Supreme Court New South Wales Medium Neutral Citation: JKB Holdings Pty Ltd v Alejandro Jose De La Vega & Anor [2011] NSWSC 1236 Hearing dates: Wednesday, 5 October 2011 Decision date: 05 October 2011 Jurisdiction: Equity Division - Duty List Before: Brereton J Decision: Paragraphs 1 to 12 of the subpoenas issued on 29 July 2011 set aside. Catchwords: PRACTICE AND PROCEDURE - Subpoenas - plaintiff serves subpoenas on third parties - subpoena catches documents of no potential relevance - plaintiff belatedly attempts via letter to defendants' and third parties' solicitor to narrow scope - no weight attributable to this - subpoena oppressive and a fishing expedition - subpoena set aside. Category: Procedural and other rulings Parties: JKB Holdings Pty Ltd (plaintiff) Alejandro Jose De La Vega (first defendant) Lynette Margaret De La Vega (second defendant) Representation: Counsel: Mr B Bradley (plaintiff) Mr S Reuben (defendants) Solicitors: Lawyers Qld (plaintiff) Charles G Roth (defendants) File Number(s): 2010/228124 Judgment (ex tempore) 1HIS HONOUR: On 29 July 2011 the plaintiff's solicitor caused to be issued three subpoenas for production addressed respectively to Mireille Friedman, Brigitte Friedman and Zupa Investments Pty Limited. Each of the subpoenas was in the following identical terms: The documents you must produce are as follows: 1. All documents recording, referable to, referring to or relating to any contact or communication between any of Zupa Investments Pty Ltd ("Zupa"), Mireille Friedman or Brigitte Friedman, the Defendants, either of them or any entity associated with the Defendants including a company now named Australian Company Number 003 506 732 Pty Ltd [formally named De La Vega Architects Pty Ltd] ("De La Vega Architects") which relate to loans made by or monies from Mireille Friedman or Zupa to the Defendants, either of them or any entity associated with the Defendants including De La Vega Architects and any person or entity as directed by the Defendants. 2. Without limiting the above, all documents recording, referable to, referring to or relating to any contact or communication between any of Zupa, Brigitte Friedman, Mireille Friedman, Charles Roth, the Defendants, either of them or any entity associated with the Defendants including but not limited to De La Vega Architects which evidence the release, transfer or advance of funds to the Defendants, either of them or any entity associated with the Defendants including De La Vega Architects and any person or entity as directed by the Defendants. 3. Without limiting the above, all documents recording, referable to, referring to or relating to any contact or communication between any of Zupa, Brigitte Friedman, Mireille Friedman, Charles Roth, the Defendants, either of them or any entity associated with the Defendants including De La Vega Architects which evidence the release, transfer or advance of funds to another person or entity as directed by the Defendants including De La Vega Architects. 4. Without limiting the above all documents recording, referable to, referring to or relating to any contact or communication between any of Zupa, Brigitte Friedman, Mireille Friedman, Charles Roth, the Defendants, either of them or any entity associated with the Defendants including De La Vega Architects related to the purchase of 67 Goodhope Street, Paddington, Sydney ("Goodhope Street"). 5. Without limiting the above, all documents recording, referable to, referring to or relating to any arrangement between any of Zupa, Brigitte Friedman, Mireille Friedman, Charles Roth, the Defendants, either of them or any entity associated with the Defendants including De La Vega Architects in relation to the release, transfer or advance of funds. 6. Without limiting the above, all documents recording, referable to, referring to or relating to any arrangement between any of Zupa, Brigitte Freidman, Mireille Friedman and the Defendants, either of them or any entity associated with the Defendants including De La Vega Architects in relation to Goodhope Street including but not limited to in connection with the purchase of Goodhope Street, having any interest in Goodhope Street or the sale of Goodhope Street. 7. Without limiting the above, all financial records including bank statements and cheque butts evidencing the release, transfer or advance of funds by Zupa to any of the Defendants, either of them, an entity associated with the Defendants including De La Vega Architects and any person or entity as directed by the Defendants. 8. Without limiting the above, all financial records including bank statements, evidencing any monies received by Zupa or by another person or entity on behalf of Zupa from the Defendants, either of them or any entity associated with them. 9. Without limiting the above, all financial records including bank statements, cheque butts and transfer receipts evidencing any monies paid by Zupa to Mireille Friedman which relate to monies from Mireille Friedman to the Defendants, either of them or any entity associated with them including De La Vega Architects. 10. Without limiting the above, all documents recording, referable to, referring to or relating to any arrangement between Zupa, Brigitte Friedman, Mireille Friedman and Charles G Roth in relation to or in any way associated with Goodhope Street. 11. Without limiting the above, all documents recording, referable to or relating to any arrangement between any of Zupa, Brigitte Friedman, Mireille Friedman and Charles G Roth in relation to or in any way associated with the Defendants, either of them or any entity associated with them including De La Vega Architects. 12. Without limiting the above, all documents recording, referable to, referring to or relating to any contact or communication about the existence of a debt the Defendants owed to the Plaintiff or any person said to be related to either of the Defendants or the existence of an interest in Goodhope Street by the Plaintiff or any person said to be related to either of the Defendants. 