FEDERAL COURT OF AUSTRALIA Gloucester Shire Council v Fitch Ratings, Inc [2016] FCA 587 File number: NSD 995 of 2014 Judge: WIGNEY J Date of judgment: 25 May 2016 Catchwords: PRACTICE AND PROCEDURE – interlocutory application to set aside notice to produce and subpoena – whether production of the documents is for a legitimate forensic purpose – where there is no assertion that production is oppressive – where documents may be relevant to the determination of a further interlocutory application Legislation: Australian Securities and Investments Commission Act 2001 (Cth) Corporations Act 2001 (Cth) Federal Court of Australia Act 1976 (Cth), Pt IVA, s 31A(2) Federal Court Rules 2011, r 26.01 Cases cited: ABN AMRO Bank NV and Others v Bathurst Regional Council and Others (2014) 224 FCR 1 Alister v The Queen (1984) 154 CLR 404 Bailey v Beagle Management Pty Ltd (2001) 105 FCR 136 Bathurst Regional Council v Local Government Financial Services Pty Ltd (No 5) [2012] FCA 1200 Commissioner for Railways v Small (1938) 38 SR (NSW) 564 Cosco Holdings Pty Ltd v Commissioner of Taxation [1997] FCA 1504; (1997) 37 ATR 432 Dorajay Pty Limited v Aristocrat Leisure Limited [2005] FCA 588 Grant v Downs (1976) 135 CLR 674 Hamilton v Oades (1989) 166 CLR 486 National Employers' Mutual General Association Ltd v Waind [1978] 1 NSWLR 372 Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 Seven Network Ltd v News Ltd (No 5) [2005] FCA 510 Spencer Motors Pty Ltd v. LNC Industries Ltd [1982] 2 NSWLR 921 Tamwood Limited (ACN 010 954 499) v Habitare Developments Pty Ltd (ACN 122 935 497) [2009] FCA 364 Trade Practices Commission v Arnotts Ltd (No 2) (1989) 88 ALR 90 Date of hearing: 18 May 2016 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: Catchwords Number of paragraphs: 38 Counsel for the Applicants: Mr C H Withers with Ms E Bathurst Solicitor for the Applicants: Squire Patton Boggs Counsel for the First and Third Respondent: Mr T G R Parker SC Solicitor for the First and Third Respondent: Maddocks ORDERS NSD 995 of 2014 BETWEEN: GLOUCESTER SHIRE COUNCIL (ABN 39 690 038 002) First Applicant DIVISION CCMF LIMITED (ABN 29 113 941 343) Second Applicant AND: FITCH RATINGS, INC (A COMPANY INCORPORATED IN DELAWARE, USA) First Respondent FITCH RATINGS, LTD (A COMPANY INCORPORATED IN THE UNITED KINGDOM) Third Respondent JUDGE: WIGNEY J DATE OF ORDER: 25 May 2016 THE COURT ORDERS THAT: 1. The interlocutory application filed by the first and third respondents on 3 May 2016 seeking orders setting aside the notice to produce filed on 8 April 2016 and the subpoena to the Commonwealth Bank of Australia filed on 15 April 2016 be dismissed. 2. The first and third respondents pay the applicants' costs of and associated with the interlocutory application. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT WIGNEY J: 1 The respondents in this proceeding, each of whom is or has been involved in some way in the global credit ratings business commonly known as "Fitch", have applied for orders setting aside a notice to produce that has been served on them, and a subpoena that has been served on the Commonwealth Bank of Australia. The notice to produce was filed and served by, and the subpoena was issued on the application of, the applicants in the proceeding, Gloucester Shire Council and Division CCMF Limited. The notice to produce and subpoena require the production of similar categories of documents. Gloucester and CCMF say that they seek production of those documents for the purpose of resisting an application for summary judgment that has been filed by Fitch. The issue raised by Fitch's application to set aside the notice to produce and subpoena is, in simple terms, whether Gloucester and CCMF have a legitimate forensic purpose in seeking production of the documents: is it "on the cards" that the documents will be relevant to, or will "throw light on", the issue or issues for resolution in Fitch's application for summary judgment? THE PROCEEDING 2 The proceeding commenced by Gloucester and CCMF is a representative proceeding under Part IVA of the Federal Court of Australia Act 1976 (Cth). Gloucester and CCMF allege that they and the group members on whose behalf the proceeding has been commenced sustained losses arising from their investments in financial products which were issued by Credit-Linked Enhanced Asset Repackagings (C.L.E.A.R.) plc. The financial products in question were particular forms of synthetic collateralised debt obligations or SCDOs. The SCDOs were given various names. For present purposes they will be referred to as the Palladin AAA and Palladin AA SCDOs. 3 The "arranger" of the issue of the Palladin AAA and AA SCDOs was the investment bank Merrill Lynch. The Commonwealth Bank of Australia was a distributor of the SCDOs in Australia. It appears to have purchased the Palladin SCDOs as principal and to have then on-sold them to investors, including Gloucester and CCMF. Fitch's involvement in the issue of the Palladin SCDOs came about because it assigned ratings to the SCDOs. As their names perhaps suggest, the Palladin AAA SCDOs were assigned a AAA rating, which was said to represent that their capacity to pay coupons and principal at maturity was exceptionally strong. The Palladin AA SCDOs were assigned a AA rating, which was said to represent that their capacity to pay coupons and principal at maturity was very strong. 