Stevens v Camille [2016] FCA 152

FEDERAL COURT OF AUSTRALIA

Stevens v Camille [2016] FCA 152 File number: WAD 1 of 2015

Judge: BARKER J

Date of judgment: 26 February 2016

Catchwords: PRACTICE AND PROCEDURE – subpoena – application to set aside – whether legitimate forensic purpose – whether a "fishing expedition" – whether oppressive

Legislation: Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) s 169-1, s 169-5 Federal Court of Australia Act 1976 (Cth) s 37M, s 37N

Date of hearing: 18 February 2016

Registry: Western Australia

Division: General Division

National Practice Area: Commercial and Corporations

Sub-area: Corporations and Corporate Insolvency

Category: Catchwords

Number of paragraphs: 29

Counsel for the Applicants: Mr MP Costello

Solicitor for the Applicants: Shayne Daley & Associates

Counsel for the Respondents: Mr RI Viner AO QC

Solicitor for the Respondents: Castledine Gregory Law and Mediation

ORDERS WAD 1 of 2015

BETWEEN: WAYNE STEVENS First Applicant

TANIA STEVENS Second Applicant

GUINESS STEVENS Third Applicant

AND: GLEN CAMILLE First Respondent

KENZIE SMITH Second Respondent

JUDGE: BARKER J DATE OF ORDER: 26 FEBRUARY 2016

THE COURT ORDERS THAT:

1. The parties to discuss and bring forward a minute to give effect to this judgment. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

