Tan v King (No 2)

[2023] NSWSC 1616

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Tan v King (No 2) [2023] NSWSC 1616

Hearing dates:

7 December 2023

Date of orders:

7 December 2023

Decision date:

07 December 2023

Jurisdiction:

Equity - Commercial List

Before:

Rees J

Decision:

Subpoenaed party ordered to produce.

Catchwords:

CIVIL PROCEDURE — subpoena to produce — seeks Court documents from Victorian proceedings — consent orders made on settlement of Victorian proceedings — whether order was under r 28.05 Supreme Court (General Civil Procedure) Rules 2015 (Vic) or Open Courts Act 2013 (Vic) — not a suppression order — order under r 28.05 limits access to non-parties to files in registry — does not absolve party in possession of documents which happen to be on the court file from compliance with subpoena.

Legislation Cited:

Open Courts Act 2013 (Vic)

Supreme Court (General Civil Procedure) Rules 2015 (Vic)

Cases Cited:

Harman v Secretary of State for the Home Department [1983] 1 AC 280

Category:

Procedural rulings

Parties:

Eng Liang Tan (First Plaintiff/ First Applicant)
Mary Juwono (Second Plaintiff/ Second Applicant)
Kylaco Pty Ltd (Third Plaintiff/ Third Applicant)
Tiberias 96 Pty Ltd (Fourth Plaintiff/ Fourth Applicant)
Barry King (First Defendant/ First Respondent)
Total Financial Solutions Australia Pty Ltd (ACN 003 771 579) (Second Defendant/ Second Respondent)
Wealth Advisory Pty Ltd (Third Defendant/ Third Respondent)
Donbar Investments Pty Ltd (Fourth Defendant/ Fourth Respondent)
King Financial Group (NSW) Pty Ltd (Fifth Defendant/ Fifth Respondent)
Bonnie King (Sixth Defendant/ Sixth Respondent)
Madgwicks Services Pty Ltd (Subpoena Recipient)

Representation:

Counsel:
Mr J Hutton SC / Mr A Byrne (Plaintiffs)
Mr N Kirby (Defendants and Subpoena Recipient, Madgwicks Services Pty Ltd)

Solicitors:
Deutsch Miller (Plaintiffs)
HWL Ebsworth Lawyers (Defendants and respondent)

File Number(s):

2023/196801

EX TEMPORE JUDGMENT

1. HER HONOUR: By notice of motion filed on 28 November 2023, the plaintiffs seek an order that a subpoenaed party, Madgwicks Services Pty Ltd, produce documents the subject of the subpoena. The issue in dispute is whether an order made by the Supreme Court of Victoria has the effect that Madgwicks is not at liberty to produce the material and, indeed, is prohibited from doing so.

2. In support of the application, the plaintiffs relied on the evidence of their solicitor, Shane Anderton, while Madgwicks relied on the evidence of its solicitor, Richard Goldberg.

Victorian proceedings

3. The first defendant in these proceedings, Barry King, provided professional financial advisory services to Kyoko Brogdon. In August 2020, Ms Brogdon commenced proceedings in the Supreme Court of Victoria against Mr King, King Financial Group (NSW) Pty Ltd, King Financial Group Vic Pty Ltd and another. Madgwicks acted for the defendants. Mr King, King Financial Group (NSW) and King Financial Group Vic are also defendants in these proceedings.

4. Little is known of the Victorian proceedings, save that Ms Brogdon sought a freezing order and, on 13 August 2020, undertakings were given to the Court, by Ms Brogdon, the defendants and third parties, Bardon Enterprises Pty Ltd and Donbar Investments Pty Ltd. I infer from the detail in the Deed of Settlement (see [5]) that the undertakings were the usual undertaking as to damages together with undertakings not to dispose of assets in the face of an application for a freezing order. A joint independent computer expert was appointed by the Court and an electronic devices collection order was made.

