Re Nanotech Industrial Solutions Inc

IN THE SUPREME COURT OF VICTORIA	Not Restricted
AT MELBOURNE
COMMON LAW DIVISION
GENERAL LIST

S ECI 2021 00403

IN THE MATTER of an application by NANOTECH INDUSTRIAL SOLUTIONS INC to the Supreme Court of Victoria for an order under Division 1C of Part I of the Evidence (Miscellaneous Provisions) Act 1958 (Vic) for the examination of a witness in Victoria in relation to a matter pending before a court in a place out of Victoria.

NANOTECH INDUSTRIAL SOLUTIONS INC

Applicant

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JUDGE:	Derham AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	7 April 2021
DATE OF JUDGMENT:	7 April 2021
CASE MAY BE CITED AS:	Re Nanotech Industrial Solutions Inc
MEDIUM NEUTRAL CITATION:	[2021] VSC 167

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EVIDENCE – Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters – Commission and Letter of Request issued by United States of America District Court for the District of New Jersey– Evidence for use in USA civil proceedings – Applicant granted leave to issue subpoena for deposition evidence and documents to be produced – Examiner appointed – Evidence (Miscellaneous Provisions)Act 1958 (Vic), Part I, Div 1C – Supreme Court (General Civil Procedure) Rules 2015 Order 81 – British American Tobacco Australia Services Limited v Eubanks [2004] NSWCA 158; Jonathan Paul Eyewear, Inc [2015] NSWSC 134; Application of Computer Sciences Corporation under the Evidence on Commission Act 1995 (NSW) [2017] NSWSC 810; Nanotech Industrial Solutions Inc v Nanoteko Pty Ltd [2020] NSWSC 1285 referred to.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P Tiernan	Garland Hawthorn Brahe, Lawyers

TABLE OF CONTENTS

Introduction........................................................................................................................................ 1

Background Facts............................................................................................................................... 1

Applicable Law................................................................................................................................... 6

Consideration.................................................................................................................................... 16

The terms of the Order.................................................................................................................... 21

HIS HONOUR:

Introduction

The applicant (‘NIS’) applies for orders pursuant to Part I, Division 1C of the Evidence (Miscellaneous Provisions) Act1958 (Vic) (the ‘Act’ or ‘Victorian Act’) for leave to issue a subpoena to Mr Glenn Finck of 24 Shorts Road, Heathmere, Victoria 3305 (‘Witness’), to attend to give evidence and to produce documents pursuant to a Commission (‘Commission’) and Letter of Request (‘Letter of Request’) issued by United States District Court for the District of New Jersey (‘US Court’).

Applicants of this kind are generally, but not universally, made by the Victorian Government Solicitor with the consent of the Attorney-General, as contemplated by r 81.01 of the Supreme Court (General Civil Procedure) Rules 2015 (‘Rules’).

In support of the making of such orders, NIS submitted Minutes of Orders by consent of NIS and the Witness. I am persuaded that the orders sought by the application should be made, with some modifications to give full effect to the terms of the Letter of Request and the provisions of the Act. There are, however, some features of the application which deserve explanation and reasons.

Background Facts

NIS is the defendant in a civil action in the US Court in which Nanoteko Pty Ltd (‘Nanoteko’) is plaintiff (‘US Proceeding’).[1]
[1]Proceeding number 2:18-CV-05214-SRC-CLW.

On 14 October 2020, the US Court issued the Commission to the Chief Justice of Supreme Court of Victoria for the oral examination of the Witness to be taken before the Court, and for the production by him of all documents requested in the Letter of Request. For that purpose, the Chief Justice was authorised and empowered:

(a) to record and transcribe the testimony of the Witness on oath, and mark for identification all documents produced by the Witness;

(b) to certify the testimony of the Witness under seal; and

(c) to permit the parties to inspect and copy the documents identified in the Letter of Request;

at a location, date and time in Australia to be designated by counsel for NIS, or at such other times and places as shall be mutually agreed upon by the Witness and counsel for NIS.[2]

[2]A copy of the Commission and Letter of Request is in exhibit MJS.1 to the affidavit of Matthew Jakob Susic made 16 February 2021 and filed in this proceeding.

Pursuant to the Commission, the US Court requested that the Courts of the Country of Australia issue any appropriate Orders in aid of taking such examination of the Witness, and issue and enforce any subpoena or other process which may be necessary or appropriate for the attendance of the Witness and the taking of such examination, pursuant to the Laws and Court Rules of the Country of Australia.

The Letter of Request is dated 9 October 2020 and is attached to the Commission issued by the US Court. NIS seeks leave to issue a subpoena requiring the Witness to produce documents identified in the Letter of Request and to be examined orally in respect of specified topics.

