a LIMITED CISTRisUTION ONLY NCT SUITABL2 FOR REPORTING IGP6 ee c RDS PRACTICE AND PROCEDURE - Subpoena duces tecum - Notice to produce - whether an abuse of power, fishing, oppressive or for an ulterior purpose - extent to which party needs to disclose documents in relation to its financial position - application for security for costs pending - where burden of proof lies - whether 0.15 rr.10 and 11 of the Federal Court Rules operate to require production of documents filed in relation to interlocutory proceedings - factors weighing on exercise of Court's discretion. 0.15 rr.10, 11 Federal Court Rules P, c - LTD. v WHITE INDUSTRIES No. G198 of 1986 Ryan J Melbourne 18 April 1988 IN THE FEDERAL COURT OF AUSTRALIA ) ) QUEENSLAND DISTRICT REGISTRY ) No. G198 of 1986 ) ) GENERAL DIVISION BETWEEN: CABOOLTURE PARK SHOPPING CENTRE PTY. LTD. (Applicant) AND: WHITE INDUSTRIES (QLD) PTY. LIMITED (Respondent) AND: WHITE INDUSTRIES (QLD) PTY. LIMITED (Cross-Claimant) AND CABOOLTURE PARK SHOPPING CENTRE PTY. LTD. (Cross—Respondent ) Coram: Ryan J. Date: 18 April 1988 Place: Brisbane MINUTES OF ORDER THE COURT ORDERS: 1. That Caboolture Park Shopping Centre Pty. Ltd. ("Caboolture Park") by 5.00 p.m. on 19 April 1988 comply with the subpoena issued by White Industries (Qld.) Pty. Ltd. ("WIQ") on 7 March 1988 by supplying to the solicitors for WIQ a copy of each of the following documents:- (a) Profit and Loss Statement of Caboolture Park for year ended 30 June 1987; (b) Balance Sheet of Caboolture Park as at 30 June 1987; (c) Any auditor's or directors' reports or notes annexed to or forming part of the accounts referred to in sub-paragraphs (a) and (b) hereof; (d) Income Tax return of Caboolture Park for year ended 30 June 1987; (e) Each instrument of mortgage secured on the land on which the Caboolture Park shopping centre is erected. (f£) The valuation of the Caboolture Park shopping centre prepared by Messrs. Jones Lang Wootton in Or about July 1987. That except to the extent specified in paragraph 1 hereof the said subpoena be set aside. That the motion on notice dated 29 March 1988 by WIQ under Order 15 r£.10 of the Federal Court Rules be dismissed. 4. That access to the copy documents referred to in paragraph 1 of this order be confined to:- (a) (b) (c) not more than two solicitors, being members or employees of the firm Morris Fletcher & Cross engaged in the conduct on behalf of WIQ of the application for security for costs in this matter; counsel briefed to appear at the hearing of the application for security for costs; Marian Micalizzi of the firm Coopers & Lybrand, Chartered Accountants; PROVIDED HOWEVER that no access to any such document shall be granted to any particular such solicitor or counsel or the said Marian Micalizzi until there has been filed with the District Registrar of the Court in Brisbane an undertaking signed by that person in the terms of the Schedule to this order. That the costs of and incidental to the motion on notice by Caboolture Park dated 31 March 1988 and by WIQ dated 29 March 1988 be costs in the application for security for costs. 6. That the hearing of the application for security for costs commence at 10.15 a.m. on 21 April 1986 in Brisbane. NOTE: Settlement and entry of orders is dealt with in 0.36 of the Federal Court Rules. ~ SCHEDULE CABOOLTURE PARK SHOPPING CENTRE PTY. LTD. v_ WHITE INDUSTRIES (QLD.) PTY. LTD. G 158 Or 1986 UNDERTAKING OF in the State of HEREBY UNDERTAKE to the Court as follows:- 1. That I will not except with the prior consent of Caboolture Park Shopping Centre Pty. Ltd. or the prior leave of the Court or a judge thereof: (a) disclose to or discuss with any person other than a person whose signed undertaking, in like terms to this undertaking, has previously been filed with the District Registrar of the Court; (b) make any use other than for the purposes of an application for security for costs herein of; the contents of any document referred to 1n paragraph 1 of the Order of the Court made herein on 18 April 1988 or the information contained in any such document. Date Signature IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY No. G198 of 1986 GENERAL DIVISION BETWEEN: CABOOLTURE PARK SHOPPING CENTRE PTY. LTD. (Applicant) AND: WHITE INDUSTRIES (QLD) PTY. LIMITED (Respondent) AND: WHITE INDUSTRIES (QLD) PTY. LIMITED (Cross-Claimant)} AND: CABOOLTURE PARK SHOPPING CENTRE PTY. LTD. (Cross-Respondent) Coram: Ryan J. Date: 18 April 1988 Place: Brisbane REASONS FOR JUDGMENT ON PRODUCTION OF DOCUMENTS IN RESPECT OF APPLICATION FOR SECURITY FOR COSTS By notice of motion dated 7 March 1988, the respondent, White Industries (Qld.) Pty. Ltd ("WIQ"), has sought an order pursuant to s.56 of the Federal Court of Australia Act that the applicant, Caboolture Park Shopping