FEDERAL COURT OF AUSTRALIA

Dorajay Pty Limited v Aristocrat Leisure Limited

[2005] FCA 588

PRACTICE AND PROCEDURE – subpoenas for production – addressed to third parties – motion to set aside subpoenas – relevance to hearing on whether proceeding should continue as representative proceeding – whether ‘fishing’ – whether oppressive.

Federal Court of Australia Act 1976 (Cth), s 33N

Federal Court Rules, O 1 r 4, O 27 r 4

Apache Northwest Pty Ltd v Western Power Corporation (1998) 19 WAR 350 cited

Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd [1998] FCA 1599 cited

Bailey v Beagle Management Pty Ltd (2001) 105 FCR 136 discussed

Chapman v Luminis Pty Ltd [2001] FCA 1580 cited

Clairs Keeley v Treacy (No 2) (2003) 28 WAR 139 referred to

Codelfa Constructions Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 referred to

Cosco Holdings Pty Ltd v Commissioner for Taxation [1997] FCA 1504 referred to

Fostif Pty Ltd v Campbells Cash & Carry Pty Ltd [2005] NSWCA 83 referred to

Grant v Downs (1976) 135 CLR 674 referred to

Kingsheath Club of the Clubs Limited (In liq) [2003] FCA 1034 referred to

Marsden v Amalgamated Television Services Pty Ltd [1999] NSWSC 619 cited

Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 62 ALJR 389 referred to

Pasini v Vanstone [1999] FCA 1271 cited

R v Barton [1981] 2 NSWLR 414 referred to

The Commissioner for Railways v Small (1938) SR (NSW) 564 referred to

Trade Practices Commission v Arnotts Limited (1989) 88 ALR 90 applied

Spatialinfo Pty Ltd v Telstra Corporation Ltd [2005] FCA 455 referred to

Spencer Motors Pty Ltd v LNC Industries Ltd [1982] 2 NSWLR 921 referred to

Waind v Hill and National Employers’ Mutual General Association Ltd (1978) 1 NSWLR 372 applied

DORAJAY PTY LIMITED v ARISTOCRAT LEISURE LIMITED

N 362 OF 2004

STONE J

13 MAY 2005

SYDNEY

THE COURT ORDERS THAT:

1.      In these orders the following meanings apply:

“Document” has the meaning given to it in Order 1, Rule 4 of the Federal Court Rules;

“Funder” means IMF (Australia) Ltd and/or Insolvency Litigation Fund Pty Ltd;

“Group Members” means persons described in paragraph 2 of the further amended Statement of Claim in this proceeding.

2. On the motion of IMF (Australia) Ltd and Insolvency Litigation Fund Pty Ltd, notice of which was filed on 5 April 2005, and on the motion of the applicant, notice of which was filed on 4 April 2005, the subpoena directed to IMF (Australia) Ltd and that directed to Insolvency Litigation Fund Pty Ltd be set aside in so far as:

(a)    paragraph 1 of the subpoena refers to documents other than documents consisting of, recording, evidencing, or referring to communications between the Funder and Maurice Blackburn Cashman Pty Ltd concerning the terms on which funding may be provided in relation to the proceedings and the negotiation of those terms (irrespective of whether created before or after the commencement of the proceedings); and

(b)   paragraph 3 of the subpoena refers to documents other than documents consisting of, recording, evidencing, or referring to communications between the Funder and Group Members and/or prospective Group Members concerning the terms on which funding may be provided in relation to the proceedings and the negotiation of those terms (irrespective of whether created before or after the commencement of the proceedings).

3. On the motion of the applicant, notice of which was filed on 4 April 2005, the subpoena directed to Maurice Blackburn Cashman Pty Ltd be set aside in so far as paragraph 1 of the subpoena refers to documents other than documents consisting of, recording, evidencing, or referring to communications between the Funder and Maurice Blackburn Cashman Pty Ltd concerning the terms on which funding may be provided in relation to the proceedings and the negotiation of those terms (irrespective of whether created before or after the commencement of the proceedings).
4. The costs of the notices of motion be reserved.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     I have before me notices of motion seeking to set aside subpoenas for production served by the respondent on the solicitors for the applicant, Maurice Blackburn Cashman Pty Ltd (‘MBC’) and on the two companies, IMF (Australia) Ltd (‘IMF’) and Insolvency Litigation Fund Pty Ltd (‘ILF’), who are providing the applicant with funding for the proceeding.  Before discussing those motions it is necessary to provide some background. 