The summary of the US Proceeding is set out in Annexure ‘A’ to the Letter of Request in the following terms:

This action arises out of a business plaintiff Nanoteko Pty Ltd. (“Nanoteko”), formed to invest in and distribute Nanolub® products created and produced by defendant Nanotech Industrial Solutions, Inc. (“NIS”). Nanoteko and NIS entered into a Distribution Agreement (“Agreement”) whereby Nanoteko would be the exclusive distributor of NIS products in Australia, New Zealand and Papua New Guinea.
Nanoteko has alleged it entered into the Agreement for Nanolub® additives and fully formulated oils, because the products could reduce fuel consumption and emissions.
After entering into the Agreement, Nanoteko engaged two testing agencies, TestSafe Australia and Orbital Australia, to perform testing on the Nanolub® products Nanoteko sought to invest in and distribute. Test Safe Australia conducted the testing, using the additives (from the initial order that Plaintiff placed with NIS) and fully formulated oil (which NIS approved for testing). On September 19, 2017, Nanoteko informed NIS of the results and advised it not to proceed with production or shipment of any Nanolub® products, including those from the August 2017 order. The test results purportedly did not yield a reduction in fuel consumption or emissions. Nanoteko subsequently cancelled the test to be completed by Orbital Australia.
The Agreement was terminated. Nanoteko filed this lawsuit on April 2, 2018, asserting claims for fraud and breach of contract. Nanoteko alleges NIS misrepresented the attributes of the Nanolub® additives and fully formulated oils and greases, causing Nanoteko harm and damages. NIS counter claimed, asserting Nanoteko breached the Agreement.

Annexed to the Letter of Request is the ‘First Amended Complaint and Jury Demand’ (‘Complaint’) which sets out the claim made in terms similar to Statement of Claim in this Court. It shows that Nanoteko is a company incorporated in Australia, specifically New South Wales. The claims asserted, in summary, stem from a distribution agreement between the parties and are:

(a) breach of contract;

(b) breach of the duty of good faith and fair dealing;

(c) breach of express warranty;

(d) unjust enrichment;

(e) fraud in the inducement; and

(f) legal fraud.

The Complaint includes a Preliminary Statement which summarises the claim in the following way:

This action arises from a distribution agreement (the “Distribution Agreement”) between Nanoteko and NIS whereby Nanoteko agreed to market and sell oil additives and related products manufactured by NIS throughout Australia, New Zealand, and Papua New Guinea. Based on NIS’s false representations concerning testing data provided to Nanoteko and key attributes of NIS’s products (specifically, the ability of NIS’s engine oil additives and derivative products to reduce fuel consumption and emissions), Nanoteko invested significant time and resources, as required by the Distribution Agreement, including hiring employees, developing an extensive distribution network, and preparing and publishing marketing materials and a website. The Distribution Agreement also required Nanoteko to spend hundreds of thousands of dollars to purchase large quantities of the products for resale. After making these investments, however, Nanoteko discovered that NIS’s representations concerning the engine oil additives ability to reduce fuel consumption and emissions were intentionally false and misleading. Because Nanoteko’s ability to market and sell these products was premised on the products performing as NIS promised, Nanoteko was ultimately forced to suspend operations, suffering considerable losses. Nanoteko now brings this lawsuit to recover damages it has suffered due to NIS’s fraudulent conduct, bad faith, and breaches of contract and warranty.

The relevance of the evidence of the Witness to the US Proceeding is explained in Annexure ‘B’ to the letter or Request, which also sets out the questions to be put to the Witness, in the following terms:

Glenn Finck is believed to have worked with Max Rudman to sell NIS products in Australia. He has knowledge about the technology and Nanolub® products manufactured by Nanotech Industrial Solutions, Inc. (“NIS”) and its predecessors. Mr. Finck initially developed a relationship with Nano Materials and/or the Weizmann Institute of Science who, according to NIS, developed the technology used by NIS today. Mr. Finck worked with NIS to potentially distribute its products in Australia.
Mr. Finck has knowledge regarding a Southwest Research Institute Report (“SWRI Report”) prepared for Rand Innovations, LLC, revisions made to the report, and his communications concerning those revisions.
Mr. Finck will be examined about his relationship with Max Rudman: communications with NIS, Mr. Rudman and other representatives of Nanoteko regarding NIS’s products; communications with NIS, Mr. Rudman and representatives of Nanoteko regarding the SWRI Report; and his knowledge of NIS’s products, including whether they reduce emissions and fuel consumption; his knowledge of sales and marketing of NIS products; his knowledge of product testing; and his knowledge of and experience with the lubricant industry including oils, greases, and additives.

The Letter of Request includes a request that a representative of the Supreme Court of Victoria be present at the examination.

NIS seeks orders facilitating the examination of the Witness, including that:

(a) the Court make an order for the examination of the Witness before Mr Patrick Tiernan, of Counsel, and that he be appointed examiner pursuant to r 81.02 of the Rules (‘Examiner’);

(b) the Examiner conduct the examination at the offices of Garland Hawthorn Brahe, Lawyers, on a date not before 1 September 2021;

(c) that the examination, oral examination (including cross-examination and re‑examination, either in person or by video conference) of the Witness be permitted to be conducted by the US Counsel for the parties in the US Proceeding on the following subject matters:

(i) his relationship with Max Rudman;

(ii) communications with NIS, Mr Rudman and other representatives of Nanoteko regarding NIS’s products;

(iii) communications with NIS, Mr Rudman and representatives of Nanoteko regarding the South West Research Institute report;

(iv) knowledge of Nanotech’s products, including whether they reduce emissions and fuel consumption;

(v) his knowledge of sales and marketing of NIS’s products;

(vi) his knowledge of product testing; and

(vii) his knowledge of and experience with the lubricant industry including oils, greases and additives.

