Hani Property Investors Pty Ltd v Taouk [2015] NSWSC 614

Supreme Court New South Wales

Medium Neutral Citation: Hani Property Investors Pty Ltd v Taouk [2015] NSWSC 614 Hearing dates: 20 May 2015 Decision date: 20 May 2015 Jurisdiction: Common Law Before: Button J Decision: (1) The two subpoenas issued on 20 March 2015 against the first and second respondents are set aside. (2) The notice of motion of the defendant of 18 May 2015 is dismissed. (3) The defendant must pay the costs of the first, second and third respondents of the proceedings before me. (4) The costs referred to in order 3 are payable forthwith. Catchwords: PRACTICE AND PROCEDURE – subpoenas to produce – whether subpoenas should be set aside - whether subpoenas are a "fishing expedition" Cases Cited: Commissioner for Railways v Small (1938) 38 SR (NSW) 564; 55 WN (NSW) 215 R v Saleam (1989) 16 NSWLR 14 Category: Procedural and other rulings Parties: Tony Taouk (Applicant) Defined Properties Investment Pty Limited (First Respondent) Wyse & Young International Pty Limited (Second Respondent) George Dimitriou (Third Respondent) Representation: Counsel:

Solicitors: C Perry (Applicant) M Foley (Respondents) File Number(s): 2014/347127