2                     This is a representative proceeding brought under Part IVA of the Federal Court of Australia Act 1976 (Cth) (‘Act’).  The group members are described in paragraph 2 of the further amended statement of claim as the applicant and other persons:

‘for whom the solicitors for the Applicant have instructions to act at any particular time, who at some time during the period between 20 September 2002 and 26 May 2003 inclusive … acquired an interest in shares in Aristocrat and who suffered loss and damage by or resulting from the conduct of Aristocrat referred to below.’

3                     In December 2004, I raised with the parties my concern about this definition of the group and whether, having regard to this definition, the proceeding should continue as a representative proceeding.  With the consent of the parties I ordered that, by motion of the Court pursuant to s 33N(1) of the Act, there be a hearing to determine if the proceeding should continue as a representative proceeding.  Section 33N(1) is in the following terms:

‘(1) The Court may, on application by the respondent or of its own motion, order that a proceeding no longer continue under this Part where it is satisfied that it is in the interests of justice to do so because:

(a)               the costs that would be incurred if the proceeding were to continue as a representative proceeding are likely to exceed the costs that would be incurred if each group member conducted a separate proceeding; or

(b)               all relief sought can be obtained by means of a proceeding other than a representative proceeding under this Part; or

(c)               the representative proceeding will not provide an efficient and effective means of dealing with the claims of group members; or

(d)               it is otherwise inappropriate that the claims be pursued by means of a representative proceeding.’

4                     As the issue was raised by the Court there is no pleading as such, however, as the respondent adopted my concerns, I ordered, also with the consent of the parties, that the respondent file and serve a statement of issues in relation to the questions arising under s 33N(1) of the Act.  As a practical matter, that document serves the function of a pleading although arguably not drafted with quite the same precision.  In any event, the relevance of the documents referred to in the subpoenas must be determined in the context of the issues identified in the statement so it is convenient to set it out in full:

‘1.       Should the Court be satisfied, pursuant to paragraph 33N(1)(c) of the Federal Court of Australia Act 1976 (Cth) (“Act”), that it is in the interests of justice that the proceeding no longer continue under Part IVA of the Act on the ground that the proceeding will not provide an efficient and effective means of dealing with the claims of group members?

2.         Should the Court be satisfied, pursuant to paragraph 33N(1)(d) of the Act, that it is in the interests of justice that the proceeding no longer continue under Part IVA of the Act on one or both of the grounds that:

(a)                in order to qualify as a group member to whom the proceeding relates, a person must instruct and continue to instruct [MBC] to act on that person’s behalf in connection with the proceeding; and

(b)                in order to qualify as group members to whom the proceeding relates, persons have been and continue to be required to enter into retainer agreements with MBC and funding agreements with [ILF] in the same or substantially the same terms as those referred to in paragraphs 19 and 40 of the affidavit of Bernard Michael Murphy sworn 8 April 2005 (“retainer and funding agreements”)?

2A.      Should the Court find the proceeding to be an abuse of process on the ground that in order to qualify as group members to whom the proceeding relates, persons have been and continue to be required to enter into retainer agreements with MBC and funding agreements with [ILF] in the same or substantially (sic) the retainer and funding agreements?

3.         In the event that one or more of the issues identified in paragraphs 1 and 2 above is determined in the affirmative, what consequences should follow?  For example:

(a)                should the applicant be granted leave to amend the application and/or the further amended statement of claim;

(b)                should MBC and ILF be required to afford group members the option of terminating their retainer and funding agreements;

(c)                should an order be made under subsection 33N(1) of the Act that the proceeding no longer continue under Part IVA of the Act; or

(d)                should the proceeding be permanently stayed?’

5                     The issues identified in the statement of issues are to be resolved at a later hearing.  In the course of its preparation for that hearing the respondent served the subpoenas referred to in [1] above.  Except where necessary to refer to them separately,  I shall refer to ILF and IMF collectively as the ‘Funders’.  The applicant and each group member have entered into agreements with ILF pursuant to which ILF pays the legal costs of the proceedings.  If the proceedings are successful ILF is entitled to reimbursement of its expenditures as well as a share of any amount recovered.  IMF guarantees ILF’s obligations under the agreements.

