Robinson v Blackheart Industries Pty Ltd (in Liq) & Ors
[2013] FCCA 1829
•8 November 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| ROBINSON v BLACKHEART INDUSTRIES PTY LTD (IN LIQ) & ORS | [2013] FCCA 1829 |
| Catchwords: PRACTICE AND PROCEDURE – Subpoenas – subpoenas issued to third parties in abuse of the court’s process – copy of subpoenas not served on the other parties at least ten days before the return date of the subpoenas as required by rule 15A.13(1)(b) of the Federal Circuit Court Rules 2001 – documents produced to the Court in response to the subpoenas – access granted to the issuing party – whether access granted without court order – whether access authorised under rule 15A.13(2) of the Federal Circuit Court Rules 2001 – factors relevant to determining whether and if so what orders should be made in relation to unauthorised access to documents produced on subpoena – destruction of documents held in the hands of the issuing party ordered. |
| Legislation: Fair Work Act 2009 (Cth), s.323 Federal Circuit Court Rules 2001, rr.1.06, 3.05, 15A.04(3), 15A.06(b), 15A.13, 15A.13A |
| Commonwealth v Albany Port Authority [2006] WASCA 185 Parsons v Martin (1984) 5 FCR 235 Waind v Hill and National Employers’ Mutual General Association Ltd [1978] 1 NSWLR 372 |
| Applicant: | PAUL ROBINSON |
| First Respondent: | BLACKHEART INDUSTRIES PTY LTD (IN LIQ) A.C.N.128 543 304 |
| Second Respondent: | KYLE ARNOLD |
| Third Respondent: | BEVERLEY ARNOLD |
| File Number: | SYG 2407 of 2012 |
| Judgment of: | Judge Manousaridis |
| Hearing date: | 31 October 2013 |
| Date of Last Submission: | 6 November 2013 |
| Delivered at: | Sydney |
| Delivered on: | 8 November 2013 |
REPRESENTATION
| Solicitors for the Applicant: | FCB Workplace Law |
| Counsel for the Second Respondent: | Ms Francois |
| Solicitors for the Second Respondent: | Clinch Long Letherbarrow |
ORDERS
Within seven days from the date of this order, the applicant must destroy or cause to destroy:
(a)all copies of documents and discs produced to the Court by:
(i)The Great Aussie Surfshop Pty Ltd (ACN 089 554 718) (GASS) in response to the subpoena for production issued by the applicant to GASS and which was returnable before the Court on 16 May 2013; and
(ii)Telstra Corporation Limited (ACN 051 775 556) (Telstra) in response to the subpoena for production issued by the applicant to Telstra and which was returnable before the Court on 16 May 2013,
as are currently in the possession of the applicant and any of the applicant’s employees, servants or agents; and
(b)all documents which refer to specific information contained in the documents referred to in paragraph (a) as are currently in the possession of the applicant and any of the applicant’s employees, servants or agents.
The question of costs be reserved.
There be liberty to apply on such notice as the circumstances warrant.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 2407 of 2012
| PAUL ROBINSON |
Applicant
And
| BLACKHEART INDUSTRIES PTY LTD (IN LIQ) A.C.N.128 543 304 |
First Respondent
| KYLE ARNOLD |
Second Respondent
| BEVERLEY ARNOLD |
Third Respondent
REASONS FOR JUDGMENT
Introduction
Before the Court is an application in a case filed by the second respondent, Mr Arnold, in the main proceedings for orders in relation to two subpoenas issued at the request of the applicant, and also in relation to documents that have been produced to the Court in response to those subpoenas.
Mr Arnold claims that:
a)the subpoenas – one addressed to Great Aussie Surf Shop Pty Limited (GASS) and one addressed to Telstra Corporation Limited (Telstra) – were improperly issued because they patently called for documents which cannot have any connection with any issue in these proceedings;
b)this feature of the subpoenas rendered them an abuse of process;
c)as a consequence, the Court must:
i)set aside the subpoenas; and
ii)order that the applicant destroy all documents produced in response to the subpoenas and to which the applicant has had access; or
iii)in the alternative to (ii), order that the applicant provide a schedule which identifies those documents to which he has had access and which the applicant intends to rely at the hearing of the substantive matter, and explain their relevance to an issue in the proceedings.