Centre Pty. Ltd. - ("Caboolture Park"), provide security for WIQ's costs of the application herein which was commenced by Caboolture Park on 22 December 1986. In support of its application for security, WIQ relies on an affidavit of Mr Haley of its solicitors, sworn 9 March 1988, which has exhibited to it copies of articles in the financial Press suggesting that GSH Corporation Pty. Ltd. was seeking to acquire the shares in Hooker Corporation Ltd., which were not already owned by entities controlled by Mr George Herscu. It was further suggested that the proposed acquisition would be financed partly from the proceeds of sale of two large shopping centres owned by Mr George Herscu's family company, Hersfield Development Corporation Pty. Ltd. (""Hersfield"). Mc Haley has pointed to the fact that in a supplementary list of documents filed herein on behalf of Caboolture Park, Hersfield has been described as Caboolture Park's "agent". He also deposes that Mr George Herscu is a director of each of Caboolture Park, GSH Securities Pty. Ltd. and Ripper Investments Pty. Ltd. At the date of swearing Mr Haley's affidavit, the last annual return of Caboolture Park available on public search in the Queensland Corporate Affairs Office was that prepared to 30 June 1986 which disclosed that Caboolture Park had a paid up capital of $2.00 and had an excess of assets over current liabilities stated to be $14,381,173, of $2,618,827. Mr Haley further deposed that that return did not become available on public search until 23 December 1987 and that no financial data for Caboolture Park was disclosed by earlier returns available before that date. Mr Haley has also sworn that the only real estate of which Caboolture Park is the registered proprietor is the land on which the shopping centre at Caboolture Park is erected. The certificate of title to that land reveals that it is encumbered by two mortgages stamped to secure advances respectively of $3 million and $1,140,980. Mr Haley has also sworn to a belief on information from WIQ that it is concerned on the basis of the matters set forth in his affidavit that Caboolture Park will not be able to meet an order for WIQ's costs if one is made against it in these proceedings. WIQ's total costs have been estimated by Mr Monsour, a legal costs consultant, at $66,396 up to and including the first day of the trial of the application. In opposition to the application for security for costs, Caboolture Park, on 22 March 1988 filed an affidavit sworn that day by Augustus Ronald Pearce, the General Manager of Hersfield, which he described as the "agent" of Caboolture Park. Mr Pearce acknowledged that Hersfield proposed to sell two shopping centres which it owned, and contended that those proposed sales were in the normal course of Hersfield's business as a property developer. To the extent that they went beyond a report of the proposed sale of those properties, Mr Pearce dismissed the newspaper articles exhibited to Mr Haley's affidavit as "idle speculation as to the future activities of Hersfield". He also disavowed any present intention by Caboolture Park to sell the shopping centre at Caboolture Park. Amongst other things, Mr Pearce deposed that for the financial year ended 30 June 1987 Caboolture Park had an operating profit before tax of $1,341,514, and that for the year ending 30 June 1988 the operating profit before tax of Caboolture Park should be not less than $2 million. As well, Mr Pearce deposed that the shopping centre at Caboolture Park had been valued by Messrs. Jones Lang Wootton in July 1987 in excess of $20 million, and that as a result of rental reviews carried out in December 1987, Mr Pearce believes that the value of the shopping centre is now in excess of $20 million. Mr Pearce, by paragraph 7 of i "his affidavit, acknowledged that Caboolture Park had granted a mortgage over the shopping centre land to secure the cost of acquiring it and erecting the shopping centre, and that presently that mortgage secured total advances of $20,735,413. It was also acknowledged that Caboolture Park had granted a_ second Mortgage over the shopping centre land to secure a guarantee given by it to ANZ Banking Group Ltd. of the performance by GSH Securities Pty. Ltd. of its obligations to repay advances made by that Bank. However, Mr Pearce also deposed to his belief that GSH Securities Pty. Ltd. could meet all of its obligations to the ANZ Banking Group Ltd. Accordingly, Mr Pearce asserted that no occasion would arise for the enforcement of the guarantee against Caboolture Park, or if it did, there would he ample assets of GSH Securities Pty. Ltd. from which Caboolture Park would be fully indemnified. Paragraph 13 of Mr Pearce's affidavit contains the following sentence: "I verily believe that after a review of the financial records of the applicant, the applicant could meet an order for costs based on the costs calculation made by Mr Monsour." WIQ''s solicitors were then prompted to write on 23 March 1988 to Caboolture Park's solicitors seeking inspection of the following documents which were said to have been referred to in various paragraphs of Mr Pearce's affidavit of 22 March 1988:- "1. Caboolture Park's annual return for the financial year ended 30 June 1987, referred to in paragraphs 3(b) and 4 of the affidavit. 