6                     The applicant and the Funders filed their notice of motion seeking relief under Order 27 r 4 of the Federal Court Rules on 4 April and 5 April 2005 respectively.  The applicant seeks to set aside the subpoena served on MBC.  The Funders seek to set aside subpoenas (‘Funders’ subpoenas) individually served on ILF and IMF.  Following discussion between the parties, the objections are now limited to paragraph 1 of all three subpoenas and paragraph 3 of the Funders’ subpoenas. 

7                     Paragraph 1, which is identical in all three subpoenas, requires production of the following documents:

‘1.       All Documents consisting of, recording, evidencing or referring to communications between the [Funders] and MBC in respect of the funding of the Proceedings (irrespective of whether created before or after the commencement of the Proceedings).’

8                     In relation to paragraph 1 of the subpoenas the respondent has qualified its position and now seeks production only of:

‘All documents consisting of, recording, evidencing or referring to communications between the [Funders] and MBC concerning the terms on which funding may be provided in relation to the Proceedings (irrespective of whether created before or after the commencement of the Proceedings).’

9                     Even so, the applicant and the respondent disagree about the proper interpretation of paragraph 1.  The applicant stated in its written submissions that it had considered that paragraph 1 of the subpoenas would involve only an example of each of the different versions of the funding agreements executed by group members and that it had no objection to providing those documents.  The respondent, however, insists that paragraph 1 embraces documents relating to the negotiation of those agreements (‘negotiation documents’) and relating to the performance of the funding arrangements (‘performance documents’).  On this basis the applicant and the Funders expressed the question for determination in relation to paragraph 1 as:

‘Whether paragraph 1 of all the subpoenas should be set aside, so far as it seeks production of documents other than the funding agreements pursuant to which funding has been provided.’ 

10                  Paragraph 3 of the subpoenas served on the Funders requires the production of the following:

‘3.        All Documents consisting of, recording, or evidencing or relating to communications between the [Funders] and Group Members and/or prospective Group Members concerning the Proceedings, the commencement of the Proceedings, the number of Group Members who are involved in the Proceedings, the likely timing or likely outcome of the Proceedings, the conduct of the Proceedings and/or the funding of the Proceedings (irrespective of whether created before or after the commencement of the Proceedings).’

11                  The applicant and the Funders claims that, in the context of s 33N(1) of the Act, and in particular subsections (c) and (d) to which the amended statement of issues refers, the documents required under the offending paragraphs are not relevant, or at least not sufficient relevant and are oppressive.    

General principles

12                  Before discussing the specific paragraphs to which the applicant and the Funders object it is appropriate to review the general principles applicable to this issue.  In Waind v Hill and National Employers’ Mutual General Association Ltd (1978) 1 NSWLR 372 (‘Waind’), Moffit P identified three steps in the procedure of having a third party bring documents to the court in response to a subpoena duces tecum and in their subsequent use.  Those principles are relevant here, all three subpoenas having been served on persons who, technically at least, are strangers to the proceeding. The learned President described the three steps as follows, at 381:

‘The first is obeying the subpoena, by the witness bringing the documents to the court and handing them to the judge.  This step involves the determination of any objections of the witness to the subpoena, or to the production of the documents to the court pursuant to the subpoena.  The second step is the decision of the judge concerning the preliminary use of the documents, which includes whether or not permission should be given to a party or parties to inspect the documents.  The third step is the admission into evidence of the document in whole or in part; or the use of it in the process of evidence being put before the court by cross-examination or otherwise.  It is the third step which alone provides material upon which ultimate decision in the case rests. In these three steps the stranger and the parties have different rights and the function of the judge differs.’

13                  Following the comment quoted above, Moffit P considered some of the grounds on which such a subpoena might be set aside on the ground that it was improperly issued and an abuse of power, including where the subpoena is used for the purpose of discovery, where it is so wide as to be oppressive and where it is used for a spurious purpose. 

14                  In R v Barton [1981] 2 NSWLR 414 at 419, Cantor J, referring to these comments of Moffit P, said that he did not believe that Moffit P was intending his comments to be an exhaustive list of the grounds on which such a subpoena might be set aside.  Having said he was not aware of any case in which such an attempt had been made, Cantor J said that a balancing of the competing and generally conflicting interests of the party to the proceedings and the stranger is required. 

