Temwell Pty Ltd v DKGR Holdings Pty Ltd

[2002] FCA 741

FEDERAL COURT OF AUSTRALIA

Temwell Pty Ltd v DKGR Holdings Pty Ltd [2002] FCA 741

COURTS – practice and procedure – whether a subpoena for production, rather than discovery, is appropriate to obtain documents from a non party to enable the preparation of affidavits that are required to be filed and served prior to trial

Federal Court Rules 1979 (Cth) O 27 r 6 and O 15A r 8

The Commissioner for Railways v Small (1938) 38 SR (NSW) 564 - cited
Lucas Industries Ltd v Hewitt (1978) 18 ALR 555 - applied

TEMWELL PTY LTD v DKGR HOLDINGS PTY LTD AND OTHERS
VG 663 of 2000

JUDGE:         MERKEL J
DATE:           4 JUNE 2002
PLACE:         MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 663 OF 2000

BETWEEN:

TEMWELL PTY LTD
(ACN 082 656 157)
APPLICANT

AND:

DKGR HOLDINGS PTY LTD
(formerly known as DYNAMIC DATA SYSTEMS PTY LTD)
(ACN 062 778 616)
FIRST RESPONDENT

mCOM SOLUTIONS INC.
SECOND RESPONDENT

DRAGON VENTURES.COM INC.
THIRD RESPONDENT

mCOM SOLUTIONS AUSTRALIA PTY LTD (in liquidation)
(ACN 091 375 950)
FOURTH RESPONDENT

DAVID HAINS
FIFTH RESPONDENT

ROBERT VAN ZANTEN
SIXTH RESPONDENT

DRAGONVENTURES.COM LTD.
SEVENTH RESPONDENT

JUDGE:	MERKEL J
DATE:	4 JUNE 2002
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1. On 4 June 2002 I granted leave under O 27 r 6 to the second, fifth, sixth and seventh respondents, one of whom is a cross-claimant in the present proceeding (“the mCOM parties”), to issue a subpoena for production to Deloitte Corporate Finance Pty Ltd and Deloitte Touche Tohmatsu Ltd,  neither of which is a party in the proceeding.  I now publish my reasons for granting that leave.

2. No date has been fixed for the trial of the proceeding but directions were made which required the parties to file and serve the affidavits upon which they intend to rely.  The documents sought to be produced pursuant to the subpoenas relate to a valuation made by Deloitte Touche Tohmatsu that is in dispute and is of particular relevance to the cross-claim in the proceeding.  The mCOM parties are seeking the documents to enable them to prepare the affidavits they are required to file and serve prior to trial.

3. Plainly, the documents sought by the mCOM parties could have been, but were not, the subject of an application for discovery from a non-party under O 15A r 8.  It would not be a legitimate use of the subpoena procedure to bypass that rule to obtain what would be in effect discovery against a non party: see The Commissioner for Railways v Small (1938) 38 SR (NSW) 564 at 573.

4. However, counsel for the mCOM parties claimed his clients are not seeking to bypass O 15A r 8.  Rather, he contended that the mCOM parties are merely utilising the subpoena procedure to procure the production of documents from a non-party for the purpose of preparing their evidence in chief to be used at the trial which, so it is said, is a proper use of that procedure.  In support of that contention reliance was placed on the observations of Smithers J (with whom Bowen CJ and Nimmo J agreed) in Lucas Industries Ltd v Hewitt (1978) 18 ALR 555 at 565-569 to the effect that the subpoena procedure is appropriate to obtain documents in the possession of a non-party to litigation if the contents of the documents are reasonably required for the preparation of trial affidavits directed by a court to be filed and served prior to trial. Smithers J stated (at 566-567):

   “I see nothing in any of the authorities to throw doubt on the principle that when, according to the nature of any particular proceeding, considerations of justice and convenience require production of relevant documents at some particular time, whether before or after trial, production should then be ordered.  So far as this case is concerned, if there are relevant documents the contents of which would be proper material for expert comment and opinion and they are not produced before the trial, then when the documents are ultimately produced the experts would have to consider them at that stage and any comments and opinion arising in respect to them would have to be made the subject of further affidavits, presumably on leave being obtained.”

5. His Honour concluded that the issue of the subpoena for the production of documents to enable the preparation of expert evidence in reply in accordance with trial directions of the court was not premature or an improper use of the subpoena process.

6. In my view a similar situation has arisen in the present case.  The documents the subject of the subpoenas appear to be relevant to a matter that is in issue in the proceeding and, accordingly, their production pursuant to a subpoena by a non-party for the purpose of enabling the mCOM parties to prepare the affidavits they were directed to file and serve prior to trial is not premature or improper.

7. Accordingly, it is appropriate to grant leave to the mCOM parties to issue the two subpoenas in question.  As the application for leave was made ex parte the leave is to be without prejudice to any objection which the parties required to produce the documents may wish to raise concerning the subpoenas.

I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel.

Associate:

Dated:             

Counsel for the Second, Fifth, Sixth and Seventh Respondents:	Mr J Delany
Solicitor for the Second, Fifth, Sixth and Seventh Respondents:	Minter Ellison
Date of Hearing:	4 June 2002
Date of Judgment:	4 June 2002