BARKER J: 1 In this proceeding, the applicants seek a variety of declarations and injunctions on the basis that the respondents, who are members and directors of the Wintawari Guruma Aboriginal Corporation RNTBC, have breached their duties as directors, as pleaded in the statement of claim filed 6 January 2015, by establishing a number of subsidiaries, namely, Eastern Guruma Administration Pty Ltd, Eastern Guruma Administration Services Pty Ltd, Wintawari Guruma Enterprises Pty Ltd and Muntulgura Guruma JV Pty Ltd. 2 By interlocutory application filed 20 April 2015 addressed to the respondents and the Aboriginal Corporation, the applicants seek an order that they be granted leave, pursuant to s 169-1 and s 169-5 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth), to bring and continue this proceeding on behalf of the Aboriginal Corporation against the respondents. They also seek an order that the originating application filed 6 January 2015 be amended to include the Aboriginal Corporation as an applicant. The interlocutory application for leave is listed for hearing on 9 March 2016. 3 A question concerning the applicants' family's rights to be appointed to the Board of the Aboriginal Corporation and boards of its subsidiaries, which may be referred to as the traditional decision-making issue, or the "four families question", squarely arises in the related proceeding WAD 374 of 2015. By earlier order of the Court, that question is to be heard in conjunction with this proceeding, in which the question also arises. 4 It is in this context, that the applicants have issued subpoenas to a number of entities, requiring production of documents said to be relevant to this proceeding. Subpoenas have also been issued, at the instance of these same applicants, in WAD 374 of 2015. 5 The Aboriginal Corporation has applied, by interlocutory application filed 24 November 2015, to set aside, in whole or in part, the subpoenas issued by the applicants that are addressed to: (1) Australian Executor Trustees Ltd (AET) on 22 October 2015; (2) Pascoe Partners Custodian Services Pty Ltd on 22 October 2015; (3) Pascoe Partners Pty Ltd on 22 October 2015; (4) The Myer Family Company Ltd on 16 November 2015; (5) Wintawari Guruma Enterprises Pty Ltd on 16 November 2015; and (6) Muntulgura Guruma JV Pty Ltd on 16 November 2015. 6 At the commencement of the hearing of the interlocutory application on 18 February 2016, counsel for the applicants advised that, as a result of correspondence between the applicants and relevant addressees, the subpoenas referred to in (5) and (6) were to be withdrawn. The Court granted leave to that end, reserving the question of costs. The Court was also advised by counsel that subpoenas addressed to these two addressees in WAD 374 of 2015 were also, subject to the leave of the Court, withdrawn. Leave was given, if not expressly, then tacitly, to that course. 7 As to the remaining subpoenas, senior counsel for the Aboriginal Corporation clarified the following circumstances: (1) Pascoe Partners Pty Ltd ((3) above) is a trustee for the Pascoe Partners Unit Trust, which is not a relevant trust in this proceeding. (2) Pascoe Partners Custodian Services Pty Ltd ((2) above), of which Pascoe Partners Pty Ltd is the parent company, was, until The Myer Family Company Ltd ((4) above) became the trustee in 2015, trustee of the Eastern Guruma Charitable Trust, which is often referred to as "Eastern Guruma Charitable Trust No 1". (3) AET ((1) above) is trustee of the Eastern Guruma Charitable Trust No 2, sometimes known as "Plan B Trust". 8 In short, the Aboriginal Corporation, by its written submissions filed 24 November 2015 and counsel's submissions at the hearing, contends that the subpoenas that remain in issue should be set aside because, as they do not serve any legitimate forensic purpose in either the interlocutory leave application or the proceeding more generally, they are not relevant; and are an abuse of process, as they are oppressive as drawn and represent a "fishing expedition". The applicants contest that view. 9 The subpoena issued against Pascoe Partners Pty Ltd is as good a starting place as any. The documents and things it requires Pascoe Partners Pty Ltd to produce are set out in the "Schedule of documents" as follows: Schedule of documents The documents and things you must produce are as follows: In relation to the Eastern Guruma Aboriginal Charitable Trust ('the Trust'):- 1. General financial records of the said Trust setting out payments to and from the said Trust for the period 1 January 2010 to date including: (a) Any financial reports, ledgers, bank registers or other internal financial accounting and management accounting records with reconciliations and details of all receipts and payments for each of the years ending between June 2010 and June 2015. (b) Any audited financial statements in respect of the Trust; (c) The bank account details, bank statements and signing authorities of each bank account operated for or on behalf of the Trust (i) by you; (j) by Pascoe Partners Custodian Services Pty Ltd; (k) by any agent or delegate of the Trust. 2. Without limitation to paragraph 1 above the bank account details, bank statements and signing authorities of each bank account operated for or on behalf of the Trust (l) by you; (m) by Pascoe Partners Pascoe Partners Custodian Services Pty Ltd; (n) by any agent or delegate of the Trust for each of • Wintawari Guruma Aboriginal Corporation RNTBC; • Eastern Guruma Administration Pty Ltd; • Eastern Guruma Administration Services Pty Ltd; • Wintawari Guruma Enterprises Pty Ltd; and • Muntulgura Guruma JV Pty Ltd: 3. In respect of any payments by the Trust to or on behalf of each of • Wintawari Guruma Aboriginal Corporation RNTBC; • Eastern Guruma Administration Pty Ltd; • Eastern Guruma Administration Services Pty Ltd; • Wintawari Guruma Enterprises Pty Ltd; and • Muntulgura Guruma JV Pty Ltd: (a) the dates of such payments; (b) details of the payee of any such payment including bank account details, if applicable, into which such payments have been made; (c) all correspondence, emails, diary notes and records of communication between you and any of the above companies or their agents or representatives in respect of any such payment; 4. In respect of any payments by the Trust to or on behalf of any third-party employer, employee or contractor, including any employee or contractor of • Wintawari Guruma Aboriginal Corporation RNTBC; • Eastern Guruma Administration Pty Ltd; • Eastern Guruma Administration Services Pty Ltd; • Wintawari Guruma Enterprises Pty Ltd; and • Muntulgura Guruma JV Pty Ltd: (a) the dates of such payments; (b) details of the payee of any such payment including bank account details, if applicable, into which such payments have been made; (c) all correspondence, emails, diary notes and records of communication between you and any of the above companies or their agents or representatives in respect of any such payment; (d) any employment records or documentation relating to such employer, employee or contractor including any group certificates, superannuation or tax records. 