2. Caboolture Park's financial accounts for the financial year ended 30 June 1987, referred to in paragraph 4. 3. The formal valuation of the Caboolture Park Shopping Centre prepared by Jones Lang Wootton in July 1987, referred to in paragraph 5. 4. The rental reviews, referred to in paragraph 6. 5. The 'security' and 'guarantee' documents referred to in paragraphs 7, 8 and 10. 6. The financial accounts of GSH Securities Pty Ltd for the financial year ended 30 June 1987, referred to in paragraph 9. 7. Caboolture Park's 'financial records' referred to in paragraph 13." The same documents were specified in a Notice to Produce given by WIQ to Caboolture Park under 0.15 1.10 of the Federal Court Rules. By letter dated 24 March 1988, the solicitors for Caboolture Park replied to the letter dated 23 March 1988 from the solicitors for WIQ as follows (omitting formal parts):- "1. Paragraph 4 of Mr Pearce's affidavit states that the annual return for the financial year ended 30 June, 1987 will be lodged by 31 March, 1988 with the Commissioner for Corporate Affairs. In view of this statement by Mr Pearce we do not understand why you wish to inspect our client's copy of the document instead of obtaining a copy from the Companies office. 2. The financial accounts for Caboolture Park Shopping Centre for the financial year ended 30 June, 1987 and the valuation prepared by Messrs. Jones Lang Wootton are held at our client's office in Melbourne. Inspection of the same will be made available to you at this office. 3. You seem to misunderstand the contents of paragraph 6 of Mr Pearce's affidavit. No documents are referred to in this paragraph. 4. The documents referred to in paragraphs 7, 8, 9 and 10 are not in the possession, custody or power of Caboolture Park Shopping Centre. In accordance with the relevant Federal Court Rule we advise that the documents are in the possession of G.S.H. Securities Pty. Ltd. and are held at its registered office. S. The financial records referred to 1n paragraph 13 of our client's affidavit will be made available for inspection at our client's office in Melbourne." In a subsequent letter of 25 March 1988, the solicitors for WIQ intimated that it proposed that "our client's accountancy adviser" should participate in the inspection of the documents which WIQ had sought from Caboolture Park. Messrs Flower and Hart, the solicitors for Caboolture Park, then sought an undertaking that the contents of the documents produced for inspection by Caboolture Park would not be disclosed to any person including WIQ's "accountancy adviser". That stipulation was not acceptable to Messrs Morris Fletcher & Cross, the solicitors for WIQ, and by Motion on Notice dated 29 March 1988, WIQ sought,.amongst other things, that the documents referred to in items 1, 2, 3 and 7 of the letter dated 23 March 1988 from Messrs Morris Fletcher and Cross to Messrs Flower & Hart be made available for inspection and copying by a representative of Messrs Morris Fletcher & Cross and a representative of Messrs Coopers and Lybrand, the accountants retained on behalf of WIQ for the purposes of these proceedings. As well as the notice of motion for security for costs, WIQ, on 7 March 1988, caused to be issued and served on Caboolture Park a subpoena duces tecum seeking production by Cabbolture Park of the following documents:-— "1. Profit and loss accounts, balance sheets and other books of account recording or referring to the financial position of Caboolture Park Shopping Centre Pty Ltd ('the company'), since 30 June 1985. 2. Documents recording the nature and amount of the present assets and liabilities of the company. 3. Tax returns of the company since 30 June 1985. 4. All statements issued since 30 June 1985 in respect of all bank and other' financial institution accounts conducted by the company or on its behalf. 5S. All valuations of any of the assets of the company, made or given since 31 December 1984. 6. All documents recording or referring to the amounts presently owed to the creditors of the company and any security held by the creditors in respect of such amounts. 