Federal Court of Australia Seven Network (Operations) Limited v Fairfax Media Publications Pty Limited [2023] FCA 1154 File numbers: NSD 870 of 2023 NSD 875 of 2023 Judgment of: PERRAM J Date of judgment: 25 September 2023 Date of publication of reasons: 27 September 2023 Catchwords: PRACTICE AND PROCEDURE – where Applicants seek leave to appeal from interlocutory decision refusing to set aside subpoenas and part of notice to produce – whether interlocutory decision attended by sufficient doubt to warrant reconsideration by Full Court – whether substantial injustice would result if leave to appeal refused supposing decision to be wrong Legislation: Federal Court of Australia Act 1976 (Cth) s 37AF Cases cited: Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 Swannick v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (No 2) [2021] FCAFC 81 Division: General Division Registry: New South Wales National Practice Area: Other Federal Jurisdiction Number of paragraphs: 8 Date of hearing: 22 September 2023 Counsel for the Applicants (NSD 870 of 2023): Mr J Williams SC and Mr K Josifoski Solicitor for the Applicants (NSD 870 of 2023): Herbert Smith Freehills Counsel for the Applicants (NSD 875 of 2023): Mr S Duggan and Mr P Sharp Solicitor for the Applicants (NSD 875 of 2023): Mark O'Brien Legal Counsel for the First, Second, Third and Fourth Respondents: Mr N Owens SC and Mr C Mitchell Solicitor for the First, Second, Third and Fourth Respondents: MinterEllison ORDERS NSD 870 of 2023 BETWEEN: SEVEN NETWORK (OPERATIONS) LIMITED First Applicant SEVEN WEST MEDIA LIMITED Second Applicant AUSTRALIAN CAPITAL EQUITY PTY LTD Third Applicant KERRY STOKES Fourth Applicant BRUCE MCWILLIAM Fifth Applicant AND: FAIRFAX MEDIA PUBLICATIONS PTY LIMITED First Respondent NICK MCKENZIE Second Respondent CHRIS MASTERS Third Respondent DAVID WROE Fourth Respondent BEN ROBERTS-SMITH Fifth Respondent order made by: PERRAM J DATE OF ORDER: 25 SEPTEMBER 2023 THE COURT ORDERS THAT: 1. The Applicants' application for leave to appeal dated 14 August 2023 is granted. 2. The parties have liberty to apply. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. ORDERS NSD 875 of 2023 BETWEEN: BEN ROBERTS-SMITH Applicant AND: FAIRFAX MEDIA PUBLICATIONS PTY LIMITED First Respondent NICK MCKENZIE Second Respondent CHRIS MASTERS Third Respondent DAVID WROE Fourth Respondent order made by: PERRAM J DATE OF ORDER: 25 SEPTEMBER 2023 THE COURT ORDERS THAT: 1. The Applicant's application for leave to appeal dated 16 August 2023 is granted. 2. The parties have liberty to apply. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT PERRAM J: 1 These are applications for leave to appeal from orders made by the primary judge dismissing interlocutory applications to set aside a number of subpoenas and part of a notice to produce. Since those determinations were interlocutory in nature an appeal does not lie as of right but first requires a grant of leave to appeal. Generally, leave will be granted if there is reason to think the primary judge's decision is attended by sufficient doubt and, if it turns out to be wrong, that its wrongness gives rise to substantial injustice: Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397. 2 I am satisfied of both matters. The subpoenas were issued in the course of the preparations for the hearing of the First, Second, Third and Fourth Respondents' (together, 'the Fairfax parties') application to have Seven Network (Operations) Limited ('SNOL') and Australian Capital Equity Pty Ltd ('ACE') (together, 'the Seven entities') pay their costs of defending Mr Roberts-Smith's defamation proceeding. The principles on which such a third-party costs order would be made are in contest between the parties. 3 The Fairfax parties contend that under the relevant financing documentation SNOL and then ACE agreed to meet Mr Roberts-Smith's costs of running the litigation. The terms of this arrangement are to an extent controversial but it appears that Mr Roberts-Smith has at least agreed to repay the loans from any judgment sum he recovered from the Fairfax parties. The documentation giving rise to the financing arrangements states that it was ACE's view that SNOL's ongoing oversight and management would be 'important for a successful outcome to the proceedings'. The Fairfax parties now contend that SNOL exercised oversight and management of Mr Roberts-Smith's proceedings. It buttresses this proposition with the observation that given the costs of the proceedings and the corresponding size of the loans advanced to Mr Roberts-Smith, it was the Seven entities which had a financial interest in the proceeding and not Mr Roberts-Smith. 4 Management and oversight are somewhat amorphous concepts. The Fairfax parties seek to sharpen their pencil by delving into the minutiae of the relationship between the Seven entities, Mr Roberts-Smith and his advisers in the context of his litigation. The end to which this endeavour is bent is, presumably, demonstrating that the Seven entities were actively involved in the conduct of the litigation and its chief financial beneficiaries. 5 The subpoenas in effect seek the production of all communications between the Seven entities and Mr Roberts-Smith or his advisers relating to the litigation and all documents held by senior officers of the Seven entities relating to the loans advanced to Mr Roberts-Smith. The notice to produce directed towards Mr Roberts-Smith is in similar terms. 6 The third-party costs application is not proceeding on pleadings. However, the basic issue appears to be whether the exercise by SNOL of its entitlement to oversee and manage the litigation has resulted in the Seven entities having a sufficient connection with Mr Roberts-Smith and the conduct of the litigation to warrant the Court making an order for costs against them. The subpoenas are not drawn in a way which limits their scope by reference to any materiality threshold. The primary judge thought that it was not possible to assess the 'sufficient connection' question without having an understanding of the full nature of the relationship and hence that the breadth of the subpoenas was justified. I can, with respect, see the force in this observation. However, there is also force in the proposition that the subpoenas are being used as a substitute for discovery. In my view, the primary judge's conclusions are attended by sufficient doubt in this sense. 7 I am also satisfied that irremediable prejudice may result if the primary judge's conclusions turn out to be wrong. Amongst the documents caught by the subpoenas are some which are personally embarrassing. If these are produced and access is granted to them, they may subsequently be tendered in evidence. That they are embarrassing will not of itself justify the making of a suppression order under s 37AF of the Federal Court of Australia Act 1976 (Cth) if they are tendered: Swannick v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (No 2) [2021] FCAFC 81 at [14]. At the moment, these communications are private and the third parties to whom the subpoenas are directed have some right to expect that their privacy will be respected. On the assumption that the decision not to set aside the subpoenas is erroneous, it is evident that these privacy interests are imperilled. I accept that this would be a substantial injustice. 8 Consequently, the decision of the primary judge is attended by sufficient doubt and, if wrong, would result in substantial injustice. It was for these reasons that I granted leave to appeal. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Perram. Associate: Dated: 27 September 2023