To identify and determine the issues that arise on this application, it will be necessary to go into the relevant facts in some detail.
Facts
From 4 October 2011 to 14 September 2012, the applicant was employed by the first respondent, Blackheart Industries Pty Limited (Blackheart), which is now in liquidation. Mr Arnold was a director of Blackheart, and the third respondent, Mrs Beverley Arnold, was a shareholder.
On 23 October 2012 the applicant commenced proceedings in this Court for relief under the Fair Work Act 2009 (Cth) (Act). The applicant alleges, among other things, that, in contravention of s.323 of the Act, Blackheart failed to pay the applicant his full entitlements under the Journalist and Published Media Award 2010. The applicant further alleges that Mr and Mrs Arnold were involved in Blackheart’s contraventions of s.323 of the Act.
On 22 April 2013 this Court, at the request of the applicant, issued a subpoena to each of GASS (GASS subpoena) and Telstra (Telstra subpoena). The GASS subpoena called for “[a]ll documents sent to or from” five email addresses “during the period from 1 October 2010 to date”. The Telstra subpoena called for “[a]ll documents sent to or from” one email address “during the period from 1 October 2010 to date”. Both subpoenas required that the documents be produced to the Court on or before 4.00 pm on 16 May 2013.
Each of the GASS and Telstra subpoenas had attached to it a document titled “Notice of Objection – Subpoena”. This notice must be read with paragraph 10 of the notes which form part of each subpoena:
Any party or interested person may object to inspection or copying of a document described in this subpoena by completing filing and serving the attached Notice of Objection – Subpoena before the date specified in this subpoena for production.
Although perhaps not entirely clear, the reference to “date specified in this subpoena for production” is a reference to the date by which the subpoena required production to the Court of the documents described in the subpoena. As I have already noted, that date was 16 May 2013.
The “Notice of Objection – Subpoena” attached to each subpoena contained the following statements:
Any person named in this subpoena or affected by this subpoena who objects to the production or inspection or copying of documents described in this subpoena must:
1.complete and sign this Notice of Objection
2.file this Notice of Objection together with a copy of the subpoena at the Court Registry before the date for the production of the documents required by the subpoena. . . .
3.serve a copy of this Notice of Objection together with a copy of the subpoena on the issuing party and all other parties, and
4.attend Court on the date set by the Registrar for consideration and determination of this Objection.
The evidence on this application does not reveal when the GASS and Telstra subpoenas were served. But there is no question that they were served before 16 May 2013 because GASS and Telstra produced documents in answer to the subpoenas by or shortly after 16 May 2013.
On 9 May 2013 the secretary of the applicant’s solicitor arranged to serve a copy of the GASS and Telstra subpoenas on each of the respondents by ordinary mail. According to Mrs Arnold, at approximately 4 pm she received a copy of the GASS and Telstra subpoenas. She says that at the time she received the subpoenas she did not know that GASS was the internet service provider that hosted Blackheart’s email communications.
At 9.15 am on 16 May 2013 Mrs Arnold, still unaware of who GASS was, attended the Court registry to see what GASS and Telstra may have produced. An officer of the Registry informed Mrs Arnold that Telstra had not produced documents. The officer further informed Mrs Arnold, however, that GASS produced a disc on 15 May 2013 but the disc was not then available for viewing.
By this time, the third applicant was aware of the “Notice of Objection”. In that regard, Mrs Arnold has deposed:
I had seen the last page on the subpoenas about objections but I didn’t understand what it meant then and I didn’t [know] how the process worked or what I would be objecting to.
On 17 May 2013, the applicant’s solicitor directed a business known as “Law In Order” to access the packet of materials that had been produced by GASS. On the afternoon of that day, the applicant’s solicitor received a DVD from Law In Order which contained data produced by GASS. On 21 May 2013, the applicant’s solicitor directed Law In Order to access the packet of materials that Telstra produced and in the afternoon of that day, the applicant’s solicitor received a CD from Law In Order that contained data produced by Telstra.
