New South Wales Supreme Court CITATION : Travel Compensation Fund v Blair & Ors [2003] NSWSC 184 revised - 24/03/2003 HEARING DATE(S) : Wednesday 12 March 2003 JUDGMENT DATE : 12 March 2003 JURISDICTION: Equity Division Commercial List JUDGMENT OF : McClellan J DECISION : CATCHWORDS : SUBPOENAE - seeking to set aside Travel Compensation Fund (Pltf) John Harvey Blair (1D) PARTIES : George Frazis (2D) Scott David Roworth (3D) Gary Kenneth Toomey (4D) Air New Zealand FILE NUMBER(S) : SC 50175/02; 50176/02; 50177/02; 50178/02; 50179/02; 50180/02; 50181/02; 50182/02; 50183/02 I Mescher (Pltf) J Gleeson SC (1D) COUNSEL : R Butler (2, 3D) S D Rares SC/M R Speakman (4D) P M Wood ( Air New Zealand) Vincent ( ASIC) Minter Ellison (Pltf) Corrs Chambers Westgarth (1D) SOLICITORS : Deacons (2,3D) Henry Davis York (4D) Freehills (Air New Zealand) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST McCLELLAN J WEDNESDAY 12 MARCH 2003 50175/02 TRAVEL COMPENSATION FUND v BLAIR & ORS 50176/02 TRAVEL COMPENSATION FUND v BLAIR & ORS 50177/02 TRAVEL COMPENSATION FUND v BLAIR & ORS 50178/02 TRAVEL COMPENSATION FUND v BLAIR & ORS 50179/02 TRAVEL COMPENSATION FUND v BLAIR & ORS 50180/02 TRAVEL COMPENSATION FUND v BLAIR & ORS 50181/02 TRAVEL COMPENSATION FUND v BLAIR & ORS 50182/02 TRAVEL COMPENSATION FUND v BLAIR & ORS 50183/02 TRAVEL COMPENSATION FUND v BLAIR & ORS JUDGMENT 1 HIS HONOUR: The defendants have brought motions seeking to set aside four subpoenae issued by the Travel Compensation Fund ("The Fund") in these proceedings. 2 On 20 December 2002 I gave judgment setting aside two previous subpoenae issued by The Fund to the Australian Securities and Investments Commission ("ASIC"). In my reasons for judgment I set out the nature of the primary proceedings brought by The Fund and the forensic purpose which The Fund said was to be served by the subpoenae which it had issued. 3 But for one matter, junior counsel for The Fund, who appears today, relies upon the statement made by senior counsel for The Fund in the previous proceedings. The additional submission made in these proceedings, as I understand it, does not take the matter beyond the previous submissions of senior counsel, but seeks to reinforce the submission that it is legitimate in these proceedings to investigate the financial affairs of the whole Ansett Air New Zealand group during the relevant period. The Fund takes issue with my previous decision in relation to that aspect of the matter. 4 I should record the fact that The Fund has lodged a holding appeal in relation to my previous decision, but has not yet determined whether to seek the necessary leave to appeal. I have already expressed my concern that proceedings of this nature should be disposed of expeditiously and that The Fund should accept the obligation, in the public interest, of ensuring this object is achieved. Applications for leave to appeal interlocutory rulings should accordingly be made, if at all, in a timely manner. 5 When the problems of the previous subpoenae were before me last year, I was careful to ask senior counsel to articulate the forensic purpose of the subpoenae, having regard to the issues to be litigated in the main proceedings. Senior counsel's remarks and my response to them are apparent from my reasons for judgment (see paragraphs 27, 28 and 29). 6 The form of the present subpoenae and the arguments put to support them, do not acknowledge the reasons and conclusions I expressed on 20 December 2002. If The Fund seeks to challenge those reasons and conclusions, the appropriate course is to prosecute the application for leave to appeal. If not, fresh subpoenae should be framed to accord with the principles which I identified. 7 I shall deal with each of the subpoenas in turn. Subpoena addressed to ASIC 8 The Fund has issued a fresh subpoena to ASIC. No objection is taken to paragraph 4 of the subpoena. However, in many respects the subpoena resembles that which I set aside on 20 December 2002. Counsel has prepared a form of the subpoena which, by crossing out or underlining, reveals the differences between the present subpoena and that which was set aside last year. "1. The transcript of interviews, evidence or statements made or given by each of the following persons during any the Australian Securities and Investment Commission hearing or proceeding of whatever nature investigation referred to in ASIC's press release of 14 September 2001 in connection with Ansett Australia Limited CAN 004 209 410 (" Ansett ") , or Ansett Holdings CAN 065 117 535 (" Ansett Holdings ") , or any related company Traveland Pty Ltd CAN 000 240 746 (" Traveland ") or Air New Zealand Limited ARBN 000 312 685 (" Air New Zealand ") on or after between 14 September 2001 and 11 July 2002 : (a) John Harvey Blair (b)John Anthony Dell; (c) (b) George Franzis (d)David James Irvine; (e)Andrew Baxter Miller; (f)Allister Currie Paterson; (g) (c) Scott David Roworth (h) (d) Garry Kenneth Toomey 2. Any D ocuments put to, shown to or produced by the persons listed iin paragraph 1 above in the course of the hearing or proceedings investigation referred to in 1 above ., and in particlar: (a)all minutes of meetings of directors of Ansett or Ansett Holdings or any related company in the period between 1 January 2000 and 14 September 2001 (" relevant period "); and (b)all board papers and financial records of Ansett or Ansett Holdings or any related company for the relevant period. 3. All Documents by way of correspondence with the persons listed in paragraph 1 above or their legal representatives in the course of the investigation referred to in paragraph 1 above. 4. All Documents, including any relevant Notice of Change of Office holders or similar form, which relate to or concern the appointment or resignation of the directors of Ansett, Ansett Holdings, Traveland or Air New Zealand during the period 14 December 2000- 14 September 2001 (" the relevant period "). 