7. All documents recording the amounts of any deposit or investment by the company or on its behalf at any bank or other financial institution." Caboolture Park has sought by notice of motion to have that subpoena set aside. By another affidavit of Augustus Ronald Pearce sworn 11 March 1988, Caboolture Park has supported that motion by pointing to the proliferation of documents brought into existence each day which would fall within paragraphs 1 and 2 of the Schedule to the subpoena. In addition, it is contended that the requirement in paragraph 4 oppressively requires records of banking transactions on behalf of the Hersfield group of companies since 30 June 1985 which could involve production of records related to as many as one hundred transactions a day. Likewise, it is contended that the requirement in paragraph 2 of the Schedule to produce "documents recording the nature and amount of the present assets and liabilities" of Caboolture Park obliges that company to produce all accounts and invoices rendered in respect to the supply to Caboolture Park of all goods and services used by it in connection with the maintenance and operation of the shopping centre and all statements for rent and outgoings rendered by Caboolture Park to tenants of that shopping centre. The annual return lodged on behalf of Caboolture Park with the Corporate Affairs Commission in Brisbane has been exhibited to an affidavit of Robert Maxwell Lockhart of the solicitors for Caboolture Park sworn 6 April 1988. That return discloses the following "key financial data" in respect of Caboolture Park at the end of the financial year to 30 June 1987:- . $ Current assets 156,882 Other assets 34,500,000 Net tangible assets 13,921,469 Share capital and reserves 13,921,469 Current liabilities 20,735,413 Other liabilities nil" Because Caboolture Park's annual return to 30 June 1987 has thus been made available to WIQ, Mr Hunter Q.C., who appeared with Mr Fraser for WIQ, has not pressed for an Order compelling production of that document. However, he did seek to compel compliance with so much of the subpoena as required production on behalf of Caboolture Park of the following documents:- "Balance Sheets for year ended 30/6/87 Profit & Loss Account for year ended 30/6/87 Directors' Reports for year ended 30/6/87 Statement of Directors for year ended 30/6/87 Auditor's Report for year ended 30/6/87 Statement of Accounting Policy for year ended 30/6/87 Notes to accounts for year ended 30/6/87 General Ledger for year ended 30/6/87 and to date Interim accounts or periodic management reports to directors and shareholders from 30/6/87 to date Register of charges to date Asset register to date Common Seal register to date Tax returns of the company since 30/6/85" - 10 - Further, the motion for production of documents under 0.15 r.10 or £.11 of the Rules of the Court was pressed on behalf of WIQ insofar as it sought production of the following documents allegedly referred to in paragraphs 4, 5 and 13 of Mr Pearce's affidavit sworn on 22 March 1988:- "2. Caboolture Park's financial accounts for the financial year ended 30 June 1987, referred to in paragraph 4 of the affidavit. 3. The formal valuation of the Caboolture Park Shopping Centre prepared by Jones' Lang Wootton in July 1987, referred to in paragraph 5 of the affidavit. 7. Caboolture Park's 'financial records' referred to in paragraph 13 of ithe affidavit." Mr Muir Q.C., who appeared with Mr Perry for Caboolture Park, contended first that the subpoena should be set aside as fishing. He referred to Cooper v Bech (No 1) (1975) 12 S.A.S.R. 147 where Bray C.J. at 148 held that "the machinery of a subpoena duces tecum is not to be used to get discovery from a stranger and still less for fishing purposes; see Commissioner for Railways v Small (1938) 38 S.R. (N.S.W.) at p.575". -ll- In that passage from The Commissioner for Railways v Small Jordan C.J. observed:- "In the absence of special circumstances, e.g. Geiebart v Morris [1920] 1 K.B. 659, a party is fo more entitled to use a subpoena duces tecum than he is a summons for interrogatories, for the purpose of 'fishing', i.e., endeavouring, not to obtain evidence to support his case, but to discover whether he has a case at all." The attempts on behalf of WIQ to obtain production of documents in the possession of Caboolture Park in relation to its financial position were said to be fishing because the evidence filed on behalf of WIQ contained concessions that its advisers did not know whether or not it had resources from which to meet an order for payment of WIQ's costs should one be made against it. Attention was drawn to paragraph 27 of Mr Haley's affidavit of 9 March 1988 where it was deposed:- "I am this day informed by Mr James Gosper, on behalf of WIQ, and verily believe, that upon the basis of the above information, WIQ is concerned that Caboolture Park will not be able to meet an order for costs against it