On the weekend of 18 and 19 May 2013, Mr Arnold became aware that GASS was the internet service provider for Blackheart. On 21 May 2013, Mrs Arnold filed with the Registry notices of objection in relation to the GASS and Telstra subpoenas. The objections were hand written in the “Notice of Objection – Subpoena” that was attached to each subpoena. In addition, Mrs Arnold stated the objections in a letter dated 21 May 2013 she addressed to the Registrar of this Court. The letter stated the following objections:
Abuse of Process
· No legitimate forensic purpose
· Further it is only a “fishing trip”. The applicants request is not specific thus requesting all company emails which may jeopardize Government contracts and sensitive subcontracts. To acquire such information can be seen to possibly have an ulterior motive.
· Current proceedings date back to October 2011, Pre 2011 to 2010 not relevant as applicants were not in our employ.
· Applicants Robinson & Foxton left our employ 14 Sept 2012 therefore 15 Sept 2012 onwards does not reference their claim.
· FOI has previously been requested by the applicants and refused by the Administrator of Blackheart Industries due to delicate privacy issues between Blackheart and Government parties.
· Company’s intellectual Property, trading, copyright & Government information is also private and at risk.
By this stage it appears that the applicant’s solicitor had extracted and read a number of emails that had been produced by GASS and Telstra. According to the applicant’s solicitor, he assessed that the DVD and CD he received contained “thousands of emails”. The applicant’s solicitor further said:
I did not read all these emails however [I] undertook searches via key word searches and then filtering those emails via “sent to” or “received from” designated persons or filtering via subject line. Some of the key word searches included: Lavarack, Townsville, Williamtown, Holsworthy, AAFCAN, Onya, Martin Orr, Condon, Robinson, Foxton, Tender, Sale of Business, exchange, completion, valuation, dump, ditch, sink, underpay, overtime, timesheet, balance and P&L.
According to the applicant’s solicitor, on the evening of 21 May 2013, he received a telephone call from Mr Carides, a solicitor, who informed the applicant’s solicitor that he received instructions to act for Mr Arnold and Mrs Arnold. According to the applicant’s solicitor’s account of the conversation, Mr Carides said he was “currently obtaining instructions on whether to make an application to set aside the Subpoena”. Mr Carides was under the impression that 22 May 2013 was a return date for the subpoenas and asked the applicant’s solicitor whether the applicant would consent to the return date being adjourned for two weeks. According to the applicant’s solicitor, he said there was no return of subpoena on 22 May 2013, but that the matter was listed for directions before Judge Lloyd-Jones on 22 May 2013. The applicant’s solicitor asked Mr Carides to identify the subpoenas he had in mind. His response indicated to the applicant’s solicitor that Mr Carides had in mind the GASS and the Telstra subpoenas. The applicant’s solicitor says he then had a conversation to the following effect:
Applicant’s solicitor:
I think you might mean the Great Aussie Surf Shop which is the company name for Coast Host. If you are applying in relation to those Subpoenas well it is perhaps too late. The subpoenas were returnable last week and the Court granted us access. We’ve already accessed all the emails. There are some extremely damming evidence in them as to your client admitting to putting the company under because my clients have sued and also that he wants to bury the company with them. You might want to get instructions. Your clients may have waived their rights on this and the content.
Carides:
Yes it seems that might be the case.
Mr Arnold has annexed to his affidavit of 29 October 2013 an email which he sent to Mr Carides on 25 October 2013 in which he set out that part of the applicant’s solicitor’s affidavit which deposes to the conversation the applicant’s solicitor says he had with Mr Carides on the evening of 21 May 2013. Before setting out that passage from the applicant’s solicitor’s affidavit, Mr Arnold said:
We are still fighting the subpoenas that you initially handled for us. Do you have any memory of this conversation with Matthew Robinson the applicants [sic] lawyer?
Mr Carides responded as follows:
Yes I do remember the conversation.
He’s put an interesting spin on my last paragraph. I was saying that it seemed to be the case that the materials have already been accessed. Not agreeing with anything else.
Thus, it appears that Mr Carides agrees he had a conversation to the effect deposed by the applicant’s solicitor except he does not accept he had agreed with the applicant’s solicitor’s contention that Mr Arnold and Mrs Arnold had waived their rights.