(d) that the Witness produce the documents identified in the Letter of Request, being:

(i) Correspondence involving Mr Finck and either Max Rudman, Rael Hurwitz, John Beville, Jim Ellison, or any other employees, representatives and agents of Nanoteko, concerning Nanolub® products or a Southwest Research Institute Report (the ‘SWRI Report’) prepared for Rand Innovations, LLC, including any revisions thereto;

(ii) Correspondence involving Mr Finck and Chris Adsett, or any other employees, representatives and agents of Techenomics concerning Nanolub® products or the SWRI Report, including but not limited to testing;

(iii) Correspondence and documents that refer or relate to testing or proposed testing of Nanolub® products;

(iv) Correspondence regarding the SWRI Report, including, but not limited to, any testing or reports completed;

(v) Reports or documentation concerning Nanolub® products;

(vi) Documents that refer or relate to sales or marketing of Nanolub® products;

(vii) All documents compiled and reviewed by Mr Finck in conjunction with blending of Nanolub® products;

(viii) Any due diligence performed by or on behalf of Mr Finck on any NIS products.

Applicable Law

The Letter of Request is issued by the US Court pursuant to Hague Convention of 18 March 1970 on the Taking of Evidence Abroad in Civil or Commercial Matters (‘Hague Convention’ or ‘Convention’). The United States of America and Australia are Contracting States under the Convention.

Part I, Division 1C of the Act contains provisions which implement the Convention and adopts it as a law of the State of Victoria.[3] The scheme for the implementation of the Convention, on a uniform basis, by almost all Australian States and Territories was a requirement for Australian signature of the Convention.[4] The Convention was given the force of law in Australia by the mechanism of translating the treaty provisions into domestic law by State legislation. There is no equivalent Commonwealth legislation.[5]
[3]British American Tobacco Australia Services Limited v Eubanks [2004] NSWCA 158 (BATAS v Eubanks) [16], [67]; Application of Computer Science Corporation under the Evidence on Commission Act 1995 (NSW) [2017] NSWSC 810, [29].
[4]BATAS v Eubanks, [16]-[17]. Evidence on Commission Act 1995 (NSW), Pt 4; Evidence Act 1958 (Vic), Pt 1, Div 1C; Evidence Act 1977 (Qld), Div 3 of Pt 3; Evidence Act 1906 (WA), ss 115-118A; Evidence on Commission Act 2001 (Tas); Evidence Act 1971 (ACT), Pt 12B; Evidence Act 1939 (NT), Div 2 of Pt 6.
[5]BATAS v Eubanks, [17].

The provisions of Pt 1 Div 1C of the Act are based on model uniform legislation agreed to by the Standing Committee of Attorneys-General. The adoption of the model legislation by all jurisdictions facilitated the Commonwealth’s ratification of the Convention on the taking of evidence abroad.[6] The case authority on the interpretation of the legislation in other States and Territories is therefore to be followed unless considered to be plainly wrong. The general principle is that an international treaty of this character should be interpreted, where possible, in an internationally uniform way.[7]
[6]BATAS v Eubanks, [19].
[7]BATAS v Eubanks, [41].

The Australian and English authorities establish a number of general propositions, including:

(a) that it is the Court’s duty to approach the interpretation and implementation of a Letter of Request benevolently;[8]
[8]Gredd v Arpad Busson [2003] EWHC 3001 ([27) (Burnton J); Cited in British American Tobacco Australia Services Ltd v Eubanks (2004) 60 NSWLR 483 ([42]) (Spigelman CJ, Handley and Bryson JJA agreeing).

(b) judicial and international comity require that any request of a foreign court for evidence should be treated with sympathy and should be complied with as far as the principles of our law permit,[9] so that letters of request should be given effect to the fullest extent possible;[10]

(c) the terms of a Letter of Request are not conclusive.[11] The court must look ‘to the substance of the matter’ rather than at the precise words of the letter of request;[12] and

(d) fishing expeditions will not be permitted as part of the process of responding to a letter of request from a foreign court and the requirement for the production of documents will only be enforced in relation to actual documents in, or that have been in, the possession of the person the subject of the order, as opposed to conjectural documents which may or may not exist.[13] The evidence sought must be for the trial itself and not for use in pre-trial discovery.[14]

[9]Pickles v Gratzon (2002) 55 NSWLR 533, [61].

[10]Re Westinghouse Electric Corporation Uranium Contract Litigation [1978] AC 547, 612, 654; Re Asbestos Insurance Coverage Cases [1985] All ER 716, 719; Pickles v Gratzon (2002) 55 NSWLR 533, [50], [61]; Re The Hague Convention [2008] SASC 51, [13] and Application of Computer Science Corporation under the Evidence on Commission Act 1995 (NSW) [2017] NSWSC 810, [32].

[11]British American Tobacco Australia Services Limited v Eubanks [2004] NSWCA 158 [52].

[12]Application of Forsyth; Re Cordova v Philips Roxane Laboratories Inc [1984] 2 NSWLR 327; Pickles v Gratzon (2002) 55 NSWLR 533, [57].

[13]Re Asbestos Insurance Coverage Cases [1985] All ER 716, 721; Pickles v Gratzon (2002) 55 NSWLR 533, [54].

[14]Application of Forsyth; Re Cordova v Philips Roxane Laboratories Inc [1984] 2 NSWLR 327, 333-4; Pickles v Gratzon (2002) 55 NSWLR 533, [57]-[59].

