FEDERAL COURT OF AUSTRALIA Hudson Timber & Hardware Ltd v Chaudhary Group Pty Ltd [2002] FCA 832 PRACTICE AND PROCEDURE – application to set aside a subpoena National Employers Mutual General Insurance Association Ltd v Waind [1978] 1 NSWLR 372 referred to HUDSON TIMBER & HARDWARE LIMITED v CHAUDHARY GROUP PTY LIMITED N 976 of 2001 GYLES J SYDNEY 30 MAY 2002 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 976 OF 2001 BETWEEN: HUDSON TIMBER & HARDWARE LIMITED APPLICANT AND: CHAUDHARY GROUP PTY LIMITED RESPONDENT AND BETWEEN: CHAUDHARY GROUP PTY LIMITED CROSS APPLICANT AND: RAFFLES EQUITIES LIMITED FIRST CROSS RESPONDENT HUDSON TIMBER & HARDWARE LIMITED SECOND CROSS RESPONDENT JUDGE: GYLES J DATE OF ORDER: 30 MAY 2002 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The applicant's motion to set aside the subpoena addressed to the Australia & New Zealand Banking Group Ltd is dismissed. 2. Leave be granted to the applicant and its solicitors to inspect the documents provided by the Australia & New Zealand Banking Group Ltd. 3. The application by the respondent for inspection of those documents is stood over to 18 June 2002 at 9.30am 4. Costs of the motion are reserved. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 976 OF 2001 BETWEEN: HUDSON TIMBER & HARDWARE LIMITED APPLICANT AND: CHAUDHARY GROUP PTY LIMITED RESPONDENT AND BETWEEN: CHAUDHARY GROUP PTY LIMITED CROSS APPLICANT AND: RAFFLES EQUITIES LIMITED FIRST CROSS RESPONDENT HUDSON TIMBER & HARDWARE LIMITED SECOND CROSS RESPONDENT JUDGE: GYLES J DATE: 30 MAY 2002 PLACE: SYDNEY EX TEMPORE REASONS FOR JUDGMENT 1 This is an application by the applicant in the proceedings ("Hudson") to set aside a subpoena for production of documents served by the respondent cross-applicant ("Chaudhary") directed to the Australia and New Zealand Banking Group Limited ("the Bank"). The documents, I am told, have been produced to the Court and, so far as I am aware, the Bank itself has had no difficulty in answering the subpoena. That, however, is not the basis for the application. 2 The basis for the application is that there is no genuine forensic purpose to be served by the production of documents as broad as sought, save for the document sought in par [4] of the documents identified in the subpoena. So, in substance, it is an application to set aside the subpoena recognising that either par [4] remains or a subpoena with only par [4] would be subject to no objection. Paragraphs [1] to [4] of the subpoena identify the following documents: "1. A copy of all documents created in the period 1 July 2000 to 30 June 2001 being, recording or evidencing communications between the Bank and Hudson referring to or recording the terms and conditions of the financial accommodation given or to be given to Hudson in that period. 2. A copy of all documents furnished to the Bank in the period 1 July 2000 to 30 June 2001 by Hudson for the Banks information or approval. 3. A copy of all requests for financial accommodation made to the Bank in the period 1 October 2000 to 30 June 2001 by Hudson. 4. A copy of all communications between the Bank and Hudson created in the period 1 October 2000 to 30 June 2001 referring to a joint venture between a Hudson company and Chaudhary Group P/L or to a company called Gold treasure P/L." 3 It is contended for Hudson that when the pleadings are examined there is little direct reference to the Bank, and such reference as there is would be satisfied by the production of documents according to par [4]. It is also pointed out that the definition of Hudson in the subpoena goes well beyond the corporate entity which is a party to these proceedings. 4 The answer which is made to the latter point, on behalf of Chaudhary, is that the corporate body which is party to the proceedings is a member of a corporate group of companies, including a listed company, the annual report of which shows the interlocking nature of the relationship between them, and the recipient of the subpoena is the banker to the group. It is suggested that from Chaudhary's point of view it is not possible to tell which of the corporate entities is what was called a "treasury company" by which I take to mean the company which actually lends to or borrows money from the Bank. 5 The substantial answer made by Chaudhary to the objection to the subpoena is that when the evidence which has been filed in the case is examined it is apparent that, from a number of points of view, the financial position of Hudson and related companies will be relevant in assessing the case which is sought to be made on behalf of Chaudhary. 