On 22 May 2013, the matter came before Judge Lloyd-Jones for directions. Mr Arnold and Mrs Arnold were represented by a lawyer, Ms Latofski. Ms Latofski applied for a two-week adjournment for reasons which, she said, “predominantly relate to the subpoenas” which she understood were returnable before Judge Lloyd-Jones. Ms Latofski said that Mr Arnold and Mrs Arnold took issue “with the schedule to the subpoenas” issued to Telstra, GASS and to another company, Inspiron. She complained that Mr Arnold and Mrs Arnold received a copy of the subpoenas on 14 May 2013 and that, as a result, they had not yet had an opportunity to consider the subpoenas, or seek legal advice. Ms Latofski noted that the applicant’s solicitor had uplifted documents produced in answer to the subpoenas and these may very well include “sensitive information and privileged documentation”. She further said that the purpose of the adjournment she sought was to “provide the second and third respondents an opportunity to bring an application and the appropriate application in relation to the ambit of the documents that have been produced”.
The applicant’s solicitor said the applicant opposed the application. The applicant’s solicitor said:
The subpoenas were properly issued, properly served upon the respondents. If they have not taken steps to exercise their rights available to them to their objections, then that is an issue for them. I have already accessed and so have my clients, all the information produced by way of Telstra and also by [GASS], so in that respect, any arguments that are raised are simply just being waived in terms of privilege and sensitivity of those materials.
Ms Latofski responded by submitting that she rejected the assertion that the subpoenas had been served properly. She said they were received on 14 May 2013 and therefore had not been served in accordance with the rules.
Judge Lloyd-Jones did not grant the adjournment, but instead made directions for the preparation of the matter for hearing. His Honour noted, however, that the matter was due to go before District Registrar Wall.
After the directions hearing, Mr Arnold “did not want to incur legal costs” because he believed he could deal with the issues in relation to the subpoenas himself. He thought the issues seemed obvious.
The matter came before District Registrar Wall on 28 May 2013. There is no transcript of what occurred before the District Registrar. Mr Arnold in paragraph 13 of his affidavit of 11 October 2013 does not record what was said about the GASS and Telstra subpoenas. All he says is that he thought the District Registrar “appeared to agree with me about my concerns”. In his affidavit of 29 October 2013, however, Mr Arnold annexed an email dated 28 May 2013 from Mrs Arnold in which she describes what occurred before District Registrar Wall. That email includes the following:
Registrar: applicant has not complied with court process. Applicant responded stating sufficient time had been allowed although accepted not in guidelines. . . .
The subpoena was not serviced [sic] which required timeframes as indicated by the Federal Court Rules Act: 15A.04(3) & 15A.06 Registrar picked up on this and noted applicant had not followed court procedure & didn’t look happy. . . .
According to the applicant’s solicitor, Ms Eather, a senior associate of his office, attended and said that the District Registrar made a finding that the subpoenas had been properly served on the respondents. In any event, all parties agree that the District Registrar referred the objection to production, as well as disputes in relation to other subpoenas, to mediation.
The mediation was scheduled to take place before Registrar Hannigan on 16 June 2013. On the application of Mr Arnold, the mediation was adjourned to 18 July 2013. In the meantime, Mr Arnold instructed a newly engaged lawyer, Mr Bainbridge, to write a letter to the applicant’s solicitor about the subpoenas. Mr Bainbridge did so by letter dated 9 July 2013. In that letter, Mr Bainbridge said that the GASS and Telstra subpoenas “were, on their face, an abuse of process and a fishing expedition in that it sought all documents, regardless of their relevance to the proceedings”. Mr Bainbridge further said he was instructed the documents that had been produced contained privileged communications and “commercially sensitive banking details and passwords and trade secrets which are entirely irrelevant to the proceedings in circumstances where your clients now appear to operate a business in competition to that of the first respondent”. The letter also asserted that the applicant failed to comply with r.15A.06(b) of the Federal Circuit Court Rules 2001 (FCCR) by not serving a copy of the subpoena on Mr Arnold and Mrs Arnold within a reasonable time before their return date. Mr Bainbridge further stated that, contrary to what the applicant’s solicitor had submitted to Judge Lloyd-Jones on 22 May 2013, Mr Arnold and Mrs Arnold had not waived privilege or any other rights. Mr Bainbridge then demanded an undertaking that the applicant and the applicant’s solicitor destroy all documents produced on subpoena and that the applicant’s solicitor and any other member of his firm who had inspected the documents cease to act for the applicant. The letter concluded:
If you and your clients do not agree to give undertakings to this effect, we confirm that we are instructed to make an application in a case to seek orders to the above effect from the Court.
