Racing New South Wales v Racing Victoria Limited

[2023] NSWSC 296

Supreme Court

New South Wales

Medium Neutral Citation:

Racing New South Wales v Racing Victoria Limited [2023] NSWSC 296

Hearing dates:

24 March 2023

Date of orders:

29 March 2023

Decision date:

29 March 2023

Jurisdiction:

Equity - Commercial List

Before:

Stevenson J

Decision:

Application to set aside subpoena dismissed

Catchwords:

CIVIL PROCEDURE – subpoenas – application to set aside – whether an abuse of process – whether issued for legitimate forensic purpose – whether fishing – whether a subversion of process for preliminary discovery – where subpoena issued by applicant for preliminary discovery

Legislation Cited:

Thoroughbred Racing Act 1996 (NSW)

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Airservices Australia v Transfield Pty Ltd (1999) 92 FCR 200; [1999] FCA 886

Rinehart v Rinehart [2015] NSWSC 205

Secretary of the Department of Planning, Industry and Environment v Blacktown City Council [2021] NSWCA 145

Tyco Australia Pty Ltd v Leighton Contractors Pty Ltd (2005) 142 FCR 428; [2005] FCAFC 115

Yes Family Pty Ltd v Sphere Healthcare Pty Ltd [2016] NSWSC 393

Category:

Procedural rulings

Parties:

Cato & Clive Partners Pty Limited (Applicant)
Racing New South Wales (First Plaintiff/Respondent)
Russell Balding AO (Second Plaintiff/Respondent)
Racing Victoria Limited (First Defendant)
Greg Nichols (Second Defendant)
Greg Carpenter (Third Defendant)
Brian Kruger (Fourth Defendant)
Racing Queensland Board (Fifth Defendant)
Racing SA Ltd (Sixth Defendant)
Racing and Wagering Western Australia (Seventh Defendant)
TasRacing Pty Ltd (Eighth Defendant)

Representation:

Counsel:
C S Rogers (Applicant)
A J L Bannon SC and O R Jones (Plaintiffs/Respondents)

Solicitors:
King & Wood Mallesons (Applicant)
YPOL Lawyers (Plaintiffs/Respondents)
Ashurst Australia (First, Second, Third and Fourth Defendants)
Clayton Utz (Fifth Defendant)
DLA Piper (Sixth Defendant)
Jackson McDonald (Seventh Defendant)
Sekel Oshry Lawyers (Eighth Defendant)

File Number(s):

2022/386737

JUDGMENT

1. Cato & Clive Partners Pty Limited is a corporate communications and public relations consultancy firm.

2. By Notice of Motion filed on 14 February 2023, Cato & Clive seeks to set aside a subpoena served on it on 25 January 2023 by the plaintiffs, Racing New South Wales and its director, Mr Russell Balding AO. For convenience, I will simply refer to the plaintiffs as “Racing New South Wales”.

3. For the reasons that follow, I decline to set aside the subpoena.

Racing New South Wales’ pending application for preliminary discovery

4. Racing New South Wales is a statutory corporation constituted under the Thoroughbred Racing Act 1996 (NSW).

5. It is the Principal Racing Authority in New South Wales.

6. There are other Principal Racing Authorities in each state and territory.

7. The subpoena served by Racing New South Wales on Cato & Clive relates to a pending application by Racing New South Wales for preliminary discovery under Uniform Civil Procedure Rules 2005 (NSW), r 5.3, against five of those Principal Racing Authorities: Racing Victoria Limited, Racing Queensland Board, Racing SA Ltd, Racing and Wagering Western Australia and TasRacing Pty Ltd.

8. Racing New South Wales’ application for preliminary discovery is listed for hearing on 4 May 2023.

9. All Principal Racing Authorities are subject to the Australian Rules of Racing, as determined by Racing Australia Limited.

10. Each of the Principal Racing Authorities has board representation at Racing Australia. Each of Racing New South Wales and Racing Victoria have effective veto power over decisions made by Racing Australia at board level.

11. Racing New South Wales apprehends that Racing Victoria and the other Principal Racing Authorities may be engaging in a plan to establish a “breakaway body” from Racing Australia, and to exclude Racing New South Wales, and the New South Wales thoroughbred racing industry, from the Australian thoroughbred horseracing market.