6 I have been taken through various paragraphs of the principal affidavit on behalf of the deponent for Chaudhary and the responses to that affidavit in the affidavits filed on behalf of Hudson. This is appropriate. The procedures of the Court enable an appreciation of the evidence to be led to be made prior to the hearing, and thus, in particular cases, can enable applications like this to be made in a real rather than theoretical situation. I do not think that I am limited to the pleadings in assessing the forensic use which may be made of documents. 7 Neither counsel have referred to authority. I do not suggest it was necessary to do so. The principles governing this kind of application were set out by the New South Wales Court of Appeal in National Employers Mutual General Insurance Association Ltd v Waind [1978] 1 NSWLR 372 many years ago and are well known. Those principles permit the obtaining of documents on subpoena which have apparent relevance to the issues in the case. That relevance is not limited to those documents which are directly admissible in themselves in proof of an issue raised on the pleadings. If it can be shown that there is a class of document which has forensic relevance (as it has been called by counsel for Chaudhary), then a subpoena will not normally be set aside. 8 In all of the circumstances, I cannot conclude that the documents in issue have no apparent relevance. Indeed, it seems to me that the financial position of the group is likely to be a material forensic component of the case. Whether or not documents are tendered is another matter, but I can certainly see that the overall financial position of the group will be relevant in cross-examination. 9 However, this is a matter in which affidavits have been filed on all sides upon which cross-examination will take place, and where discovery has been ordered. It is not, by any means, clear to me at the moment that immediate inspection of any of these documents is required. There are other means by which Chaudhary can explore this aspect of the matter without necessarily inspecting documents which, counsel for Hudson has rightly pointed out, based upon the evidence of his solicitor, are likely to be highly sensitive. I am very conscious of the necessity to ensure that litigation is not used oppressively so as to cause the production of sensitive and confidential financial information any wider than is necessary. 10 I appreciate that Chaudhary's solicitor has offered an undertaking going beyond the usual undertaking, but that is not a complete answer to the problem concerned. The subpoena is framed in very wide terms and will undoubtedly pick up, it seems to me, material which is likely to have slight relevance to this case. I am not convinced, however, that a meaningful subpoena could be directed more narrowly. 11 I conclude that there is no proper basis for setting aside the subpoena. However, I am not persuaded that there is any need for inspection of these documents at this stage of the case. It will be some time before the case comes on for hearing and, in view of the very bald form of the affidavits filed on behalf of Huddon, it may be that one possible solution is a few well directed interrogatories, which I might be persuaded to consider administering. Another way of dealing with the issue is for the Court, at some stage, to inspect the documents, either myself, or perhaps a Registrar of the Court or another Judge of the Court, to assess what should be inspected and what should not be inspected. Counsel for Hudson has suggested that it would be appropriate for Hudson to inspect the documents first. I agree. 12 The net result is that I dismiss the motion which seeks to set aside the subpoena, but I do not propose to permit inspection by the respondent and its solicitors at the moment. The documents produced will remain in the custody of the Court. Leave will be granted for inspection by or on behalf of Hudson. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles. Associate: Dated: 28 June 2002 Counsel for the Applicant/Cross Respondents: JW Stevenson Solicitor for the Applicant/Cross Respondents: Atanaskovic Hartnell Lawyers Counsel for the Respondent/Cross Applicant: DP Robinson Solicitor for the Respondent/Cross Applicant: Minter Ellison Date of Hearing: 30 May 2002 Date of Judgment: 30 May 2002