The applicant’s solicitor replied by letter dated 11 July 2013. The applicant’s solicitor asserted that on 28 May 2013 the Court found that the subpoenas “were reasonably served” and refused to give the undertakings sought. He reiterated his contention that privilege had been waived. The applicant’s solicitor further claimed that “a Subpoena cannot be set aside once there has been: a return, access orders made and access obtained”. He also denied the subpoenas were an abuse of process and gave reasons for his denial. The applicant’s solicitor’s refusal to give the undertakings did not result in Mr Arnold and Mrs Arnold commencing proceedings
On 18 July 2013, the mediation concerning the subpoenas took place before Registrar Hannigan. The Registrar directed Mr Arnold to identify the documents which were claimed to be privileged. Mrs Arnold, however, was unable to review the material because the disc containing the documents with which she had been provided was corrupted. The mediation resumed on 15 August 2013, but the parties could not resolve their differences. The hearing of the various applications in relation to the subpoenas, including the objection to access to the documents produced by GASS and Telstra, were set down for hearing before Registrar Hannigan on 4 September 2013.
There is no transcript of what occurred before Registrar Hannigan on 4 September 2013. The applicant’s solicitor has set out in paragraph 16 of his affidavit made on 24 October 2013 his account of what occurred. Mr Arnold takes issue with one part of that account, namely the applicant’s solicitor’s stating that the applicant would undertake “not to use and will destroy the privileged materials subject to the Respondent identifying those materials”. According to that part of the applicant’s solicitor’s account which I do not understand is disputed by Mr Arnold, Mr Arnold submitted to the Registrar that the subpoenas should be set aside as an abuse and that he did not receive the subpoenas until 14 May 2013. The Registrar said that this was a bit late because access has already been granted.
The Registrar made a number of orders. She did not, however, make an order in relation to the GASS and Telstra subpoenas. In response to an email Mrs Arnold sent on 8 September 2013 to the Registrar inquiring what the Registrar determined in relation to the GASS and the Telstra subpoenas, the Registrar sent an email to Mrs Arnold on 12 September 2013 as follows:
The subpoena issued to the Great Aussie Surf Shop, is the subpoena to which the applicant’s solicitor has already had access. No orders were made in respect to that subpoena. I did not find there was any irregularity in the issue of the subpoena or the taking of access to the documents produced in answer to the subpoena.
Was issuing the subpoenas an abuse of process?
In my opinion, the applicant’s arranging to issue the GASS and Telstra subpoenas was an abuse of process. The subpoenas did not purport to call only for documents that were or were apparently relevant to an issue in the proceedings. Nor were they drawn in such a way as to enable one to infer that they only called for such documents. The subpoenas simply called for all documents sent to and from a number of email addresses within the time frame stated in the subpoenas. It was not suggested that the only documents that were sent to or received from the email addresses were documents that were or were apparently relevant to any issue in the proceedings. Further, the time frame appears to be much wider than is warranted. The subpoenas called for the production of documents commencing in October 2010 whereas the applicant commenced his employment in October 2011.
The applicant submitted that the subpoenas should not be condemned as an abuse because, as framed, it was easier for internet service providers, such as GASS and Telstra, to identify and produce the documents than it otherwise would have been had documents been identified with some precision.
I am prepared to assume that drafting a subpoena in the form of the GASS and Telstra subpoenas made it easier for those companies to comply with the subpoenas than would have been the case had the subpoenas been drafted to identify with the requisite particularity documents which could be said to be at least apparently relevant to an issue in the proceedings. That consideration, however, does not transform what would otherwise be an abusive subpoena into one that is not abusive. Nor does that address the fact that the subpoenas call for documents for a period of one year before the applicant commenced his employment with Blackheart.
The applicant also submitted that the documents produced by the subpoenas are relevant to the issues in the proceedings. This, however, does not render the subpoenas proper. The submission ignores the fact that the subpoenas also called for and resulted in the production of irrelevant material. The vice of the subpoenas was that, on their face, they called for documents which were not relevant or apparently relevant to any issue in the proceedings.