in these proceedings. I am unaware of any other means of obtaining further information concerning the capacity of Caboolture Park to meet a costs order, short of provision by Caboolture Park of its financial records." Similarly, reliance was placed on the following paragraphs in an affidavit sworn on 8 March 1988 by Mrs Micalizzi, an accountant and member of the firm of Coopers and Lybrand retained by WIQ for the purpose of these proceedings: - 12 - "5. In order to form a view upon the ability of Caboolture Park to meet an order for costs against it, I would need to examine at least the following financial information:- (a) audited financial accounts for 30 June, 1987 for both Caboolture Park and GSH Securities Pty. Ltd.; (b) interim financial accounts to 29 February, 1988 (including balance sheet, profit and loss account and notes to the accounts) for both Caboolture Park and GSH Securities Pty. Ltd.; (c) details of current market values of all assets of Caboolture Park and GSH Securities Pty. Ltd.; (d) current details of unsecured and secured liabilities of both companies, floating charges over the assets of Caboolture Park and any security given by Caboolture Park to secure the indebtedness of any third party (ineluding dollar amounts) ; (e) details of forecast net rental cash flow and met profit for Caboolture Park (so as to ascertain the ability of Caboolture Park to meet an award of costs without the need to realise the assets). 6. On the information made available to me, I am unable to form an opinion as to whether or not Caboolture Park will be able to meet an order for costs against it." Mc Hunter referred to the judgment of Jenkinson J in Chester & Fein Property Developments Pty. Ltd. v Candam Investments Pty. Ltd. (1985) 9 F.C.R. 419 as authority for the proposition that s.56 of the Federal Court of Australia Act, unlike the provisions in s.533(1) of the Companies Code or 0.28 r.3(1)(b) of the Federal Court Rules does not impose on a respondent applying for security for costs an onus of proof that a corporate applicant lacks the capacity to satisfy any order for costs which might be made against it. However, in my view it is clear from his Honour's reasoning -13- in that case that he was speaking of the legal burden of establishing a case and not what the High Court in Purkess v Crittenden (1965) 114 C.L.R. 164 at 168 called "the burden of proof in the sense of introducing evidence". The latter burden is cast on an applicant for security for costs even where the question falls to be determined, as here, under s.56 of the Federal Court of Australia Act. WIQ has sought to discharge it by adducing evidence of what is disclosed on public registers about the assets and liabilities of Caboolture Park. It was open to Caboolture Park to allow the argument on the application for security to be resolved solely by reference to that evidence and whatever inference the Court might be persuaded to draw from Caboolture Park's silence about its own financial position. However, Caboolture Park has elected itself to introduce evidence, directed to that question, of its actual and estimated operating profit respectively for the years to 30 June 1987 and 30 June 1988. It has also referred to a valuation of its principal asset and the extent and nature of encumbrances over that asset. Finally, it has introduced an assertion by Mr Pearce of a belief "after a review of the financial records of the applicant" that it could satisfy an order for costs if one were made against it. Those circumstances permit the present case to be contrasted with W.A. Pines Pty. Ltd. v Bannerman (1980) 41 F.L.R. 175 where Brennan J observed, at 181:- -14- "In the present case, discovery is sought before there is a tittle of evidence to suggest that the Chairman did not have the requisite cause to believe which par. 6 of the statement of claim would put in issue. Some assistance was sought to be derived from cases where discovery had been given to a party before he was required to give particulars of his claim: cases such as Ross v. Blakes Motors Ltd. [1951] 2 All &.R. 689, but in cases of that kind there is either an anterior relationship between the parties which entitles one to obtain information from the other, or sufficient is shown to ground a suspicion that the party applying for discovery has a good case proof of which is likely to be aided by discovery. This is not such a case. This is a case where a bare allegation is made by par. 6 of the statement of claim and, the paragraph being denied, the applicant seeks to interrogate the Chairman and ransack his documents in the hope of making a case. That is mere fishing. As Smithers J. said in Melbourne Home of Ford Pty. Ltd. v. Trade Practices Commission and Bannerman (1579) 36 F.L.R. at p.460: 'In