Self Care Corporation Pty Ltd v Green Forest International Pty Ltd (No 4)
[2021] FCCA 1504
•2 July 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
Self Care Corporation Pty Ltd v Green Forest International Pty Ltd (No 4) [2021] FCCA 1504
File number(s): SYG 2771 of 2019 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 2 July 2021 Catchwords: PRACTICE AND PROCEDURE – application to set aside notice to produce – whether notice to produce calls for documents that are not relevant or apparently relevant – notice to produce in part set aside Cases cited: Southern Pacific Hotel Services Inc v Southern Pacific Hotel Corp Ltd [1984] 1 NSWLR 710
Spencer Motors Pty Ltd v LNC Industries Ltd [1982] 2 NSWLR 921
Wong v Sklavos [2014] FCAFC 120
Number of paragraphs: 18 Date of hearing: 30 June 2021 Place: Sydney Counsel for the Applicants: Mr J Hennessy SC and Mr C McMeniman, by video Solicitor for the Applicants: Gilbert + Tobin Counsel for the Ninth and Fourteenth Respondents: Mr M Heath, by video Solicitor for the Ninth and Fourteenth Respondents: Matthews Folbigg Lawyers ORDERS
SYG 2771 of 2019 BETWEEN: SELF CARE CORPORATION PTY LTD
First Applicant
SELF CARE IP HOLDINGS PTY LTD
Second Applicant
AND: GREEN FOREST INTERNATIONAL PTY LTD ACN 607 602 988
First Respondent
YAOAN (ERIC) CHEN
Second Respondent
YILIN TRADING PTY LTD ACN 626 244 479 (and others named in the Schedule)
Third Respondent
ORDER MADE BY:
JUDGE MANOUSARIDIS
DATE OF ORDER:
2 JULY 2021
THE COURT ORDERS THAT:
1.Paragraphs 2 and 6 of the notice to produce dated 16 June 2021, issued by the applicants and directed to the ninth and fourteenth respondents, are set aside.
2.The balance of the notice to produce is returnable before Judge Manousaridis at 11:00 am on 8 July 2021.
REASONS FOR JUDGMENT
INTRODUCTION
On 12 February 2020 a judge of this Court, Judge Baird, made freezing orders, ex parte, against a number of the respondents, including the ninth respondent, Ms Yang. On 10 March 2020 Judge Baird made freezing orders against the fourteenth respondent, Mr Wang.
The freezing orders restrain each of Ms Yang and Mr Wang from dealing with any of their assets up to the unencumbered value of $5,102,750. Both sets of freezing orders define “asset” to include a property in Rochedale, Queensland (Property), although Ms Yang appears to be the sole registered proprietor of the Property.
On 17 May 2021 Ms Yang and Mr Wang filed an application in a case (variation application) for an order modifying the freezing orders made on 12 February 2020 to permit Ms Yang to sell the Property with a view to having the proceeds of sale deposited into a controlled account, and for Ms Yang to use those proceeds to pay Ms Yang’s and Mr Wang’s legal expenses.
The applicants oppose the variation application. They submit, among other things, that Ms Yang and Mr Wang carry an onus of establishing that they have no assets beyond those that are the subject of the freezing orders which they can use to pay their legal expenses, and Ms Yang and Mr Wang cannot discharge that burden.
In support of their opposition to the variation application, on 16 June 2021 the applicants served a notice to produce on the lawyers for Ms Yang and Mr Wang requiring Ms Yang and Mr Wang to produce documents. By an application in a case filed on 18 June 2021 Ms Yang and Mr Wang apply to set aside the notice to produce. At the hearing of that application on 30 June 2021 Mr Heath, counsel for Ms Yang and Mr Wang, said that Ms Yang and Mr Wang will produce the documents identified in paragraph 1 of the notice to produce, and they will instruct their lawyers, Matthews Folbigg, to produce documents that fall within paragraph 5 that are in the power or possession of Matthews Folbigg. Mr Heath otherwise pressed for an order that the notice to produce be set aside.
In these reasons for judgment I consider whether I should set aside any part of the notice to produce.
PRINCIPLES
I first refer to the well-known principles that apply to when a party seeks to set aside a notice to produce. They are the same as the principles that apply to the setting aside of a subpoena:[1]
The party issuing a subpoena bears the onus of demonstrating that the subpoena has a legitimate forensic purpose in relation to the issues in the proceedings. A subpoena may be set aside if it requires the production of documents which do not have apparent relevance to the issues arising on the pleadings. Other cases have used different terminology, but with essentially the same effect, for example, by requiring that, viewed realistically, the documents sought have a bearing on an issue which is not unreal, fanciful or speculative, or that the material sought is reasonably likely to add in some way to the relevant evidence in the case, or that it be “on the cards” that the documents sought will materially assist the party at whose request the subpoena has been issued.
