FEDERAL COURT OF AUSTRALIA Australian Competition and Consumer Commission v Cascade Coal Pty Ltd (No 2) [2015] FCA 1527 Citation: Australian Competition and Consumer Commission v Cascade Coal Pty Ltd (No 2) [2015] FCA 1527 Parties: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v CASCADE COAL PTY LTD (ACN 119 180 620), MINCORP INVESTMENTS PTY LIMITED (ACN 132 441 868), LOYAL COAL PTY LTD (ACN 132 497 913), LOCAWAY PTY LIMITED (ACN 066 616 484), COAL & MINERALS GROUP PTY LTD (ACN 144 641 092), SOUTHEAST INVESTMENT GROUP PTY LIMITED (ACN 143 535 620), MOSES EDWARD OBEID, PAUL EDWARD OBEID, RICHARD JONATHAN POOLE, JOHN VERN MCGUIGAN and JAMES WILLIAM MCGUIGAN File number: NSD 584 of 2015 Judge: FOSTER J Date of judgment: 18 December 2015 Catchwords: PRACTICE AND PROCEDURE – whether the Court should set aside five subpoenas for production issued by the applicant with the leave of the Court Cases cited: Attorney-General (NSW) v Chidgey (2008) 182 A Crim R 536 Carroll v Attorney-General (NSW) (1993) 70 A Crim R 162 National Employers' Mutual General Insurance Association Ltd v Waind & Hill [1978] 1 NSWLR 372 R v Saleam [1999] NSWCCA 86 Date of hearing: 18 December 2015 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 15 Counsel for the Applicant: Mr CA Moore SC and Mr RA Yezerski Solicitor for the Applicant: Australian Government Solicitor Counsel for the First, Tenth and Eleventh Respondents: Mr NJ Owens Solicitor for the First, Tenth and Eleventh Respondents: TressCox Lawyers Counsel for the Third Respondent: Dr RCA Higgins Solicitor for the Third Respondent: Ashurst Australia Counsel for the Fourth, Sixth, Seventh and Eighth Respondents: Mr P Singleton Solicitor for the Fourth, Sixth, Seventh and Eighth Respondents: Breene & Breene Counsel for the Fifth and Ninth Respondents: Mr LT Livingston Solicitor for the Fifth and Ninth Respondents: Corrs Chambers Westgarth IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 584 of 2015 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: CASCADE COAL PTY LTD (ACN 119 180 620) First Respondent MINCORP INVESTMENTS PTY LIMITED (ACN 132 441 868) Second Respondent LOYAL COAL PTY LTD (ACN 132 497 913) Third Respondent LOCAWAY PTY LIMITED (ACN 066 616 484) Fourth Respondent COAL & MINERALS GROUP PTY LTD (ACN 144 641 092) Fifth Respondent SOUTHEAST INVESTMENT GROUP PTY LIMITED (ACN 143 535 620) Sixth Respondent MOSES EDWARD OBEID Seventh Respondent PAUL EDWARD OBEID Eighth Respondent RICHARD JONATHAN POOLE Ninth Respondent JOHN VERN MCGUIGAN Tenth Respondent JAMES WILLIAM MCGUIGAN Eleventh Respondent JUDGE: FOSTER J DATE OF ORDER: 18 DECEMBER 2015 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The Interlocutory Application filed by the fourth, sixth, seventh and eighth respondents on 15 December 2015 be dismissed. 2. The fourth, sixth, seventh and eighth respondents pay the applicant's costs of and incidental to the said Interlocutory Application. 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 584 of 2015 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: CASCADE COAL PTY LTD (ACN 119 180 620) First Respondent MINCORP INVESTMENTS PTY LIMITED (ACN 132 441 868) Second Respondent LOYAL COAL PTY LTD (ACN 132 497 913) Third Respondent LOCAWAY PTY LIMITED (ACN 066 616 484) Fourth Respondent COAL & MINERALS GROUP PTY LTD (ACN 144 641 092) Fifth Respondent SOUTHEAST INVESTMENT GROUP PTY LIMITED (ACN 143 535 620) Sixth Respondent MOSES EDWARD OBEID Seventh Respondent PAUL EDWARD OBEID Eighth Respondent RICHARD JONATHAN POOLE Ninth Respondent JOHN VERN MCGUIGAN Tenth Respondent JAMES WILLIAM MCGUIGAN Eleventh Respondent JUDGE: FOSTER J DATE: 18 DECEMBER 2015 PLACE: SYDNEY REASONS FOR JUDGMENT 1 On 26 November 2015, I made orders permitting the applicant to issue and serve a number of subpoenas. Included within those subpoenas were subpoenas for production addressed to the following law firms: (1) Colin Biggers & Paisley Pty Ltd (CBP) (two subpoenas); (2) HWL Ebsworth Lawyers (HWL); and (3) Thomson Geer Lawyers (Thomson Geer). 2 I also permitted the issue of a subpoena addressed to Rothshire Group Pty Limited (Rothshire) (formerly known as United Pastoral Group Pty Ltd). 3 Those subpoenas were first returned before the Court on 9 December 2015. On that occasion, the Registrar was informed that the subpoenas to which I have referred would be the subject of an application to set aside brought by the fourth, sixth, seventh and eighth respondents (the Obeid respondents). 4 On 15 December 2015, the Obeid respondents filed an Interlocutory Application seeking an order setting aside the subpoenas. 5 When the applicant sought the issue of the subpoenas which were the subject of the orders which I made on 26 November 2015, the applicant supported its application with an affidavit sworn by Christopher Michael Steger on 23 November 2015. Mr Steger is a solicitor employed by the Australian Government Solicitor. In that affidavit, Mr Steger explained in some detail the reasons why the applicant sought the leave of the Court to issue the various subpoenas dealt with in the affidavit. 6 It is not necessary to traverse the material in the affidavit in any great detail. Senior Counsel who appears for the applicant before me today has summarised the effect of Mr Steger's evidence and the purpose for which the challenged subpoenas had been served by reference to certain issues raised by the Obeid respondents in the proceeding. 