Phillip Lawrence Cohen v Damon Peter Fealy

[2021] QCA 72

[2021] QCA 72

COURT OF APPEAL

McMURDO JA
MULLINS JA
BRADLEY J

Appeal No 12597 of 2020
DC No 9 of 2020

PHILLIP LAWRENCE COHEN  Applicant

v

DAMON PETER FEALY  Respondent

BRISBANE

THURSDAY, 15 APRIL 2021

JUDGMENT

McMURDO JA:  This is an application for leave to appeal against an interlocutory decision of Judge Chowdhury which set aside subpoenas for the production of documents.  The applicant, who is a qualified but not a practising lawyer, is the plaintiff in a proceeding in the District Court in which he claims damages for an alleged defamatory statement made by the defendant.  This was commenced in May last year and the pleadings closed on 23 June.  Less than a week later, he caused subpoenas to be issued to six persons who are said to have been present at a board meeting at which the defendant is said to have made the defamatory statement.  The defendant denies doing so.

The subpoenas were in very wide terms.  They called for the production of documents in paper or electronic form, and whether the originals, copies, or backups, of all correspondence between the recipient and any person which contained any reference to the applicant or his position, and of all diaries, notes, minutes, recordings and other records relating to any such correspondence.  Each subpoena was accompanied by a cheque for $50 for conduct money.  One of the recipients, Mr Cook, swore an affidavit saying that he had responded to the subpoena and had handed his cheque back, saying that this was because he did not want any payment from the applicant.  Another recipient, Mr Bass, presented his cheque but did not respond to the subpoena.  The other individuals did not present their cheques or respond to their subpoenas.  The subpoenas required a response by 31 July, however, that date was to be extended to 28 August.

The application to set aside the subpoenas was not made by the recipients.  It was made by the defendant in the proceeding.  At the same time, the applicant applied for orders, ex parte, against the recipients, apart from Mr Cook, for orders that they be arrested and brought before the Court to be dealt with for contempt for their failure to comply with the subpoenas.  The judge identified the question of whether the subpoenas were an abuse of process as the fundamental issue on each application.

He held that they were an abuse of process, not because the width of their terms made them oppressive or because the material sought was irrelevant to the proceeding, but because the applicant should have issued a notice of non-party disclosure to each of those persons pursuant to r 242 of the Uniform Civil Procedure Rules.  His Honour rejected the submission that the respondent, as the defendant in the proceeding, had no standing to apply to set aside the subpoenas issued to non-parties.

As this application recognises the decision can be appealed only the leave of this Court.  Ordinarily, leave is not granted in a case involving an interlocutory decision on a procedure point.  However, the applicant submits that the decision was wrong in principle.

On the question of the respondent’s standing to apply for these orders, his Honour referred to the reasoning of Judge Alan Wilson, as he then was, sitting in the Planning and Environment Court in Darwen v Pacific Reef Fisheries (Australia) Pty Ltd [2009] QPELR 616. Judge Wilson said that a party to that case had standing to argue that a subpoena issued to a non-party should be set aside as an abuse of process. Judge Wilson referred to a judgment of Justice Powell in Botany Bay Instrumentation & Control Pty Ltd v Stewart [1984] 3 NSWLR 98 which supported that view. The Court’s power to set aside a subpoena derives from its inherent powers to prevent an abuse of its own process. In an appropriate case, the Court may act of its own motion to do that and there is no reason in principle why it should not exercise that power on the motion of a party to the proceeding. The Judge was correct to hold that the respondent had standing to bring the application.

The Judge decided that these subpoenas were an abuse of process according to the decision in Leighton Contractors Pty Ltd v Western Metals Resources Ltd [2001] 1 Qd R 261 where Justice Mackenzie held that the procedure of a subpoena should not be used to bypass the safeguards to a non-party which were provided by the rules for the process of non-party disclosure. His Honour said that if it was apparent to the registry that:

“[A] request for a subpoena is being made where it was unconnected with a trial or hearing, it would be appropriate for the discretion in r 414(1) to be exercised against issuing it.”

