FEDERAL COURT OF AUSTRALIA Hua Wang Bank Berhad v Commissioner of Taxation (No 1) [2012] FCA 589 Citation: Hua Wang Bank Berhad v Commissioner of Taxation (No 1) [2012] FCA 589 Parties: HUA WANG BANK BERHAD v COMMISSIONER OF TAXATION BYWATER INVESTMENTS LIMITED v COMMISSIONER OF TAXATION CHEMICAL TRUSTEE LIMITED v COMMISSIONER OF TAXATION SOUTHGATE INVESTMENT FUNDS LIMITED v COMMISSIONER OF TAXATION DERRIN BROTHERS PROPERTIES LIMITED v COMMISSIONER OF TAXATION File numbers: NSD 653 of 2011 NSD 652 of 2011 NSD 654 of 2011 NSD 655 of 2011 NSD 656 of 2011 Judge: PERRAM J Date of judgment: 6 June 2012 Catchwords: PRACTICE AND PROCEDURE – Application to set aside notices to produce – whether notices to produce could be used to compel production of documents relevant to an issue at trial before the trial – whether notices to produce could be used to compel production of documents relevant to an issue at trial at some time that had no nexus with the trial itself Legislation: Federal Court Rules 2011 r 30.28 Cases cited: Apotex Pty Ltd v Les Laboratoires Servier [2012] FCA 359 cited Suzlon v Bangad (No 2) (2011) 198 FCR 1 cited Tyco Australia Pty Ltd v Leighton Contractors Pty Ltd (2005) 142 FCR 428 cited Date of hearing: 6 June 2012 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 11 Counsel for the Applicant: Mr J Morris Solicitor for the Applicant: Australian Government Solicitor Counsel for the Respondents: Mr J Hyde Page Solicitor for the Respondents: Henry Davis York IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 653 of 2010 BETWEEN: HUA WANG BANK BERHAD Applicant AND: COMMISSIONER OF TAXATION Respondent JUDGE: PERRAM J DATE OF ORDER: 6 JUNE 2012 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The applicant's interlocutory application to set aside the respondent's notices to produce be dismissed. 2. The applicant pay the respondent's costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 652 of 2010 BETWEEN: BYWATER INVESTMENTS LIMITED Applicant AND: COMMISSIONER OF TAXATION Respondent JUDGE: PERRAM J DATE OF ORDER: 6 JUNE 2012 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The applicant's interlocutory application to set aside the respondent's notices to produce be dismissed. 2. The applicant pay the respondent's costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 654 of 2010 BETWEEN: CHEMICAL TRUSTEE LIMITED Applicant AND: COMMISSIONER OF TAXATION Respondent JUDGE: PERRAM J DATE OF ORDER: 6 JUNE 2012 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The applicant's interlocutory application to set aside the respondent's notices to produce be dismissed. 2. The applicant pay the respondent's costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 655 of 2010 BETWEEN: SOUTHGATE INVESTMENT FUNDS LIMITED Applicant AND: COMMISSIONER OF TAXATION Respondent JUDGE: PERRAM J DATE OF ORDER: 6 JUNE 2012 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The applicant's interlocutory application to set aside the respondent's notices to produce be dismissed. 2. The applicant pay the respondent's costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 656 of 2010 BETWEEN: DERRIN BROTHERS PROPERTIES LIMITED Applicant AND: COMMISSIONER OF TAXATION Respondent JUDGE: PERRAM J DATE OF ORDER: 6 JUNE 2012 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The applicant's interlocutory application to set aside the respondent's notices to produce be dismissed. 2. The applicant pay the respondent's costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 653 of 2010 BETWEEN: HUA WANG BANK BERHAD Applicant AND: COMMISSIONER OF TAXATION Respondent IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 652 of 2010 BETWEEN: BYWATER INVESTMENTS LIMITED Applicant AND: COMMISSIONER OF TAXATION Respondent IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 654 of 2010 BETWEEN: CHEMICAL TRUSTEE LIMITED Applicant AND: COMMISSIONER OF TAXATION Respondent IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 655 of 2010 BETWEEN: SOUTHGATE INVESTMENT FUNDS LIMITED Applicant AND: COMMISSIONER OF TAXATION Respondent IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 656 of 2010 BETWEEN: DERRIN BROTHERS PROPERTIES LIMITED Applicant AND: COMMISSIONER OF TAXATION Respondent JUDGE: PERRAM J DATE: 6 JUNE 2012 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is an application to set aside certain notices to produce issued by the Commissioner of Taxation to the applicants. On 30 May I directed that the issue of whether the notices to produce which had been served were an abuse of process be determined as a preliminary issue prior to the consideration of the individual requests made in the notices. The question of whether there was an abuse was fixed for hearing before me this morning (6 June 2012) and it is with that issue that these reasons deal. It is useful for the purpose of these reasons to assume that the notices to produce seek material which is relevant in the requisite sense. The question of whether that is so or not will be determined on another occasion. 2 Federal Court Rules 2011 r 30.28(1) provides as follows: (1) A party may serve on another party a notice, in accordance with Form 61, requiring the party served to produce any document or thing in the party's control: (a) at any trial or hearing in the proceeding; or (b) at any hearing before a Registrar or any examiner or other person having authority to take evidence in the proceeding. 3 The argument for the Commissioner was straightforward. The notices had initially been returnable before the Registrar on 30 May 2012. It followed on his submission that the textual requirements of subclause (b) had been satisfied and, therefore, that he had been entitled to issue the notice under r 30.28(1)(b). 