FEDERAL COURT OF AUSTRALIA

Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd

[2009] FCA 1197

PRACTICE AND PROCEDURE - Application for notice to produce - Where jurisdiction of the Court is an alternative challenge by the Respondent - Respondent seeking to rely invoke Court's compulsory process to support an application - Held O 33 r 12 requires a grant of leave where notice to produce is sought at an interlocutory stage - Whether notice to produce constitutes "fishing" - Held notice to produce constitutes "fishing" - Held notice to produce set aside

Trade Practices Act 1974 (Cth) s 82

Federal Court Rules O 33 r 12

Lloyd Werft Bremerhaven GmbH v Owners of Ship “Zoya Kosmodemyanskaya” and Anor  (1997) 79 FCR 71 cited

Telstra Corporation v Minister for Communications, Information Technology and the Arts [2007] FCA 1398 cited

Armacel Pty Ltd v Smurfit Stone Container Corporation (2007) 164 FCR 123 considered

Tyco Australia Pty Ltd v Leighton Contractors Pty Ltd (2005) 142 FCR 428cited

BP Australia Pty Ltd v Nyran Pty Ltd [2003] FCA 834 considered

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

McMahon v Gould (1982) 7 ACLR 202 cited

SUNLAND WATERFRONT (BVI) LTD and SUNLAND GROUP LTD ACN 063 429 532 v PRUDENTIA INVESTMENTS PTY LTD ACN 091 390 742, HANLEY INVESTMENTS PTE LTD, ANGUS JOHN LUXMOORE REED and MATTHEW JAMES JOYCE

QUD 195 of 2009

LOGAN J

14 OCTOBER 2009

BRISBANE

THE COURT ORDERS THAT:

1.                  The notice to produce is set aside.

2.                  The Fourth Respondent is to pay the First and Second Applicants’ costs of and incidental to the application for the setting aside of the notice of produce, to be taxed.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.

REASONS FOR JUDGMENT

1                     Mr Matthew James Joyce is the Fourth Respondent in proceedings which have been instituted in this Court by Sunland Waterfront (BVI) Limited and Sunland Group Limited (the Sunland Parties).  In those proceedings the two Sunland parties seek damages pursuant to s 82 of the Trade Practices Act 1974 (Cth) (TPA), and, further, or alternatively, damages for the tort of deceit, together with interest pursuant to statute. 

2                     A statement of claim has been filed and served in the proceedings.  At the risk of over-generalisation, the essence of the case alleged against Mr Joyce, as disclosed in the statement of claim, is what is said to be a series of false statements on his part in relation to the availability and ownership of waterfront land in the Emirate of Dubai (the Emirate).  It is alleged, inter alia, that, on the strength of such statements, the Sunland parties have paid a consultancy fee, have incurred costs in relation to an investigation conducted by the authorities of the Emirate, and have lost reputation in the Emirate for having been a party to a transaction which is said to have been characterised by the authorities in the Emirate as illegal.

3                     It emerges on the evidence to hand that Mr Joyce has been charged criminally by the authorities in the Emirate and is presently in gaol there.  Mr Joyce has made application for orders that the whole of the proceeding against him be stayed permanently, or at least until further order.  That application is to be heard on 14 December 2009.  The basis for that application, as related today, is twofold, firstly, a submission that the Court lacks jurisdiction to entertain the claim made against Mr Joyce by the Sunland parties, and, secondly, and in the alternative, that even if there is jurisdiction, the Court should, as a matter of discretion and to prevent the abuse of its processes, either stay permanently, or until further order, the proceedings. 

4                     In support of Mr Joyce’s application for such orders his solicitors have caused to be made and served on the solicitors for the Sunland parties what is, or at least purports to be, a notice to produce in Form 45.  The notice concerned is exhibit 1 in the proceedings.  It is in the following terms:

Notice to Produce

To the First Applicant and Second Applicant

The Fourth Respondent requires you to produce to the Court at 10.15am on 14 October 2009 at the Harry Gibbs Commonwealth Law Courts Building, 119 North Quay, Brisbane, Queensland the following documents for the purpose of evidence:

For the purpose of this Notice to Produce:

Document means any circular, correspondence, email, facsimile, file note, letter, memoranda, note, purchase record, records of conversations, report, statements, summary, and all other records of information (whether stored on paper, electronically or in any other format), or any other document within the meaning of the Evidence Act 1995 (Cth).

