Van Duren v Hammond & Roberts Pty Ltd
[2017] WASC 308
•27 OCTOBER 2017
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: VAN DUREN -v- HAMMOND & ROBERTS PTY LTD [2017] WASC 308
CORAM: ALLANSON J
HEARD: 26 SEPTEMBER 2017
DELIVERED : 27 OCTOBER 2017
FILE NO/S: CIV 2270 of 2016
BETWEEN: NATALIE BARBARA VAN DUREN
Plaintiff
AND
HAMMOND & ROBERTS PTY LTD
First DefendantSTEVEN JAMES ROBERTS
Second Defendant
Catchwords:
Practice and procedure - Subpoena to produce documents - Where documents earlier sought on discovery - Whether subpoena an abuse of process
Practice and procedure - Subpoena - Scope of subpoena
Practice and procedure - Service and Execution of Process Act 1992 - Where no tender of allowances on service - Turns on own facts
Legislation:
Rules of the Supreme Court 1971 (WA), O 2 r 1, O 36B
Service and Execution of Process Act 1992 (Cth), s 32, s 34, s 35
Trustees Act 1962 (WA), s 77, s 94
Result:
Application allowed in part
Category: B
Representation:
Counsel:
Plaintiff: Mr A Tharby
First Defendant : Mr G D Cobby
Second Defendant : Mr G D Cobby
Solicitors:
Plaintiff: Bennett + Co
First Defendant : Price Sierakowski
Second Defendant : Price Sierakowski
Case(s) referred to in judgment(s):
Areva NC (Australia) Pty Ltd v Summit Resources (Australia) Pty Ltd [2007] WASC 276
Australian Competition and Consumer Commission v Shell Co of Australia Ltd (1999) 161 ALR 686
Boase v Axis International Management Pty Ltd [No 3] [2012] WASC 498
Commissioner of Police v Tuxford [2002] NSWCA 139
Darbyshire v Gilbert [2006] WASCA 13; (2006) 31 WAR 558
Diddams v Commonwealth Bank of Australia [1998] FCA 497
Heugh v Central Petroleum Ltd [No 2] [2013] WASC 323
ICAP Australia Pty Ltdv Forrest Moebes [2010] NSWSC 738
Jeffery & Katauskas Pty Ltd v SST Consulting Pty Ltd [2009] HCA 43; (2009) 239 CLR 75
Kizon v Palmer (1997) 75 FCR 261
Rankilor v City of South Perth [2016] WASCA 28
Stanley v Layne Christensen Co [2004] WASCA 50
The Commissioner of Railways v Small (1938) 38 SR (NSW) 564
Walton v Gardiner [1993] HCA 77; (1993) 177 CLR 378
ALLANSON J: The plaintiff, Natalie Van Duren, brings this action against four defendants. The action results from the ending of a business relationship between them and the failure of the parties to agree the terms on which that should be done. The present application is between the plaintiff and the first and second defendants only. I will refer to those defendants, Hammond & Roberts Pty Ltd and Steven James Roberts, collectively as the defendants in these reasons.
The plaintiff is also known as Natalie Oberman.
The subpoenas
On 7 June 2017, the defendants issued two subpoenas to produce documents.
One is to the proper officer of the National Australia Bank (NAB), for the production of:
(a)All bank statements relating to accounts held in the name of Natalie Barbara Oberman or Natalie Barbara Van Duren, whether individually or jointly with others, the period 1 January 2016 to 31 December 2016, inclusive; and
(b)All bank statements or records relating to accounts held in the name of Natalie Barbara Oberman as Trustee of the Oberman Family Trust, or Natalie Barbara Van Duren as Trustee of the Oberman Family Trust, for the period 1 January 2016 to 31 December 2016, inclusive.
The second is to the Colonial Mutual Life Assurance Society Limited (CML), for the production of:
(a)Any and all documents relating to any income protection insurance policy held by or for the benefit of Natalie Barbara Oberman or Natalie Barbara Van Duren, including but not limited to:
(i)Any and all applications for an income protection insurance policy or insurance policy including income protection made by Natalie Barbara Van Duren or for the benefit, or made by Natalie Barbara Oberman or for her benefit; and
(ii)Any and all claims made by or for the benefit of Natalie Barbara Van Duren or Natalie Barbara Oberman on any policy referred to in paragraph (a) from 1 January 2015 to 21 June 2017.