15                  Although both those opposing and those supporting the demands made in paragraphs 1 and 3 of the respondent’s subpoenas relied on Waind, in the present circumstances it seems to me that although MBC and the Funders are not parties to the litigation their interests are intimately connected with it.  In any event, I do not think that whether or not they are treated as strangers to the litigation has a material impact on the question of relevance in the present dispute; see The Commissioner for Railways v Small (1938) SR (NSW) 564 (‘Small’) at 574-5. 

16                  In Trade Practices Commission v Arnotts Limited (1989) 88 ALR 90, Beaumont J was concerned with whether documents should be produced pursuant to a subpoena issued by Arnotts Limited (among others) and served on Mattingly Pty Ltd.  In an oft-quoted passage at 102-103 his Honour said:

‘The general test for present purposes is well settled. The issue of a subpoena will be an abuse of process if it is not used for a legitimate forensic purpose …….  But, as Deane and Gaudron JJ observed in Hamilton v Oades (1989) 85 ALR 1 at 11, the court’s general powers in this area have a dual aspect: “The inherent power of a court to control and supervise proceedings includes the power to take appropriate action to prevent injustice …[This] power … is not restricted to defined and closed categories … In this context injustice is not simply a question of the purpose or motive for which the relevant proceedings were instituted but includes a consideration of the consequences of the proceedings for the person invoking the power.  The terms ‘oppressive’ and ‘vexatious’ are often used to signify those considerations which justify the exercise of the power to control proceedings to prevent injustice, those terms respectively conveying, in an appropriate context, the meaning that the proceedings are ‘seriously and unfairly burdensome, prejudicial or damaging’ and ‘productive of serious and unjustified trouble and harassment’: Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 62 ALJR 389 per Deane J at 411; 79 ALR 9 at 45.”

In other words, the present inquiry is not limited to an analysis of the true purpose of Arnotts in procuring the issue of the subpoena.  It is also material to look at the impact of the subpoena upon Mattingly.

Without restricting this inquiry, it is convenient to address the present application in the first instance by reference to two questions:

(1)          Does the material sought have an apparent relevance to the issues in the principal proceedings, ie, is adjectival, as distinct from substantive, relevance established? Does the subpoena have a legitimate forensic purpose to this extent?  This involves a consideration of the matter from the standpoint of Arnotts.

(2)          Is the subpoena seriously and unfairly burdensome or prejudicial? This is to look at the matter from the point of view of Mattingly.

…

The test of adjectival relevance is satisfied if the material has apparent relevance.  In my opinion, the documentation called for here could possibly throw light on the issues in the main case.  In my opinion, adjectival relevance is established.’

17                  The general principles and the test of adjectival or apparent relevance propounded by Beaumont J have been applied or cited with approval in numerous cases including: Cosco Holdings Pty Ltd v Commissioner for Taxation [1997] FCA 1504 (‘Cosco’);  Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd [1998] FCA 1599;  Marsden v Amalgamated Television Services Pty Ltd [1999] NSWSC 619 at [393]-[394]; Pasini v Vanstone [1999] FCA 1271 at [31]; and Chapman v Luminis Pty Ltd [2001] FCA 1580.  A similar view was expressed in Spencer Motors Pty Ltd v LNC Industries Ltd [1982] 2 NSWLR 921 at 927 where Waddell J, following Waind, summarised the views of Moffitt P in that case saying that whether subpoenas are oppressive or an abuse of process depends on whether ‘it is reasonably likely to add, in the end, in some way or other, to the relevant evidence in the case’.  A similar approach was adopted by Spender J in Cosco when his Honour, having quoted Beaumont J’s test of ‘adjectival relevance’ (see [16] above), commented:

‘Notwithstanding the use of the word “possibly” in this paragraph, in my opinion, that word is not used in any speculative sense.  I take his Honour’s conclusion expressed in that paragraph as an acquiescence to the correctness of the submission that the material sought could reasonably be expected to throw light on some of the issues in the principal proceedings.  It is not a question of looking at the documents to see if the documents might permit a case to be made.’

18                  These authorities show that the criteria by which one determines whether a subpoena should be set aside, in whole or in part, may be expressed in different ways but ultimately, they all come down to whether such action is required to prevent an abuse of the processes of the court to prevent injustice.  As Deane and Gaudron JJ recognised in the comments quoted by Beaumont J (see [16] above), various terms may be used in focusing these concerns on the circumstances of a particular case.  In this case, whether the documents are relevant (in the sense used by Beaumont J) will determine the issue provided that the requirements of the subpoena are not otherwise oppressive.