4 Gloucester and CCMF allege in the proceeding that in assigning those credit ratings to the Palladin AAA and Palladin AA notes, Fitch conveyed a number of representations to investors and potential investors in the SCDOs. Those representations included that Fitch's opinions concerning the capacity of the SCDOs to pay coupons and principal at maturity were based on reasonable grounds and that, in reaching those opinions, Fitch had exercised reasonable care and skill and had acted objectively and independently, uninfluenced by any conflicts of interest. Gloucester and CCMF contend that those representations were false and misleading. They also allege that Fitch failed to disclose material facts about their ratings methodology and acted unconscionably and breached its duty of care to investors and potential investors in the Palladin AAA and AA SCDOs. Their case is that, in assigning the ratings and thereby conveying the false and misleading representations, Fitch contravened various provisions of the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth) and was negligent. 5 A critical element in Gloucester's and CCMF's case against Fitch is that, when they agreed to invest in the Palladin AAA SCDOs (in Gloucester's case) and the Palladin AA SCDOs (in CCMF's case), they substantially relied on the ratings assigned by Fitch. It is that element of the case against Fitch which is central to Fitch's summary judgment application. The allegations of reliance by Gloucester and CCMF are pleaded in the following terms in paragraphs 87 to 91 of the Statement of Claim. (A) First Applicant's Acquisition of Palladin AA 87. On or about 24 May 2007, the First Applicant agreed to acquire a $500,000 investment in the Palladin AA rated SCDO and the acquisition was completed on 7 June 2007. PARTICULARS Contract Note for Palladin AA, dated 5 June 2007. 88. Prior to investing in Palladin AA, the First Applicant became aware that Fitch intended to assign a AA rating to the production of the issue date of that product. PARTICULARS IN May 2007, the First Applicant was told by the CBA that Fitch was expected to assign a AA rating to the Palladin Series 56 SCDO. Further particulars of the means by which the First Applicant was informed by CBA of the rating assigned to the Palladin AA SCDO will be provide3d with the First Applicant's evidence. (B) Second Applicant's Acquisition of Palladin AAA 89. On or about 21 May 2007, the Second Applicant agreed to acquire a $1,000,000 investment in the Palladin AAA rated SCDO and the acquisition was completed on 7 June 2007. PARTICULARS Contract Note for Palladin AAA, dated 5 June 2007. 90. Prior to investing in Palladin AAA, the Second Applicant became aware that Fitch intended to assign a AAA rating to the product on the issue date of that product. PARTICULARS In May 2007, the Second Applicant was told by the Commonwealth Bank of Australia (CBA) that Fitch was expected to assign a AAA rating to the Palladin Series 57 SCDO. Further particulars of the means by which the Second Applicant was informed by CBA of the rating assigned to the Palladin AAA SCDO will be provided with the Second Applicant's evidence. (C) Reliance by the First Applicant on the Fitch Representations and Fitch's Independence 91. In deciding to invest in the Palladin AA SCDO, the First Applicant relied substantially on the ratings assigned to those SCDOs by Fitch, on the basis of the First Applicant's belief that those ratings were a reliable, independent indicator of the creditworthiness of those SCDOs. (D) Reliance by the Second Applicant on the Fitch Representations and Fitch's Independence 92. In deciding to invest in the Palladin AAA SCDO, the Second Applicant relied substantially on the ratings assigned to those SCDOs by Fitch, on the basis of the Second Applicant's belief that those ratings were a reliable independent indicator of the creditworthiness of those SCDOs. 6 A number of matters can be noted from the pleading. First, Gloucester and CCMF do not allege that they became aware of the ratings assigned by Fitch before they agreed to acquire the Palladin SCDOs (on 24 and 21 May 2007 respectively). That is because Fitch did not formally assign or communicate its rating until the SCDOs were issued on 7 June 2007. Rather, they allege that prior to investing they became aware that Fitch "intended to" assign the AAA and AA ratings on the issue date of the product. 