te el te CATCHWORODS PRACTICE - subpoena - against non-party ~- pleadings not closed ~ substitute for discovery ~- whether too wide - test of validity - whether subpoena must be for purpose of hearing. EVIDENCE - public interest privilege - confidential information - balancing exercise. Federal Court Rules, 0.27, r.4 Greyhond Australia Pty. Ltd & Ors. v. Deluxe Coachlines Pty. Ltd. & Ors. Qld G46 of 1986 PINCUS J. BRISBANE 25 June 1986 em et eee "ee aL" IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ) OLD G46 of 1986 GENERAL DIVISTON BETWEEN : AND: JUDGE MAKING ORDER: DATE OF ORDER: WHERE MADE: GREYHOUND AUSTRALIA PTY. LTD. First Applicant GREYHOUND COACHES PYY. LTD. Second Applicant GREYHOUND (SOUTHERN) PTY. LTD. Third Applicant DELUXE COACHLINES PTY. LTD. Pirst Respondent DELUXE OPERATIONS Pry, LTD. Second Respondent GEOFFREY H. McINTYRE Third Respondent LEONARD RODEN Fourth Respondent MINUTES OF ORDER PINCUS J. 25 June 1986 BRISBANE eee eg te eye Pe Rte ee OI i ay a THE COURT ORDERS THAT: l. NOTE: The subpoena issued on 5 June 1986 directed to The Director, Mr. G.K.R. Reid, Federal Bureau of Transport Economics, be set aside. The Applicants pay the Federal Bureau of Transport Economics ' costs of and incidental to this application, to be taxed. Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. ep rene 7 Se ne co ns he? IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ) QLD G46 of 1986 GENERAL DIVISION ) BETWEEN: GREYHOUND AUSTRALIA PTY, LTD. First Applicant AND: GREYHOUND COACHES PTY, LTD. Second Applicant AND: GREYHOUND (SOUTHERN) PTY. LTD. Third Applicant AND: DELUXE COACHLINES PTY. LTD. First Respondent AND: DELUXE OPERATIONS PTY. LTD. Second Respondent AND: GEOFFREY H. McINTYRE Third Respondent AND: LEONARD RODEN Fourth Respondent PINCUS J. 25 June 1986 REASONS FOR JUDGMENT These are two applications relating to documents produced under a subpoena duces tecum; they seek the return of the documents. One of the applications is by the respondents in the principal proceedings, and the other is brought on behalf of the oo rae LT oe oo) whies: Lo ad EERIE II Ee" os one - =a 2. person to whom the subpoena was addressed, namely the Director of the Federal Bureau of Transport Economics, Mr. G.K.R. Reid. In these reasons the parties will be given the designations they have in the principal proceedings. The principal proceedings seek injunctive relief and damages in respect of an alleged breach of s.52 of the Trade Practices Act 1974. The applicants run long distance bus services, as do the first two respondents. The applicants complain that those respondents have falsely represented, in substance, that they carry more people around Australia than any other coachline; the applicants say their "Greyhound Coachline" is the biggest. Some details of the statements complained of are set out below. On 5 June 1986, there was signed by the District Registrar a subpoena duces tecum at the instance of the applicants purporting to command the attendance of Mr. Reid at the court on 12 June at 9.30 a.m. The documents the subject of the subpoena were set out as: "All papers, letters, copies of letters, transcripts of evidence and other writings in your custody possession or power containing any entry, memorandum or minute relating to the participation by Deluxe Coachlines, Deluxe Coachlines Pty. Ltd. and/or Deluxe Operations Pty. Ltd. in the Australian long distance coach industry since January, 1983, to the present time." It will be noted that the documents required cover a period of three and a half years - a point further mentioned below. I was told that some documents had been produced to the court before 12 June in response to the subpoena, under 0.27, r.4. a aN Ck 4as: 8" eRe EIE A Pe Ane a eee hee 3. On 12 June, the principal application came before me for directions and I made, by consent, certain procedural orders relating to pleadings and the like. I also ordered, at the request of the applicants, that the documents produced pursuant to the subpoena of 5 June 1986 might be inspected by the solicitors for any party at the registry and made provisions for photocopying. Although the order last mentioned was not opposed, there is an uncontradicted affidavit saying that the solicitors for the respondents were not aware of the subpoena until immediately before the directions hearing and had no instructions upon that matter. It does not appear, therefore, that any consequence adverse to the respondents should flow from their not having opposed the order for inspection of the documents produced pursuant to the subpoena. At some subsequent date, an arrangement was made between the parties and Mr. Reid that inspection of the documents pursuant to the order would be deferred pending the applications presently before me. Mr. D. North, who appeared for Mr. Reid, said that the subpoena should be set aside for two reasons; firstly, on the ground of public interest privilege, and secondly on the ground that the subpoena sought, in substance, discovery from a non-party and was too wide. To support the first ground, material was filed showing that the Bureau of Transport Economics is given information by people in the industry on a confidential basis, the te a re te tee ee en eee gy ee anys ee ee eee te ee ree o fate v--— —-. a, -7e star ar Sr Veer s," a a eo ot Fe 4. gathering of such information being important for reasons stated in the material. The argument was that if such information, which could be of value to competitors, was disclosed