The respondent’s subpoenas

19                  Although the applications that I am presently considering concern only the first of the three steps identified by Moffit P, in my view, many of the submissions made on behalf of the applicant and the Funders either concern the second or third step or are directed to the substantive questions in s 33N(1).  Those issues are not relevant to the notices of motion with which I am presently concerned, which raise only the question of whether paragraphs 1 and/or 3 should be set aside.

20                  As would be expected there is considerable overlap between the submissions of the applicant and the Funders.  I therefore propose to refer to the Funders’ submissions only where, relevantly, they differ from or expand upon those of the applicant. 

21                  Mr Bathurst QC who appeared, with Mr Darke, for the respondent, clarified a number of points that had been raised by the applicant and the Funders, namely:

(a)     the respondents accepted that privileged documents, which are confidential communications between MBC’s clients, did not lose that privilege by virtue of having been mailed to clients using IMF as a mail house;

(b)    for the purpose of considering the issues that the respondent intends to raise in the hearing of the s 33N issue, the only complaint the respondent makes about the representative group springs from the respondent’s statement of issues, namely that the class is limited to clients of MBC.

22                  Whether particular categories of documents would be likely to throw light on the issues in the s 33N hearing must be determined with reference to the issues to be raised in that hearing, as set out in the respondent’s amended statement of issues.  Although not formally a pleading, as a practical matter the statement of issues serves the same purpose.  It does not follow, however, that the statement of issues must be construed narrowly or precisely.  The purpose of the statement is to put the applicant on notice as to the issues to be canvassed in the s 33N hearing.  It is sufficient for present purposes if documents required by paragraphs 1 and 3 may throw light on one of more of those issues.  Putting it another way, for a paragraph to be set aside it would be necessary to show that the documents could not reasonably be expected to illuminate any issue that might reasonably be raised by the statement of issues.

23                  In relation to the negotiation and performance documents, both the applicant and the Funders emphasised the narrow scope of the hearing under s 33N.  I accept their submission that s 33N is concerned with whether the representative character of the proceeding, not with whether the proceeding should continue at all.  That being so, I also accept that whether the challenged paragraphs of the subpoenas are relevant to the s 33N hearing cannot be judged with reference to the possible consequences of a determination that the proceeding should not continue as a representative proceeding. 

24                  In my opinion, however, it does not follow that the funding arrangements that group members were required to enter into in order to become members of the group as defined in the statement of claim are irrelevant to the issues raised in s 33N(1).  Senior counsel for the applicant, Dr Hanscombe SC, claimed that if the funding arrangements were objectionable they would be objectionable whether the proceeding was brought under s 33N or otherwise.  That submission ignores the comparative element in s 33N(1), in particular ss 33N(1)(a) and (c).  The applicant submitted that, in so far as there is a discretionary question as to whether the interests of justice are affected by the criteria for group membership, the terms of the MBC Retainer and the ILF Funding agreements may be relevant but neither the negotiations preceding those agreements or the manner of their performance can be relevant.  

25                  The respondent submits that the retainer and funding arrangements are relevant because in order to become a member of the group represented by the applicant, a person must retain MBC and this requires that the person enter into retainer and funding agreements.  Without the requirement to retain MBC, a person could be a member of the group without taking any positive steps or incurring any costs and, in the absence of a decision to opt out of the group, would remain a member.  Although both the applicant and the respondent have canvassed the terms of the funding and retainer agreements in some detail it is not necessary for present purposes for me to dwell on these details.  In my view the fact that entry into these agreements is necessary to meet the criteria for group membership is sufficient to show that they may shed some light on whether, given those criteria, the proceeding should continue as a representative proceeding group. 

26                  It is not to the point that it is now accepted that litigation funding arrangements may ‘render positive outcomes for the administration of justice by providing impecunious litigants with access to the courts they otherwise would not have’; Spatialinfo Pty Ltd v Telstra Corporation Ltd [2005] FCA 455 at [23].  Unlike the situations considered in Fostif Pty Ltd v Campbells Cash & Carry Pty Ltd [2005] NSWCA 83 (‘Fostif’)and Clairs Keeley v Treacy (No 2) (2003) 28 WAR 139,entry into the funding agreements is necessary for a person to become a member of the group.  The respondent submits that, for this reason, the funding arrangements in this proceeding limit rather than promote access to justice.  Without expressing a view a concluded view on this submission, I accept that it is at least arguable and, that being so, I am of the opinion that the terms of the agreements are relevant to an issue in the s 33N hearing. 