7 Second, Gloucester and CCMF do not allege that Fitch directly communicated its ratings (or the representations said to flow from them) to them. Rather, they allege that they became aware that Fitch intended to assign those ratings from the distributor of the Palladin SCDOs, the Commonwealth Bank. That awareness is alleged to have come about as a result of them being told by the Commonwealth Bank that Fitch "expected to" assign AAA and AA ratings to the SCDOs, though it is also said that further particulars concerning their awareness will be provided with the evidence. 8 Third, as events transpired, Fitch did assign the intended or expected ratings to the SCDOs on the issue date (7 June 2007), which was also (perhaps not surprisingly) the completion date of the acquisitions by Gloucester and CCMF. 9 In light of each of those three matters, there may be an issue concerning the allegations in paragraphs 91 and 92 of the pleading that Gloucester and CCMF relied substantially on the ratings assigned by Fitch. On one view, at least, there would appear to be some tension or inconsistency between the allegations in those paragraphs (that Gloucester and CCMF relied on the AAA and AA ratings assigned by Fitch) and the allegations in paragraphs 88 and 90 of the pleading concerning the awareness of Gloucester at the time they agreed to invest (that Fitch intended to, or expected to, assign AAA and AA ratings). That issue or possible tension is likely to be a matter which will be the subject of argument and submission at the hearing of Fitch's summary judgment application. FITCH'S APPLICATION FOR SUMMARY JUDGMENT 10 Fitch has applied for an order pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth) and r 26.01 of the Federal Court Rules 2011 that the proceeding, insofar as it concerns the claims brought by Gloucester and CCMF, be dismissed. Section 31A(2) and r 26.01 provide, in essence and in this context, that the Court may give judgment for Fitch against Gloucester and CCMF if it is satisfied that Gloucester and CCMF have no reasonable prospect of prosecuting the proceeding. In the alternative, Fitch seeks an order the effect of which is that the Court separately hear and determine questions relating to whether it is possible for a person to rely on a rating assigned by Fitch on a date prior to the date on which the rating was assigned. 11 The evidence filed by Fitch in support of its summary judgment application indicates that Fitch contends that there is no reasonable basis for the contention that Gloucester and CCMF relied on Fitch's AAA and AA ratings because they agreed to purchase the Palladin AAA and AA SCDOs prior to the date that the ratings were assigned. It would also appear that Fitch contends that there is a deficiency in paragraphs 87-92 of the pleading because they do not plead or particularise how the conduct of the Commonwealth Bank "resulted from" any conduct by Fitch. THE NOTICE TO PRODUCE AND SUBPOENA 12 The Notice to Produce calls upon Fitch to produce the following documents: 1. All documents disclosing or recording communications between the First Respondent and the Commonwealth Bank of Australia Limited ABN 48 123 123 124 (the CBA) up to and including 7 June 2007 in relation to the credit ratings the First Respondent intended to or expected to assign to each of the: (a) Palladin AAA Series 57 synthetic collateralised debt obligations with ISIN: AU3FN0003000 (Palladin AAA SDCO); and (b) Palladin AA Series 56 synthetic collateralised debt obligations with ISIN: AU3FN0002994 (Palladin AA SCDO). 2. All documents disclosing or recording communications between the Third Respondent and the CBA up to and including 7 June 2007 in relation to the credit ratings the First Respondent intended to or expected to assign to each of the: (a) Palladin AAA SDCO; and (b) Palladin AA SCDO. 3. All documents disclosing or recording communications between the First Respondent and Merrill Lynch International up to and including 7 June 2007 in relation to the credit ratings the First Respondent intended to or expected to assign to each of the: (a) Palladin AAA SCDO; and (b) Palladin AA SCDO. 4. All documents disclosing or recording communications between the Third Respondent and Merrill Lynch International up to and including 7 June 2007 in relation to the credit ratings the Third Respondent intended to or expected to assign to each of the: (a) Palladin AAA SCDO; and (b) Palladin AA SCDO. 5. All documents recording or disclosing when the First Respondent determined that applying its ratings criteria to the Palladin AAA SCDO, the Palladin AAA SCDO would be entitled to be assigned a AAA rating by the First Respondent. 6. All documents recording or disclosing when the Third Respondent determined that applying its ratings criteria to the Palladin AA SCDO, the Palladin AA SCDO would be entitled to be assigned a AA rating by the Third Respondent. 13 The subpoena is addressed to the Commonwealth Bank. It requires the production of the following documents: 1. All documents disclosing or recording communications between the Commonwealth Bank of Australia Limited ABN 48 123 123 124 (the CBA) and the First Respondent up to and including 7 June 2007 in relation to the assignment of credit ratings by the First Respondent for each of the: (a) Palladin AAA Series 57 synthetic collateralised debt obligations with ISIN: AU3FN0003000 (the Palladin AAA SCDO); and (b) Palladin AA Series 56 synthetic collateralised debt obligations with ISIN: AU3FN0002994 (the Palladin AA SCDO). 