more specific requirement preventing an officer of APRA from disclosing protected information or producing a protected document “to a court”. Section 56(8) provides:
A person who is, or has been, an officer cannot be required to disclose to a court any protected information, or to produce in a court a protected document, except when it is necessary to do so for the purposes of a prudential regulation framework law.
APRA contended that these two provisions separately or in combination prevent it from producing the documents sought by the subpoena because any production by APRA would require a natural person to act in contravention of ss 56(2) and 56(8). APRA pointed to the specific terms of the prohibition in the sections as expressly including a prohibition against the production or disclosure “to a court” and contended that the submissions by the plaintiff would render nugatory the express prohibition in the sections and its evident policy intent.
The plaintiffs’ argument was that the prohibitions in question did not apply because there is no prohibition upon APRA itself providing information and that complying with a subpoena under Order 42A would not involve production of documents “to a court”, but rather, to a person, namely the Prothonotary. Counsel for the plaintiffs drew attention to the “bespoke” nature of Order 42A and its fundamental difference from a subpoena duces tecum requiring production (“under penalty to bring with you”) to the Court.[4] The plaintiffs submitted that Order 42A requires not production to the Court, but to the Prothonotary as the named person identified by the Rules for the purpose of compliance with a subpoena.[5] On that view there would, therefore, be no infringement of the prohibition against production by APRA (as distinct from an officer) to a person (as distinct from “a court”).
[4]National Employers’ Mutual General Association Ltd v Waind and Hill [1978] 1 NSWLR 372, 378 (Moffitt P); Trade Practices Commission v Arnotts Limited and Others (No 2) (1989) 88 ALR 90.
[5]Supreme Court (General Civil Procedure) Rules 2005 (Vic) O 42A.05(1).
The competing propositions advanced by the plaintiffs and APRA depended in part upon how each characterised the purpose of s 56 of the APRA Act. APRA contended that the purpose of s 56 was to prevent production in all circumstances other than those specifically permitted in the APRA Act and that the inclusion of the words “to a court” in the prohibition were plainly intended to prevent production by operation of the Court’s compulsory powers such as upon subpoena. The plaintiffs, in contrast, contended that the provisions were essentially designed to prevent production without APRA’s official or formal authorisation. On that view there was said to be no reason to prevent a subpoena to APRA itself since any person producing documents in discharge of an obligation upon APRA itself would necessarily be an act of APRA and therefore would not be unauthorised by APRA.
In my view APRA’s objection should be maintained. The inclusion of “a court” within the category of the prohibition from production in ss 56(2) and 56(8) must have been intended to exclude production by operation of the Court’s compulsory powers to require production whether upon subpoena or otherwise. The prohibition no doubt also includes the voluntary production by a person to a court, but the specific inclusion of “a court” within the prohibition is intended to encompass the Court’s compulsory powers to require production and discovery. In Churche v Australian Prudential Regulation Authority,[6] Cowdroy J expressed the view that s 56(8) prohibited the Court from ordering disclosure of the documents which had been sought in the case before his Honour. The prohibition in both sections may not have been expressed to apply to APRA itself but there is no need that it should because APRA could only produce documents through a person and the prohibitions are expressed to apply to a person. Production by a corporation, such as APRA, is required to be by an authorised officer of the corporation.[7] The prohibition, therefore, in its present terms is effective to prevent disclosure or production by APRA through a person “who is or has been an officer”. Neither section is in terms limited to production that has not been authorised by APRA, and I see no reason to limit the ordinary meaning of the words in the sub-sections in the way for which the plaintiffs contended.
[6](2006) 153 FCR 373.
[7]Supreme Court (General Civil Procedure) Rules 2005 (Vic) O 42.03(9).
The particular nature of subpoenas for production to the Prothonotary under Order 42A does not require a different conclusion. Compliance with a subpoena under Order 42A requires producing documents to the Prothonotary. The rule is in aid of production to the Court with the Prothonotary as the person receiving documents as an employee or official of the Court.[8] “Court” for the purposes of ss 56(2) and 56(8) is defined to include “a tribunal, authority or person having the power to require the production of documents or the answering of questions”.[9] A subpoena under Order 42A is issued by the Court, not by the Prothonotary, and the receipt of documents by the Prothonotary is in his capacity as the person nominated for production in response to the Court’s power to compel production of documents.
[8]Supreme Court Act 1986 (Vic) s 106.
[9]Australian Prudential Regulation Authority Act 1998 (Cth) s 56(1).
A further reason in support of APRA’s grounds of objection may be found in the discretion given by s 56(5) of the APRA Act for APRA to approve the disclosure of protected information or the production of a protected document by instrument in writing. Section 56(5) provides a specific exception to the offence created by s 56(2) by providing:
It is not an offence if the disclosure of protected information or the production of a protected document by a person:
(a)occurs when the person is satisfied that the disclosure of the information, or the production of the document, will assist a financial sector supervisory agency, or any other agency (including foreign agencies) specified in the regulations, to perform its functions or exercise its powers and the disclosure or production is to that agency; or
(b)is to another person and is approved by APRA by instrument in writing.
The power conferred by this provision is broad. Through it APRA may approve disclosure of protected information or production of protected documents to another person without specific limitation. What factors may be relevant for APRA to consider in deciding whether to give approval is not a matter for this proceeding. What is significant, however, is that the legislature has sought fit to confer upon APRA the power to approve disclosure and production that is otherwise prohibited. It is for APRA to decide whether to exercise the power and there is nothing to suggest that the legislature intended that the power be exercised whenever a court issues a subpoena upon the application of a party. On the contrary, such indications as may be found in the legislation suggests that the legislature intended to leave it to APRA to decide whether the power should be exercised.
Accordingly, there shall be orders excusing APRA from compliance with the subpoena.
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