4 Mr Hyde Page of counsel who appeared for the taxpayers submitted that r 30.28(1) could not be used in that manner. The effect of his argument was that there was a limitation on its operation. The limitation which was identified was that the rule could be used to produce documents which were relevant to an interlocutory matter where that arose before trial but it could not be used to require the production of documents relevant to an issue at trial before trial. He accepted a development of that argument which was that a notice to produce could be made returnable before trial so long as the time at which it was made returnable bore some nexus to the actual trial itself. 5 I do not accept this argument. The rule itself does not say any such thing. The rule attempts to erect some equivalence between the notice to produce procedure and the subpoena procedure and for a very long time in New South Wales it has been plain that a subpoena may be made returnable before trial seeking the production of documents. It is difficult to identify the redeeming features of an argument which would seek to put notices to produce on an anomalous and somewhat different basis. 6 Mr Hyde Page, in his carefully developed argument, sought to persuade me from this view by reference to three authorities. The first of these was the Full Court's judgment in Tyco Australia Pty Ltd v Leighton Contractors Pty Ltd (2005) 142 FCR 428. This case was concerned with the deployment of a notice to produce in the context of an application for preliminary discovery. Despite Mr Hyde Page's submissions, I do not discern in this decision anything which requires the suggested limitation on the operation of r 30.28(1). To the contrary, it is apparent at [3] that the notice to produce in that proceeding was made returnable before the disposition of the final proceeding, a proposition which appears, to me at least, to be inconsistent with that which the taxpayer has put forward. 7 The second decision upon which reliance was placed was the decision of Rares J in Suzlon v Bangad (No 2) (2011) 198 FCR 1. This case was concerned with the issue of a notice to produce during the pendency of an application relating to obtaining service out of a jurisdiction. His Honour was prepared to accept that the notice to produce procedure was available in such a circumstance but, as a matter of discretion, having regard to the conflict of laws issues, determined that he would not compel the notice to be complied with. As with the Tyco decision, I am unable to discern from this judgment the suggested limitation on the operation of the rule. 8 Mr Hyde Page's principal reliance was placed upon a decision of Bennett J in Apotex Pty Ltd v Les Laboratoires Servier [2012] FCA 359 and, in particular, [32] and [33] of that judgment, which are as follows: 32 The timing of the service of the Notice is also relevant. Servier did not seek preliminary discovery. Had it done so, it would have to have had to comply with the requirements of Division 7.3 of the Rules and would only have been entitled to the documents provided for in those Rules. For example, if Servier had applied under r 7.22, it would have been entitled to documents concerning the description of the prospective respondents. The present circumstances are not the occasion for a sweeping notice to produce, akin to discovery. Notices to produce are not a substitute for discovery or for preliminary discovery. 33 However, Servier is entitled to serve a notice on Apotex to produce documents at the hearing of the Service Application. The scope of documents to be produced should be appropriate for the purposes of that application and the stage of the proceedings. To the extent that Servier relies on r 20.35, subrule (2) provides that the Court may inspect the documents produced to the Court to decide the validity of any objection to production. 9 It is true, as her Honour noted, that it would not be appropriate to allow the use of a notice to produce to achieve, effectively, the result of discovery and, indeed, there are any number of authorities in this Court and other courts which establish that proposition. I do not think, however, that any of those decisions go so far as to establish that r 30.28 is subject to the presently alleged limitation. 10 Another variant of the argument which was advanced was this: to look at the structure of the rules was to see a division into certain areas of activity and authority. Part 20 explicitly dealt with the topic of discovery and inspection of documents. On the other hand, Part 30 dealt with the question of hearings. It would be impermissible, so the argument went, to allow a use of the machinery of Part 30, confined as it was to the determination of trials, effectively to outflank the rules and limitations which applied to discovery. In principle, I accept the correctness of that argument. The procedure in r 30.28 may not be used effectively to achieve the same outcome as discovery under Part 20. The difficulty for the argument, however, so it seems to me, is that notices to produce need not be used and, indeed, cannot be used for the purposes of obtaining discovery. They can be permissibly used for the purposes of obtaining relevant material. Once one accepts the existence of that use for notices to produce, the argument collapses because the suggested trespass by the operation of Part 30 into Part 20 simply does not arise. 11 In those circumstances, I dismiss the applications with costs. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram. Associate: Dated: 8 June 2012