The plaintiff has applied to set aside the subpoenas on the grounds that they are an abuse of process and exceed the scope of any legitimate forensic purpose. The plaintiff also submits that neither subpoena was effectively served, and that the form of the subpoena to the NAB was defective.
Each recipient has complied; the number of documents produced is not known, although Commonwealth Insurance Ltd sent three parcels of documents to the court.
Relevant evidence
Each party filed affidavits in the application. The affidavits filed on behalf of the defendants attach the subpoenas and the letters or emails which accompanied their service.
The plaintiff relies on the affidavit of Alexander James Tharby, solicitor, affirmed 14 August 2017. Mr Tharby attaches correspondence between the parties to show:
(1)the defendants requested further and better discovery of documents which, while differently described, included the classes of documents now sought on subpoena;
(2) the plaintiff responded that she had given discovery of documents relating to the payments into her bank account;
(3) the plaintiff told the defendants that the documents relating to her health insurance were irrelevant and would not be discovered; and
(4)the plaintiff provided a transaction report for the period 22 April to 12 May 2016, showing the receipt of three amounts said to be from her clients, and drawings on 'Hammond Roberts Natalie Oberman Inter‑Bank Credit', but otherwise redacted.
The issues on the pleadings
For the purposes of this application, it is sufficient to note these elements of the pleadings.
The statement of claim
Hammond & Roberts Pty Ltd is the trustee of the Hammond & Roberts Unit Trust, carrying on business as a public accountancy practice under the name Hammond & Roberts.
The plaintiff is a public accountant, holds 30% of the issued ordinary units in the Unit Trust, and was a principal of the practice Hammond & Roberts. The other 70% of the issued ordinary units are held by Jest Nominees Pty Ltd.
On 21 April 2016, the plaintiff retired from the practice of Hammond & Roberts. The plaintiff and the second defendant, Mr Roberts, were unable to agree on the acquisition of her units in the Unit Trust. On or before 21 June 2016, Hammond & Roberts Pty Ltd commenced winding up the Hammond & Roberts business.
In this action the plaintiff claims an order pursuant to s 77 of the Trustees Act 1962 (WA) removing Hammond & Roberts Pty Ltd as trustee of the unit trust, further or alternatively orders pursuant to s 94 for the winding up of the trust, including directions and orders for accounts to be taken. The plaintiff also claims equitable damages.
The allegations in the statement of claim are diverse and serious. It is not necessary to detail them for the purposes of this application. In general terms, the plaintiff alleges that Mr Roberts caused the trustee to prefer his interests over those of the plaintiff. She alleges that the trustee fraudulently distributed income. Specifically, she pleads that the trustee distributed income and profits from the Hammond & Roberts business to income unit holders on a pro rata basis for the plaintiff, but on a full-time basis for Mr Roberts, when the terms of the Trust Deed do not permit the trustee to discriminate between holders of units of the same class: par 11G.1.
The defence
The first and second defendants have filed a joint defence.
The defendants admit that the plaintiff held 30% of the issued ordinary units in the unit trust (par 3), but plead that the trust also had income units. In par 6, they plead that the plaintiff and Jest Nominees each held one income unit; that the terms of the trust deed pleaded by the plaintiff in the statement of claim applied only to ordinary units in the trust; and that an income unit conferred the right to share in the net income of the unit trust. The defendants plead, in par 6.2.2.3 and par 6.2.2.4, that by the trust deed:
In each accounting period, the trustee might pay, apply or set aside the whole of such part of the net income of the Hammond & Roberts Unit Trust fund or all or any part of any attributive income account to or for the benefit of any one or more of the holders of income units as the trustee thought fit;
the payment, application or setting aside by the trustee might be to or for the holders in respect of one or more income units to the exclusion of or in an amount different from that paid, applied or set aside to or for the holders of other income units.