in court, the would have greater difficulty in performing its functions; those engaged in the industry would not be inclined to give it further information. Counsel referred, among other cases, to the decision of the House of Lords in D. v. National Society for the Prevention of Cruelty to Children £19783 A.C. 171. There, confidential information about neglect or ill-treatment of children was held to be protected by public interest privilege. Lord Diplock said at p.218, speaking of the analogy of police informers: "If their identity were liable to be disclosed ina court of law, these sources of information would dry up and the police would be hindered in their duty of preventing and detecting crime." Mr. Morris, who appeared for the applicants, argued that Che law draws a distinction between protecting the means of collecting information and protecting the information itself. He said that, here, the information which the Bureau wished to keep secret could, in any event, be obtained in the course of the proceedings by discovery against the respondents. To a large extent, but not necessarily in its entirety, that seems to be correct. Nevertheless, the assurance of confidentiality which the Bureau gives to potential suppliers of information to it must be, to some extent, eroded by enforced disclosure of that information to the court, even where much of the information could be obtained other than by access to the Bureau's documents. we Pa ae oh ae a oe 2 2 2 falls within the scope of public interest privilege. 5. On the evidence, I hold that the Bureau's information In Sankey v. Whitlam 142 C.L.R. 1 at p.38, Gibbs A.C.d., as he then was, said: Here, information supplied to the Bureau is to "The general rule is that the court will not order the production of a document, although relevant and otherwise admissible, if it would be injurious to the public interest to disclose it. ... The court must decide which aspect of the public interest predominates, or in other words whether the public interest which requires that the document should not be produced outweighs the public interest that a court of justice in performing its functions should not be denied access to relevant evidence." the public interest in preserving the confidentiality of be balanced against the interest mentioned in the passage just quoted - i.e. that the court not be denied access to the relevant information. It is my view to the that the balancing exercise must be performed having regard are sought; that brings me to Mr. North's second objection. stage at which, and the purpose for which, the documents Counsel argued that (in general, at least) a subpoena should not be used except to obtain evidence for a hearing. was It - said that to issue a subpoena against a non-party for production at a merely procedural hearing, at which directions are to be given for delivery of pleadings and the like, the is to allow subpoena to be used simply for the purpose of discovery against a non-party. The question whether the procedure just mentioned is permitted under the practice of this Court does not receive as clear an answer from the authorities as one would wish. A i cs "avs Wem oa Peete ee 6. starting point is Trade Practices Commission v. T.N.T. Management Pty. Ltd. (No. 1) 55 F.L.R. 197,in which Bowen C.J. had before him applications to set aside subpoenas served on non-parties and requiring production to the Court some four weeks before the date of trial. The proceedings were instituted before the Federal Court Rules came into operation and were thus governed, principally, by the High Court Rules. It was argued that, in the absence of a specific provision in those rules authorising the subpoena to have a return date other than the date of hearing, the subpoenas in question could not be supported. Bowen C.J. rejected that argument, saying at p.200: "Where the matter is left at large the court, in my opinion, has power to order that a subpoena be returnable at a date prior to the date of hearing." The point was considered by the Full Court in Lucas Industries Utd. v. Hewitt (1978) 18 A.L.R. 555. That was an action for infringement of a patent in which an order had been made that expert evidence was to be on affidavit; the Full Court held that the order contemplated that the evidence of the experts would be complete before the hearing commenced. Again, the case was not governed by rules of this Court because it was one instituted in the High Court which had been remitted to the Supreme Court of Victoria. The subpoenas were objected to as an attempt to obtain discovery, but Smithers J., with whose reasons the other judges agreed, held otherwise, because of the order I have mentioned. When taking evidence on affidavit, his Honour held (pp.565, 566) just as when evidence is wo een en sate tee ae oe ae ee Sie em pee eee rome 7. taken on commission, production of documents may be enforced in relation thereto before the trial. In the instant case, there was said to be a "substantial similarity with the situation which obtains in relation to taking of evidence on commission". His Honour went on: "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." It seems clear that this statement of principle did not depend upon any peculiarity of the rules of the Victorian Supreme Court. In Wayne v. Mudgeeraba Village Estates Pty. Ltd. (unreported, 14 September 1984) Spender J. relied on these cases in upholding a subpoena to a non-party to produce documents shortly before trial. In Jet Corporation Australia Pty. Ltd. v.