The Convention provides, amongst many other things:

(a) that in civil or commercial matters a judicial authority of a Contracting State may, in accordance with the provisions of the law of that State, request the competent authority of another Contracting State, by means of a Letter of Request, to obtain evidence, or to perform some other judicial act (Article 1);

(b) a Contracting State shall designate a Central Authority which will undertake to receive Letters of Request coming from a judicial authority of another Contracting State and to transmit them to the authority competent to execute them. Each State shall organise the Central Authority in accordance with its own law. Letters shall be sent to the Central Authority of the State of execution without being transmitted through any other authority of that State (Article 2);

(c) the judicial authority which executes a Letter of Request shall apply its own law as to the methods and procedures to be followed (Article 9); and

(d) that the provisions of the Convention shall not prevent a Contracting State from permitting, by internal law or practice, any act provided for in the Convention to be performed upon less restrictive conditions or by methods of taking evidence other than those provided for in the Convention (Article 27).

Pt 1 Div 1C of the Act comprises 6 sections, ss 9L to 9Q. Section 9L sets out some relevant definitions. Sections 9M to 9Q provide as follows:

9MApplication to the Supreme Court for assistance in obtaining evidence for proceedings in other court
(1)If an application is made to the Supreme Court for an order for evidence to be obtained in Victoria and the Supreme Court is satisfied-
(a)that the application is made in pursuance of a request issued by or on behalf of a court or tribunal exercising jurisdiction in a place outside Victoria; and
(b)that the evidence to which the application relates is to be obtained for the purposes of proceedings which either have been instituted before the requesting court or whose institution before that court is contemplated-
the following provisions of this Part apply.

(2)This Part does not apply in respect of proceedings relating to the commission of an offence or an alleged offence unless the requesting court is a court of a place in Australia or of New Zealand.

9NPower of the Supreme Court to give effect to application for assistance
(1)The Supreme Court has power, on any such application as is mentioned in section 9M, by order to make such provision for obtaining evidence in Victoria as may appear to the court to be appropriate for the purpose of giving effect to the request in pursuance of which the application is made.
(2)An order under this section may require a specified person to take such steps as the court may consider appropriate for that purpose.
(3)Without limiting the generality of subsections (1) and (2), an order under this section may, in particular, make provision-
(a) for the examination of witnesses, either orally or in writing;
(b) for the production of documents;
(c)for the inspection, photographing, preservation, custody or detention of any property;
(d)for the taking of samples of any property and the carrying out of any experiments on or with any property;
(e)for the medical examination of any person;
(f)without limiting paragraph (e), for the taking and testing of samples of blood from any person.

(4)An order under this section shall not require any particular steps to be taken unless they are steps which can be required to be taken by way of obtaining evidence for the purposes of proceedings in the Supreme Court (whether or not proceedings of the same description as those to which the application for the order relates).
(5)Subsection (4) does not preclude the making of an order requiring a person to give testimony (either orally or in writing) otherwise than on oath or by affirmation where this is asked for by the requesting court.
(6)An order under this section shall not require a person-
(a)to state what documents relevant to the proceedings to which the application for the order relates are or have been in the person’s possession, custody or power; or
(b)to produce any documents other than particular documents specified in the order and appearing to the court making the order to be, or to be likely to be, in the person’s possession, custody or power.

(7)A person who, by virtue of an order under this section, is required to attend at any place shall be entitled to the like conduct money and payment for expenses and loss of time on attendance as a witness in proceedings before the Supreme Court.
9OPrivilege of witnesses
(1)A person shall not be compelled by virtue of an order under section 9N to give any evidence which the person could not be compelled to give-
(a) in similar proceedings in Victoria; or
(b)in similar proceedings in the place in which the requesting court exercises jurisdiction.

(2)Subsection (1)(b) does not apply unless the claim of the person in question to be exempt from giving evidence is either-
(a)supported by a statement contained in the request (whether it is so supported unconditionally or subject to conditions that are fulfilled); or
(b)conceded by the applicant for the order.

(3)Where such a claim by any person is not so supported or conceded, the person may (subject to the other provisions of this section) be required to give the evidence to which the claim relates, but that evidence shall not be transmitted to the requesting court if that court, on the matter being referred to it, upholds the claim.
(4)In this section, references to giving evidence include references to answering any question and to producing any document, and the reference in subsection (3) to the transmission of evidence given by a person shall be construed accordingly.

9P Offence
If any person, in giving any testimony (either orally or in writing) otherwise than on oath or by affirmation, where required to do so by an order under section 9N, makes a statement-
(a) which the person knows to be false in a material particular; or
(b)which is false in a material particular and which the person does not believe to be true-
the person is guilty of an offence.
Penalty:imprisonment for 5 years.

9Q Operation of other laws
This Part is not intended to exclude or limit the operation of any other law of the State that makes provision for the taking of evidence in the State for the purpose of a proceeding outside the State.

It can be seen that s 9M refers to the making of ‘an application’ to the Supreme Court, but does not limit who can make such an application. Similarly, s 9N refers to ‘such application as is mentioned in section 9M’, but again makes no reference to who can or cannot make the application.

In the corresponding NSW legislation there is a specific rule-making power, in s 36 of the Evidence on Commission Act 1995, which authorises the making of rules for or with respect to the manner in which an application under s 32 of that Act is to be made (s 32 of the NSW legislation is the equivalent of s 9M of the Victorian Act). Part 52 of the Uniform Civil Procedure Rules 2005 (NSW) (‘UCPR’) deals with the procedure for taking evidence for foreign and Australian courts and tribunals. Rule 52.1 of the UCPR provides for a proceeding for an order under the NSW equivalent to s 9m of the Victorian Act to be made by a person nominated for that purpose by the requesting court and if no person is so nominated, by the Attorney-General.