27                  Mr Bathurst contended that if the funding agreements contained material that would tend to show that it is inappropriate that the proceedings continue as a representative proceeding then the circumstances leading up to the funding agreements are relevant and legitimately the subject of a subpoena.  He submitted that this also extends to documents relating to the performance of the agreements. 

28                  I accept that the negotiation documents are relevant, in the sense used by Beaumont J at [16] above, to the issues raised in clause 2(b) of the statement of issues.  The fact that, as clause 2(b) alleges, in order to qualify as members of the group persons ‘have been and continue to be required to enter into’ retainer and funding agreements is sufficient to make the documents that relate to the negotiation of those agreements relevant to issues in the s 33N hearing.  It is not unreasonable to expect that such documents may show the extent to which group members were able to negotiate the terms of the funding documents.  The applicant, relying on Codelfa Constructions Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337, submitted that once the agreements have been entered into questions about the rights of group members in respect of those arrangements must be based on the executed documents not anterior negotiations.  This may be so but the issue here is not the contractual rights of a group member but the issues raised under s 33N(1), in particular what was required for a person to become a group member.  

29                  In this respect it is relevant to note that the written submissions for the Funders, relying on Fostif,  make the point that the court has no business in enquiring into the details of funding arrangements that ‘group members have been prepared to accept’.  There is a circularity in this submission in that persons do not become group members unless they do accept the funding arrangements.  Moreover, as the respondent submits, submissions such as this make relevant the documents concerning the negotiations of those agreements. 

30                  I do not accept, however, that documents relating to the performance of the agreements are relevant.  I am not convinced by the respondent’s argument that evidence of how, as a matter of practice, the arrangements are carried out, is able to shed light on the appropriateness of the proceeding to continue as a representative proceeding.  In my opinion the statement of issues does not raise any issue that directly or indirectly involves whether the agreements are being performed consistently with the obligations contained in the written agreements.  Nor do I think that evidence of actual performance is relevant to the question of control, which was an issue on which both the applicant and the respondent made submissions.  In brief, I am not satisfied that the requirement to produce documents relating to or demonstrating how the parties carry out their agreements has a legitimate forensic purpose.  Given that I do not accept the respondent’s claim of relevance, it is not necessary for me to discuss the applicant’s submission that the only potential use for the documents would be to attack the credit of a witness.  

31                  In its written submissions the applicant also objected to documents other than examples of the executed funding agreements on the ground that the respondent would obtain information about the costs of the litigation as well as about the resources available to the applicant to fund the proceeding.  This, it was submitted, would give the respondents a strategic advantage similar to that which Goldberg J was not prepared to countenance in Kingsheath Club of the Clubs Limited (In liq) [2003] FCA 1034.  This submission was not pressed at the hearing because, as Dr Hanscombe informed the Court, the solicitors for the respondent had agreed that relevant documents could be masked to prevent the ‘war chest’ (as Goldberg J termed it) from disclosure.

32                  Paragraph 3 of the subpoenas served on the Funders is directed to communication about the proceeding between the Funders and actual and prospective group members.  To the extent that these communications concern the terms of the funding agreements and the negotiation of those agreements, I find them relevant for the reasons explained above at [26]-[29] above.  To the extent that they relate to the performance of the agreements I find that they are not relevant for the reasons given at [30] above.

33                  Paragraph 3 extends well beyond the terms of the terms of the funding agreements and their negotiation.  It requires production of documents concerning the commencement and conduct of the proceedings, the number of group members, the likely timing or likely outcome of the proceedings and the conduct of the proceedings irrespective of whether those documents were created before or after the proceedings commenced.  In my view these documents are not relevant to issues raised in the statement of issues.