Consequences of subpoenas being an abuse of process
Counsel for Mr Arnold submitted that if I conclude that the issue of the subpoenas constituted an abuse of process, the Court must set aside the subpoenas. Counsel did not identify an authority which so held. Instead, counsel relied on authorities which discussed the consequences of abuse of process in general. Counsel drew my attention to the following passage from the reasons of judgment of Pullin JA of the Court of Appeal of the Supreme Court of Western Australia in Commonwealth v Albany Port Authority:[1]
The decision of a Judge to strike out a proceeding for abuse of process is evaluative in nature . . . . This means that circumstances in which proceedings may constitute an abuse of process cannot be exhaustively defined, and in some cases minds will differ as to whether there is an abuse, which depends upon a proper evaluation of the circumstances. If the correct conclusion is that there is an abuse, then there is no discretion about whether or not to make an appropriate order to remedy the abuse.
[1] [2006] WASCA 185 at [83]
In my opinion, this passage does not compel the conclusion that the Court must set aside a subpoena which has been issued in abuse of the Court’s process. The passage only states that a court must make an appropriate order to remedy an abuse which the court has found took place. In any event, the consequences of the issuing of a subpoena in abuse of process must be determined, not by reference to general principles concerning abuse of process, but by reference to the context of the rules that regulate the issuing of subpoenas and the stage at which the question of abuse arises.
The setting aside of an abusive subpoena will be the appropriate remedy before documents are produced to the Court. The setting aside of an abusive subpoena, however, may not be appropriate after documents have been produced to the Court. By that stage, the addressee has produced documents in compliance with a valid court order. To set aside a subpoena on the ground it was issued as an abuse of process may deprive the addressee’s production of documents the legal protection it would otherwise have.
If documents have been produced to the court in response to an abusive subpoena, other remedies may be available. Whether and, if so, what remedies will be available will depend on what happens after the documents are produced. There are rules in most courts – in the case of this Court the rules are largely contained in FCCR Pt. 15A - which provide for access to documents after notice is given to the non-issuing party and other interested persons. If access is granted to the documents in accordance with a court order or court rules the time for complaining about the abusive subpoena may have passed or, if it has not passed, the court may grant a more limited remedy than setting aside the subpoena.
In my opinion, the fate of Mr Arnold’s application does not turn on whether the GASS and Telstra subpoenas should be set aside. For the reasons I discuss below, the applicant was not authorised to gain access to the documents produced by GASS and Telstra. The relevant question is what follows from the applicant’s unauthorised access to the documents.
How applicant obtained access to the documents
In his affidavit, the applicant’s solicitor refers to his having “directed Law in Order to access the packet of materials” produced by GASS and Telstra. On the Court file there is a letter dated 17 May 2013 from the applicant’s solicitor to the Registrar stating that he authorised two persons from Law In Order to “uplift and copy documents produced upon subpoena in these proceedings”. Also in the Court file is a completed form titled “Notice of Request to Inspect in accordance with Federal Circuit Court Rule 15A.13(1)(c)”. The form identifies GASS and Telstra as persons to whom a subpoena had been issued. It also identified Mr Arnold and Mrs Arnold as persons who were served with the subpoenas. The form states that Mr Arnold and Mrs Arnold were served on 9 May 2013 by post. The form indicates that an officer in the Registry permitted the inspection requested in the form.
Was the applicant’s access to the documents authorised
To determine whether the applicant’s access to the documents was authorised, it is necessary to first set out FCCR r.15A.13A which provides as follows:
(1) This rule applies if:
(a)the Court or a Registrar issues a subpoena for production of a document under rule 15A.02; and
(b)the issuing party serves a copy of the subpoena on each other party, any interested person and any independent children’s lawyer in accordance with rule 15A.06 at least 10 days before the day stated in the subpoena for production; and
(c)the issuing party files a notice of request to inspect in an approved form.
(2)If a person subpoenaed, another party or an interested person has not made an objection under rule 15A.14 by the date required for production, each party and any independent children’s lawyer may, after that day:
(a)inspect a subpoenaed document; and
(b)take copies of a subpoenaed document, other than a child welfare record, medical record or police record.
(3)Unless otherwise ordered, the inspection is by appointment and without an order.
Under this rule, therefore, each party is entitled to inspect documents under FCCR r.15A.13(2) without a court order, but only if the matters stated in FCCR r.15A.13(1) are satisfied. If any one of those matters is not satisfied, FCCR r.15A.13(2) cannot apply. In particular, if the subpoena is not served on a party at least ten days before the return date of the subpoena, as required by FCCR r.15A.13(1)(b), a party cannot inspect any document produced on subpoena under FCCR r.15A.13(2). A party can only do so under an order of the Court.