The Victorian position is much the same. Rule 81.01 of the Rules provides that an application for an order under Division 1C of Part 1 of the Act for the examination of a witness in Victoria in relation to a matter pending before a court or tribunal in a place out of Victoria may be made:

(a) by a person nominated for that purpose by the court or tribunal concerned; or

(b) if no person is so nominated, by the Victorian Government Solicitor with the consent of the Attorney-General.

The Victorian Act has no rule making power equivalent to s 36 of the Evidence on Commission Act 1995 (NSW). There is a general regulation making power in s 152 of the Act which enables the making of regulations by the Governor in Council ‘prescribing any matter or thing required or permitted by this Act to be prescribed or necessary to be prescribed to give effect to this Act.’ Order 81 of the Rules is, however, made by the Judges of the Court pursuant to s 25 of the Supreme Court Act 1986 (Vic), and probably pursuant to s 25(f)(i), which provides for the making of rules for or with respect to any matter relating to the practice and procedure of the Court.

Rule 81.02 provides that the Court may make an order for the examination of the witness before any fit and proper person nominated by the person making the application or such other qualified person as the Court appoints (‘the examiner’).

Rules 81.03 to 81.06 provide as follows:

81.03 Conduct of examination
(1)An examination under this Order shall be conducted in accordance with this Rule, unless the Court otherwise orders.
(2)Subject to Rules 81.04, 81.05 and 81.06, Rules 41.02 to 41.10 apply to the examination as if-
(a)the matter pending before the court or tribunal concerned were a proceeding in the Court;
(b)the order for the examination were made under Rule 41.01(1)(a) in that proceeding; and
(c)where the examiner is a Judge of the Court or an Associate Judge, an order were made under Rule 41.01(1)(a) for the examination of a person before a Judge of the Court or an Associate Judge.

81.04 Attendance of non-party
Where the person on whose application an order is made under this Order is not a party to the matter pending before the court or tribunal concerned, the examiner may permit that person and the person’s legal advisers to attend the examination.

81.05   Deposition and exhibits
(1)       Rule 41.08(4) and (5) do not apply to an examination under this Order.
(2)       The examiner shall send the deposition to the Prothonotary.
(3)Where the examiner receives an exhibit on the examination, the examiner shall, on the conclusion of the examination, return the exhibit to the person producing it unless that person consents to its retention by the examiner.
(4)Where the examiner retains an exhibit under paragraph (3), the examiner shall send it to the Prothonotary together with the deposition.

81.06 Certificate
Upon receipt of a deposition taken under this Order, the Prothonotary shall-
(a)give a certificate sealed with the seal of the Court annexing and identifying the letter of request, certificate or other document from the court or tribunal requesting the examination, the order of the Court for examination, the deposition, and the exhibits (if any) received from the examiner; and
(b)send the certificate and the annexures to the Attorney-General or, where the letter of request, certificate or other document was sent to the Prothonotary by some other person pursuant to a Convention, to that other person.

Order 41 of the Rules deals with the obtaining of evidence before trial. Under r 41.01 the Court may, for the purpose of any proceeding (in the Court), make an order for the examination of any person before a Judge or an Associate Judge or such other person as the Court appoints as examiner, and sets out the procedure for that to take place. Rules 42.02 to 42.10, which are made applicable to an examination pursuant to the Hague Convention under Order 81, provide in substance as follows (omitting those parts that are specifically not applicable by r 81.05):

(a) the party obtaining an order for examination must furnish the examiner with copies of such of the documents in the proceeding as are necessary to inform the examiner of the question in the proceeding to which the examination is to relate. (r 41.02);

(b) the examiner must appoint a place and time for the examination. The time must be as soon as practicable after the making of the order. The examiner must give notice of an appointment to the party obtaining the order not less than seven days before the time of the appointment, and that party shall forthwith serve notice of the appointment on each other party (r 41.03);

(c) that each party and their counsel and solicitor are entitled to attend the examination. The person examined shall be examined, cross-examined and re-examined in like manner as at trial. The examiner may put any question to the person examined as to the meaning of any answer made by that person or as to any matter arising in the course of the examination, and may adjourn the examination from time to time and place to place (r 41.04);

(d) where the examiner is a Judge of the Court or an Associate Judge, the examiner may, on the application of a party to the proceeding, take the examination of any person not named or described in the order for examination. Where the examiner is not a Judge of the Court or an Associate Judge, the examiner may, with the consent in writing of each party to the proceeding, take the examination of any person not named or described in the order for examination and, if the examiner does so, the examiner shall annex to the deposition of that person the consent of each of the parties (r 41.05);

(e) where the examiner is not a Judge or an Associate Judge, and the person being examined objects to answer any question or to produce any document or thing, then the validity of the objection shall be decided by the Court and for that purpose-

(ix)where the objection is taken to a question, unless the question is objected to on the ground of privilege, the person being examined shall answer the question and the question, the ground for the objection and the answer, if any, shall be set out in the deposition;

(x) where the objection is taken to the production of a document or thing, the ground for the objection shall be set out in the deposition and where the objection is to the production of a document, unless production is objected to on the ground of privilege, the document or a copy shall be attached to the deposition (r 41.06);

(f) the deposition of a person examined before an examiner shall be taken down by the examiner, by a shorthand writer or some other person in the presence of the examiner or recorded by mechanical means in accordance with Part VI of the Act in the presence of the examiner. Subject to certain exceptions, the deposition need not set out every question and answer if it contains as nearly as may be the statement of the person examined (r 41.07);

