Supreme Court New South Wales Medium Neutral Citation: In the matter of Beechworth Land Estates Pty Ltd (admins apptd) and Griffith Estates Pty Ltd (admins apptd) [2014] NSWSC 1743 Hearing dates: 1 December 2014 Decision date: 01 December 2014 Jurisdiction: Equity Division - Corporations List Before: Black J Decision: Order made for dismissal of interlocutory process with costs. Parties granted access to documents produced by the Office of the Director of Public Prosecutions on subpoena, subject to any claim of privilege or public interest immunity by that entity. Catchwords: PROCEDURE - subpoenas - application for subpoena to be set aside - where subpoena issued seeking production of documents to impugn credit of witness - whether subpoena issued for legitimate forensic purpose - whether subpoena should be set aside. Legislation Cited: - Evidence Act 1995 (NSW) s 135 Cases Cited: - Aqua-Marine Marketing Pty Ltd v Pacific Reef Fisheries (Australia) Pty Ltd (No 3) [2011] FCA 519 - Ballard v Multiplex Ltd [2010] NSWSC 1038 - Brand v Digi-Tech (Australia) Ltd [2001] NSWSC 425 - Fried v National Australia Bank Ltd [2000] FCA 911; (2000) 175 ALR 194 - Jack Brabham Engines Ltd v Beare [2010] FCA 35 - Liristis v Gadelrabb [2009] NSWSC 441 - Thomas v SMP (International) Pty Ltd (No 2) [2010] NSWSC 870 Category: Interlocutory applications Parties: James Photios (First Plaintiff) Perri Investments No 3 Pty Ltd (Second Plaintiff) James Edward Spencer (Third Plaintiff) Cleary Corporation Pty Ltd (Fourth Plaintiff) Redhill Estate Developments Pty Ltd (Fifth Plaintiff) First Debenture Ltd (Sixth Plaintiff) Neil Robert Cussen and Ezio Marco Senatore in their capacity as joint and several administrators of Beechworth Land Estates Pty Ltd (administrators appointed) (First Defendants) Beechworth Land Estates Pty Ltd (administrators appointed) (Second Defendant) Neil Robert Cussen and Ezio Marco Senatore in their capacity as joint and several administrators of Griffith Estates Pty Ltd (administrators appointed) (Third Defendants) Griffith Estates Pty Ltd (administrators appointed) (Fourth Defendant) Vangory Holdings Pty Ltd (Fifth Defendant) Vangory Services Pty Ltd (Sixth Defendant) Representation: Counsel: R Glasson (Plaintiffs) T Orlizki (sol) (Fifth - Sixth Defendants) Solicitors: O'Neill Partners (Plaintiffs) Kent Attorneys (Fifth - Sixth Defendants) File Number(s): 2014/229138 Judgment 1By Interlocutory Process filed on 18 November 2014, the Fifth and Sixth Defendants in these proceedings move to set aside a subpoena issued at the request of the Plaintiffs to the office of the Director of Public Prosecutions ("DPP"). I infer that no question of oppression arises as to the volume of documents that were required to be produced, since I have been informed, and it is common ground between the parties, that the relevant documents have already been produced, without objection, by the DPP. I infer that either there is no claim by the DPP for public interest immunity, to resist the production of those documents, or, if there is such a claim, then the DPP has dealt with it by way of an objection to access rather than by seeking to set aside the subpoena. 2The application to set aside the subpoena relies on an affidavit of the Fifth and Sixth Defendants' solicitor, Mr Orlizki dated 18 November 2014, which annexes a copy of the subpoena and correspondence between the solicitors, which essentially debate the question of whether the subpoena for the documents had a legitimate forensic purpose. 3By way of background, Mr Rory McDonnell, a witness called by the Fifth and Sixth Defendants in the proceedings, has been charged with several offences and, it appears, has yet to go to trial for those offences, so that the outcome of those charges is not known. Mr Glasson, who appears for the plaintiffs, tenders a National Police Certificate dated May 2012 which records several charges against Mr McDonnell, in respect of, inter alia, obtaining money by deception, and fraudulent misappropriation of money which were then to go to trial in August 2012. I have been informed that that trial was subsequently adjourned. 4The subpoena, in turn, calls for the charge sheet or indictment of Mr McDonnell in respect of any or all charges currently pending against him including those charges; the brief of evidence relating to or in respect of the charges and certain other documents in respect of the charges. Mr Orlizki raised an issue as to the fact that the scope of the subpoena extended beyond the particular charges to which I referred above to any or all charges currently pending against Mr McDonnell. The Plaintiffs did not seek to support the subpoena, to the extent that it extended beyond the particular matters which were the subject of the identified charges. It seems to me that I should give little weight to the matter raised by Mr Orlizki, where it is not suggested that there is any other charge presently pending against Mr McDonnell, and the issue is, as far as the evidence goes, theoretical. It would plainly have been open to Mr Orlizki, so far as he seeks to contest the subpoena on the basis of that extension, to make an inquiry of Mr McDonnell, a witness called in his clients' case, as to whether any other charges were pending and to draw that matter to the Court's attention if any real issue arose from it. Where that has not been done, it seems that I should not assume that there are other charges pending so as to give rise to any difficulty on that basis. 5Mr Orlizki also points to the width of the documents called for, so far as they call for the brief of evidence, and records and/or statements by the witnesses. That may or may not cause difficulty, in respect of the tender of relevant materials, and what might be done with them, and I will return to that question below. 