34                  Both the applicant and the Funders have made submissions to the effect that paragraphs 1 and 3 of the subpoenas constitute ‘fishing’ by the respondent.  This amounts to a submission that the paragraphs have no legitimate forensic purpose because the documents are sought in order to discover if there is a case not to support a case that has already been articulated; Small at 575.  In Bailey v Beagle Management Pty Ltd (2001) 105 FCR 136 at 143, a  Full Court of this Court noted that the concept of fishing had undergone ‘substantial rethinking’ in recent years.  The Court referred to the comment of the majority of the High Court in Grant v Downs (1976) 135 CLR 674 at 685 to the effect that the public interest requires that in the interests of a fair trial ‘all relevant documentary evidence’ should be available.  The Full Court commented at 143:

‘The applicants’ suggested rule imposes a requirement that, to avoid the stigma of fishing, a party must already be in possession of some evidence, before issuing a notice to produce (or, presumably, any other compulsive interlocutory process).  But historically the concept of fishing was not concerned with the prior possession of evidence but rather that there was a prior pleading which raised issues for which the evidence sought by the process would be relevant.’

Their Honours noted at 144 that, more often, a holding on fishing in relation to an interlocutory process ‘appears to be more a question of oppression’.  They referred to the comments of Jordan CJ in Small at 575 that a subpoena ‘will be set aside as abusive if great numbers of documents are called for and it appears that they are not sufficiently relevant’.  Even if I am wrong in relation to the documents referred to in [33] above not being relevant to the s 33N hearing, I would set aside the subpoenas to the extent that they refer to those documents on the ground that such relevance as they may have is disproportional to any benefit that their production might have for the respondent.  

35                  In their written submissions the Funders made strong objection to paragraph 3 on the grounds of:

(a)    commercial prejudice to the Funders if they were required to reveal information about the group members given to them in confidence including information about the members’ trading activities; and

(b)   the tactical disadvantage it would suffer in this proceeding if it were required to reveal confidential communications concerning matters such as the manner in which the claims of group members are calculated and progress reports on the proceeding.

36                  I accept Mr Bathurst’s submission that questions of the degree of commercial prejudice that IMF would suffer if certain documents should be revealed is not an issue that needs to be decided at this time.  It is properly a question of access to documents that, in accordance with Waind, is to be decided at the stage when the documents are produced.  Similarly, the confidentiality of documents sought by a subpoena is a relative but not determinative issue in considering if a subpoena should be set aside; Apache Northwest Pty Ltd v Western Power Corporation (1998) 19 WAR 350 at 380-81; Spatialinfo Pty Ltd v Telstra Corporation Ltd [2005] FCA 455 at [51].  Nevertheless both issues are relevant when considering the applications made in the applicant’s and the Funders’ notices of motion.  In my opinion they support the claim of oppression in relation to paragraph 3.

37                  As yet I have not heard submissions as to the costs of the notices of motion and I shall reserve costs until I have had an opportunity to hear from the parties on this matter. 

38                  For the reasons given above the orders of the court shall be:

1.      In these orders the following meanings apply:

“Document” has the meaning given to it in Order 1, Rule 4 of the Federal Court Rules;

“Funder” means IMF (Australia) Ltd and/or Insolvency Litigation Fund Pty Ltd;

“Group Members” means persons described in paragraph 2 of the further amended Statement of Claim in this proceeding.

2.      On the motion of IMF (Australia) Ltd and Insolvency Litigation Fund Pty Ltd, notice of which was filed on 5 April 2005, and on the motion of the applicant, notice of which was filed on 4 April 2005, the subpoena directed to IMF (Australia) Ltd and that directed to Insolvency Litigation Fund Pty Ltd be set aside in so far as:

(c)    paragraph 1 of the subpoena refers to documents other than documents consisting of, recording, evidencing, or referring to communications between the Funder and Maurice Blackburn Cashman Pty Ltd concerning the terms on which funding may be provided in relation to the proceedings and the negotiation of those terms (irrespective of whether created before or after the commencement of the proceedings); and

(d)   paragraph 3 of the subpoena refers to documents other than documents consisting of, recording, evidencing, or referring to communications between the Funder and Group Members and/or prospective Group Members concerning the terms on which funding may be provided in relation to the proceedings and the negotiation of those terms (irrespective of whether created before or after the commencement of the proceedings).

3.      On the motion of the applicant, notice of which was filed on 4 April 2005, the subpoena directed to Maurice Blackburn Cashman Pty Ltd be set aside in so far as paragraph 1 of the subpoena refers to documents other than documents consisting of, recording, evidencing, or referring to communications between the Funder and Maurice Blackburn Cashman Pty Ltd concerning the terms on which funding may be provided in relation to the proceedings and the negotiation of those terms (irrespective of whether created before or after the commencement of the proceedings).

4.      The costs of the notices of motion be reserved.

Associate:

Dated:              13 May 2005