(g) except where the deposition is taken down by a shorthand writer or is recorded by mechanical means, the examiner shall, if any party so requests, ask the person examined to sign that person’s deposition. In any event, the examiner shall authenticate and sign the deposition and indorse on the deposition a statement signed by the examiner of the time occupied in taking the examination and the fees received by the examiner in respect of the examination (r 41.08);

(h) unless the Court gives leave, a deposition so taken or recorded must not be disclosed to any person not a party before it has been admitted into evidence (r 41.08.1);

(i) the examiner may make to the Court a report upon the examination before the examiner or with regard to the absence of any person from the examination. The Court may direct such proceedings to be taken, or make such order, on the report as it thinks fit (r 41.09); and

(j) where a person has been required by subpoena to attend before an examiner who is not a Judge or an Associate Judge, and the person fails or refuses to attend, refuses to be sworn, to answer any lawful question or to produce any document or thing, the examiner shall, at the request of any party, give to that party a certificate, signed by the examiner, of the failure or refusal. Once that certificate is filed the Court may make various orders (r 41.10).

Consideration

It is clear from the provisions of ss 9M and 9N of the Act that this Court has the power to make provision for the examination of persons in Victoria and to compel them to produce documents for the purposes of proceedings outside of Australia. The terms of s 9M show that there are three conditions for the exercise of the jurisdiction:

(a) the application is made pursuant to a request issued by or on behalf of a court or tribunal exercising jurisdiction in a place outside Victoria (s 9M(a));

(b) the evidence to which the application relates is to be obtained for the purposes of proceedings which either have been instituted before the requesting court or whose institution before that court is contemplated (s 9M(b)); and

(c) that the proceedings in the court outside of Victoria does not relate to the commission of an offence or an alleged offence (s 9M(2)).

Once those criteria are established, this Court has power, by order, to make such provision for obtaining evidence in Victoria as may appear to the court to be appropriate for the purpose of giving effect to the request (s 9N(1)). The fact that the Commission is directed to the Chief Justice of the Court should be construed as a reference to the Court pursuant to the provisions of the Act.

However, in this case, the Letter of Request does not explicitly nominate NIS to make application for an order for the examination of the Witness as contemplated by r 81.01(a) of the Rules. Despite the fact that this application is brought ex parte and the question of the standing of NIS to make the application has not been raised by the Witness, who consents to the order sought, I must nonetheless be satisfied that the US Court has nominated the applicant for the purpose of bringing the application or that the Court is otherwise able to permit the Applicant to make the application.

In my view the Letter of Request does, when read as a whole, reveal that it is the intent of the US Court that NIS is nominated as the relevant applicant. The application for the issue of the Letter of Request was made to the US Court, in adversarial litigation, by NIS. At the outset of the ‘Order for Issuance of Commission for Out of State Deposition of Glenn Finck’, which provides for the US Court to issue the Commission and Letter of Request, it is recited that:

THIS MATTER having been presented to the Court by defendant Nanotech Industrial Solutions, Inc. (“NIS”), for an Order issuing a commission for the oral examination and the production of documents by Glenn Finck, and for an Order requesting the issuance of process and the entry of an Order by the Supreme Court of Victoria, Australia in aid of taking such examination, on notice and consent of counsel for plaintiff, Nanoteko Pty Ltd. (“Plaintiff”) and the Court having read an considered the papers submitted; and for good cause shown…

In the decision of N Adams J in Application of Computer Sciences Corporation under the Evidence on Commission Act 1995 (NSW),[15] his Honour noted that:

Some of the states that are parties to the Hague Convention have inquisitorial legal systems and others have an adversarial legal system. In countries with inquisitorial legal systems, it will usually be the court of its own volition that seeks the assistance of this Court in the taking of evidence on commission…
The present applications have been brought by parties to the litigation in Delaware. Those parties approached the Delaware Court and made direct application to it. The letters of request have all been issued at the request of those applicants, the identity of which is clearly stated in each of the letters of request, albeit in terms that differ slightly.[16]

[15][2017] NSWSC 810.

[16]Ibid, [39]-[40].

In that case, his Honour concluded from an examination of the Letters of Request concerned as a whole, and adopting a benevolent construction, that each of the letters of request nominated the relevant applicant.

In this case, it seems to me that a similar construction is open on the terms of the Order of the US Court referred to above ([30]). This is supported by the fact that the request of the US Court to this court is to examine the Witness at a time and place ‘designated by counsel for NIS’. It is the Court’s duty to approach the interpretation and implementation of the Letter of Request benevolently.[17] When that approach is taken, it is open to conclude that the nomination of NIS to make application to this Court is implicit in the Letter of Request.
[17]Gredd v Arpad Busson [2003] EWHC 3001 ([27) (Burnton J); Cited in British American Tobacco Australia Services Ltd v Eubanks (2004) 60 NSWLR 483 ([42]) (Spigelman CJ, Handley and Bryson JJA agreeing).