His Honour went so far as to say that:

“[A]ny attempt henceforth to issue a subpoena for the purpose of obtaining disclosure would be an abuse of process.”

See page 265, at [22].

The applicant submits that my judgment in Xstrata Queensland Ltd v Santos Ltd & Ors [2005] QSC 323 is to a different effect from the reasoning in Leighton Contractors, and indicates that there is a discretion to permit the use of subpoenas to effect the production of documents considerably in advance of any trial or other hearing.  In Xstrata, I referred to Leighton Contractors, but found it unnecessary to decide whether I should follow it because the subpoenas in question there were for the purpose of proceedings before arbitrators under the Commercial Arbitration Act 1990 (Qld) for which there was no alternative process of non-party disclosure. See [42] of my judgment.

In the present case, the applicant claimed that it was necessary to issue these subpoenas, at this early stage of the proceeding, because of a suggested risk that the documents might be unavailable at a later stage.  It was said, in particular, that some of the individuals would shortly cease to hold office as members of the organisation’s board and that their access to the documents might then be lost.  As to that, it is to be noted that the applicant also issued a subpoena to the organisation in question.

With no disrespect to the careful analysis by Justice Mackenzie in Leighton Contractors, that case should not be understood as precluding, in every case, the use of the process of subpoenas for the production of documents in advance of a trial or other hearing for which the documents would have an evidentiary value.  For example, I would not be prepared to say that there could never be cases where the urgent production of documents of evidentiary value and where there was an imminent risk that the documents would be lost or destroyed, would always be an abuse of process.  I agree that ordinarily a party seeking documents for a non-party should invoke the process of non-party disclosure, and as this Court held in Alder v Khoo & Ors [2010] QCA 360, an attempt to use the subpoena to obtain a document, which was correctly refused on a non-party disclosure application, would be an abuse of process. But the text of the rules does not preclude the use of subpoenas in every case where there is not yet a scheduled hearing.

Judge Chowdhury may have been too strict in his view that the use of subpoenas, in any case in which the documents could be sought by non-party disclosure, will always be an abuse of process, and, for that reason, there was an abuse of process in this case.  That having been said, however, despite the claim by the applicant that there were circumstances of urgency requiring the production of these documents now, the evidence which he then presented fell short of demonstrating that is was necessary to employ this process.

There is an application to adduce further evidence in this Court.  All of it relates to a substantial controversy between different factions within in the organisation in question, which is said to be relevant to the applicant’s concern that documents which he sought by the subpoenas could be lost.  Of that further evidence, there is one document which predates the hearing below, but that could not have affected the outcome.  The remainder of this further evidence post-dates the hearing below.  The application to adduce further evidence should, in my view, be refused.

It follows that there is no basis for this Court to reverse the judgment so that these subpoenas would have effect.  Nor is it appropriate to set aside his Honour’s orders so that there could be a rehearing of these applications.  It would be more expeditious for the applicant to pursue the documents by the process of a non-party disclosure.

There was also a question of whether the subpoenas were set aside nunc pro tunc.  The reasons for judgment indicated that they would be set aside on those terms.  But the orders which were pronounced and recorded did not include those words.  The point is of no consequence, however, because there could be no basis for holding a recipient of a subpoena in contempt once the subpoena has been held to be an abuse of process.

Finally, there was a challenge to his Honour’s order that the respondent’s costs be paid by the applicant.  Once it is accepted that the subpoenas were an abuse of process, and that the respondent, as the defendant in the proceeding, had standing to make the application, it was appropriate that costs should follow the event.

There was no denial of procedural fairness, as the applicant suggests, in that order for costs being made.  Both in the application made by the present respondent and in his submissions before the primary judge, that order for costs was sought.  In my opinion, this Court should order that leave to adduce further evidence be refused and that the application for leave to appeal be refused.

MULLINS JA:  I agree.

BRADLEY J:  I agree.

McMURDO JA:  They will be the orders.

...

McMURDO JA:  It will be further ordered that the applicant pay the respondent’s costs of the application for leave to appeal.