The defendants plead that the trustee exercised its discretion by reference to a notional annual payment per income unit (the Notional Income Unit Dividend); that it determined the amount of the payment by reference to an amount considered to represent a fair and reasonable salary for a typical experienced public accountant working on a full-time, permanent basis, excluding superannuation; and that it paid fortnightly amounts by way of an advance against the payment of the Notional Income Unit Dividend at the end of each accounting period. The defendants plead that Mr Roberts provided his services five days a week, and that the plaintiff provided her services three days a week around January 2015 to 30 June 2015, and four days a week from around 1 July 2015 to 21 April 2016. The defendants plead that, with her knowledge and consent, the plaintiff was paid 60% and 80% of the Notional Income Unit Dividend for those periods.
The defendants also plead in par 7 that, from a date unknown 'but at least 21 April 2016', the plaintiff instructed debtors of the business to pay amounts invoiced by Hammond & Roberts Pty Ltd to the plaintiff, without the consent of Hammond & Roberts Pty Ltd.
Reply
In her reply, the plaintiff:
(1)admits pars 6.2.2.3 and 6.2.2.4,
(2)says that she and Mr Roberts agreed that each would receive as 'director's remuneration' the annual sum of $200,000 on a full‑time equivalent basis,
(3) admits that she supplied her services '3 days a week at least' but on occasions between January 2015 and 30 June 2015 provided additional services,
(4)admits providing her services four days a week between 1 July 2015 and 21 April 2016,
but otherwise denies or does not admit par 6.2: reply par 2.
The effect of her plea (with par 11G of the statement of claim) is to deny or not admit that income units conferred the right to share in the net income of the trust, and to maintain that the distribution of income, including the distribution to her on a pro rata basis, was fraudulent. She does not admit that the Trustee resolved, with her consent and knowledge, to pay her 60% and 80% of the Notional Income Unit Dividend for the two periods when she did not work full‑time.
The plaintiff admits that she sent an email to her clients, 'advising them that any outstanding accounts were to be paid to her directly', and 'only instructed 3 clients to pay outstanding accounts into the Natalie Oberman Family trust account'. She denies receiving any other payments in respect of Hammond & Roberts invoices: par 8.3.
Particulars
In further and better particulars, the defendants refer to an oral conversation in or about January 2015 in which the plaintiff told Mr Roberts that she could only work three days a week for health and family reasons, and could not be paid on a full‑time basis, giving as a reason, 'I can't double dip on my income protection insurance'. The particulars relate to the defendants' plea that Hammond & Roberts resolved to pay the plaintiff 60% of the Notional Income Dividend with her knowledge and consent.
Challenging a subpoena
Neither subpoena recipient challenged the subpoena. Each has complied by sending the documents requested to the registry of the court.
The rules for setting aside a subpoena to be produced are found in O 36B r 8A and 8B of the Rules of the Supreme Court 1971. In summary, the addressee, a party or any other person with a sufficient interest, may request the court, to:
(a)set aside the subpoena or part of it; or
(b)make or vary directions in relation to removing from and returning to the court, and the inspection, copying and disposal, of any document or thing that has been or is to be produced under it; or
(c)grant other relief in respect of it.
The Rules do not distinguish between the grounds on which the court may set aside a subpoena, and the grounds on which the court may make directions relating to the inspection and copying of any document produced under it. They are, however, separate questions. The separation was perhaps more acute when leave was required to issue a subpoena.
The principles set out in the cases dealing with leave to issue a subpoena have been applied where a subpoena has issued without leave, and the recipient or a party has applied to set it aside or prevent inspection of documents: see, for example, Heugh v Central Petroleum Ltd [No 2] [2013] WASC 323; Boase v Axis International Management Pty Ltd [No 3] [2012] WASC 498 [10] ‑ [21].
Relevantly, for the present application, I rely on the following guidance from the cases.