6The plaintiffs, in turn, point out that there is a substantial issue in the proceedings as to Mr McDonnell's credit, and I do not understand Mr Orlizki to contest that proposition. There is a dispute between the parties as to the status of loan and security documents signed in October 2013, and again in November 2013, in respect of two entities, and a further dispute as to a meeting which is said to have taken place in February 2014 on which reliance is placed in respect of further proceedings relating to the identity of shareholders in the relevant company or companies. Those meetings were respectively attended by either Mr Spenser who is associated with the plaintiffs and Mr McDonnell, or by Mr McDonnell and Mr Huxley, who are associated with the Fifth and Sixth Defendants. Where there is a factual question as to what occurred at meetings attended by only two persons, and their respective evidence is contradictory, then it can readily be recognised that a credit issue is likely to arise. That credit issue is further emphasised by the fact that the Plaintiffs' case, on which Mr Glasson indicates they opened at the hearing before the trial judge, is that Mr McDonnell's evidence is not to be believed, and that the relevant transactions were shams or did not take place at the time that the documents record them to have taken place. 7In these circumstances, I should proceed on the basis which, as I noted, does not seem to be contested by Mr Orlizki, that the question of credit is seriously in issue in the proceedings. Mr Glasson points out in submissions, and the authorities make clear, that there is no rule of law preventing the issue of a subpoena that goes only to the credit of a witness, at least where there is otherwise a legitimate purpose for the issue of that subpoena. I will refer to some of the authorities which deal with that proposition below. Mr Glasson, in turn, submits that it cannot be said that the documents which are sought, in respect of the issues as to Mr McDonnell's credit in the proceedings, are manifestly irrelevant and incapable of touching the matter of his credit. 8I should now turn to several of the authorities, to which my attention has been drawn in submissions. In a decision which has been cited in subsequent cases, Hunter J observed in Brand v Digi-Tech (Australia) Ltd [2001] NSWSC 425 at [36] that an application to set aside a subpoena would not succeed, on the basis of lack of relevance, if the subpoenaed documents were capable of providing a legitimate basis for cross-examination as to credit and, conversely, that an application to set aside the subpoena would succeed if the description of documents was such as to support a finding that those documents were manifestly irrelevant or incapable of touching matters of credit. That observation was in turn adopted and approved by Collier J in Aqua-Marine Marketing Pty Ltd v Pacific Reef Fisheries (Australia) Pty Ltd (No 3) [2011] FCA 519. In Fried v National Australia Bank Ltd [2000] FCA 911; (2000) 175 ALR 194, also referred to in subsequent authorities, Weinberg J noted at [24]) that, "it may be legitimate to issue a subpoena to a third party to obtain documents which are to be used solely to impeach the credit of a witness", but observed that the Court must be alert to ensure that any such subpoena has a legitimate forensic purpose, such that it is likely to facilitate the conduct of the proceedings, rather than merely suppress a party or witness. His Honour also noted (at [30]) that it was not a legitimate use of a subpoena to have specified documents produced in a "speculative attempt" to identify whether the documents might, ultimately, be of some evidential value. 9In Liristis v Gadelrabb [2009] NSWSC 441, Brereton J in turn noted that, in the context of a subpoena to produce records of convictions for dishonesty and in particular perjury, the existence of a conviction for dishonesty could be relevant to the question of credit. His Honour also observed (at [4]): "even documents which, though not evidencing a conviction for dishonesty, enabled a party to establish or tend to establish that the other had made false statements when under an obligation to tell the truth, could legitimately provide the basis for cross-examination as to credit (under Evidence Act 1995 (NSW) s 103(2))." His Honour also addressed the concept of "fishing", often referred to in the context of subpoenas, but noted that it was not fishing to seek documents where there were reasonable grounds to think that fish of the relevant type were in the relevant pond, or to put it another way, that it was "on the cards" that documents relevant to credit would be produced in response to the subpoena. That decision is, on one view, distinguishable, so far as it turned on the production of records of conviction. Here, the documents sought by the plaintiffs are at an interior stage prior to conviction of Mr McDonnell in respect of the matters with which he has been charged, and it must, of course, be recognised that no such conviction may eventuate. 10In Thomas v SMP (International) Pty Ltd (No 2) [2010] NSWSC 870, Pembroke J considered the position where a subpoena was issued to the New South Wales Crime Commission seeking the production of a transcript of interview or hearing of a defendant, in respect of his knowledge of involvement in possible money laundering activities, and set aside that subpoena on the basis of a finding that the relevant financial transaction in that case was ultimately not likely to be in dispute. His Honour, however, provided a comprehensive summary of the relevant principles (at [19]) which seems to me to be of considerable assistance. His Honour noted, as did Liristis to which I have referred above, that the production of documents intended to be used solely to impeach a witness's credit may be a legitimate forensic purpose. His Honour pointed to the need for evidence that indicated what that legitimate forensic purpose really was and, in particular, that the credit issue should be capable of reasonable articulation, and the probable connection between the documents sought to be produced and that credit issue should be apparent. His Honour noted that a credit issue of doubtful plausibility is unlikely to be sufficient to justify a subpoena. Mr Glasson submits, and I accept, that that is not a relevant consideration here, where it is plain that there is a live and significant credit issue in respect of Mr McDonnell, and potentially also the Plaintiffs' witnesses so far as there is a contest between him and the Plaintiffs' witnesses in respect of relevant events. 