12. Racing New South Wales contends that this may give rise to an entitlement for it to bring a claim against the defendant Principal Racing Authorities on various grounds, including breach of competition law, breach of directors’ duties and breach of contract.

13. Racing New South Wales contends that it does not know the detail and extent of any discussions that have taken place amongst the other Principal Racing Authorities, or whether any agreement has in fact been reached or acted upon. Racing New South Wales contends that preliminary discovery is necessary for it to determine whether to commence proceedings against the defendant Principal Racing Authorities.

14. The defendant Principal Racing Authorities deny, categorically, the existence of any such agreement.

15. One matter that will arise on Racing New South Wales’ application for preliminary discovery is whether it “may be entitled” to bring a claim of the kind to which I have referred. ^[1] That will depend on, amongst other things, whether Racing New South Wales can show that it may be able to establish an agreement between the other Principal Racing Authorities to establish a “breakaway body” of the kind I have discussed.

    1. UCPR, r 5.3(1)(a).

16. Racing New South Wales seeks by way of preliminary discovery eight categories of documents from the defendant Principal Racing Authorities. ^[2]

    2. And also from three named individuals.

17. Six of those categories are directed, in various ways, to documents referring to or recording any agreement between those Principal Racing Authorities to exclude Racing New South Wales from the Australian thoroughbred racing industry and to establish “a new entity or joint venture for the provision of services relating to thoroughbred racing in Australia”; this being the “breakaway body” that Racing New South Wales apprehends may be in the process of being established.

18. A seventh category relates to documents recording the reasons for the alleged exercise by Racing Victoria on a specified occasion of the veto right to which I referred at [10] above.

19. The final category seeks:

“Any documents created [since 1 July 2021] created by, referring to or recording communications with any corporate affairs, corporate communications, media communications or public relations and consultants or advisers (including but not limited to Cato & Clive Partners) in respect of the establishment of a new entity or joint venture for the provision of services relating to thoroughbred racing in Australia …”

The subpoena

20. The subpoena that Racing New South Wales has served on Cato & Clive is said by Racing New South Wales to be directed to the question of whether it “may be entitled” to bring a claim of the kind I have described against the defendant Principal Racing Authorities.

21. It seeks production of:

“All communications created [since 1 July 2021] between any [Principal Racing Authority] (including any representative of any Principal Racing Authority) and Cato & Clive Partners.”

22. The “Principal Racing Authorities” identified in the subpoena are the defendant Principal Racing Authorities, together with the Principal Racing Authorities from the Northern Territory and the Australian Capital Territory. ^[3]

    3. Thoroughbred Racing NT and Canberra Racing Club Incorporated.

23. It can immediately be seen that there is considerable overlap between the documents sought by Racing New South Wales on subpoena from Cato & Clive and the documents sought by Racing New South Wales from the defendant Principal Racing Authorities in the category set out at [19] above.

A connection between Cato & Clive and the defendant Principal Racing Authorities

24. On this application, there is evidence of a connection between Cato & Clive and the defendant Principal Racing Authorities.

25. First, Racing New South Wales’ solicitor has deposed, on information and belief from Racing New South Wales’ General Legal Counsel, that “one or more” of the defendant Principal Racing Authorities has “retained Cato & Clive Partners”.

26. Further, on 20 February 2023, the solicitors for Racing Victoria wrote to the solicitors for Racing New South Wales:

“Our client understands that Cato & Clive has objected to the subpoena and proposes to apply to have it set aside. Our client will support any such application to have the subpoena set aside.

In the event that the subpoena is not set aside, the proposed access order stated in the subpoena is ‘general access’. Our client objects to that access order.

Our client considers that some or all of the documents returnable under the subpoena may properly be the subject of a claim for confidentiality by Racing Victoria Limited. Accordingly, our client proposes that, in the event the subpoena is not set aside, it should have access to the documents for 7 days in order to have an opportunity to apply for restricted access.”

27. The claim made in that letter that the documents called for by the subpoena directed to Cato & Clive might be the subject of a claim of confidentiality by Racing Victoria carries with it the implication, indeed the strong implication, that Cato & Clive have provided some service to Racing Victoria or have given some advice to Racing Victoria of a confidential nature.