the absence of such evidence the proceeding is essentially speculative in nature. In such circumstances for the court to assist the applicants by making available to them the processes of interrogatories and discovery would be to assist them in an essentially fishing exercise and from this the court on established principles should refrain'." Accordingly, in my view, it is not fishing for WIQ to seek inspection of documents necessary to permit it to test and analyse the assertions made on behalf of Caboolture Park. However, that is not to say that WIQ should be allowed to compel production of any or every document in the possession of Caboolture Park which might cast some light on the extent and nature of its assets and liabilities. I shall identify the documents (if any) which should be produced by Caboolture Park after considering the other submissions made on its behalf in support of the motion to set aside the subpoena, and in opposition to the motion under 0.15 r.10. ~15 - The second ground on which Caboolture Park sought to resist production of the documents called for by WIQ is that to require production would be oppressive and would put Caboolture Park to effort and expense which would be unreasonable in all the circumstances. Reference was made to Lucas Industries Ltd. v_ Hewitt (1978) 18 A.L.R. 555 where Smithers J. observed, at 571:- "It would, no doubt, be a good reason for failure to produce documents that the effort and expense involved in doing so was greater than ought reasonably to be required. This is a matter which would at that stage be capable of rational resolution by the court according to the circumstances. So far as the effort and expense in arranging for production of particular documents in any case exceeded what was reasonable, their non-production would be acceptable to the court. But if a subpoena be wholly set aside on the grounds that on its face it is oppressive, then the subpoena wholly fails and there is the possibility that although some or even substantial compliance might have been undertaken with a minimum of effort, the whole procedure may be needlessly frustrated." I accept that it would be oppressive to require Caboolture Park, in the circumstances of this litigation, to search for, retrieve from computers and collate every document which could be said to form part of its books of account, or to record or refer to its present assets and liabilities, and every statement issued to it since 30 June 1985 in respect of any accounts conducted, or deposits or investments made by it with a bank or other financial institution. On the other hand, I consider that there are other documents within the ambit of the subpoena which can be produced by Caboolture Park, with, in the words of Smithers J. in Lucas Industries Ltd v Hewitt (supra), "a minimum of - 16 - effort". I shall again defer identifying those documents until I have dealt with the remaining submissions advanced on behalf of the parties. It was thirdly submitted on behalf of Caboolture Park that WIQ's attempts to obtain production by Caboolture Park of its documents were made for the ulterior purpose of bringing pressure to bear on Caboolture Park to compromise the action on terms unfavourable to it by compelling the disclosure of information which is commercially sensitive in the context of takeover offers for companies controlling Caboolture Park. Reference was made to Waind v Hill and National Employers' Mutual General Association Ltd. (1978] 1 N.S.W.L.R. 372 at 382 where Moffit P. pointed out that:- "The issue of a subpoena may involve an abuse of the power in other ways and as stated in Small's case (1938) 38 S.R. (N.S.W.) 564 at p.575, objection to production to the court may be on other grounds. Thus, it would be an improper use of the subpoena if it were not sought for the purpose of the litigation, but for some spurious purpose, such as to inspect the documents in connection with other proceedings, or for some private purpose, or in collusive proceedings to give them publicity." However, in view of the assurances given on behalf of WIQ that any information obtained by means of its subpoena or its application under 0.15 £.10 or r.11 will be kept confidential and not disclosed to any person except in aid of its application for security for costs, I am not prepared to infer that production of documents containing such -17- information has been sought for an ulterior purpose. It was also submitted on behalf of Caboolture Park that 0.15 rr.10 and 11 could not be invoked to require production of documents referred to in affidavits filed in relation to interlocutory proceedings like the present application for security for costs. The rules in question provide as follows:- " 10. (1) Where a pleading or affidavit filed by a party