2. All document disclosing or recording communications between the CBA and the Third Respondent up to an including 7 June 2007 in relation to the assignment of credit ratings for each of the: (a) Palladin AAA SCDO; and (b) Palladin AA SCDO. 3. All documents disclosing or recording communications between the CBA and Merrill Lynch International up to and including 7 June 2007 in relation to the assignment of credit ratings for each of the: (a) Palladin AAA SCDO; and (b) Palladin AA SCDO. 14 The asserted purpose and basis for the issue of the subpoena to the Commonwealth Bank is identified in an affidavit sworn by Ms Amanda Banton, the solicitor for Gloucester and CCMF. That affidavit was filed in support of the application for leave to issue the subpoena. The asserted basis and purpose of the notice to produce may be taken to be relevantly the same. 15 The basis for the subpoena was said to be the availability of an inference that there were communications between Fitch, Merrill Lynch and the Commonwealth Bank concerning the rating of the SCDOs. Ms Banton expressed the view, apparently based on her involvement in other litigation concerning ratings applied to different SCDOs by a different ratings agency, that "it is standard practice for there to be communications between the arranger and the ratings agency prior to the ratings being assigned". According to Ms Banton, the "rating agency may inform the arranger of a proposed or intended rating prior to the rating being formally assigned and published". As indicated earlier, Merrill Lynch was the arranger of the issue of the Palladin AAA and Palladin AA SCDOs. 16 Ms Banton also referred to and annexed to her affidavit two documents that appear to be documents that the Commonwealth Bank used to market the Palladin SCDOs. Those documents, an "Investor Presentation" and a "Product Brochure", both appear to have been created in early May 2007. Both refer to the Palladin SCDOs as having AAA or AA ratings. In each case, however, there is a footnote to the ratings statement that says that this is the "expected" rating by Fitch. Based on those documents, and her experience, Ms Banton expressed the opinion that "it seems likely" that by May 2007 Fitch had communicated to either the arranger, Merrill Lynch, or the distributor, the Commonwealth Bank, that it "would be assigning or was likely to assign the AAA and AA ratings to the Palladin SCDOs". 17 Little weight can be given to Ms Banton's opinion concerning what "seems likely". Her experience in litigation involving different parties and different SCDOs provides a somewhat flimsy basis for the opinion she expresses. The Commonwealth Bank documents largely speak for themselves. Nevertheless, it seems to be a fairly obvious inference that there would have been some form of communication between Fitch, Merrill Lynch and the Commonwealth Bank concerning the rating of the Palladin SCDOs. It would be somewhat unlikely that the Commonwealth Bank would refer to an "expected" rating in promotional material if there had not been some prior communication with Fitch, either directly or through Merrill Lynch. 18 As for the purpose of the subpoena, Ms Banton deposed as follows: 24. The purpose of the CBA Subpoena is to ascertain whether the First and Third Respondent communicated to the CBA or Merrill Lynch International prior to 7 June 2007 what ratings they intended to assign to the Palladin SCDOs. These documents are necessary to support the Applicants' case, in opposition to the summary judgment application, that the Applicants' acquisition of the Palladin SCDOs was made in reliance on the expected credit rating of the Palladin SCDOs. 25. Alternatively, the documents may be used to demonstrate that: (a) summary judgment should not be granted because the Applicants could re-plead the case to plead the CBA's reliance on communications from the First and Third Respondents concerning the Palladin SCDO ratings prior to 7 June 2007 and, as a consequence, an indirect-causation case by the Applicants against the First and Third Respondents based on those communications; or (b) the Court should not hear the First and Third Respondent's application for determination of separate questions because they involve a detailed factual inquiry into the communications between the First and Third Respondent, the CBA and Merrill Lynch International. 26. Further, the documents produced in response to the CBA Subpoena will enable the parties and the Court to understand the basis for the Applicants' contention that they relied on the credit ratings assigned to the Palladin SCDOs at the time of acquisition, notwithstanding that the acquisition dates were before 7 June 2007. 