- Petres Pty. Ltd. (unreported, 3 May 1985), documents were produced under a subpoena by a non-party who objected to inspection. One of the objections was on the basis of prematurity. Northrop J. said at p.9 of his reasons: "It is said that the issues are not yet fully clarified; the hearing is still very much in the future; that this is a matter that should he deferred until much closer to the time of trial. In 'my opinion, that submission also should he rejected. For reasons already given, it is apparent that this is a most complex and difficult action commenced by the applicant. The applicant is facing difficulties in obtaining the necessary documentation to enable it to frame properly its claim..." rn pan] meas "aT ey Pte ad fh - eee oo ae iad sara oe u 8. Of the decisions I have seen, that just referred to is the one which most clearly approves the use of a subpoena for a purpose having no immediate connection with the trial, or with a taking of evidence prior to trial; the subpoena was issued simply to gather information. To revert to the T.N.T. case (supra), Bowen C.J. there referred, with approval, to the decision of the English Court of Appeal in Elder v. Carter £18901 25 Q.B.D. 194. That was concerned with the interpretation of an English rule rather like our 0.15, yvr.13 in that it gave the Court power to order "at any stage of the proceedings" the production of documents. Our rule, however, applies only to an order against a party, whereas under the English rule, the Court could order the attendance of any person for the purpose mentioned. The Court read the rule down as not authorising an order for the production of documents other than for the purpose of a pending hearing. Recently, in Botany Bay Instrumentation and Control Pty. Ltd. v. Stewart (1984) 3 N.S.W.L.R. 98 at p.100, Powell J. relied on Elder's case and other authority for the proposition that a subpoena will be set aside unless it was issued for the purpose of a pending trial, hearing or application. It is not easy to reconcile that line of authority with the decision in Jet Corporation (supra). In this case, there is no pretence by Mr. Morris that the purpose of the subpoena was related to the only pending hearing, which was a mere application for procedural directions. It was, in substance, designed to get discovery against a third party. Condemnation of a subpoena as being discovery in disguise ae a+ a a moat te. a ae oe yey ew 9. 1S usually based on the notion that a subpoena must identify the documents in question more precisely than is necessary for the purpose of discovery. The distinction is, however, fundamentally unsound: discovery ordered against a third party, where that procedure is permissible, may relate only to specific documents; see Re Tallebudgera Estates Pty. Ltd. (1970) Qd.R. 63 at 74E. A subpoena, on the other hand, may relate to all documents ina particular category, if their description is clear enough. Although the rules of this Court make no express provision for what is, in effect, discovery against a non-party, it appears to me that the better view is that a subpoena may be used for that purpose, in accordance with the principle stated in the Lucas Industries case, namely that when "... considerations of justice and convenience require production of relevant documents at some particular time ..." production should be ordered. I therefore reject the proposition that the procedure here used is bad because open to the criticism that it is, in substance, an attempt to obtain discovery from a third party. As mentioned above, Mr. North also objected on the ground that the subpoena was too wide. He referred to the reasons of Jordan C.J. in the Commissioner for Railways v. Small (1938) 38 S.R.N.S.W. 564 at 573: "A weit of subpoena duces tecum may be addressed to a stranger to the cause or toa party. If it be addressed to a stranger, it must specify with reasonable particularity the documents which are required to be produced. A subpoena duces tecumn ought not to be issued to such a person requiring him to search for and produce all such documents as he may have in his possession or power relating to a particular subject matter." ee ee pe te eee ee Te —— Fat tha SEES ee A ER 10. Here, the subpoena is framed in such terms as neatly to be caught by the learned Chief Justice's dictum. It seeks production of all papers etc. "relating to the participation by" various named companies in the Australian long distance coach industry since a particular date. It is my view, however, that the statement of Jordan C.J. should not be so read as to require a holding that the subpoena is bad on that account. The fundamental rule is that the subpoena must not be oppressive, particularly where delivered to a stranger. One reason for holding a subpoena oppressive may be that it is so framed as to require that stranger to "form a judgment as to what is relevant to the issue joined in a proceeding": Waind v. Hill and National Employers' Mutual Association Ltd. (1978) 1 N.S5.W.L.R. 372 at 382A (per Moffitt P.). The mere fact, however, that one of the limitations included in the description in the subpoena is that the documents must relate to a particular subject matter does not necessarily render it oppressive, as long as the subpoena specifies with reasonable particularity the documents which are required to be produced. I therefore reject the contention that the subpoena is oppressive on the ground of its lack of particularity. (As