First, where leave was required to issue a subpoena, a legitimate forensic purpose must exist in relation to the documents sought before leave would be granted. In Stanley v Layne Christensen Co [2004] WASCA 50 [9], the Court of Appeal agreed with the statement of the test at first instance by Master Sanderson in these terms:
(1)A legitimate forensic purpose will be established if a document gives rise to a line of enquiry which is relevant to the issues before the trier of fact, including for the purpose of meeting the opposing case by way of cross-examination: see Apache Northwest Pty Ltd & Ors v Western Power Corporation (1998) 19 WAR 350 at 374; National Employers' Mutual General Insurance Association Ltd v Waind & Anor [1978] 1 NSWLR 372 at 385; Maronis Holdings Ltd & Ors v Nippon Credit Australia Ltd & Ors (2000) 18 ACLC 609 at 613 ‑ 614.
(2)In assessing whether a legitimate forensic purpose exists in relation to documents sought on an early return of subpoena, it must be borne in mind that the necessity for having a document to fairly dispose of the issues at trial might well not become apparent before trial. It may, for example, become apparent when a document is used in cross-examination to refute unforeseen evidence-in-chief. Thus, whether a document is 'necessary' to fairly dispose of proceedings is to be understood in the broad sense of embracing any document which has value, in the sense of at least apparent relevance, and fairly disposing of proceedings, even if it might not readily be seen, at the pre-inspection stage, necessarily to be admissible in evidence: see Apache Northwest (supra) at 376. Cases will be rare in which, prior to production of documents, a subpoena will be set aside as an abuse of process on the ground the documents by description are manifestly irrelevant to the subject proceedings, or are incapable of bearing upon matters of credit pertinent to the proceedings: see Brand v Digi-Tech [2001] NSWSC 425.
(3)At least one object of the rule permitting early return of subpoenas is to appraise the parties of the strengths and weaknesses of their case at an early stage. Hence, no narrow view as to the legitimate purposes of a subpoena ought to be taken: see Khanna v Lovell White Durrant [1995] 1 WLR 121 at 123.
(4)There is no requirement that to avoid the stigma of fishing, a party must already by in possession of some evidence before issuing a subpoena. Historically the concept of fishing was not concerned with the prior possession of evidence, but rather the prior pleading of issues for which the evidence sought would be relevant: see Bailey & Ors v Beagle Management Pty Ltd & Ors (2001) 105 FCR 136 at 143 – 144; Chapman v Luminis Pty Ltd [2001] FCA 1580 at [48]. In the interests of a fair trial, litigation should be conducted on the footing that all relevant documentary evidence is available: see Bailey (supra) at 143.
To these principles (perhaps an expansion of par (3) above) may be added that legitimate forensic purposes may include purposes relevant to management of cases prior to trial, including preparation for mediation and the encouragement of settlement: Areva NC (Australia) Pty Ltd v Summit Resources (Australia) Pty Ltd [2007] WASC 276 [22] ‑ [23] (Martin CJ).
Second, and more generally, the court has an inherent power to prevent misuse of its procedures in a way which, although not inconsistent with the literal application of procedural rules of court, would nevertheless be 'manifestly unfair to a party to litigation ... or would otherwise bring the administration of justice into disrepute among right-thinking people': Walton v Gardiner [1993] HCA 77; (1993) 177 CLR 378, 393; Jeffery & Katauskas Pty Ltd v SST Consulting Pty Ltd [2009] HCA 43; (2009) 239 CLR 75, 93 [28].
The principles applied in making orders regarding the inspection of subpoenaed documents were summarised by Beech J in Boase v Axis International Management Pty Ltd [No 3] [2012] WASC 498 [10] - [21]:
The first question is whether the documents, or the passages to which objection is taken, have apparent relevance to the litigation.
Apparent relevance is a low threshold. It is not a question of whether it appears that the party issuing the subpoena could, or could probably, tender the document in evidence. It is enough to establish apparent relevance if a document or class of documents gives rise to a line of enquiry relevant to the issues before the trier of fact, including for the purpose of meeting the opposing case by way of cross-examination: Apache Northwest Pty Ltd v Western Power Corporation [1998] WASCA 127; (1998) 19 WAR 350, 374; Stanley v Layne Christensen Co [2004] WASCA 50 [9]; Commonwealth of Australia v Albany Port Authority [2006] WASCA 185 [18].