19 Ms Banton's somewhat oblique reference to an "indirect-causation" case would appear to be a reference to the fact that Fitch did not make any direct representation to either Gloucester and CCMF. It did not directly communicate the ratings to Gloucester or CCMF. Rather, Gloucester and CCMF became aware of Fitch's (intended or expected) ratings (and the representations they allegedly conveyed) through the Commonwealth Bank. The question whether an investor could be considered to have relied on ratings assigned to financial products by a ratings agency in such circumstances was considered by Jagot J in Bathurst Regional Council v Local Government Financial Services Pty Ltd (No 5) [2012] FCA 1200. In that case, the applicants alleged that when they invested in certain SCDOs they relied on ratings assigned to those SCDOs by the ratings agency Standard & Poor's. In its defence, Standard & Poor's contended that the applicants did not rely on any statements made directly to them by Standard & Poor's. Rather, there was a "cascading domino effect" of Standard & Poor's informing the arranger, who informed someone else, who informed the applicants. Standard & Poor's submitted that it was insufficient for the applicants to prove that some other person relied on the rating, and that other person's reliance led to the applicant suffering loss. Jagot J rejected that submission. Her Honour held (at [2877]-[2881]) that the very purpose of assigning the rating was to enable it to be communication by the arranger or distributor to potential investors so that the rating could be relied upon as part of the decision whether or not to invest. That finding was upheld on appeal: ABN AMRO Bank NV and Others v Bathurst Regional Council and Others (2014) 224 FCR 1 at 151 [797]-[798]. 20 The availability or otherwise of such an indirect causation case may be an issue ventilated at the hearing of the summary judgment application. IS THERE A LEGITIMATE FORENSIC PURPOSE? 21 There was no apparent contest between the parties concerning the principles to apply when a subpoena (or notice to produce) is challenged on the basis of the absence of any legitimate forensic purpose. The contest was in relation to the application of those principles. 22 The law concerning subpoenas is one of those areas of law where metaphors abound. The test for whether a subpoena has a legitimate forensic purpose has been put in terms of whether the material caught by the subpoena appears to have relevance in the sense of "throw[ing] light" on at least some of the issues in the principal proceedings: Cosco Holdings Pty Ltd v Commissioner of Taxation [1997] FCA 1504; (1997) 37 ATR 432 at 439-440. It has also been said that it must be "on the cards" that the documents sought will materially assist the party at whose request the subpoena has been issued: Alister v The Queen (1984) 154 CLR 404 at 414; Tamwood Limited (ACN 010 954 499) v Habitare Developments Pty Ltd (ACN 122 935 497) [2009] FCA 364 at [13], [35]-[38]. Slightly more prosaic statements of the test include that the documents must have some "apparent" or "adjectival" relevance, or would be reasonably likely to add, in the end, in some way or another, to the relevant evidence in the case: Spencer Motors Pty Ltd v. LNC Industries Ltd [1982] 2 NSWLR 921 at 927-928 G-A; National Employers' Mutual General Association Ltd v Waind [1978] 1 NSWLR 372 at 385 D-F; Trade Practices Commission v Arnotts Ltd (No 2) (1989) 88 ALR 90 at 103; Dorajay Pty Limited v Aristocrat Leisure Limited [2005] FCA 588 at [17]. 23 The common theme of these various statements of the applicable test of relevance in the context of subpoenas or notices to produce is that it is less stringent than the test of relevance that applies in the context of the admissibility of evidence. And where, as here, the proceeding is at a very early stage and the issues have not been clearly defined, the question whether documents sought by a subpoena have apparent relevance should not be approached too narrowly or rigidly. In such circumstances, the court should be wary of too readily excluding the possibility that a document or class of documents might at the end of the day be relevant to a fact in issue in the litigation. The court should not lose sight of the fact that the public interest requires that in the interests of a fair trial litigation should be conducted on the footing that all relevant documentary evidence is available: Grant v Downs (1976) 135 CLR 674 at 685; referred to by the Full Court in Bailey v Beagle Management Pty Ltd (2001) 105 FCR 136 at 143 [27]. 24 A subpoena also cannot be used for the purposes of "fishing" or conducting a "fishing expedition". A finding of "fishing" amounts to a finding that the subpoena has no legitimate forensic purpose because the documents are sought to discover if the issuing party has a case, not to support a case that has already been articulated: Commissioner for Railways v Small (1938) 38 SR (NSW) 564 at 575. A finding of "fishing" also appears to involve a question of oppression. A subpoena will be more readily set aside if great numbers of documents are required to be produced in circumstances where it cannot be demonstrated that they are likely to be sufficiently relevant: Dorajay at [34]. 