If I am wrong in this conclusion, I note that there is nothing in the Act itself that limits who can apply for such orders. Rule 81.01 is presumably made, as I have said, pursuant to the rule making power in s 25 (f) of the Supreme Court Act 1986. Nothing in the Act requires or even permits the limiting of who it is can make such an application. The limitation under the Rule is presumably the product of the uniform regulation of this jurisdiction, as the NSW UCPR make a similar limitation on who may make an application under the Act. Although in Application of Computer Sciences Corporation under the Evidence on Commission Act 1995 (NSW),[18] N Adams J found it unnecessary to decide whether the equivalent rule in NSW went beyond the regulation making power applicable under the Evidence on Commission Act 1995 (NSW), he nevertheless expressed the view that to limit who may make an application under the NSW equivalent of s 9M would result in the rule extending beyond the regulation making power.[19]
[18][2017] NSWSC 810.
[19]Ibid, [46].

It is also unnecessary (and in an ex parte application inappropriate) to decide that question. That is because it is, in my view, open under r 81.01 to allow the application to be made directly by the party to the foreign proceeding who requested the issue of the Letter of Request. That is because r 81.01 is facultative. It does not prescribe that if no person is nominated by the foreign court to make application of an order for examination of a witness that the application must be made by Victorian Government Solicitor with the consent of the Attorney-General. Moreover, should there be any doubt about this, r 2.04 of the Rules gives to the Court the power to dispense with any of the requirements of the Rules. This is recognition that the Rules are the servant of justice and not the master. They are a means to the attainment of justice and not an end in themselves.[20]
[20]Bay Marine Pty Ltd v Clayton Country Properties Pty Ltd (1986) 8 NSWLR 104, 108-9 (Kirby P).

Such an approach is also within the ambit of the terms of the Hague Convention, particularly considering that the Convention provides by Article 9 that the judicial authority which executes a Letter of Request shall apply its own law as to the methods and procedures to be followed and that by Article 27 the provisions of the Convention do not prevent a Contracting State from permitting, by internal law or practice, any act provided for in the Convention to be performed upon less restrictive conditions or by methods of taking evidence other than those provided for in the Convention.

Notwithstanding the absence of an express nomination in the Letter of Request, it is clear that the US Court has authorised NIS (which is the defendant in the US Proceeding) to seek the evidence pursuant to the Letter of Request. If NIS is required to pursue the matter through the Attorney-General, that is likely to lead to significant delays. In the circumstances of this case, I consider that, to the extent necessary, pursuant to dispensing power in r 2.04 of the Rules, it is appropriate to dispense with compliance with Order 81.01 and permit NIS to make this application. That course is not proscribed by the Act, is convenient and is in the interest of the facilitation of the just, efficient, timely and cost-effective resolution of the real issues in the proceeding.

Although the orders for examination are consented to by the Witness, at least in general terms, I must nonetheless be satisfied of the relevant statutory preconditions under the Act before granting the orders sought. I am satisfied that the three conditions referred to above ([27]) for the exercise of the power are met:

(a) the application is made pursuant to a the Letter of Request issued by a court exercising jurisdiction in a place outside Victoria, namely New Jersey USA;

(b) the evidence to which the application relates is to be obtained for the purposes of proceedings which have been instituted before the requesting court;

(c) the proceedings in the US Court are civil, not criminal, in nature so that they do not relate to the commission of an offence or an alleged offence.

The effect of rr 81.02 and 81.03(2) is that the Court may make an order for the examination either before a Judge, an Associate Judge or such other person as the Court appoints as examiner. In a number of decisions under the equivalent New South Wales provisions (Evidence on Commission Act 1995 (NSW)) it has been found to be just and convenient that a member of the Bar be appointed as examiner.[21] That is also the course I have adopted in an earlier unreported decision. NIS has put forward a well-qualified member of the Victorian Bar to be the examiner and the Witness has agreed that he be appointed. In my view, it is appropriate that he be so appointed. In relation to the request that a representative of the Supreme Court be present at the examination, substantial compliance with that request is achieved by the appointment of Mr Tiernan, who is an officer of this Court by virtue of his admission as an Australian Lawyer in this Court. Both as a person admitted to practice law in this Court and as a practitioner regulated by the Legal Profession Uniform Law,[22] Mr Tiernan has a duty to the Court that is higher than his duty to those who have engaged him, in this case NIS. As the appointed examiner, he has the additional duties cast upon him by the order made and the Rules applicable to the examination.
[21]Jonathan Paul Eyewear, Inc [2015] NSWSC 134 (Hall J); Nanotech Industrial Solutions Inc v Nanoteko Pty Ltd [2020] NSWSC 1285, [23]-[24] (Rothman J).
[22]Applicable in Victoria pursuant to the Legal Profession Uniform Law Application Act 2014 (Vic).

Further, NIS seeks an order that the examination be conducted at the offices of Garland Hawthorn Brahe, Lawyers, on a date not before 1 September 2021. The Commission issued by the US Court provides that this Court is authorised and ‘empowered’ to order the examination at ‘a location, date and time… to be designated by counsel for’ NIS. Under r 41.03 it is provided that the examiner must appoint a place and time for the examination. There is, however, ample power to dispense with this requirement and given that both NIS and the Witness agree to the examination being conducted at the offices of the solicitors acting for NIS at a time that is somewhat delayed, that is good reason to make orders accordingly.

There are, no doubt, good reason for the delay in commencement of the examination, as provision is also sought to be made for the examination to be conducted by Counsel engaged by the parties in the US Proceeding. Section 9N(1) of the Act gives ample power to the Court to provide for the examination to be conducted by US Counsel, as it empowers the Court ‘to make such provision for obtaining evidence in Victoria as may appear to the court to be appropriate for the purpose of giving effect to the request in pursuance of which the application is made.’ This has been a feature of cases of this kind that have come before the Court in the past, and generally arises out of the familiarity with the US Proceeding that those Counsel have. It is plainly sensible and in accordance with the overarching purpose prescribed by the Civil Procedure Act 2010 (Vic).