refers to a document, any other party may, by notice to produce served on him require him to produce the document for inspection. (2) Where a notice to produce a document is served on a party under sub-rule (1), he shall, within 4 days after that service, serve on the party requiring production a notice-— (a) appointing a time within 7 days after service of the notice under this sub-rule when, and a place where, the document may be inspected; '(b) claiming that the document is privileged from production and sufficiently stating the grounds of the privilege; or ({c) stating that the document is not in his possession, custody or power and stating to the best of his knowledge information and belief where the document is and in whose possession, custody or power it is. 11. (1) Where- (a) it appears from a list of documents filed by a party under this Order that any document is in his possession, custody or power; (b) a pleading or affidavit filed by a party refers to any document; or (c) it appears to the Court from evidence or from the nature or circumstances of the case or from any document filed in the - 18 - proceeding that there are grounds for a belief that any document relating to any matter in question in the proceeding is in the possession, custody or power of a party, the Court may, subject to any question of privilege which may arise, order the party- (d) to produce the document for inspection by any other party at a time and place specified in the order; or (e) to file and serve on any other party a copy of the whole or any part of the document, with or without an affidavit verifying the copy made by a person who has examined the document and the copy. (2) An affidavit made pursuant to an order under paragraph (1)(e) shall, unless the Court otherwise orders, state whether there are in the document copied any and, if so, what erasures, interlineations or alterations." It was contended that 0.15 as a whole is concerned with discovery and inspection of documents in substantive application and not in relation to an _ interlocutory proceeding in relation thereto. However, I do not read the Order as being limited in that way. The facility of seeking discovery is afforded by 0.15 r.1 to "any party". It is true that 0.15 r.2 contemplates that a party will give a notice for general discovery, and that it will be complied with, once and for all, but it is open to the Court under r.3 to limit discovery to "such documents or classes of documents, or to such of the matters in question in the proceeding, as may be specified in the order". I see no reason why the question of whether a respondent should be required to provide security for costs should not be regarded as one of the "matters" arising in the proceeding within the meaning of that rule. There is a similar reference in 0.15 r.8 to "some - 19 - document or class of document relating to any matter in question in the proceeding". See also 0.15 £.13(1) which provides that:- "The Court may, at any stage of any proceeding, order any party to produce to the Court any document in his possession, custqdy or power relating to any matter in question in the proceeding.* "Proceeding" is very widely defined in s.4 of the Federal Court of Australia Act as including:- "a proceeding in a court, whether between parties or not, and includes an incidental proceeding in the course of, or in connexion with, a proceeding, and also includes an appeal;" Moreover, the facility to require production of a document is expressed by 0.15 1r.10(1) to be available where "a pleading or affidavit filed by a party refers to" that document. It seems to me to introduce an artificial distinction to construe that sub-rule as referring only to an affidavit to be relied on at the final hearing as distinct from some interlocutory stage such as the hearing of a motion for an interlocutory injunction or for security for costs. Iam reinforced in my view about the width of application of 0.15 rr.10 and 11 by the consideration that the power thereby conferred on the Court to order production of a document is discretionary and shall not be exercised unless the Court is "satisfied that the order 1S necessary at the time when the order is made;" (0.15 r.15). - 20 - Mr Muir invited me to exercise that discretion in favour of Caboolture Park on the grounds which he had earlier sought to set aside the subpoena, namely that the application under 0.15 r.10 or £.11 is fishing or oppressive. I find some difficulty with the notion that it can be fishing to require a party to produce a document to which that party has himself referred in an affidavit, but in any event, for reasons already given in respect of the subpoena, I am not disposed to accede to Mr Muir's invitation in its entirety. It was also objected on behalf of