FEDERAL COURT OF AUSTRALIA

Australian Prudential Regulation Authority v Rural & General Insurance Limited (ACN 000 007 492) (Subject to Deed of Company Arrangement)

[2005] FCA 1548

PRACTICE AND PROCEDURE – motion by third party for access to subpoenaed documents for use in other proceedings and for release from implied undertaking – motion granted in part

Federal Court Rules, O 15 r 18

British American Tobacco Australia Services Ltd v Cowell (2003) 8 VR 571 cited

Harman v Home Department State Secretary; sub nom Home Office v Harman [1983] 1 AC 280 cited

AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY v RURAL & GENERAL INSURANCE LIMITED (ACN 000 007 492) (SUBJECT TO DEED OF COMPANY ARRANGEMENT) AND AARON STEPHENSON

NSD 3050 OF 2003

GYLES J

21 OCTOBER 2005

SYDNEY

THE COURT ORDERS THAT:

1                     Leave be granted to Aaron Stephenson to utilise Exhibit G to his statement in proceedings 2005/08 in the Administrative Appeals Tribunal for the purposes of those proceedings. 

2                     Costs be reserved.

3                     Judgment is otherwise reserved.

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

REASONS FOR JUDGMENT

1                     This is an unusual set of circumstances.  Because the issue affects current proceedings in the Administrative Appeals Tribunal, I should endeavour to dispose of matters that I properly can dispose of as soon as I can. 

2                     I will not grant access to the documents which are in Court purely because they were subpoenaed a couple of years ago and per chance still remain in the Court.  They should not be here and I would not propose to exercise any power to grant access to them.  It is purely happenchance that they are here.

3                     Secondly, it would be a very unusual case in which a third party would be allowed access to documents that have been subpoenaed without the consent of the parties to the original litigation or the party from whom the document originated.  The use of the compulsory powers of the Court to bring documents to the Court is not a matter of convenience for others to use, no matter what the purpose is.  I cannot, of course, rule out circumstances in which it might be appropriate but, in my view, it is quite clear this is not one of them.

4                     Thirdly, document Exhibit G to the affidavit of Mr Stephenson should be regarded as free of any restraint so far as his use of that document is concerned.  It is a moot point as to whether or not the use of it is covered by the implied undertaking as to use referred to in Harman v Home Department State Secretary; sub nom Home Office v Harman [1983] 1 AC 280 at all.  There is a substantial argument that, so far as this Court is concerned, O 15 r 18 of the Federal Court Rules deals expressly with this situation. In my view, the tendering of a document in evidence is either the equivalent of being read to or by the Court, or referred to in open court.  It seems to me to be plain that a documentary exhibit is in that category.

5                     Even if that not be correct and the approach of the Victorian Court of Appeal in British American Tobacco Australia Services Ltd v Cowell (2003) 8 VR 571 is applied, then I would respectfully take the view that, the substance of this case having been concluded, the public tendering of the document and the fact that it was in truth partially read in public are good reasons for relieving Mr Stephenson and anybody else involved from any potential contempt of Court through the use of that document.

6                     What remains to be decided is whether or not leave ought to be given to utilise the other documents sought in the notice of motion.  That amounts to an application that the implied undertaking be lifted or varied to enable that to be done.  This, of course, is not a proceeding for contempt and I have no power to control the processes of the Administrative Appeals Tribunal.  What I can do is deal with the consequences of what has occurred in this Court. 

7                     Mr Stephenson was, of course, not a party to the principal proceeding.  He was, however, the Managing Director of the respondent and the active party giving instructions in the matter.  It is clear that Mr Stephenson would know or would have known at the relevant time that the documents that he took possession of, or his solicitors took possession of, were documents which had been produced on subpoena in this Court.  First of all, that is in fact what happened and, secondly, the evidence shows that there is no other source for those documents.  The implied undertaking binds not only parties to the proceeding itself but would bind anybody who had notice of what had occurred.  As a result, one way or another, I have no doubt Mr Stephenson would be in contempt of Court if the substance of the implied undertaking was deliberately breached and, thus, it is prudent that he should seek relief from that consequence.

8                     The initial difficulty I have about that application is that, as counsel for the Australian Prudential Regulation Authority (APRA) has pointed out, the utilisation of the documents and deployment of the documents for forensic purposes elsewhere has already taken place, and this is a rather belated attempt to regularise what has occurred.  If I were persuaded to do that, it would only have effect for the future although it may have some consequence for the past.

9                     I am not satisfied that the evidence which has been put on so far gives a satisfactory explanation as to the provenance of these documents, just exactly how they came to be utilised, how they came to be available, what was known about them by the people concerned and so on.

10                  The implied undertaking is a very serious matter in the administration of justice, as counsel for APRA has submitted, and the Court must be astute to protect its processes in this respect because it arises out of the use of compulsory powers.  In this case, five boxes of documents have been produced.  It is against the public interest that people producing documents to the Court should get the idea that those documents can be utilised by others without their consent.  Secondly, there is a difficulty because one of the subpoenaed parties, Ernst and Young, is not here.  That could no doubt be easily cured.  It is not of as great importance as it otherwise might be because APRA is here whose interest is, if anything, in substance perhaps more real than that of Ernst and Young.  Nonetheless, Ernst and Young was the party who produced the documents.  Thirdly, I have not yet been persuaded that, in any event, there is a proper case for release of the undertaking to enable use of these documents. 

11                  However, I think I need to reflect a little more carefully upon this question because of the differing approaches and emphasis in the authorities, and because of the difficulty that I have had, and I think counsel have had, in recreating the precise chronology of events which took place back in late 2003 and early 2004.  This issue is important, as I have said, from the point of view of the Court and litigants generally and it is, of course, of importance to Mr Stephenson in this particular case.  So I decline to make any order permitting access to those subpoenaed documents at this stage.

12                  I order that leave be granted to Aaron Stephenson to utilise Exhibit G to his statement in proceedings 2005/08 in the Administrative Appeals Tribunal for the purposes of those proceedings.  I otherwise reserve my decision and costs are reserved.

Associate:

Dated:              2 November 2005