In advance of trial, the determination of whether a document is relevant is a difficult one: National Employers' Mutual General Association Ltd v Waind [1978] 1 NSWLR 372, 385; Apache Northwest Pty Ltd (373).
In determining relevance, the difficulty of assessing relevance prior to trial must be taken into account. The necessity for having a document in order to fairly dispose of the issues at trial might well not become apparent before trial: Apache Northwest Pty Ltd (374, 376, 379); Stanley v Layne Christensen Co [9]; Commonwealth of Australia v Albany Port Authority [18].
Ultimately the relevance of the documents produced will be a question for determination at the trial. It is not appropriate for the court to embark on a detailed preliminary enquiry involving evidence from the party seeking to issue the subpoenas and the recipient of the subpoenas: Apache Northwest Pty Ltd (379).
Documents can be inspected whether or not they are in an admissible form: Waind (385); Apache Northwest Pty Ltd (372).
One object of the rule permitting early return of subpoenas is to appraise the parties of the strengths and weaknesses of their case at an early stage in proceedings. Accordingly, a narrow view should not be taken as to the legitimate purposes of a subpoena of apparent relevance: Stanley v Layne Christensen Co [9]; Commonwealth of Australia v Albany Port Authority [18].
The determination of whether inspection should be permitted of documents produced on subpoena is separate from the question of whether to grant leave to issue the subpoena: Waind (381); Apache Northwest Pty Ltd (371); Stanley v Layne Christensen Co [11] [13].
Further, the question of inspection is distinct from the question of whether a document may be tendered at trial: Waind (381); Apache Northwest Pty Ltd (371). The tests are very different. Many documents might meet the apparent relevance threshold for inspection, but fall well short of being sufficiently relevant to be admissible at trial.
If a document is apparently relevant, inspection will usually be permitted, even though it is not admissible as it stands and the party seeking the document has not undertaken to tender it or use it in cross-examination: Waind (385); Apache Northwest Pty Ltd (373 - 374).
Confidentiality is not of itself a ground to refuse inspection of an apparently relevant document. In the end, the public interest in the administration of justice prevails over the interest in confidentiality of the information: Apache Northwest Pty Ltd (379); Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] VicRp 54; [1996] 2 VR 34, 38. However, confidentiality can be taken into account, together with any assessment of the extent of the document's apparent relevance, in the exercise of discretion whether to permit inspection: Apache Northwest Pty Ltd (380 381).
The principles of case flow management and the objects in O 1 r 4(b) of the Rules of the Supreme Court 1971 (WA) must be kept in mind in the exercise of discretion whether to permit inspection: Wookey v Quigley [No 5] [2011] WASC 275 [35].
The Rules do not, at least expressly, permit redaction of documents provided on subpoena.
The court may permit first inspection by the party to whose affairs the documents relate, to enable him or her to raise any claims of privilege, or perhaps to seek confidentiality orders where the documents include information to which such orders are appropriate.
The challenge to the subpoenas
The plaintiff challenges the subpoenas on three grounds.
First, the defendants did not comply with the Service and Execution of Process Act 1992 (Cth) in the service of the subpoenas in New South Wales and Victoria in that, from the cover letter sent with each, it appears that no conduct money was paid or tendered.
The Service and Execution of Process Act does not use the term conduct money. Section 32(1) provides:
Service of the subpoena is effective only if, at the time of service or at some other reasonable time before the person to whom the subpoena is addressed is required to comply with it, allowances and travelling expenses sufficient to meet the person's reasonable expenses of complying with the subpoena are paid or tendered to the person.
Section 32 must be read in context with s 34, which provides for how a recipient may comply with a subpoena that requires only production of a document or thing, and s 35, by which
(1)A person served with the subpoena is entitled to payment of an amount equal to the reasonable expenses incurred by the person in complying with the subpoena.
(2)The amount must be paid:
(a)if the subpoena was issued at the request of a person--by that person; or
(b)in any other case--by the State in which the subpoena was issued.
(3)The court or authority that issued the subpoena may make orders to ensure that the person complying with the subpoena receives the exact amount of the person's reasonable expenses in so complying.