The applicant, through his solicitor, obtained access to the documents produced by GASS and Telstra by appointment and without a court order. He was entitled to do so only if the GAA and Telstra subpoenas had been served on Mr Arnold and the other respondents at least ten days before 16 May 2013, being the return dates of the subpoenas. That did not occur. The applicant’s solicitor arranged to send the subpoenas by post on 9 May 2013. Unless the Court exercises the power under FCCR r.1.06 to waive or modify the requirements of FCCR r.15A.13(1)(b), the applicant had no right to access the documents produced by GASS and Telstra, and has no right and never had a right to hold or to use any of the documents he obtained.
The applicant makes a number of submissions about the access he obtained to the documents. First, the applicant submits that he “has complied with the Court Rules in relation to service of Subpoenas”. That is not correct if the applicant intends to assert he complied with FCCR r.15A.13(1)(b). The applicant plainly did not comply with that rule.
Second, the applicant submits that the applicant made no misrepresentation to the Court as to service of the subpoenas. That is not disputed. But that does not alter the fact that the applicant did not comply with FCCR r.15A.13(1)(b) and that, without such compliance, the applicant had no right to access the documents.
Third, the applicant submits that on 16 May 2013 the Court made access orders. No access order was made. Access to the documents was gained by appointment and without order purportedly pursuant to FCCR r.15A.13(3).
Fourth, the applicant submits he lawfully gained access to the documents, and that the applicant did not gain access “via fraud or inadvertence but via a Court sanctioned process that has been upheld by Registrar Hannigan on 4 September 2013”.[2] I agree there was no fraud, and none is alleged. I do not agree, however, that access was not gained through inadvertence; it clearly was. It is true that Registrar Hannigan in her email of 12 September 2013 said she “did not find there was any irregularity in the issue of the subpoena or the taking of access to the documents produced in answer to the subpoena”. That, however, is not surprising. Although the applicant’s solicitor did refer the Registrar to FCCR r.15A.06, the question whether FCCR r.15A.13(1)(b) had been complied with was not raised. The applicant’s solicitor instead submitted, incorrectly in my view, that “we have complied with the Court Rules”.
[2] Applicant’s Outline Submissions, [38]
Fifth, the applicant appears to submit that the Registrar did in fact make an order granting access. There is no evidence of any such order, unless the applicant submits that the decision recorded in the Registrar’s email of 12 September 2013 is an order granting access. In my opinion, that email does not record an order granting access or any other order. The Registrar said that no order was made in relation to the subpoenas; and no order was made because, as the Registrar stated in her email, the applicant’s solicitor “has already had access”.
Consequences of non-compliance with FCCR r.15A.13(1)(b)
I have concluded that the applicant’s access to the documents produced in answer to the GASS and Telstra subpoenas was and remains unauthorised. I must now consider what consequences should follow from this. The first question is what powers the Court has to deal with the applicant’s unauthorised access to the documents produced under the GASS and Telstra subpoenas.
Power
First, this Court has “such powers as are incidental and necessary to the exercise of the jurisdiction or the powers” conferred on this Court in any given case.[3] That obviously includes the power to remedy harm flowing from breaches of its rules and procedures. Secondly, the Court has power under FCCR r.1.06 to dispense with the compliance or full compliance with any of the FFCR when it is in the interests of justice to do so. Third, the Court has power under FCCR r.3.05 to extend or shorten a time fixed by the FCCR.
[3] Parsons v Martin (1984) 5 FCR 235 at 241 (Bowen CJ, Northrop and Toohey JJ)
From these three sources of power, the Court has a broad discretion to determine what, if anything, it should do in response to the applicant’s unauthorised access to the documents produced by GASS and Telstra.
Applicant’s submissions
The applicant submits that, if I were to set aside the subpoenas, the principles which should guide me when considering what should become of the documents which the applicant obtained pursuant to those subpoenas are those which apply to claims for relief based on breach of confidence. That is, the applicant submits that before I make any order, I should be satisfied that all the elements of a cause of action for breach of confidence are present in relation to the documents which are in the applicant’s possession, and that there are no discretionary factors, such as “unclean hands” or “iniquity”, which would lead a court of equity to decline relief.