[1] Wong v Sklavos [2014] FCAFC 120, at [12] (references omitted)
Subpoenas and, therefore, notices to produce, must not be used as a substitute for discovery. That rule, however, does not require that the subpoena or notice to produce identify documents individually. It is permissible to describe documents by reference to, or in relation to, a particular subject matter. Waddell J made this point in Spencer Motors Pty Ltd v LNC Industries Ltd:[2]
It is, of course, important not to read the passage cited as forbidding the use of expressions such as “relating to”. Taken as a whole, the passage indicates that what is objectionable is placing on the person to whom a subpoena is addressed the same kind of burden as is placed on a party required to give discovery of documents. Broadly speaking, that burden is to go through the documents in his possession or power and list each document which relates to the matters in question in the proceeding in the sense that “it contains information which may — not which must — either directly or indirectly enable the party requiring the discovery either to advance his own case or to damage the case of his adversary, or which may fairly lead to a train of inquiry which may have either of these two consequences”: . . .
Use of expressions such as “relating to” need not result in there being any oppression or abuse of process. It all depends on the context in which the expression is used. For instance, it could hardly be said to be objectionable to require a person to produce all “invoices” relating to sales of a particular item to the defendant on a particular day. The use of the word “invoices” would restrict the potential width of the expression “relating to”.
[2] Spencer Motors Pty Ltd v LNC Industries Ltd [1982] 2 NSWLR 921, at page 929
Also relevant is the following passages from the judgment of Clarke J in Southern Pacific Hotel Services Inc v Southern Pacific Hotel Corp Ltd:[3]
[I]t does not follow . . . that a subpoena requiring the production of documents relating to a specified subject matter is necessarily objectionable on the ground it calls for discovery. . . .
I have been at pains in this judgment to point out that court procedures are designed to bring about, as far as possible, an efficient and expeditious resolution of disputes between parties. They are essentially practical matters. The subpoena, which is an important part of the process, requires a person, quite often a lay person, to bring to court documents which may be specified in particular or general terms. The recipient is not and should not be required to consult a dictionary and then carry out an exercise in construction of the document before embarking upon the collection of the documents. The court, in determining whether a subpoena is oppressive, is concerned with whether in all the circumstances the demand is, for relevant purposes, too wide or uncertain. For this purpose it must determine whether the terms of the subpoena convey to the recipient in relatively clear language the document or class of document called for. The court would inquire, I apprehend, as to the meaning which would be conveyed to members of the public as opposed to the meanings which might be conveyed to lawyers engaged in a debate upon construction. It seems to me that, in the context of the subpoena with which I am presently concerned, the recipient would not be concerned with fine distinctions between “relating to” and “referring to” and would read them as broadly calling for the same range of documents.
[3] Southern Pacific Hotel Services Inc v Southern Pacific Hotel Corp Ltd [1984] 1 NSWLR 710, at pages 718 and pages 720-721
THE NOTICE TO PRODUCE
The notice to produce calls for the production of the following documents:
1.All Documents recording or referring to the terms of any retainer agreement or costs agreement entered into with Matthews Folbigg in connection with this Proceeding.
2.All Documents recording or referring to Communications between any of Yiping Yang, Yulin Wang, Keifi (Emilio) Wang, Associates of Emilio Wang and Matthews Folbigg concerning the Application in a Case, including the timing of the filing of the Application in a case.
3.All Documents recording or referring to Communications between any of Yiping Yang, Yulin Wang, Keifi (Emilio) Wang, Associates of Emelio Wang and Matthews Folbigg concerning the approval of any fees or charges by Matthews Folbigg or counsel briefed by Matthews Folbigg, including the invoices listed in Annexure B to . . . the Brown Affidavit.
4.All Documents recording or referring to Communications between any of Yiping Yang, Yulin Wang, Keifi (Emilio) Wang, Associates of Emilio Wang and Matthews Folbigg concerning:
a. the payment of; or
b. any arrangement for the payment of,
legal fees to Matthews Folbigg or counsel briefed in connection with this Proceeding.
5.All Documents recording or referring to the payment (including the source or sources of any such payments) of any legal fees paid to Matthews Folbigg in connection with this Proceeding, including the identity of the person, persons, entity or entitities who paid those fees, whether directly to Matthews Folbigg or otherwise.
6.All Documents recording or referring to Communications between any of Yiping Yang, Yulin Wang, Keifi (Emilio) Wang, Associates of Emilio Wang and Matthews Folbigg concerning the sale, or possible sale, of any of the Properties from 25 October 2019 to date.
7.[Not pressed]
8.This notice to produce.
The words that begin with capital letters are defined in the notice to produce. It is unnecessary, however, to set out those definitions.
SUBMISSIONS
Mr McMeniman, junior counsel for the applicants, submitted that the documents called for by the notice to produce were relevant to the exercise of the Court’s discretion whether to grant Ms Yang and Mr Wang the variation application. Mr McMeniman directed my attention to a document annexed to the affidavit of Mr Brown made on 17 May 2021 titled “Matter Enquiry Transaction Report”, which apparently records the amounts claimed in invoices Matthews Folbigg issued to Ms Yang and Mr Wang for legal services provided to them. Mr McMeniman submitted the document shows that Matthews Folbigg issued invoices to Ms Yang and Mr Wang from 14 April 2020 to 24 February 2021, and that all but the last invoice appear to have been paid, suggesting that Ms Yang and Mr Wang have, or had, assets not covered by the freezing orders from which they have been able to pay their legal costs.