Penal Case #2130/2009 means the proceeding in the Emirate of Dubai against among others, Matthew James Joyce (the Fourth Respondent in this Proceeding) concerning the sale and purchase of Plot D17.

Plot D17 means the plot of land named “Plot D17” identified in paragraph 11 of the statement of claim in this Proceeding.

Proceeding means this proceeding, Federal Court Proceeding No QUD 195 of 2009.

Public Authority means any authority or body constituted by or under a law of a State or Territory of Australia or under a law of the Commonwealth of Australia.

1.         All Documents provided to any organ of the Emirate of Dubai, by any officer, agent or employee of the First Applicant or Second Applicant, regarding Penal Case #2130/2009.

2.         All Documents recording or evidencing any statement made or assistance given, by any officer, agent or employee of the First Applicant or Second Applicant, to any organ of the Emirate of Dubai regarding:

(a)        Penal Case #2130/2009; or

(b)        any civil claim in Dubai, by the First Applicant or Second Applicant, arising out of the sale or purchase of Plot D17.

3.         All Documents received by any officer, agent or employee of the First Applicant or Second Applicant, from any organ of the Emirate of Dubai, regarding Penal Case #2130/2009.

4.         All Documents provided to any Public Authority, by any officer, agent or employee of the First Applicant or Second Applicant, recording or evidencing:

(a)        a complaint by the First or Second Applicant regarding Plot D17; or

(b)        a request by the First or Second Applicant for the Public Authority to investigate the sale or purchase of Plot D17.

5.         All Documents recording or evidencing any press release or public comment to the press, by any officer, agent or employee of the First Applicant or Second Applicant, regarding this Proceeding or Penal Case #2130/2009.

6.         All Documents recording or evidencing any internal communications of the First Applicant or Second Applicant (that is, any communications between any officers, employees or agents of the First Applicant or between any officers, employees or agents of the Second Applicant) regarding Penal Case #2130/2009.

7.         This notice to produce.

5                     The provision in the Federal Court Rules in relation to notices to produce is O 33 r 12.  That rule provides:

(1)        Where a party to any proceedings serves on another party notice, in accordance with Form 45, requiring the party served to produce at any trial or hearing in the proceedings, or before any Judge, officer, examiner or other person having authority to take evidence in the proceedings any document or thing for the purpose of evidence and the document or thing is in the possession, custody or power of the party served, the party served shall, unless the Court otherwise orders, produce the document or thing in accordance with the notice, without the need for any subpoena for production.

(2)        Where the document or thing required to be produced in accordance with subrule (1) is not produced, the party serving the notice may lead secondary evidence of the contents or nature of the document or thing.

(3)        Subrule (2) does not affect the power of the Court to order costs against a party who fails to comply with a notice under subrule (1).

6                     Some principles have emerged in relation to notices to produce under O 33 r 12 from prior authorities.  It is accepted that a notice to produce, properly issued in terms of O 33 r 12, has the same coercive effect as a subpoena.  There is also authority that a notice to produce may be used even in respect of an interlocutory hearing. 

7                     Though examples are to be found of such use it may perhaps require reconsideration at some stage in light of the remarks made in the Full Court in Lloyd Werft Bremerhaven GmbH v Owners of Ship “Zoya Kosmodemyanskaya” and Anor (1997) 79 FCR 71 at 93D (Bremerhaven), where the Full Court makes reference to adjectival rules to be applied at the hearing, being those appropriate to a final hearing.  I proceed, though, on the basis that the desired use of a notice to produce by Mr Joyce to secure the production of particular documents for use in relation to the application to be heard on 14 December 2009 is, at least in theory, permissible under the Rules even though the application to be heard that day is not a final hearing.