There is, in my opinion, a question about whether s 32 applies to a subpoena that does not require attendance. It is, however, unnecessary to answer it in this case. Section 32 provides that service of the subpoena is not effective. It does not address the validity of the subpoena. And where the recipient has complied, there is no utility in setting aside the subpoena on that ground. The position of the recipient is protected under s 35.
Second, the NAB subpoena does not comply with the requirements of O 36B, as amended, in that it:
1.was not in the form of form 21A;
2.omitted the form 22A subpoena notice and declaration; and
3.did not attach the correct cover sheet.
The subpoena was issued the day that the amendment of O 36B, which included changing the prescribed forms, came into operation.
By O 2 r 1
Where …at any stage in the course of or in connection with any proceedings, there has, by reason of anything done or left undone, been a failure to comply with the requirements of these rules, whether in respect of time, place, manner, form or content or in any other respect, the failure shall be treated as an irregularity and shall not nullify the proceedings, any step taken in the proceedings, or any document, judgment or order therein.
(2)Subject to subrule (3) the Court may, on the ground that there has been such a failure as is mentioned in subrule (1), and on such terms as to costs or otherwise as it thinks just, set aside either wholly or in part the proceedings in which the failure occurred, any step taken in those proceedings, or any document, judgment or order therein or exercise its powers under these rules to allow such amendments (if any) to be made and to make such order (if any) dealing with the proceedings generally as it thinks fit.
The use of the wrong form was an irregularity. There is no question of deliberate non-compliance, or any intention to mislead the recipients. There is no evidence that either the plaintiff or the subpoena recipient has been prejudiced in any way by the use of the incorrect form. The recipient has provided the documents requested. I do not believe that it would be in the interests of justice, or consistent with case management principles, to set aside the subpoena for a non‑compliance of this nature.
The third ground is that the documents called for are an abuse of process and exceed the scope of any legitimate forensic purpose that might be served by the issue of subpoenas to those addressees. The complaint in this regard includes that a subpoena should not be used in substitution for an application for discovery of particular documents. As noted above, the defendants had sought discovery of both classes of documents sought on subpoena. The plaintiff gave limited (redacted) discovery of bank records, and submits that there is simply nothing more to see. She refused to produce documents relating to her income protection insurance on the grounds of relevance.
The NAB subpoena
It is in issue on the pleadings whether the plaintiff received payments from debtors of the first defendant during 2016. The admissions made regarding the three payments means those three payments are not in issue, but that does not detract from the relevance of the balance of the statements.
The documents sought relate also to the defendants' claim in par 7 of the defence, which is admitted only in part, and may also provide evidence about whether the plaintiff was receiving income protection insurance during the period to 21 April 2016.
The subpoena to NAB is properly confined as to the period for which documents are sought. I am satisfied that the scope of the documents sought - confined to the 2016 year - does not exceed any legitimate forensic purpose in calling for their production.
The plaintiff relies on Rankilor v City of South Perth [2016] WASCA 28 [38], where the Court of Appeal said:
38Finally, on the fourth ground, the primary judge was correct in observing that it is inappropriate to use a subpoena as a substitute for discovery. There is, by O 26 of the Rules of the Supreme Court 1971 (WA), a procedure for discovery of documents by which a party may obtain from the other party documents relating to any matter in issue in the action and, if a party is dissatisfied with the extent of discovery made by an opposing party, a procedure by which discovery of particular documents may be sought. The principles to be applied in respect of those procedures are well‑settled. A subpoena to produce documents to the court is intended for a different purpose and is subject to different rules. A subpoena is not a different means by which the purposes of O 26 may be achieved and it is inappropriate to use a subpoena in substitution for an application for discovery or discovery of particular documents. That has long been established: see The Commissioner for Railways v Small (1938) 38 SR (NSW) 564, 574 ‑ 575; Kizon v Palmer (1997) 75 FCR 261, 271 ‑ 272; Diddams v Commonwealth Bank of Australia [1998] FCA 497; Australian Competition and Consumer Commission v Shell Co of Australia Ltd (1999) 161 ALR 686 [49] ‑ [51]; NSW Commissioner of Police v Tuxford [2002] NSWCA 139 [19].