to the necessity for particularity, see also Lane v. Registrar (1981) 35 A.L.R. 322 at p.332.) The last point taken on this subject was that the subpoena sought the production of documents as far back as January 1983. The statements complained of in the applicants' pleading, speaking generally, appeared to relate to the situation as at the end of 1985 and in the current year - also, conceivably, in 1984. But the requirement that documents relating to the 1983 year would - a orn moh ae 11. not, in itself, make the subpoena bad because the statements complained of are not such as absolutely to exclude that year from consideration. Nevertheless, the reach of the subpoena as to time is a factor tending against the applicant in the ultimate exercise of discretion. To summarise my conclusions to this point: 1. The subpoena is issued against a person not party to the litigation and its real purpose is to seek what is, in effect, discovery against that party. 2. The subpoena is not necessarily bad on that account, the description of the documents required being sufficiently precise, although the criterion of inclusion is that of having relevance to a particular subject matter. 3. Since the information reflected in the documents was obtained in such circumstances as to necessitate consideration of "public interest privilege", there is a balancing exercise to be performed, Two further points should be made about the case. The first is that the applicants, in defending the subpoena, did not attempt to rely upon the fact that it had largely been complied with, except insofar as it threw light upon the extent to which the Bureau would truly be embarrassed by inspection of the documents. The second is that the solicitors for the respondents —— a ta SF Yi 'ietne oe eSATA 12. wrote a letter dated 6 February 1986 relating to the correctness of the statements complained of, in which they said of one advertisement that the information upon which it was based was supplied by the Bureau. That statement, which has not been controverted, inclined me at one stage to hold the subpoena should simply be let stand. The circumstances in which, and the person by whom, the information is said to have been supplied, are not specified, and it would appear from other material that any such supply of information must have been unauthorised by the Bureau. Nevertheless, it must be said that 1t comes particularly ill from the respondents now to complain of the disclosure of documents which contain information on the basis of which they have defended the statements made; that comment does not apply to the Bureau. Although there 1s authority for use of a _ subpoena against a third party early in the proceedings as a means of obtaining what is, in effect, discovery, that process should ordinarily be allowed only when it is clearly seen to be necessary. As a general rule, the court should not, in my view, trouble strangers to the proceedings with subpoenas duces tecum except in respect of a hearing at which the subpoenaed documents may be used. Of course, it will often be convenient to make a subpoena returnable in advance of the set date of hearing to allow time for analysis of the documents produced. Here, the pleadings have not been completed and it may appear in the end that the issues between the parties are not such en =e tte Ao Ser erEseeR 7 te En ake cee ce ne ane a 13. as to require production of the Bureau's documents in order to ascertain the facts. More importantly, the applicants may well obtain, on discovery against the respondents in the ordinary course of practice, such documents as to make production of any material by the Bureau unnecessary. They may obtain, for example, copies of the very written information which they seek from the Bureau. Performing the functiron mentioned in Sankey v. Whitlam (above) at pp.38 and 39, I am of opinion that the public interest in preservation of confidentiality of the Bureau's records clearly outweighs the interest of the public that the Court be not precluded from getting at the truth. It would, no doubt, be convenient for the applicants to have access to the documents in question now, but there is no demonstrated necessity that they do so. To the contrary, 1t seems likely that they will incur no significant disadvantage 1n pursuit of their claim if the subpoena 1s set aside. If, for the purposes of the trial, a similar subpoena is issued, a different balancing exercise will have to be performed and I say nothing as to the likely outcome of that. On the application by Mr. Reid on behalf of the Bureau, it will be ordered that the subpoena be set aside with costs. It will also be ordered that the documents in the Court''s possession, produced pursuant to the subpoena, be returned to the Federal Bureau of Transport Economics. The respondents have, as I mentioned, sought similar relief. They had no legitimate interest in the question of meee ees ore wee pe ee cn 2 eo ae | At a a27 eX RnR ee Mes SEPEMAN DOMED, Te Ane . * 14. confidentiality of the documents, but supported the contention, Which has been successful, that the use of this process was at least premature. Nevertheless, I do not propose to make any order for costs in favour of the respondents, in view of the information in their solicitor's letter, referred to above. 1 certify that this and the 13 preceding pages are a true copy of the reasons for judgment herein of His Honour Mr, Justice Pincus Ve Cle Gio Associate Dated @5 pom (FEE m+ ne nnn ep ee ee ne ee