I note that in Tyco Australia Pty Ltd v Leighton Contractors Pty Ltd (2005) 142 FCR 428, Hely J at 442, having voiced his general agreement with observations made by Hill J in relation to notices to produce, stated:

Contestable issues of fact may arise in proceedings under O 15A for preliminary discovery.

8                     Further, at 442:

There is no reason why the ordinary interlocutory procedures should not be available to assist in the resolution of those contestable issues of fact, subject to the overriding consideration that the invocation of those proceedings does not amount to an abuse of the process of the Court;  Kimberley Mineral Holdings Ltd (in liq) v McEwan [1980] 1 NSWLR 210.  Thus, at least prima facie, it would be an abuse of process for an application for preliminary discovery to seek to compel the production of documents by notices to produce, when the production of those documents is sought under O 15A r 6.  But it does not follow, for example, that a subpoena sought to be issued by an applicant for preliminary discovery against a third party would necessarily be an abuse, depending upon the scope and purpose of the subpoena.

9                     Those sentiments expressed by Hely J were quoted with apparent approval by Graham J in Telstra Corporation v Minister for Communications, Information Technology and the Arts [2007] FCA 1398 (Telstra).  One finds in Graham J’s judgment in the Telstra case at para 44 through to, and including, para 54, a helpful recitation of authority in relation to practice and procedure concerning notices to produce.  The Sunland parties do not challenge the prima facie ability of Mr Joyce to invoke the notice to produce procedure in support of his application on 14 December 2009.

10                  There is, it must be said, something of an incongruity in respect of a party who, on the one hand, challenges the jurisdiction of this Court to entertain the substantive proceeding and, on the other hand, seeks to invoke its compulsory process to support an application that that party is making.  It may well be that, again prima facie, that course is impermissible:  see Armacel Pty Ltd v Smurfit Stone Container Corporation (2007) 164 FCR 123 at [10]. 

11                  The application to be heard on 14 December 2009 has about it, though, as noted, an alternative predicated upon an absence of success as to the jurisdictional challenge.  The Sunland parties, for their part, recognise the practicalities and also the service of the interests of justice by the hearing of the application for the relief Mr Joyce seeks on that day conjunctively rather than in some staggered way.  For that reason there is no formal challenge to the ability to invoke the compulsory process reflected in a notice to produce made by the Sunland parties.  Rather, they seek to meet whether the notice to produce should be set aside on the assumption that it is otherwise open to Mr Joyce to invoke that process.

12                  That seems to me to be a just way to approach the question of whether the notice to produce should be set aside in the particular circumstances of this case.  In other words, whilst I have a particular reservation as to the invocation of the process when jurisdiction is under challenge, I shall proceed on the assumption that it is otherwise regular to have sought to invoke the process.

13                  Another question which emerges in terms of practice and procedure is the absence of a grant of leave to Mr Joyce for the issuing of any notice to produce, be it in the form quoted or in some other form.  I say that because the notice seeks to have the documents it describes produced at a time other than the hearing which was to occur on 14 December. 

14                  In BP Australia Pty Ltd v Nyran Pty Ltd [2003] FCA 834, Nicholson J had occasion to deal with an application for leave to serve a notice to produce.  His Honour made the observation - with respect, an unsurprising observation - that O 33 r 12(1) did not require leave, but that was in the context of where production was to occur at a trial or hearing, or otherwise as provided in r 12.  His Honour further observed that leave was necessary in the case before him because the notice sought the production of documents other than at a trial or hearing.

15                  Mr Joyce’s counsel, upon this particular subject being drawn to his attention, applied orally for a grant of leave.  Thus there are strictly two applications before the Court today.  One is that brought by the Sunland parties for the setting aside of the notice to produce; the other is for a grant of leave for the production of documents on notice prior to the hearing on 14 December. 

16                  The Sunland parties describe the notice to produce as “a mere fishing expedition”.  Their submission is that fails to meet the requisite test of relevance in relation to notices to produce.  An alternative submission is made in respect of paras 2, 5 and 6 of the notice; that it is oppressive. 

17                  One thing which must be said about the notice to produce procedure under r 12 is that, in terms of existing authority, it should not be approached on the basis that it is merely a means by which secondary evidence may be introduced in the event of a failure to produce.  In other words, one does not read r 12 as if it provides for an ability not to produce as required subject to just objection.  It is truly, in that sense, a procedure which has the same coercive effect as a subpoena. 

