Song v South Beach Management Pty Ltd [No 3]

[2021] WASC 282

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   SONG -v- SOUTH BEACH MANAGEMENT PTY LTD [No 3] [2021] WASC 282

CORAM:   ALLANSON J

HEARD:   11 AUGUST 2021

DELIVERED          :   17 AUGUST 2021

PUBLISHED           :   17 AUGUST 2021

FILE NO/S:   CIV 3152 of 2019

BETWEEN:   CHANGFU SONG

First Plaintiff

YUANCHAO XUE

Second Plaintiff

TOPSTAR MARKETING (AUST) PTY LTD

Third Plaintiff

AND

SOUTH BEACH MANAGEMENT PTY LTD AS TRUSTEE FOR THE SOUTH BEACH TWO DEVELOPMENT TRUST

First Defendant

CAMERON ANDREW KEAST BARR

Second Defendant

LLOYD RICHARD CLARK

Third Defendant

Catchwords:

Practice and procedure - where plaintiffs seek leave to issue subpoenas before defence - whether plaintiffs have legitimate forensic purpose in seeking the documents - whether the plaintiffs have shown exceptional circumstances for issue of subpoena before defence

Legislation:

Rules of the Supreme Court 1971 (WA), O 36B r 2

Result:

Application granted

Category:    B

Representation:

Counsel:

First Plaintiff	:	K A Dundo
Second Plaintiff	:	K A Dundo
Third Plaintiff	:	K A Dundo
First Defendant	:	D K Zusman
Second Defendant	:	D K Zusman
Third Defendant	:	D K Zusman

Solicitors:

First Plaintiff	:	KD Legal (Perth)
Second Plaintiff	:	KD Legal (Perth)
Third Plaintiff	:	KD Legal (Perth)
First Defendant	:	Bennett + Co
Second Defendant	:	Bennett + Co
Third Defendant	:	Bennett + Co

Case(s) referred to in decision(s):

Sandy v Yindjibarndi Aboriginal Corp RNTBC [2019] WASC 322

Song v South Beach Management Pty Ltd [2020] WASC 402

ALLANSON J:

Introduction

1. By letter dated 2 August 2021, the plaintiffs applied for leave to issue subpoenas to five recipients seeking documents which can be generally described as instructions, advice and draft documents relating to the establishment of the South Beach Two Development Trust and any deeds of variation to the Trust.  The proposed subpoenas cover the period from 1 January 2011 and 6 August 2014.  The proposed recipients have been identified by evidence filed in an earlier summary judgment application in this action.

2. The plaintiffs require leave of the court for the issue of subpoenas pursuant to O 36B r 2(2B)(b) of the Rules of the Supreme Court 1971 (WA). Leave is required because no defence has been filed.

3. Under subrule (2B)(b), the court must not give leave unless satisfied there are 'exceptional circumstances'.[1]

   [1] O 36B r 2(2D).

4. In Sandy v Yindjibarndi Aboriginal Corp RNTBC, Le Miere J said:

   The words 'exceptional circumstances' have their ordinary meaning. 'Exceptional' means 'out of the ordinary' or 'unusual', rather than 'unique'. The party requesting the issue of a subpoena should be able to demonstrate the precise issues in respect of which the documents are required.[2] 

   [2] Sandy v Yindjibarndi Aboriginal Corp RNTBC [2019] WASC 322 [4].

5. This is the second application by the plaintiffs for leave in these proceedings.  I followed the decision of Le Miere J in the earlier application.[3] I am not aware of any other cases in this court where the operation of O 36B r 2(2D) has been considered.

   [3] Song v South Beach Management Pty Ltd [2020] WASC 402.

6. The first application was brought in circumstances where the plaintiffs had filed a statement of claim and were facing applications by the defendants for summary judgment, alternatively to strike out specified paragraphs in the statement of claim.  In the first application, the plaintiffs sought a more limited class of documents, relating to the deeds of variation, and from a different subpoena recipient.

7. I allowed the application.[4]   In my reasons, I accepted that the plaintiffs had a legitimate forensic interest in determining when the Deed of Amendment of the Trust Deed for the South Beach Two Development Trust was executed.  There are discrepancies in the documents that support the plaintiffs' argument that they have a legitimate interest in exploring whether the Deed of Amendment was backdated.  I further accepted that the plaintiffs reasonably required the documents before a defence was filed because they might be relevant to limitation issues which were likely to arise in a pending summary judgment application.

   [4] The plaintiffs did not, however, obtain access to the documents returned under the subpoena. The defendants' objection to the plaintiffs inspecting the documents was upheld by another judge.

8. The summary judgment application was later dismissed.  The defendants were, however, successful in having several paragraphs of the statement of claim struck out, requiring the plaintiffs to substantially replead their case.

9. The plaintiffs have leave to re-plead and have not yet done so.  The question in this application is not confined to whether the plaintiffs have a legitimate forensic interest in the production of the documents sought.  The plaintiffs must also demonstrate exceptional circumstances relating to the issue of the subpoenas before a defence is filed.

10. The plaintiffs seek the documents to see if they would provide evidence to support a plea that the Deed of Amendment was prepared later and backdated.  That is, they do not seek to obtain documents relevant to an issue joined between the parties, or even a case they have pleaded, but documents that may be relevant to a case they have not yet advanced.

11. Their application is not, however, purely speculative.  The true date of the Deed of Amendment is relevant to exercises of the powers by the Trustee that will be in issue in the action.  The defendants' affidavits in the summary judgment application clearly state their position that the Deed of Amendment was not backdated.  There is a discrepancy in the documents which requires explanation, although it may not be a sufficient foundation for pleading a serious factual allegation. 

12. I am satisfied that the plaintiffs have a legitimate forensic interest in seeking the documents described in the subpoenas.  I am also satisfied that, where the defendants have already brought a summary judgment application in which the alleged backdating of the Deed of Amendment was addressed, the circumstances are exceptional. 

13. It is likely that the defendants would object to the inspection of any subpoenaed documents.  Assuming there are any documents held by the recipients, the terms of the proposed subpoenas may include documents for which privilege could be claimed.  But I am not satisfied that all documents coming within the categories sought would necessarily be privileged.  That is an issue for another day.

14. I will allow the application and grant leave.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

MG

Associate to the Honourable Justice Allanson

17 AUGUST 2021