10 The subpoena issued to Pascoe Partners Custodian Services Pty Ltd is in similar terms to the subpoena above, save that, by item 1 of the "Schedule of documents", the following documents are required: 1. Constitution and membership: (a) The Trust Deed and any Deed amending or replacing any such Trust Deed for the said Trust; (b) any document used or prepared by you which sets out or establishes the appointment of, rights of or composition of any Trustee Advisory Council or other body of persons to perform the functions of an advisory trustee pursuant to the said Trust Deed ('Advisory Trustees); (c) a list of the names of the persons who currently are or have been advisory trustees of the said Trust for the period 1 January 2010 to date and the dates of their appointment or resignation; (d) copies of the minutes of the meetings of advisory trustees for the period 1 January 2011 to date; (e) copies of the minutes of the meetings of Pascoe Partners Custodian Services Pty Ltd for the period 1 January 2011 to date relating to the Trust (f) a current list of those persons who have to date been identified by you as members of the Eastern Guruma People for the purposes of the Trust. 11 The subpoena issued to The Myer Family Company Ltd is in similar terms to that issued to Pascoe Partners Custodian Services Pty Ltd. The main difference, given the terms of the subpoenas and the information set out at [7(2)] above, is that this entity is only required to produce documents generated since it became trustee of the Eastern Guruma Charitable Trust No 1 in 2015. 12 The subpoena issued to AET is also in similar terms to that issued to Pascoe Partners Custodian Services Pty Ltd, with the relevant period being 1 January 2010 to date. 13 Thus, all subpoenas, save the subpoena issued to The Myer Family Company Ltd, are intended to cover documents created over about a five year period. 14 The primary question is whether any legitimate forensic purposes are advanced to justify the issue of these subpoenas. In short, the Aboriginal Corporation, which has a "sufficient interest" in the disclosure of information concerning its affairs in this proceeding, says that the applicants are on a classic "fishing expedition", and have failed to target the document requests to particular categories of documents that might arguably be relevant to matters in issue. 15 As senior counsel for the Aboriginal Corporation acknowledged, the applicants say that the forensic purposes of the subpoenas are: the marshalling of documents to demonstrate the financial capacity of the Aboriginal Corporation to withstand an adverse costs order, should the applicants' interlocutory application for leave to conduct these proceedings against the respondents in the name of the Aboriginal Corporation be granted; to give insight into the flow of funds between the Aboriginal Corporation and other entities; as well as to demonstrate that the Aboriginal Corporation has made payments to the applicants in the past, and the likelihood of those payments being continued in the future. Alternatively, the applicants submit that this information would support the proposition that, in the circumstances, an indemnity or full indemnity by the applicants if they are granted leave to conduct the proceedings in the name of the Aboriginal Corporation ought not be required or, if required, could be levied from their "share of future payments", commonly referred to as the "bucket payments". The central proposition here is that, with access to the documents required, the applicants, on the interlocutory leave application, will be able to satisfy the Court that any costs liability the Aboriginal Corporation may incur, if leave is granted, can be covered by the Aboriginal Corporation or indemnified by the applicants from payments they receive, or expect to receive, from the trusts. 16 In my view, the subpoenas, as currently framed, go beyond a request for documents for such a purpose. There is a reasonable basis to the objection that they are calculated to conduct a fishing expedition as they are not sufficiently targeted to produce the particular information that the applicants say they require in order to make submissions concerning consideration of the costs' indemnity factor on the interlocutory leave application. 17 To that extent the subpoenas should be set aside. 18 In any event, there is, in my view, sufficient information available, albeit of a general nature, for the applicants to make the proposed submissions concerning indemnity, without there being any obligation on the various trustees of the trusts to conduct a search of records that answer the very general description of documents requested. 19 If it be the case that the applicants have received "bucket payments" in the past, then they are in an ample position to give evidence about those payments and make submissions as to whether or not they believe they will or should continue into the future. The Court may be invited to make inferences on the available evidence, including the terms of the relevant trusts, which have now been adduced in evidence on this application. 20 If necessary, it may also be considered possible for the parties to agree facts about what "bucket payments" have historically been made, bearing in mind the obligations of the parties and their lawyers arising under s 37M and s 37N of the Federal Court of Australia Act 1976 (Cth). 21 The applicants also seek to justify the subpoenas by reference to what counsel called the "subsidiary use" to be made of the documents. In this regard, counsel was not referring to the forthcoming interlocutory leave application, but any subsequent hearing on the primary issues raised in this proceeding against the respondents as directors of the Aboriginal Corporation. 22 Counsel said that if a trial were ultimately to proceed, the use to which he referred would become the primary use of the documents. He referred to the statement of claim and what has been variously described as the traditional decision-making issue or the "four families allegations". This is, as set out in [8(d)] of the statement of claim, the allegation that the following families, which include the applicants, are entitled to share equally in the benefits and opportunities created by, or which result from, the activities and enterprises conducted or carried on by any of the Eastern Guruma corporate entities: (a) the Hicks family; (b) the Stevens family; (c) the Hughes family; and (d) the Smith-Connors family. 23 Counsel submitted that the documents the subject of the subpoenas would enable the applicants to show that payments have been made by the trusts to individual families in the earlier mentioned "buckets", which would in turn support the claim that there is an agreed traditional decision-making process that has since been disregarded in the operation of the Aboriginal Corporation and its associated entities. 24 Senior counsel for the Aboriginal Corporation submitted, so far as the "subsidiary use" argument, that it was not an argument advanced in the applicants' written submissions filed 9 December 2015 and that, in any event, the subpoenas, as currently directed, seek the production of documents going far beyond any such forensic use at a subsequent trial of the traditional decision-making issue. 25 In my view, the submission made on behalf of the Aboriginal Corporation should be accepted. If there are particular documents that arguably go to the traditional decision-making issue, then the subpoenas should be better targeted to identify relevant documents. Additionally, to require the production of a wide range of financial and related records suffers from the deficiency of engaging in a fishing expedition not significantly related to any presently legitimate forensic inquiry. 26 The fact that the "subsidiary use" argument was only raised in counsel's submissions at the hearing and was not advanced in the applicant's written submissions filed 9 December 2015, tends to support the view that this argument has only been advanced, at the last minute, in order to help overcome any perceived deficiencies in the argument at [15] above.