I do not believe that the considerations referred to in Rankilor and the authorities cited in it exclude all use of subpoenas to a third party where the documents requested, or documents containing the same information, might have been obtained on discovery. In each of Rankilor; The Commissioner of Railways v Small (1938) 38 SR (NSW) 564; Diddams v Commonwealth Bank of Australia [1998] FCA 497 and Australian Competition and Consumer Commission v Shell Co of Australia Ltd (1999) 161 ALR 686, the court was concerned with a subpoena issued to a party. In Commissioner of Police v Tuxford [2002] NSWCA 139, although the subpoena recipient was not a party, he was described as an interested party rather than a stranger to the litigation; and the subpoena - which was of extraordinary breadth - was described as a substitute for discovery. Kizon v Palmer (1997) 75 FCR 261 turned on a different principle: the issue of the subpoena was an abuse of process because it was an attempt to do indirectly what had been prohibited directly. In Small and Diddams, the court was also concerned with the effect of the issue of a subpoena for return at trial, greatly impeding the progress of the trial of the action.
The defendant refers to Darbyshire v Gilbert [2006] WASCA 13; (2006) 31 WAR 558 [16] - [17] where Pullin JA, with whom Roberts-Smith JA agreed, said that the fact that the documents had earlier been sought on discovery, and refused, did not prevent them being obtained by subpoena from a third party.
In summary, I am not satisfied that the issuing of the subpoena to NAB is an abuse of process. I am satisfied that the documents have apparent relevance to the litigation, in the sense described in the authorities. They are not documents of a kind which could attract a claim of privilege. The fact that they had earlier been sought on subpoena is not conclusive.
I am not satisfied that the subpoena should be set aside.
The plaintiff submits that the court should permit her to first inspect the documents produced and redact any material she considers irrelevant. The documents are bank statements. I accept that they may include records of transactions which are not relevant. I also accept that the financial information disclosed in bank statements may include confidential information, although the confidentiality of the information is preserved by the implied undertaking. Generally, a party who seeks protection additional to that given by the implied undertaking bears the onus of establishing why the court should impose that additional protection: see ICAP Australia Pty Ltd v Forrest Moebes [2010] NSWSC 738 [8] and the cases there cited.
I will permit the plaintiff to first inspect the documents returned on the NAB subpoena.
I will not, however, permit the plaintiff to amend or mask parts of the documents. If there are specific entries in the statements which the plaintiff contends should be deleted, she will have five days from when she inspects the documents to apply for orders permitting her to redact specified entries. The defendants will otherwise be permitted to inspect.
The CML subpoena
The subpoena to CML includes apparently relevant documents. On the pleadings, including the further and better particulars, whether the plaintiff claimed or received income protection insurance in the periods from around January 2015 to 30 June 2015, and from around 1 July 2015 to 21 April 2016, may bear on the issue of whether the distribution to her on a pro rata basis during those periods was fraudulent. The documents relating to that period are also apparently relevant to a likely factual issue: whether the trustee made the pro rata distributions with the plaintiff's knowledge and consent.
I also accept the defendants' submission regarding the forensic purpose of documents relating to periods outside January 2015 to April 2016. The documents relating to the period before 2015 are relevant to the plaintiff's understanding of the terms on which she held units in the trust, including the basis on which the distribution to unit holders would be calculated. Claims or payments made after April 2016 may bear on the plaintiff's claim that she was entitled to receive distributions on her income units after 21 April 2016.
The defendants cannot, however, justify the scope of the subpoena. The request is limited to a specified period only in relation to claims made. For other documents, including applications for insurance and any policies, it has no temporal limitation. Documents relating to periods well outside the time of the plaintiff's engagement with Hammond & Roberts do not meet the test of relevance.
Where CML has complied and returned documents, it may appear futile to set aside the subpoena. The defendants should not, however, be entitled to inspect the documents returned, and setting aside the subpoena is the most practical order.
It should be apparent from these reasons that I believe the plaintiff needs to reconsider its position on discovery of at least some of the CML documents.
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