EX TEMPORE Judgment Introduction 1. Before the court is an application by way of notice of motion of 6 May 2015 to set aside two subpoenas to produce documents issued on 20 March 2015. There are affidavits to the effect that they have been served. The application is brought by three respondents to that compulsory process, Defined Properties Investment Pty Limited, Wyse & Young International Pty Limited and George Dimitriou, all of whom are represented by Mr Foley. I shall explain in a moment why Mr Dimitriou is also a respondent. 2. The subpoenas were issued by Ms Perry, who appears for Mr Taouk. Ms Perry presses the enforcement of the two subpoenas to produce in her own notice of motion of 20 May 2015. 3. The background is that Mr Taouk is the defendant in proceedings for possession of two parcels of real property. The registered proprietors of those parcels are two companies that are associated with Mr Taouk and are in liquidation. The three plaintiffs in the proceedings for possession against Mr Taouk are the two companies, and the liquidators of those companies. It is said that the two corporate respondents have lodged proofs of debt against the two plaintiff companies. For convenience, I shall refer in this judgment to Mr Taouk as the defendant. 4. It can be seen from a statement of claim filed 25 November 2014 by the plaintiffs in the possession proceedings that they have asserted (in short but orthodox form) that the liquidators of the registered proprietors have a duty to take into their custody or control all of the property of the two companies in liquidation. The statement of claim goes on to assert in a nutshell that the defendant is occupying the properties without the consent of the registered proprietors, and must leave the premises. 5. By way of a defence of 22 December 2014, the defendant accepts the entirety of the statement of claim except for the contention that he is a trespasser. It is noteworthy that he admits paragraph 26 of the statement of claim, which is as follows: There is no agreement between any of the plaintiffs and the defendant or any other person or entity that grants the defendant or any other person or entity the right to occupy the Properties. 1. The defendant does not go on to plead the basis for the contention that he is not trespassing on the land, in light of that admission. 2. The defendant separately pleads in his defence that he is prepared to pay a substantial occupation fee; that he had made an arrangement, seemingly with the directors of the plaintiff companies, to repay the debt outstanding to a bank and other creditors; that the defendant and the directors of the companies believe that the two plaintiff companies are solvent; and that the defendant and the directors intend to make an application to the Supreme Court to terminate the winding up, and have notified the solicitor for the liquidators of that intention. 3. The defence of the defendant concludes with the proposition that, in the interim, the proceedings for possession should be stayed. 4. It is noteworthy that the subpoenas have been issued in those proceedings for possession. 5. Turning to analyse for a moment the facts in issue that arise by way of the joinder of the pleadings, to my mind they are merely whether or not the proceedings for possession should be stayed. As I have said, the defendant admits almost the entirety of the statement of claim except for a legal characterisation. In particular, he admits that he is in possession without the agreement of the registered proprietors of the land. 6. Returning to the background of the matter, at first the defendant sought to enforce the subpoenas after they had not been the subject of compliance by way of a document entitled "Interlocutory Process". Subsequently, the defendant relied upon the notice of motion filed 20 May 2015 seeking enforcement of the subpoenas; in the alternative, he sought examination on oath of Mr Dimitriou, who is the third respondent and is associated with the two corporate respondents. 7. Ms Perry has filed two affidavits sworn by herself. They show that some draft documents have been prepared with an eye to having the winding up of the two plaintiff companies stayed, along with a declaration that the plaintiff companies do not owe money to at least one of the respondents. It can be seen that the central document is thoroughly in draft; for example, by way of examination of paragraph 5. Her affidavits record some things that she has been told by her client, the defendant; there is no sworn evidence from him of his contentions about any matter. 8. The subpoenas that are impugned are addressed to the first and second respondents. They seek a number of documents pertaining to debts said to be owed by the plaintiff companies to the respondents. It can be seen from the definition of the phrase "all documents" appearing within them that the subpoenas are quite extensive in the documents that they seek. 9. As I have said, Mr Foley has filed his own notice of motion seeking to have the subpoenas set aside, along with costs of that process. He has also filed an affidavit of Mr Dimitriou, much of which must be characterised as nothing more than submissions. The affidavit does assert that compliance with the subpoenas would entail examination of thirteen folders of documents, along with many emails. 10. Finally, each solicitor has provided me with helpful written submissions. 11. In short, the issue is whether the subpoenas should be enforced (as Ms Perry submits) or set aside (as Mr Foley submits). If she fails with regard to the subpoenas, Ms Perry seeks compulsory examination of the third respondent. Submissions 1. Mr Foley has submitted that the subpoenas should be set aside on three bases. 2. First, the subpoenas have no legitimate forensic purpose in the proceedings between the three plaintiffs and the defendant. So much can be seen, he submits, from the facts in issue in those proceedings, which are entirely to do with whether or not the plaintiffs have a right to possession as against the defendant. They are nothing to do with debts owed to or by the defendant, or debts owed to or by the two corporate plaintiffs. 3. Secondly, the subpoenas are a fishing expedition, and accordingly offend against the principles discussed in R v Saleam (1989) 16 NSWLR 14. That is because, he submits, the subpoenas are being used to gather material to commence proceedings. They are not being used in a way ancillary to proceedings that have already commenced. 4. Thirdly, the subpoenas are broad to the point of being inappropriately onerous. 5. Ms Perry has made the following submissions to the contrary. 6. First, the documents will be relevant to a stay of a pending notice of motion of the three plaintiffs seeking summary judgment for possession. 7. Secondly, once she has the documents, she may well be in a position to impugn the liquidation. 8. Thirdly, I would not be satisfied that compliance with the subpoenas would be unduly onerous. 9. Fourthly, it is incumbent on the party resisting a subpoena to demonstrate that it does not possess a legitimate forensic purpose, and is not a fishing expedition. Determination 1. Turning to my determination, I think that this dispute can be resolved without a lengthy analysis of the well-established principles with regard to the proper foundation for the issue of a subpoena to produce documents or other things: see generally Commissioner for Railways v Small (1938) 38 SR (NSW) 564; 55 WN (NSW) 215. 2. As I have said, the defence that has been filed does not dispute that the plaintiffs are entitled to possession. Nor does it dispute that the defendant is on the premises without the agreement of the registered proprietors. It simply asserts that enforcement of that entitlement should be stayed. To my mind, the subpoenas serve no legitimate forensic purpose with regard to the facts in issue that have been joined by way of the statement of claim of the three plaintiffs and the defence of the defendant. I respectfully consider that foreshadowed proceedings and draft documents that may in due course seek to impugn the liquidation are not to the point. I would set the subpoenas aside on this primary basis. 3. If I be wrong in that analysis, I would set the subpoenas aside on the basis that they are a fishing expedition. I consider that that is established by the correct characterisation being that the documents are sought so that separate or ancillary proceedings can be commenced, not as part of the process of the proceedings that have already commenced. I repeat that no pleadings have been filed, either in the proceedings under discussion or in any other proceedings, as between the defendant and the respondents to the subpoena denying debts to the respondents, or pleading any other contention of fact or law. 4. It follows from my primary and secondary determinations that I do not need to determine the third question about onerousness. 5. To my mind the respondents have established that the subpoenas issued against them must be set aside, and I propose to make an order to that effect. 6. Finally, in the circumstances that I have outlined, there is no question of me ordering that any person undertake compulsory examination on oath. Costs 1. As for costs, there is no reason why they should not follow the event. 2. Furthermore, it can be seen that the three respondents are "third parties" to the proceedings between the three plaintiffs and the defendant. It could be many months before the proceedings between the plaintiffs and the defendant are fully resolved. I consider there is force in the submission of Mr Foley that the costs of his clients should be payable forthwith. Orders 1. The two subpoenas issued on 20 March 2015 against the first and second respondents are set aside. 2. The notice of motion of the defendant of 18 May 2015 is dismissed. 3. The defendant must pay the costs of the first, second and third respondents of the proceedings before me. 4. The costs referred to in order 3 are payable forthwith.