7 The first issue raised by those respondents concerns the company Voope Pty Ltd (Voope). Voope has been renamed "Mincorp Investments Pty Limited" and is the second respondent in this proceeding. It has not yet filed an appearance and is currently not represented. It is the contention of the Obeid respondents that, at the relevant time, they did not control Voope and, to put it in the vernacular, Voope was not and is not an Obeid entity. The question of whether or not the Obeid respondents controlled Voope at the relevant time is an important issue in the case. I am satisfied that there is a legitimate forensic purpose in the applicant's seeking to procure evidence that will go to establishing that, as contended by it, Voope is and was, in fact, controlled by the Obeid respondents. The subpoenas addressed to CBP and to HWL plainly seek documents which will assist the applicant to establish its contention in relation to this important contested issue. A related issue concerns the capacity in which Mr Gardner Brook negotiated with Cascade Coal Pty Ltd (Cascade Coal) for the establishment of a joint venture in respect of the Mt Penny tenement and the withdrawal of the Monaro companies' bid for that tenement. The Obeid respondents argue that Mr Brook undertook those negotiations on his own account whereas the applicant will argue that he did so on behalf of the Obeid respondents. 8 CPB acted for Voope at all relevant times in relation to its acquisition of shares in Monaro Coal (Aust) Pty Ltd and for other corporate entities in relation to the acquisition by those entities of parcels of land over which the hoped-for exploration licence was going to be granted. Among the documents called for by the subpoenas addressed to CBP are documents which are very likely going to bear upon the question whether the Obeid respondents controlled all of these entities. The same reasoning supports the subpoena served upon Thomson Geer. 9 The second issue to which the subpoenas are directed concerns the capacity in which Mr Brook approached Ms Owen of HWL in relation to a proposed joint venture agreement involving Cascade Coal. It is the contention of the applicant that Mr Brook was acting as agent for the Obeid respondents in respect of his dealings with Ms Owen in respect of that subject matter. In particular, the applicant will argue that the co-venturer with Cascade Coal, Buffalo Resources Pty Ltd, was also a company controlled by the Obeid respondents. These are also matters of contest. Again, it seems clear to me that the material which is sought from HWL is plainly being sought for a legitimate forensic purpose and is likely to produce material which can be used in support of the applicant's contention in respect of that matter. The same may be said of the subpoena addressed to Thomson Geer. 10 The subpoena addressed to Rothshire is also directed to procuring for use in the proceeding documentary material which is likely to establish the requisite connection between the Obeid respondents and the transactions involving the land in respect of which the relevant exploration licence was to be issued. It is the applicant's broad contention that the Obeid respondents orchestrated the acquisition of that land and controlled the entities which became the registered proprietors of the various parcels comprising that land. Documents produced in answer to this subpoena will also almost certainly shed light upon the identity of the true controllers of this company. 11 Mr Singleton, who appeared for the Obeid respondents before me this morning, made submissions as to the relevant law in relation to the purpose for which subpoenas may be issued. He referred to National Employers' Mutual General Insurance Association Ltd v Waind & Hill [1978] 1 NSWLR 372 and the three-step process which the Court of Appeal explained in that case. He also referred to several criminal cases in support of two propositions (Carroll v Attorney-General (NSW) (1993) 70 A Crim R 162 at 182 per Mahoney AP; R v Saleam [1999] NSWCCA 86 at [11] per Simpson J (with whom Spigelman CJ and Studdert J agreed); and Attorney-General (NSW) v Chidgey (2008) 182 A Crim R 536). First, he submitted that the legitimate forensic purpose for which the subpoena is being issued must be identified by the party seeking to have it issued. Second, he argued that that party must demonstrate that there are concrete or definite grounds for believing that the material which will be produced in answer to the subpoena will assist the case sought to be made by the subpoenaing party. He went on to submit that, in the present case, the applicant had not established that it had a legitimate forensic purpose in issuing the subpoenas and had fallen well short of proving concrete or definite grounds. 12 As to the first proposition, I have no difficulty in accepting it as an accurate statement of the law, as far as it goes. As already noted, I am satisfied that the applicant had a legitimate forensic purpose for issuing all five of the subpoenas in question and that it had adequately explained that purpose when it sought leave to issue those subpoenas. 13 As to the second proposition, I doubt that that is a correct statement of the law relevant to civil proceedings. However, I need not tarry on that point because, even if that is a correct statement of the law, for the reasons which I have already explained, I am more than satisfied that there are concrete grounds in the circumstances of the present case for believing that the material which will be produced in answer to the subpoenas will assist the case sought to be made by the applicant. 14 For all of the above reasons, I am comfortably satisfied that all of the challenged subpoenas should be allowed to stand and that the Obeid respondents' application to set aside those subpoenas should be refused with costs. 15 There will be orders accordingly. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster. Associate: Dated: 16 March 2016