5. In October 2020, a Deed of Settlement was executed by the parties to the Victorian proceedings and third parties, Bardon Enterprises and Donbar Investments. The deed has been produced by Madgwicks in answer to the subpoena. The deed provided that the defendants, without admission and in consideration for releases, would pay $5 million to Ms Brogdon in two instalments, being $4.2 million by 18 October 2020 and a further $800,00 by 18 April 2021. The parties agreed that, on payment, consent orders would be filed with the Supreme Court of Victoria. Order 4 of the proposed consent orders provided:

The Court makes orders for the contents of the file in the proceedings be marked as “Confidential” and only accessed in Registry under order by a Judge of the Supreme Court.

6. The parties also acknowledged that it was an essential term of the deed that its terms would remain confidential and not be disclosed to any person, including any regulatory or law enforcement authority: clause 7. Ms Brogdon also covenanted that she would not disparage the defendants nor file any complaint with any regulatory body in respect of the defendants, including to the Australian Securities and Investments Commission, the Australian Financial Complaints Authority, the police or the Australian Taxation Office.

7. According to Madgwicks’ trust account statement, funds were paid into a trust account in the name of Mr King in respect of the Brogdon proceedings, to pay the settlement moneys. Specifically, Ski Super Fund paid $2.15 million into the trust account. I was informed that this is a superannuation fund for the plaintiffs in these proceedings, having been set up by Mr King. A further payment of $1.55 million was made by Donbar Investment. I was informed that $600,000 of these funds came from the third plaintiff in these proceedings, Kylaco Pty Ltd. From the trust account, the first tranche of the settlement sum was paid on 19 October 2020. The final tranche was paid on 11 March 2021.

8. On 16 March 2021, Delany J made consent orders in the Brogdon proceedings including:

4.   The contents of this proceeding will be marked as confidential and will only be accessible in Registry under order by a Judge of this Court.

It will be observed that Order 4 as made was similar to, but not the same as, the proposed consent orders attached to the Deed of Settlement.

These proceedings

9. By summons dated 20 June 2023, the plaintiffs commenced these proceedings, seeking to recover some $18 million of their funds and assets (principally listed equities) which were entrusted to Mr King but, apart from a few hundred thousand dollars, are now missing. Freezing orders have been made, extended and varied.

10. On 11 September 2023, the Court issued a subpoena to Madgwicks at the request of the plaintiffs, requiring production of inter alia:

Court Documents (including, but not limited to, pleadings, notices, affidavits, or other forms) relating to the [claim or claims made by Brodgon against Barry King and others in around 2020].

11. It is apparent from the documents which Madgwicks has produced in answer to the subpoena that it has such documents in its possession. Emails produced by Madgwicks referred to or attached (but did not produce) outlines of submissions, affidavits and the like. The Deed of Settlement itself referred to a writ and summons, together with a number of allegations made by Brogdon against the defendants, presumably recorded in Court documents. None of those documents were produced.

Opposition to production

12. Madgwicks submitted that the order made by Delany J on 16 March 2021 was a suppression order under the Open Courts Act 2013 (Vic), such that the firm was prohibited from producing the material. Madgwicks accepted that there was no statement of reasons for such an order, as required by the Open Courts Act 2013. However, the Court could not be taken to have made the orders simply at the behest of the parties, where the terms of the order differed from the proposed consent orders annexed to the Deed of Settlement. Ordinarily, one Court may not issue a subpoena to another Court. Rather, there is a procedure for requests for disclosure from one registry to another. Circumvention of the order made by Delany J on 16 March 2021, making confidential the contents of the proceedings, should be eschewed. The plaintiffs should not be permitted to “go through the back door” but should make their application to a judge of the Supreme Court of Victoria.

13. The plaintiffs submitted that the order made by Delany J appeared on its face to involve sealing the file and restricting access to those who were not subject to a Harman undertaking (named after Harman v Secretary of State for the Home Department [1983] 1 AC 280), under rule 28.05 of the Supreme Court (General Civil Procedure) Rules 2015. It was difficult to reconcile the orders with the requirements of the Open Courts Act 2013, including the absence of reasons required by the legislation. It would be an extraordinary effect of an order under rule 28.05 that documents that happen also to have a copy on the court file were immunised from production under a subpoena issued by another court. Nor was it obvious how a judge of the Supreme Court of Victoria could make an order that immunised from production documents held by someone elsewhere.