5. All Documents which relate to or concern the appointment of administrators to Ansett, Ansett Holdings and Traveland on or about 12 or 14 September 2001. In this schedule ' Documents ' includes but is not limited to correspondence (including by electronic e.mail), memoranda, instructions, directors, reports, summaries, agreements, drafts, opinions, advices, file notes, internal documents, diary notes, files, notes of meetings and notes of conversations, including telephone conversations." 9 The Fund submits that by identifying a closed period of time, 14 September 2001 to 11 July 2002, one of the problems with the previous subpoena has been cured. This submission has no force once it was realised that the defined period is the whole of the duration of the ASIC investigation. Although no date was identified within the document, the effect of the previous subpoena was the same in relation to time as the present one. 10 It is true that the new subpoena does not seek documents relevant to related companies of Ansett Holdings, but this does not, in my opinion, cure the problems which I identified with the previous subpoena. But for paragraph 4, I am of the view that the subpoena should be set aside for the reasons which I previously gave in relation to the ASIC subpoena. 11 One further matter was addressed in the present proceedings. The defendants are, of course, former directors, but are no longer engaged in the activities of the relevant companies. Although they could have been required to make discovery of documents, the property of the company of which they were formerly directors, arrangements were made to relieve them of that obligation. The course taken was that subpoenae would issue to retrieve those documents from the persons or organisations where they are presently kept. However, before these arrangements were made, a schedule of identified categories of documents was proposed and exchanged. The schedule was in evidence before me. In that schedule there are identified classes of documents which are plainly discoverable and which will be amenable to subpoena. They relate to the operation of relevant travel agent corporations or so much of the corporations which engaged in that type of enterprise within the Ansett group. 12 It is possible that if subpoenae are issued, confined in the first instance to those documents, inspection may lead to proper inquiry beyond the immediate documents of the travel companies. At that time it might be possible to justify the issue of further subpoenae which at present appear merely speculative. Subpoena to the administrators of the Ansett Group 13 No objection is taken to paragraphs 3 or 4 of the subpoena provided that the latter paragraph is confined to documents which "relate" to relevant matters and not any which "concern" those matters. 14 A previous subpoena has been issued to the administrators of the Ansett group which, although proceedings were mooted, was not the subject of a motion to set it aside. Some of the documents called for under the original subpoena have been produced, but I am informed that The Fund believes the subpoena was not adequately answered and seeks to address those matters by the issue of the fresh subpoena. I do not believe the decision taken by the defendants in relation to the previous subpoena binds them with respect to the present one. The present subpoena falls to be considered, having regard to the appropriate principles. I identified those principles in my reasons for judgment of 20 December 2002. 15 For the same reasons which I gave for setting aside the previous ASIC subpoena, the subpoena to the administrators of the Ansett group should be set aside. Subpoena to the liquidators of Internova Pty Ltd t/as Traveland 16 Objection is taken to paragraphs 1, 2 and 5 of this subpoena. For the same reasons that I gave in relation to the ASIC subpoena on 20 December 2002, the present subpoena in relation to the paragraphs identified should be set aside. Subpoena to Air New Zealand 17 Counsel for The Fund indicated that The Fund did not wish to press for the documents referred to in paragraphs 1d, 2d and 4e of the subpoena. Air New Zealand is concerned about this subpoena and has brought an amended motion to set it aside. Evidence was tendered, which I accept, from the assistant secretary, which indicated the onerous nature of the tasks which the subpoena, in its present form, would require to be undertaken. 18 It is only necessary to reflect on the obligation which flows from paragraph 4 to appreciate the very serious burdens imposed. That paragraph seeks any "diary notes or other documents recording a meeting, interview, function, deadline, telephone conversation, policy, procedure or other engagement relating to or concerning Ansett Holdings, Traveland or the Ansett group" which, inter alia, "was created by or for" Mr Gary Toomey who was the chief executive of Ansett and Air New Zealand. To meet that request it would be necessary for an investigation to be conducted of each of the relevant corporations identified which were active during the relevant period. This would be an enormous undertaking, to say nothing of material which would have to be retrieved to identify the documents, of or created by, the other directors referred to in the subpoena. The subpoena is clearly oppressive. 19 Apart from these matters, the subpoena suffers from the same problems as the earlier ASIC subpoena and for the same reasons should be set aside. 20 The defendants seeks costs on an indemnity basis. Although they have succeeded and generally for the same reasons as they gave in relation to the earlier ASIC subpoena, the proceedings have not been entirely without utility. Accordingly, I do not believe that an order for costs on an indemnity basis is appropriate. However, in my opinion, The Fund should be ordered to pay the defendants' costs of the motion on a party and party basis. 21 I also order that the Fund should pay the costs of Air New Zealand of its motion. ********** Last Modified: 03/25/2003 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.