25 In this matter, the question whether any documents likely to be produced in answer to the notice to produce and subpoena might "throw light" on the issues that might arise in the summary judgment application is not easy to resolve. That is largely because at this stage it is not entirely clear precisely what issues will arise on that application. Written submissions have not yet been filed. There has been no clear articulation of exactly how the parties will put their respective cases for and against summary judgment. 26 At the hearing of this application, senior counsel for Fitch was, perhaps understandably, somewhat reluctant to rehearse the submissions that will or might be made in support of Fitch's summary judgment application. It is perhaps fair to say, however, that Fitch's case appears to hinge largely on defects that it contends are apparent from the current pleading. The defects include the timing issue (the decisions to invest were made before the ratings were assigned) and the so-called indirect causation issue (Gloucester and CCMF became aware of the "expected" ratings as a result of what they told by the Commonwealth Bank, not as a result of any representation by Fitch). Fitch submitted that the notice to produce and subpoena had no legitimate forensic purpose because any documents produced could not resolve or cure the defects in the pleaded reliance case. Communications between Fitch and Merrill Lynch or the Commonwealth Bank could not change the fact that Gloucester and CCMF decided to invest before the ratings were assigned, and that Gloucester and CCMF relied on what the Commonwealth Bank told them about the expected ratings, not on any representations that were said to flow from the assignment of the ratings by Fitch. 27 Gloucester and CCMF, on the other hand, contended that the issues that arise, or may arise, in the context of the summary judgment application are broader than the pleading issues raised by Fitch. They submitted that their pleading is not defective or deficient as contended by Fitch. If there was any such defect, however, that defect could, in their submission, readily be cured by amendment of the pleading. The more significant issue was whether they have a valid claim. That may depend on the evidence available to them. Gloucester and CCMF submitted that they were entitled to support their contention that they have a valid claim by tendering evidence which provides some factual foundation for their claim. In their submission it is "on the cards" that the documents produced in answer to the subpoena and notice to produce will be relevant to, or will "throw light on", two aspects of their reliance case: first, the reasonableness of their reliance; and second, their indirect causation case based on the fact that Fitch's ratings and the representations that they allege flowed from them, were conveyed to them through the Commonwealth Bank. 28 The issue is complicated because the parties appear to have different interpretations of the current pleaded case in relation to reliance. That is apparent from both the correspondence between the parties' solicitors concerning the pleading and the submissions that were advanced in relation to the notice to produce and subpoena. Whether that disjunct is or is not a result of ambiguities or other deficiencies in the pleading is an issue that can only be determined at the hearing of the summary judgment application. 29 Fitch appeared to interpret the pleading as amounting to, in effect, an allegation that Gloucester and CCMF relied on the Commonwealth Bank's expectations concerning the ratings. Gloucester and CCMF, on the other hand, appeared to contend that they relied on Fitch's intended ratings, albeit that the intended ratings were conveyed to them through or via the Commonwealth Bank. They submitted that the pleading is capable of supporting a case that Fitch effectively authorised or permitted the dissemination of the rating that they intended or expected to assign to the Palladin SCDOs when issued. They contended that transactions involving the issue and distribution of SCDOs are invariably structured and arranged in such a way that the issue of the SCDOs will not go ahead unless the intended ratings are in fact assigned on the issue date. In that context, an intended rating or an expected rating is effectively tantamount to an assigned rating. 30 Despite this complication, or perhaps because of it, the better view is that Gloucester and CCMF have discharged their onus of establishing a legitimate forensic purpose for the notice and subpoena. It is "on the cards" that the documents required to be produced in answer to the notice and subpoena may bear on the issues to be determined in the context of Fitch's summary judgment application, or that they will or may have the capacity to "throw light on" whether Gloucester and CCMF have a valid claim. 