Conclusion

14. When the Deed of Settlement was executed, and when Delany J made the consent orders in March 2021, rule 28.05 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) provided:

28.05   Inspection of documents

(1)   When the office of the Court is open, any person, on payment of the proper fee, may inspect and obtain a copy of any document filed in a proceeding.

(2)   Notwithstanding paragraph (1)—

(a)   no person may inspect or obtain a copy of a document which the Court has ordered remain confidential; …

15. Proposed Order 4, as attached to the Deed of Settlement, appears to have been drafted as an order under rule 28.05(2)(a), such that the Court file would not be available to third parties who may wish to inspect it. Such an order would prevent “any person, on payment of the proper fee” from inspecting the Court’s file in respect of the Brogdon proceedings and obtaining a copy of any document filed in those proceedings. This would certainly enhance the confidentiality and non-disparagement clauses in the deed.

16. A “suppression order” is defined in section 3 of the Open Courts Act 2013 to include:

suppression order means –

…

(d)   an order made by the Supreme Court in the exercise of its inherent jurisdiction that prohibits or restricts the publication or other disclosure of information in connection with any proceeding, whether or not the information was derived from the proceeding.

17. Part 2 of the Open Courts Act 2013 applies to any suppression order: section 9. Notice of applications for suppression orders must be given by the applicant: section 10. On receiving such a notice, the Court must take reasonable steps to ensure that relevant news media organisations are notified of the application: section 11. A suppression order must specify the duration of the order: section 12. A suppression order must specify the scope of the information covered by the order with sufficient particularity to ensure that the order is limited to achieving the purpose for which the order is made and so that the order does not apply to any more information than is necessary to achieve that purpose: section 13. In making a suppression order, the Court must be satisfied on the basis of evidence, or sufficient credible information, that the grounds for making the order are established: section 14(1). A court must give a statement of reasons for making the order, albeit a failure to give reasons does not affect the validity of the order: section 14A.

18. As mentioned, Order 4 as made was similar to, but not the same as, the proposed consent orders attached to the Deed of Settlement. The reason for the difference was not the subject of evidence. I do not know whether the change was made by the parties during final drafting of the orders, or by his Honour. In the absence of such evidence, the question is whether Order 4 was made under rule 28.05 – as appears to have been the initial intention – or whether it was a suppression order made by the Court in the exercise of its inherent jurisdiction.

19. The answer is to be found on the orders themselves, which record that the orders were made in chambers “On receipt of signed consent orders”. The Court “ORDERS BY CONSENT” that “The contents of this proceeding will be marked as confidential and will only be accessible in Registry under order by a Judge of this Court.” Consent is not a basis on which suppression orders are made, either under the Open Courts Act 2013 or more broadly. Under the Victorian legislation, a judicial officer may only make a suppression order on the basis of evidence or sufficient credible information: section 14. The provision of consent orders provided by parties on resolution of their commercial dispute is neither evidence nor sufficient credible information.

20. Further, any judicial officer making a suppression order under the inherent jurisdiction of the Court may be expected to take a number of considered and detailed steps. Such steps are enumerated in the Victorian legislation and have clearly not been adhered to here, indicative of the fact that that is not what the judicial officer was doing. The order does not specify its duration but is unlimited. The order does not specify the scope of the information covered “with sufficient particularity to ensure that … the order does not apply to more information than is necessary to achieve the purpose for which the order is made”: section 13(1)(b). One would also expect to find reasons for making such an order: section 14A.

21. I do not think that anything turns on the fact that Order 4, as made, referred to the contents "of this proceeding." That seems to be a shorthand way of referring to the Court file and its contents. The fact that the contents were to be “marked as confidential”, and that access in the Registry was restricted, points to the same purpose as the proposed orders annexed to the Deed of Settlement, being to restrict access to the court file under rule 28.05 of the Supreme Court (General Civil Procedure) Rules 2015. The purpose of such an order is prevent non-parties accessing a court file. The effect of such an order is not to protect parties, their representatives, or anyone else who happens to have documents which are on the court file in their possession from producing such documents in answer to a subpoena, simply on the basis that a copy of the document is also in the Registry on the Court file. Madgwicks is obliged to produce the documents.

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Amendments

22 April 2024 - Amendment to Representation on coversheet.

Decision last updated: 22 April 2024