Taylor Collison Ltd v Ausgold Ltd
[2022] WADC 10
•17 FEBRUARY 2022
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS
LOCATION: PERTH
CITATION: TAYLOR COLLISON LTD -v- AUSGOLD LTD [2022] WADC 10
CORAM: DEPUTY REGISTRAR HEWITT
HEARD: 1 FEBRUARY 2022
DELIVERED : 17 FEBRUARY 2022
FILE NO/S: CIV 837 of 2021
BETWEEN: TAYLOR COLLISON LTD
Plaintiff
AND
AUSGOLD LTD
Defendant
Catchwords:
Practice and procedure - Subpoenas issued to directors of defendant company - Whether the subpoenas were in fact an attempt to obtain further and better discovery - Turns on its own facts
Legislation:
Nil
Result:
Objection upheld
Subpoenas set aside as an abuse of process
Representation:
Counsel:
| Plaintiff | : | Mr S J Penrose |
| Defendant | : | Mr D Banda |
Solicitors:
| Plaintiff | : | Tottle Partners |
| Defendant | : | Bennett + Co |
Case(s) referred to in decision(s):
Nil
DEPUTY REGISTRAR HEWITT:
In this action the plaintiff contends that under the terms of an agreement between the plaintiff and the defendant dated 25 November 2019 it was granted the right to be the lead manager in respect of capital raising conducted by the plaintiff for the period of 12 months after the allotment of shares in an earlier issue in which the plaintiff had been involved. It is contended by the plaintiff that certain terms should be implied into the contractual arrangement and in particular that it should be given notice of any intention to conduct any equity raising and a reasonable opportunity to exercise its right to act as lead manager in that raising.
It was a provision of the agreement that certain fees were to be paid in the event that the plaintiff occupied the position of lead manager in respect of the raisings.
It appears to be common ground that the share raising which is relevant to the present action took place within the time period required and the issues in the case are therefore whether the implied terms contended for by the plaintiff should be implied in the contract, whether they have been breached and if so, what damages have been suffered by the plaintiff.
Against that background Ausgold Ltd by its director Mr Neil Christian Fearis executed an affidavit of discovery which was lodged on 6 August 2021. That affidavit prompted a letter from the solicitors for the plaintiff complaining that the affidavit was inadequate and the inadequacies should be addressed by the filing of a further affidavit of discovery. The letter appears as exhibit DDW-2 in the affidavit of Mr Dillon Dard-Sing Wong lodged on 17 November 2021. The letter concludes with the following paragraph:
Please let us know whether the abovementioned issues may be resolved by further discovery by Ausgold, failing which we are instructed to file a formal application for further and better discovery.
The solicitors for the defendant responded contending that the affidavit filed was complete and rejecting any proposition that a further affidavit of further and better discovery was required. That generated two subpoenas which were issued by the plaintiff, one directed to Mr Fearis and the other to another of the directors of Ausgold Ltd, Mr Matthew Richard Greentree. Each of the subpoenas identified the same documents which were required to be produced and those were:
1.Correspondence between the directors or management of Ausgold Ltd (Ausgold) between 25 November 2019 and 1 November 2020 regarding:
a.the Taylor Collison Limited mandates dated 2 September 2019 and 25 November 2019 and any associated rights that it might have under the same;
b.the August 2020 equity raising by Ausgold by way of the issue of 194,150,000 fully paid ordinary shares to raise $6,348,705 before costs (August Raising);
c.proposed or actual participants (investors or service providers such as brokers) in the August Raising; and
d.the payment of fees with respect to the August Raising.
2.Correspondence with any other parties in relation to
a.the August Raising; and
b.the payment of fees in relation to funds raised by reason of the August Raising.
3.Any motions, resolutions or notices of meeting of the directors of Ausgold regarding the August Raising.
By letter dated 17 November 2021 the defendant wrote to the court by way of challenge to the propriety of the subpoenas seeking that they be set aside and the plaintiff pay the defendant's costs. At the same time a memorandum pursuant to O 59 r 9 of the Rules of the Supreme Court 1971 (WA) was lodged which made it clear that the plaintiff was informed of the challenge and the basis for it. The matter was listed before me for determination on 1 February 2022 and these are my reasons for decision.
I accept as is argued by counsel for the plaintiff that where a director is possessed of documents, relevant to a litigated case, which are documents private to the director and not required to be the subject of an affidavit of discovery by the company of which he is a director, that such a subpoena may issue. The question therefore which requires answering is, are the documents described in the subpoenas company documents or private documents in the possession of the witness? In my view the documents which are described in the subpoenas are clearly company documents and in reaching that conclusion I repeat the description which is given in the subpoenas themselves. In par 1 on page 2 of the subpoenas what is sought is 'correspondence between the directors or management of the company between 25 November 2019 and 1 November 2020'. There is nothing whatever in this which suggests that what is sought to be produced is anything other than company records in regard to these matters. There is no reason to suppose that the subpoenas are intended to focus on some particular document which may be exclusively in the possession of the witness, likewise in par 2, 'correspondence with any other parties …'. There is no reason to suppose that what is sought is limited to personal correspondence held by the witness which does not form part of the corporate records. And finally, in par 3 'any motions, resolutions or notices of meetings of the directors of Ausgold regarding the August Raising', it could not be clearer that what is sought is company records.
When I have regard to the letter written by the solicitors for the plaintiff dated 18 August 2021 and in particular to the reference for an application for further and better discovery, the situation becomes clearer. In order to succeed in an application for further and better discovery it is necessary to demonstrate to a standard which has been described as 'on the cards' that the documents exist and are relevant to the issues. No such threshold exists for the issuing of a subpoena and my view is that these subpoenas are a means by which the plaintiff seeks to sidestep an impediment to its success in an application for further and better discovery.
No doubt the likelihood of such a finding led counsel to suggest that the terms of the subpoenas be modified to make it clear that what was sought were private documents in the possession of the witness. When I look at the letter and I look at the subpoenas it is plain to me that that was not the intention of the subpoenas. The intention of the subpoenas was to provide a means by which in fact further and better discovery could be achieved by a means which did not require the plaintiff to address and satisfy the threshold issues.
For these reasons I consider that the subpoenas were an abuse of process and should be set aside. As to the proposed amendments to the subpoenas, I see no evidence which might lead me to a conclusion that private documents of relevance to this action do in fact exist and are in fact in the possession of these witnesses.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
FN
Court Officer
16 FEBRUARY 2022
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