Wingecarribee Shire Council v Lehman Brothers Australia Ltd (No. 4)

In the matter of Wingecarribee Shire Council v Lehman Brothers Australia Ltd (No. 4), the court was asked to determine the validity of a subpoena issued to Standard & Poor's (Australia) Limited. The subpoena sought the production of various internal documents, including those related to the methodology or modelling for rating financial products. Lehman Brothers Australia Ltd (In Liquidation) sought to set aside the subpoena, arguing that it was overly broad and lacked a legitimate forensic purpose.

The legal issues at the heart of the case revolved around the relevance and legitimacy of the subpoena. Specifically, the court had to decide whether the documents sought were sufficiently relevant to the facts in issue and whether the subpoena served a legitimate forensic purpose. The court also had to consider whether the subpoena was framed in a manner that would avoid undue burdens or inconvenience to the subpoenaed party.

In its reasoning, the court held that the documents described in the subpoena were relevant and necessary to the proceedings, as they could potentially confirm or negate the allegations made by the councils against Lehman Bros. The court noted that the internal working papers and modelling documents of Standard & Poor’s could provide crucial insights into the validity of the allegations, thus serving a legitimate forensic purpose. The court also acknowledged the importance of narrowing the scope of the subpoena to avoid undue burdens on the subpoenaed party, but found that the proposed amendments made by the parties were satisfactory. As a result, the court refused to set aside the subpoena.

The court ordered that the application to set aside the subpoena be dismissed, and that Lehman Brothers Australia Ltd (In Liquidation) pay 40% of the costs of Standard & Poor’s (Australia) Pty Ltd. The subpoena was then stood over to a later date to allow for further negotiations and amendments. The court noted that Standard & Poor’s (Australia) Pty Ltd had agreed to the substitution of the schedule to Exhibit SP-L2, reserving its rights regarding costs and the legitimacy of the subpoena for future argument.