The terms of the Order

Having regard to these reasons, I propose to order as follows:

1.Leave be granted to the Applicant to issue a subpoena to Mr Glenn Finck of 24 Shorts Road, Heathmere, Victoria 3305 (‘Witness’), to attend to give evidence and to produce documents, such documents to be as described in the schedule to this order.
2.A copy of these orders as authenticated be served on the Witness concurrently with service of the Subpoena.
3.Pursuant to r 81.02 of the Rules, Mr Patrick Tiernan of Counsel is appointed as examiner (‘Examiner’).
4.The plaintiff must comply with r 41.02 of the Rules.
5.The Examiner conduct the examination at the offices of Garland Hawthorn Brahe, Lawyers, on a date not before 1 September 2021, and compliance with r 41.03 is dispensed with.
6.The Witness be sworn or affirmed before evidence is taken.
7.At the examination, oral examination (including cross-examination and re-examination, either in person or by video conference) of the Witness be permitted to be conducted by the US counsel for the parties in Civil Action Number 2:18-CV-05214-SRC-CLW Nanoteko Pty Ltd – Plaintiff v. Nanotech Industrial Solutions Inc, Defendant pending before the District Court for the District of New Jersey in the United States of America (‘US Proceedings’) on the following subject matter:
(a) his relationship with Max Rudman;
(b)communications with Nanotech Industrial Solutions Inc (‘NIS’), Mr Rudman and other representatives of Nanoteko regarding NIS’s products;
(c)communications with NIS, Mr Rudman and representatives of Nanoteko regarding the South West Research Institute report;
(d)his knowledge of NIS’s products, including whether they reduce emissions and fuel consumption;
(e)his knowledge of sales and marketing of NIS’s products;
(f)his knowledge of product testing; and
(g)his knowledge of and experience with the lubricant industry including oils, greases and additives.

8.Subject to any further or other order of the Court, in respect of any documents produced by the Witness pursuant to the Subpoena, that Mr John Price of Garland Hawthorn Brahe, Lawyers, be at liberty to access, inspect and take copies of the documents for forwarding to the parties in the US Proceeding.
9.The evidence of the Witness is to be transcribed in writing (‘Transcript’) and video-recorded (‘Video-Recording’) and such documents or other articles produced and identified during the Examination to be marked and attested as exhibits (‘Exhibits’).
10.Upon the conclusion of the oral examination, the Applicant shall provide to the Witness a certified copy of the Exhibits.
11.The Examiner forward the Transcript, the Video-Recording and the Exhibits to the Prothonotary of the Supreme Court of Victoria in accordance with r 81.05 of the Rules (and compliance with r 81.05(3) is dispensed with).
12.The Prothonotary comply with r 81.06 of the Rules by delivering a certificate and annexures to the Applicant for provision to the US District Court.
13.Not less than seven days’ notice of the examination of the Witness be given to the legal representatives of the parties to the US Proceeding.
14.The Applicant, the Witness and Nanoteko have liberty to apply in respect of:
(a)any claim for legal professional privilege, or other privilege or immunity, in respect of any document produced by the Witness pursuant to the Subpoena;
(b)the further working of this order; and
(c)in respect of any claim for conduct money and payment for expenses and loss of time on attendance made by the Witness pursuant to s 9N(7) of the Evidence (Miscellaneous Provisions) Act 1958.

The Schedule to the order will list the documents to be produced the subject of the Subpoena, as described in the Letter of Request, as follows:

(a)Correspondence involving Mr Finck and either Max Rudman, Rael Hurwitz, John Beville, Jim Ellison, or any other employees, representatives and agents of Nanoteko, concerning Nanolub® products or a Southwest Research Institute Report (the ‘SWRI Report’) prepared for Rand Innovations, LLC, including any revisions thereto;
(b)Correspondence involving Mr Finck and Chris Adsett, or any other employees, representatives and agents of Techenomics concerning Nanolub® products or the SWRI Report, including but not limited to testing;
(c)Correspondence and documents that refer or relate to testing or proposed testing of Nanolub® products;
(d)Correspondence regarding the SWRI Report, including, but not limited to, any testing or reports completed;
(e)Reports or documentation concerning Nanolub® products;
(f)Documents that refer or relate to sales or marketing of Nanolub® products;
(g)All documents compiled and reviewed by Mr Finck in conjunction with blending of Nanolub® products;
(h)Any due diligence performed by or on behalf of Mr Finck on any NIS products.

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Citations

Re Nanotech Industrial Solutions Inc [2021] VSC 167

Most Recent Citation

Nanoteko Pty Limited v Nanotech Industrial Solutions Inc [2022] NSWSC 272

Cases Citing This Decision

1

Nanoteko Pty Limited v Nanotech Industrial Solutions Inc [2022] NSWSC 272

Cases Cited

5

Statutory Material Cited

0

British American Tobacco Australia Services Ltd v Eubanks [2004] NSWCA 158

Application of Computer Sciences Corporation under the Evidence on Commission Act 1995 (NSW) [2017] NSWSC 810

British American Tobacco Australia Services Ltd v Eubanks [2004] NSWCA 158

[2021] VSC 167

7 April 2021