11In Thomas v SMP (International) Pty Ltd above, Pembroke J also noted the need for the Court to exercise particular caution when a subpoena is sought to be justified solely on the basis of credit, and for the need for the judge to be satisfied about the utility of production of the documents and fairness to the witness, having regard to the potential for abuse and the need to control and confine cross-examination within manageable limits. That seems to me to be a significant factor here, but it must be recognised that the control of cross-examination is not necessarily to be achieved by excluding documents which might be the subject of cross-examination at the point a subpoena is issued, as distinct from the exercise of powers of a trial judge in that regard. That may be illustrated simply. If, for example, a record of interview indicates that Mr McDonnell has, for example, admitted to conduct that was deceptive, then cross-examination as to his credit may neither be time-consuming nor unfair, and a trial judge may have no particular difficulty in permitting it. If, on the other hand, Mr McDonnell has denied such an allegation, it may be unlikely that a trial judge would permit cross-examination in these proceedings, which is directed to some sort of collateral trial of the criminal proceedings against Mr McDonnell, so as to establish in these proceedings that the allegations made against him in those proceedings, which are still pending were well-founded. Those matters, however, seem to me to be matters that are within the control of the trial judge, and the significance of any difficulty arising from cross-examination would rather depend upon the nature of documents produced, as the example which I have just given indicates. Pembroke J also noted that a subpoena that does little more than "speculatively trawl" for documents that may possibly impugn a witness's credit has never been justifiable. I accept that proposition; however, it seems to me that here there is, on any view, something more than speculation that the evidence in a prosecution for deception offences is likely to be relevant to the honesty or otherwise of Mr McDonnell. 12In Jack Brabham Engines Limited v Beare [2010] FCA 35, Jagot J noted that the test for legitimate forensic purpose was apparent relevance, and pointed to the fact that a scale was to be applied, with documents which were manifestly irrelevant and incapable of touching matters of credit on the one hand, and at the other, documents which were identifiable and likely to facilitate the conduct of the proceeding, not merely to oppress a party or witness. In Ballard v Multiplex Ltd [2010] NSWSC 1038, Smart AJ referred to both the decision in Fried, to which I have referred above, and the decision of Pembroke J in Thomas v SMP (International) Pty Ltd (No. 2), and applied principles set out in those cases, although holding in that case that the documents sought to be produced were not sufficiently relevant to the question of credit so as to warrant their production. 13On balance, it seems to me that I should not set aside the subpoena in the present case. I have noted above, that, first, the subpoena does not appear to give rise to oppression, since no objection has been taken to it by the DPP on that basis and documents have already been produced. Second, the nature of the charges against Mr McDonnell, so far as they involve elements of deception, suggest that the matters which give rise to those charges are likely to be relevant to Mr McDonnell's credit. I have noted above, that it is on the cards that documents produced may support a cross-examination of Mr McDonnell, as to credit, for example, if there were admissions made by him, or indeed by Mr Huxley, in records of interview. Conversely, if the documents produced ultimately indicate that no such admissions were made, and it were necessary to conduct some sort of collateral trial at the criminal trial in order to support any adverse finding of credit, then that is a matter which might well support the exclusion of documents, or the constraining of cross-examination, by reference to, for example, s 135 of the Evidence Act 1995 (NSW). That is, however, a matter within the trial judge's control and not, it seems to me, a reason to set aside the subpoena. Third, it does not seem to me that, in the present case, given the link between the nature of the allegations in the criminal trial and the question of Mr McDonnell's honesty and the significance of Mr McDonnell's credit as a witness in these proceedings, that it could be suggested that the production of the relevant documents was merely speculative. 14For all these reasons, I order that the Interlocutory Process dated 18 December 2014 should be dismissed with costs. I will make an additional order that all parties have access to documents produced by the Office of the Director of Public Prosecutions on subpoena, subject to any claim of privilege or public interest immunity by that entity. ********** 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: 19 December 2014