Caboolture Park that many documents within the categories specified in WIQ's notice of motion under 0.15 r.10 were not "referred to" in Mr Pearce's affidavit in the sense required by the rule. Some documents, so it was argued, were only alluded to peripherally and were not relied on so as to warrant an order for their production. I consider that the valuation by Messrs Jones Lang Wootton of the shopping centre at Caboolture Park and the first and second mortgages over that property have been referred to in Mr Pearce's affidavit in a way sufficient to attract the operation of 0.15 r.10. It is far from clear that the allusion in paragraph 13 of that affidavit to "a review of the financial records of the applicant" amounts to a reference for the purposes of the rule to every document comprised in those records, but in any event, I would decline in the exercise of the discretion conferred by 0.15 r.11(1)(d) to order Caboolture Park to produce all those documents for inspection by WIQ. -21- For the reasons which I have outlined I consider that WIQ should have inspection of the profit and loss statement and income tax return of Caboolture Park for the year ended 30 June 1988 and its balance sheet as at the same date. Inspection of those documents should extend to any directors' or auditor's reports or notes annexed to or forming part of the accounts. In addition, inspection should be afforded of the Jones Lang Wootton valuation of July 1987 of the Caboolture Park shopping centre and any instruments of mortgage currently secured over that shopping centre. Because the documents which I have just specified are all comprehended within the categories specified in the subpoena duces tecum issued on 7 March 1988, it is unnecessary to make any order on WIQ's motion under 0.15 rr.10 and 11 which, accordingly, is dismissed. I consider that each of the documents to which I propose to grant access, and the information contained therein, should only be disclosed to WIQ's legal advisers and Mrs Micalizzi of the firm of Coopers & Lybrand, and should be used by them solely for the purpose of the application for security for costs. A similar approach to inspection of documents was taken by McPherson J in Ex parte Pielder Gillespie Ltd (1984) 2 Qd. R. 339 and by Wilcox J in Kanthal Australia Pty. Ltd. v_ Minister for Industry, Technology and Commerce (1987) 71 A.L.R. 109. I have therefore adapted the form of order made in the latter case to make it applicable to the documents of which I propose to order inspection in this matter. - 22 - The order of the court will be:- That Caboolture Park by 5.00 p.m. on 19 April 1988 comply with the subpoena issued by WIQ on 7 March 1988 by supplying to the solicitors for WIQ a copy of each of the following documents:- (a) (b) (c) (d) (e) (£) Profit and Loss Statement of Caboolture Park for year ended 30 June 1987; Balance Sheet of Caboolture Park as at 30 June 1987; Any auditor's or directors' reports or notes annexed to or forming part of the accounts referred to in sub-paragraphs (a) and (b) hereof; Income Tax return of Caboolture Park for year ended 30 June 1987; Each instrument of mortgage secured on the land on which the Caboolture Park shopping centre is erected. The valuation of the Caboolture Park shopping centre prepared by Messrs. Jones Lang Wootton in or about July 1987. ~ 23 - That except to the extent specified in paragraph 1 hereof the said subpoena be set aside. That the motion on notice dated 29 March 1988 by WIQ under Order 15 £.10 of the Federal Court Rules he dismissed. That access to the copy documents referred to in paragraph 1 of this order be confined to:- (a) not more than two solicitors, being members or employees of the firm Morris Fletcher & Cross engaged in the conduct on behalf of WIQ of the application for security for costs in this matter; (b) counsel briefed to appear at the hearing of the application for security for costs; (c) Marian Micalizzi of the firm Coopers & Lybrand, Chartered Accountants; PROVIDED HOWEVER that no access to any such document shall be granted to any particular such solicitor or counsel or to the said Marian Micalizzi until there has been filed with the District Registrar of the Court in Brisbane an undertaking signed by that person in the terms of the Schedule to this order. - 24 - That the costs of and incidental to the motion on notice by Caboolture Park dated 31 March 1988 and by WIQ dated 29 March 1988 be costs in the application for security for costs. That the hearing of the application for security for costs commence at 10.15 a.m. on 21 April 1988 in Brisbane. I certify that this and the twenty- three (23) preceding pages are a true copy of the Reasons for Judgment herein of his Honour Mr Justice Ryan. Associate KO P Twarnto Dated: V8 hpot PEE