28. There is also in evidence on this application a document called “Technical Communications Plan”, which has been provided to Racing New South Wales from an anonymous source. That document speaks of there being a “public announcement” of a “call for reform” of Racing Australia made by “major thoroughbred racing jurisdictions”. It also speaks of the “objective” of that “call for reform” being a “reform agenda” of the Victorian, Queensland, South Australian and Western Australian Principal Racing Authorities “as it relates to the ongoing operation of Racing Australia”.

29. The document also speaks of the “key messages” to be delivered by a “spokesperson” of media management and of “stakeholder engagement”. That document is said by Racing New South Wales to appear, on its face, to have been drafted by or with the assistance of a corporate communications or public relations consultancy. It has the hallmarks of such an engagement.

30. Together, these matters point to Cato & Clive’s possible, if not probable, involvement with one or more of the defendant Principal Racing Authorities, particularly Racing Victoria.

Abuse of process?

31. A subpoena will be set aside if it constitutes an abuse of process. A subpoena will not constitute an abuse of process if it has a legitimate forensic purpose.

32. Racing New South Wales accepts that it must show that its subpoena directed to Cato & Clive has a legitimate forensic purpose.

33. During argument, much attention was paid to the decisions of Darke J in Rinehart v Rinehart,^[4] and of Slattery J in Yes Family Pty Ltd v Sphere Healthcare Pty Ltd. ^[5] The circumstances before their Honours were, however, quite different to the circumstances here. The question of whether a subpoena is an abuse of process or has a legitimate forensic purpose is, necessarily, one dependent on a careful consideration of the particular circumstances.

    4. [2015] NSWSC 205.

    5. [2016] NSWSC 393.

34. The relevant test was recently discussed by the Court of Appeal in Secretary of the Department of Planning, Industry and Environment v Blacktown City Council. ^[6]

    6. [2021] NSWCA 145.

35. To justify a subpoena, what must be shown is that:

1. the documents sought are “apparently relevant”; or

2. it can be seen that the documents sought will materially assist on an identified issue; or

3. there is a reasonable basis beyond speculation that it is likely that the documents subpoenaed will so assist; ^[7] and

4. it is “likely” or “on the cards” that the documents sought will in some way or another add to the relevant evidence in the case in the sense that there is a “reasonable basis for supposing that the material called for will likely add, in the end, in some way or another, to the relevant evidence in the case”. ^[8]

   7. Bell P (as the Chief Justice then was) at [65].

   8. Brereton JA at [89].

36. Here the question is whether the documents sought satisfy these requirements vis-à-vis Racing New South Wales’ application for preliminary discovery.

37. In my opinion, the documents sought in the subpoena answer each of these requirements.

38. The relevant issue in Racing New South Wales’ application for preliminary discovery is whether it “may be entitled to make a claim for relief” against the defendant Principal Racing Authorities arising from the existence of a “breakaway agreement” of the kind the subject of Racing New South Wales’ apprehension.

39. Here, there is some evidence that one or other of the Principal Racing Authorities has retained Cato & Clive. As I have set out, there is evidence to suggest that Cato & Clive provided some service or advice to, at least, Racing Victoria. There is also evidence from which an inference can be drawn that one or more of the Principal Racing Authorities has obtained, from some source, advice of a marketing or public relations nature. It is unlikely that an organisation like Cato & Clive would be retained unless there was some circumstance, perhaps a proposed arrangement or agreement, in respect of which the retaining party wished to have public relations or like advice.

40. In those circumstances, it appears to me that there is a reasonable basis, beyond speculation, that Cato & Clive has in its possession documents which may assist Racing New South Wales to establish whether it may be able to make a claim such an agreement exists.

41. In those circumstances, I cannot see how the subpoena can be characterised as an abuse of process.

42. It was common ground before me that Racing New South Wales could not have served a Notice to Produce on any one of the defendant Principal Racing Authorities seeking production of the documents now sought in the subpoena against Cato & Clive. There is clear authority that such a course would be an abuse of process. ^[9]

    9. For example, Tyco Australia Pty Ltd v Leighton Contractors Pty Ltd (2005) 142 FCR 428; [2005] FCAFC 115 at [34] (Hill J).