Also relevant to determining whether any part of the notice to produce should be set aside are the issues Mr Hennessy, senior counsel for the applicants, identified in his opening submissions in opposition to the variation application. Mr Hennessy submitted there are four matters that will occupy my consideration of the variation application: (a) the purpose for which the freezing orders were granted in the first place; (b) whether the circumstances in which, or in the contemplation of which, the freezing orders were made have changed; (c) whether Ms Yang and Mr Wang have discharged the onus of showing whether they have no assets, other than those identified in or covered by the freezing orders, to which resort can be had to pay their legal expenses, and whether, in any event, there is any new need for expenditure for legal costs that cannot be satisfied from assets other than those identified in the freezing orders; and (d) whether Ms Yang and Mr Wang have adequately addressed how they have otherwise spent their other resources.
Mr Heath, counsel for Ms Yang and Mr Wang submitted that, excepting the documents covered by paragraph 1 of the notice to produce, documents that fall within the notice to produce call for documents that are broader than documents that could conceivably be relevant to the issues that arise on the variation application; and, for that reason, the notice to produce constitutes fishing. Mr Heath also submitted that some of the paragraphs in the notice to produce call for documents which are privileged.
DETERMINATION
The documents called for by paragraph 2 include documents, if they exist, that would be relevant or apparently relevant to the issues that arise out of the grounds on which the applicants oppose the variation application (Variation Application Issues). They also call, however, for documents that could not conceivably be relevant or apparently relevant to any of the Variation Application Issues. Paragraph 2 calls for all documents in relation to or concerning the application variation. That would include communications ranging from the mundane (for example a communication that an application in the case has been filed, or that it has been set down for hearing) to the privileged (communications that have been made for the dominant purpose of the variation application). Paragraph 2 of the notice to produce, therefore, should be set aside.
Paragraphs 3, 4, and 5 of the notice to produce are different. They specify documents relating to the payment of legal fees, or documents relating to arrangements for the payment of legal fees, or to documents that identify persons who have approved the payment of legal fees. These are subjects that form part of the Variation Application Issues. It is true that paragraphs 3 and 4 of the notice to produce call for documents recording or referring to communications between a relatively large number of persons. That by itself, however, does not prevent me from being satisfied that all documents called for by paragraphs 3 and 4 of the notice to produce are relevant or apparently relevant to any of the Variation Application Issues. Further, it does not indicate that there would be any oppression in Ms Yang or Mr Wang complying with paragraphs 3, 4, and 5 of the notice to produce. All of the documents called for by paragraphs 3, 4, and 5 relate to a distinct subject matter, and the notice to produce only requires Ms Yang and Mr Wang to produce documents that are in their possession or control. I do not propose, therefore, to set aside paragraphs 3, 4, or 5 of the notice to produce.
That leaves paragraph 6 of the notice to produce. It is not apparent that any of the documents called for by that paragraph, except to the extent they may be called by paragraphs 4 and 5 of the notice to produce, can conceivably be relevant to any of the Variation Application Issues. Paragraph 6, therefore, should also be set aside.
DISPOSITION
I propose to order that paragraphs 2 and 6 of the notice to produce be set aside. I will also order that the notice to produce be made returnable before me at 11:00 am on 8 July 2021, being the day to which the variation application has been adjourned part heard. I expect that Ms Yang and Mr Wang will use their best efforts to produce informally before 8 July 2021 the documents called for by paragraphs 1, 3, 4, and 5 of the notice to produce. There is already on foot an order I made on 30 June 2021 that the parties have liberty to apply on such notice as the circumstances warrant. The parties may apply pursuant to that order if there is any issue in relation to the production of documents called for by paragraphs 1, 3, 4, and 5 of the notice to produce.
I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis. Associate:
Dated: 2 July 2021
SCHEDULE OF PARTIES
SYG 2771 of 2019 Respondents
Fourth Respondent:
FREEZEFRAME CHINA CO PTY LTD ACN 621 016 975
Fifth Respondent:
KEFEI (EMILIO) WANG
Sixth Respondent:
PASCAL SKELIN
Seventh Respondent:
EPAQ INTERNATIONAL PTY LTD ACN 608 870 588
Eighth Respondent:
QUANJIAN PTY LTD
Ninth Respondent:
YIPING YANG
Tenth Respondent:
TAOYU PAN
Eleventh Respondent:
KEFEI (IVAN) WANG
Twelfth Respondent:
ZUREN INTERNATIONAL PTY LTD
Thirteenth Respondent:
SIQI HUO
Fourteenth Respondent:
YULIN WANG
Fifteenth Respondent:
E-GO CHANNEL PTY LTD
Sixteenth Respondent:
AUSTRALIAN VITAMIN PLUS PTY LTD
Seventeenth Respondent:
YAN (CYNTHIA) LI
Key Legal Topics
Areas of Law
-
Civil Procedure
-
Commercial Law
Legal Concepts
-
Abuse of Process
-
Costs
-
Res Judicata
-
Stay of Proceedings