13. Without limiting the above, all documents recording, referable to, referring to or relating to any contact or communication about the existence of an interest in Goodhope Street by Blacksmith Developments Pty Ltd. 14. Without limiting the above, all documents recording, referable to, referring to or relating to any contact or communication in relation to the creation of an interest over Goodhope Street in favour of Universal Properties (Aust) Pty Ltd or the registration of a caveat over Goodhope Street by Universal Properties (Aust) Pty Ltd. 2The subpoenas were first returnable on 15 August 2011. They have been adjourned from time to time thereafter and presently stand adjourned to 12 October 2011. The recipients have so far produced no documents in response to them. On 12 August 2011, however, the solicitors for the defendant, who also act for the recipients, wrote to the plaintiff's solicitor taking objection to paragraphs 1-12 inclusive of each subpoena, upon the grounds that they were oppressive and an abuse of process and a fishing exercise. No response having been received to that letter by 22 August, the defendants and the recipients on that day filed a motion seeking an order setting aside paragraphs 1-12 inclusive of each of the subject subpoenas. 3On 28 September 2011, the plaintiff's solicitor responded, seeking to uphold the subpoenas and contending: In light of assertions contained in your letter of 12 August 2011 we advise that the documents sought pursuant to the subpoenas are: 1. For the period from 1 April 2008 to the date of the subpoenas. 2. The only entity associated with the Defendants is the company identified in the subpoena named Australian Company Number 003 506 732 Pty Ltd (formally named De La Vega Architects). 3. Any person related to either of the Defendants means any person who the Defendants or either of them said were related to them. 4. Any person or entity "as directed by either of the Defendants or De La Vega Architects" applies in circumstances where either of the Defendants in their own right or on behalf of De La Vega Architects directed the recipients of the subpoenas to make a payment to another person or entity on their behalf. Without limiting the foregoing, there are two dealings in respect of which we seek all documents: An advance on or about 17 June 2008 of $150,000 by Mireille Friedman to Mr and Mrs de la Vega in the form of a Bank Cheque payable to the Office of State Revenue. At the time the Defendants were liable to pay approximately $160,000 duty on the contract for the Defendants' purchase of 67 Goodhope Street Paddington. On or about 9 July 2010 by [ sic ] Mr and Mrs de la Vega instructed that the following bank cheques be issued on completion of the sale of the Goodhope Street property: Zupa Investments Pty Ltd $247,500 and Charles G Roth $32,639. 4In the defendant's amended first cross-claim, it is pleaded (at paragraph 13): On 9 July 2010 DLV (being the defendants/cross-claimants) had no practicable alternative other than to agree to the consent orders which were made on that day which included an order that DLV and their then solicitor, Henry Frydman, pay $791,682 from the sale of the Property into Court within 7 days of the sale of the Property Particulars (a) The sale price of the Property was $5.9 million; (b) The amount due to the first mortgagee on settlement was $3,573,173 (c) Payments due to be made to other creditors from the net proceeds of sale of the Property totalled $479,456.09; (d) Payments due to be made to other creditors of DLV and of De La Vega Architects Pty Limited totalled approximately $1.4m; (e) DLV needed to serve evidence in reply to the issues raised by JKB in the Summons and supporting affidavit which would have taken some time to prepare; (f) DLV was subject to a potential risk of termination of the Sale Contract if completion of the sale could not occur before the hearing and determination of the Summons; (g) DLV would have been subject to ongoing penalty interest in respect of the first mortgage. 5Then it is alleged (in paragraph 21): As a consequence of the matters pleaded above DLV have been denied the use of the Unavailable Funds and DLV have suffered loss and damage. Particulars (a) DLV have been prevented from investing the Unavailable Funds or any part thereof in the purchase of an option over properties at 9, 11, 15 and 17 Larkin Street Roseville from the owners, obtain [sic] development approval for 31 units, all at a cost of approximately $300,000, and on sell the option with the DA which would have yielded a profit of in excess of $1 million. 6As I understand it, the plaintiff/cross-defendant wishes to explore the basis on which the purchase the Larkin Street property was funded, and the basis upon which cheques were drawn on that occasion - including to Mr Roth for $32,629 and to Zupa Investments for $247,500. 7It may well be that a subpoena which sought, with some degree of specificity, documents relating to those matters would be unobjectionable. This subpoena, however, inevitably would catch many documents of no potential relevance to issues in the proceedings. For example, if one has regard to paragraph one of the schedule, there is no necessary connection between loans by or advances by Mireille Friedman or Zupa to the defendants or their associates and issues in these proceedings. Nor, as to paragraph 3 of the Schedule, is there any necessary connection between communications evidencing advances of funds to any entity associated with the defendants or other persons or entity directed by the defendants, with any issue in the proceedings. 8It is true that some paragraphs of the subpoena are limited by reference to the purchase of Goodhope Street, and if that were all there were in the subpoena, the objection would be on much fainter and, perhaps, unsustainable grounds, but as drafted each of the subpoenas is too wide. In circumstances where objection to the subpoena was taken by letter before the motion was filed, and there was no attempt to limit it until after the motion was filed, little significance can be given to the belated attempt by the 28 September letter to narrow the scope of an otherwise objectionable subpoena. 9I order that paragraphs 1 to 12 of the subpoenas issued on 29 July 2011 addressed respectively to Mireille Friedman, Brigette Friedman and Zupa Investments Pty Limited be set aside. 10I order that the plaintiff pay the defendant's costs of the motion. ********** 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. Decision last updated: 03 November 2011