The applicant submits that, on the basis of these principles, a court of equity would not disturb the applicant’s possession of the non-privileged documents produced on subpoena. First, he submits that the documents do not have the necessary quality of confidence. Secondly, the documents disclose “iniquity” and “unclean hands”. The iniquity which the applicant says the documents disclose is the respondents stripping assets out of Blackheart so as to deny the applicant the fruits of any order he may obtain on his application.
In my opinion, the equitable principles on which the applicant relies are not relevant to the question I must decide; that is, what orders, if any, I should make in relation to the applicant’s having gained unauthorised access to documents produced on subpoena. That question is not, or at least, is not centrally about preventing the use of confidential information. The question is what orders, if any, the Court should make to remedy the applicant’s failure to comply with a rule of the Court, the consequence of which was the applicant’s gaining unauthorised access to documents.
Relevant factors
In my opinion, the following matters are relevant to answering that question.
First, there is the subject matter of FCCR r.15A.13, namely, access to documents produced on subpoena without a court order. The issuing of a subpoena is an invasion of the addressee’s right to keep its documents from the eyes of strangers. Such invasion is justified only to the extent necessary for the proper conduct of the litigation in which the subpoena is issued; and the courts jealously guard a person’s right not to have his or her documents used for purposes unconnected with the proper conduct of litigation. This point was made by Moffitt P in Waind v Hill and National Employers’ Mutual General Association Ltd:[4]
It is true that, in the exercise of the power in relation to the subpoena, the invasion of the rights of a third party have been jealously guarded. It is accepted that the documents should not go beyond the judge against the objection of the owner, unless there is valid reason to do so. It is clear that it can only be legitimate to do so, so far as is necessary in the proper conduct of the litigation.
[4] [1978] 1 NSWLR 372 at page 384
This consideration leans in favour of the Court insisting on strict compliance with its rules which govern a party’s access to documents produced on subpoena.
Second, the applicant’s breach of FCCR r.15A.13(1)(b) was severe. Instead of ten days, Mr Arnold was given not much more than one day to submit his objections to the applicant obtaining access to the documents.
Third, Mr Arnold submitted his objections to the applicant’s gaining access to the documents well within ten days after he received the subpoenas, which indicates that he would have done the same thing had the subpoenas been served on him more than ten days before their return dates. And the grounds of his objections included the contention which I have held is correct, namely that the subpoenas were an abuse of process. Had the applicant complied with FCCR r.13A.13(1)(b) and served the subpoenas on Mr Arnold at least ten days’ before their return dates, I am satisfied that Mr Arnold would have lodged his objections before the return dates of the GASS and Telstra subpoenas, and that his objections would have been upheld. The applicant would not, therefore, have gained access to any of the documents produced by GASS and Telstra.
Orders
Consideration of these factors lead me to conclude that the Court should make an order that such of the documents produced by GASS and Telstra as the applicant or his solicitor or any other agent of the applicant still hold should be destroyed. That would place the parties nearer the position they would have been in had the applicant complied with FCCR r.15A.13(1)(b).
Conclusion and disposition
The GASS and Telstra subpoenas were issued in abuse of the process of the Court because they called for documents which were not relevant or apparently relevant to any issue in the proceedings. Because documents were produced by GASS and Telstra in answer to the subpoenas, however, it would be inappropriate to order that the subpoenas be set aside. The applicant, however, obtained access to the documents produced in answer to the subpoena purportedly pursuant to FCCR r.15A.13(2) but without giving the notice required by FCCR r.15A.13(1)(b). That means that the applicant’s access to the documents was unauthorised. One consequence of the applicant’s unauthorised access to the documents was to deny Mr Arnold’s right to object to the applicant’s access to the documents. Had that right not been denied, Mr Arnold would have succeeded in obtaining an order preventing the applicant from gaining access to the documents.
In these circumstances, I propose to make an order substantially in terms of that claimed in paragraph 2 of the application in a case filed by Mr Arnold.
I will hear the parties on the question of costs.
I certify that the preceding sixty-five (65) paragraphs are a true copy of the reasons for judgment of Judge Manousaridis
Associate:
Date: 8 November 2013
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