31 An important issue that may arise in deciding whether Gloucester and CCMF have a valid claim with reasonable prospects of success is what, if anything, Fitch authorised or permitted third parties, including the arranger, Merrill Lynch, and distributors, including the Commonwealth Bank, to say about its intended or expecting rating of the SCDOs in question. Did Fitch directly or indirectly authorise or permit distributors, such as the Commonwealth Bank, to tell prospective investors that Fitch intended or expected to assign AAA and AA ratings to the Palladin SCDOs? In those circumstances, and having regard to the nature of the transaction in question, can the Commonwealth Bank's reference to expected ratings reasonably be taken to be a dissemination of Fitch's intentions or expectations, as opposed to a statement concerning the Commonwealth Bank's expectations. 32 Equally, the documents might shed light on what persons in the position of Gloucester and CCMF might reasonably infer or conclude from a statement concerning Fitch's intended or expected ratings. Such a statement may need to be considered in its proper context, including the nature of the transaction and the relationships between the parties involved in it. Is it the case that these types of transactions are invariably structured or arranged in such a way that they will not proceed to the point of issue if the expected or intended rating of the SCDOs is not in fact assigned on the issue date? That may be an explanation for why the rating is not finally assigned until the issue date, which is also the date that acquisitions are finalised. If so, it would follow that if Fitch did not assign AAA and AA ratings to the Palladin notes as expected or intended, the issue would not have proceeded and the acquisitions by Gloucester and CCMF would not have been completed. Can it be inferred, in such circumstances, that a statement by Fitch concerning its expected ratings could reasonably be interpreted by prospective investors as tantamount to a statement that if the issue proceeds, Fitch would assign those ratings to the issued product? 33 None of the observations just made should be taken to amount to even provisional views about how the issues that might arise in the context of the summary judgment application will eventually play out. Rather, they are simply teasing out the possible issues so as to illustrate how documents that disclose communications that may have occurred between Fitch, Merrill Lynch and the Commonwealth Bank in relation to the rating of the Palladin SCDOs might bear on the question whether Gloucester and CCMF have a valid claim against Fitch. In particular, they illustrate how the documents might possibly be relevant to the question whether it could be found that Gloucester and CCMF invested in the Palladin SCDOs in substantial and reasonable reliance on the ratings assigned by Fitch. 34 It follows that Gloucester and CCMF have a legitimate forensic purpose in seeking production of the documents in the notice and subpoena. 35 The notice to produce and subpoena also could not fairly be characterised as involving "fishing" or as effectively seeking discovery. The notice and subpoena are both reasonably targeted and not expressed in overly broad or ambiguous terms. For the reasons already given, the documents sought by the notice and subpoena have apparent relevance to a case that has been articulated by Gloucester and CCMF, albeit that issues may arise as to the adequacy or clarity of the current pleading in that regard. It cannot reasonably be concluded that the notice and subpoena involve "trawling" for documents for the purpose of Gloucester and CCMF seeking to discover if they have a case against Fitch. 36 There is no other basis to conclude that the notice to produce and subpoena are oppressive. There was no evidence that a large volume of documents would be required to be produced by the notice to produce and subpoena, or that the requirement to produce the documents would otherwise be unduly onerous. There is no basis to conclude that the notice to produce and subpoena could be considered to be "seriously unfairly burdensome, prejudicial or damaging" or "productive of serious and unjustified trouble or harassment": Hamilton v Oades (1989) 166 CLR 486 at 502; Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 at 247; Seven Network Ltd v News Ltd (No 5) [2005] FCA 510; (2005) 216 ALR 147 at 151 [12]. 37 It follows that there is no basis to set aside the notice to produce or subpoena to the Commonwealth Bank. CONCLUSION AND DISPOSITION 38 The interlocutory application by Fitch filed 3 May 2016 seeking orders setting aside the notice to produce filed on 8 April 2016 and the subpoena to the Commonwealth Bank of Australia filed on 15 April 2016 is dismissed with costs. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Wigney. Associate: Dated: 25 May 2016