43. That is because such an exercise would result in Racing New South Wales’ application for preliminary discovery becoming self-perfecting.

44. That appears to me to be what Finn J was alluding to when he made the observation that “preliminary discovery cannot itself be used to remedy deficiencies in the satisfaction of the conditions [of an application for preliminary discovery] themselves”. ^[10]

    10. Airservices Australia v Transfield Pty Ltd (1999) 92 FCR 200; [1999] FCA 886 at [5].

45. In that context, it has been stated:

“Thus, at least prima facie, it would be an abuse of process for an applicant for preliminary discovery to seek to compel the production of documents by Notice to Produce, when the production of those documents is sought [in the preliminary discovery application itself]. But it does not follow, for example, that a subpoena sought to be issued by an applicant for preliminary discovery against a third party would necessarily be an abuse, depending upon the scope and purpose of the subpoena.” ^[11] (Emphasis added.)

11. Tyco Australia v Leighton Contractors (supra) at [54] (Hely J).

46. In this case, the scope of the subpoena is, on the face of it, wide, in that it seeks “all communications” since 1 July 2021 between Cato & Clive and the state and territory Principal Racing Authorities. However, Cato & Clive does not contend that it would be onerous or oppressive for it to respond to the subpoena.

47. The purpose of the subpoena is apparent: to obtain documents which have apparent relevance to the contention Racing New South Wales wishes to make, on its preliminary discovery application, that it may be entitled to make a claim for relief arising from the “breakaway agreement” it apprehends has been made.

Fishing?

48. On behalf of Cato & Clive it was also submitted that by issuing the subpoena, Racing New South Wales was “fishing”.

49. However, as Racing New South Wales submitted, reference in the authorities to a “fishing expedition” is generally used in contradistinction to the existence of a legitimate forensic purpose. If it cannot be said that the documents sought have apparent relevance to an issue in the dispute, the subpoena might be characterised as a “fishing expedition”.

50. Indeed, in this context, it has been stated authoritatively:

“If the documents are apparently relevant and, provided that the terms of the subpoena are not unduly vague or the ambit of the subpoena is not such that it would be oppressive to comply with it, the subpoena should not be set aside.” ^[12]

12. Secretary of the Department of Planning, Industry and Environment v Blacktown City Council (supra) at [69] (Bell P).

51. That is the position here. The terms of the subpoena are not vague, and are not said to be oppressive.

Subversion of the process for preliminary discovery?

52. Cato & Clive also made the separate submission that the effect of the subpoena was to predetermine “much of” Racing New South Wales’ application for preliminary discovery “because the scope of documents sought by the subpoena overlaps to a significant extent with the documents [Racing New South Wales] seeks by way of preliminary discovery”.

53. In that context, it was said on behalf of Cato & Clive:

“If the subpoena was allowed to stand it would allow [Racing New South Wales] to obtain a substantial element of the relief it seeks without having satisfied the Court in respect of the conditions necessary for an application under r 5.3.”

54. It is true that there is overlap between the documents sought in the subpoena and the documents sought in one of the eight categories the subject of Racing New South Wales’ application for preliminary discovery. But that does not itself bespeak an abuse of process,^[13] nor a subversion of the preliminary discovery process. As Racing New South Wales submitted, the starting point is that the subpoena has been in accordance with the rules and that there is no rule preventing a party seeking preliminary discovery from issuing a subpoena in aid of that application. ^[14] Accepting that the Court should be mindful of the potential for abuse of its processes when a subpoena is issued in that context, an applicant for preliminary discovery faced with an outright rejection of the contention that it may be entitled to make a particular claim,^[15] ought generally be able to avail itself of the Court’s interlocutory processes to assist it to establish such a matter. ^[16]

    13. Rinehart v Rinehart (supra) at [18].

    14. UCPR, r 33.3.

    15. See [14] above.

    16. Rinehart v Rinehart (supra) at [19].

55. And here, the ambit of Racing New South Wales’ application for preliminary discovery is far broader than communications between any of the defendant Principal Racing Authorities and Cato & Clive.

56. I do not see this as a separate basis to set aside the subpoena.

Conclusion

57. Cato & Clive’s Notice of Motion of 14 February 2023 is dismissed with costs.

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Endnotes

Decision last updated: 29 March 2023