18                  The test, so far as the question of relevance is concerned, is one of adjectival relevance.  Further, so far as any question of “fishing” is concerned, observations made in the Full Court in Bailey v Beagle Management Pty Ltd (2001) 105 FCR 136 at 143 are pertinent:

[E]ven if the notices to produce are properly to be regarded as fishing, that concept has undergone substantial rethinking in this Court in recent years.  In a number of cases it has been pointed out that O 15A r 6 (discovery before action) expressly contemplates what once might have been castigated as fishing and that it would be incongruous if the power to order discovery much less extensive in favour of a party to a proceeding properly brought in the Court than in favour of someone unable for lack of evidence to mount a case.

19                  Further, at 143:

Also one should not lose sight of what the majority in the High Court in Grant v Downs (1976) 135 CLR 674 noted as the public interest

..which requires that in the interests of a fair trial litigation should be conducted on the footing that all relevant documentary evidence is available.

20                  On 14 December 2009, insofar as the application turns on matters other than jurisdiction, it is evident that Mr Joyce will seek to persuade the Court that there is unjust prejudice to him in the continuance of these proceedings of a kind described in McMahon v Gould (1982) 7 ACLR 202 at 208.  One factor to which Mr Joyce proposes to point is that it is, to say the least, likely that evidence in these proceedings, insofar as it is lawfully possible under our law for the same to be disclosed, will find its way to the authorities in the Emirate.  So much is accepted by the Sunland parties.

21                  The Sunland parties go rather further in terms of the particular qualities that are likely to attend them in relation to these proceedings and in respect of proceedings, both civil and criminal, in the Emirate. 

22                  That this is so is evident in terms of statements made publicly by the Sunland parties, the contents of which are in evidence before me in the form of a series of Australian Stock Exchange and Media Releases issued under the hand of a Mr Harrison, the company secretary of the Sunland Group.  Thus, on 20 February, the Sunland parties have disclosed openly that:

Information has been provided by Sunland to the investigating authorities

[I interpolate “in Dubai”]

and the Sunland Group will continue to provide assistance where required.

23                  On 2 March 2009, in a media release, the Sunland parties stated:

Sunland fully supports the Dubai Government’s commitment to ensure the region’s property market is transparent.  We will continue to provide assistance where required, maintaining the highest ethical standards in all our dealings has long been a core value of Sunland.

24                  On 21 July 2009, in a release, the Sunland parties stated:

Sunland Managing Director, Sahba Abedian, said the company has been assisting the authorities in Dubai with their investigations since December 2008 and will continue to provide assistance where required.  Sunland has also taken steps to report the action of certain individuals to Australian authorities and we are investigating civil remedies in respect of the alleged fraud.

25                  In that media release of 21 July it is further stated that:

As a consequence of the Dubai authorities finalising their investigations, the Chief Operating Officer of Sunland’s Dubai branch, David Brown, had his passport returned.  Mr Brown was a witness to the Dubai authorities’ investigations and was never subject to the investigations nor detailed.

26                  It is no secret, and statements in effect were made to that end in open court on behalf of the Sunland parties, that Mr Brown has been and will continue, so far as the Sunland parties are aware, to assist the authorities in the Emirate with their investigations.  Further, and, again, in open court, the Sunland parties take the position that they will, to the extent lawfully possible, assist the authorities in the Emirate with their investigations.  The taking of such a stance and the making of such admissions form part of the basis upon which the Sunland parties seek to have the notice to produce set aside.  Indeed, in so doing, they invite the Court to assume that it is inherently likely that, to the extent lawfully possible, evidence which is obtained or other information which is obtained by them in civil proceedings in this Court will find its way to the authorities in the Emirate.

27                  It is necessary to emphasise the caveat in the Sunland parties’ position, which is to the extent lawfully possible.  I certainly do not approach the question of whether the notice to produce should be set aside on the basis that it would be impossible, in the event that documents were produced pursuant to notice to the Court and it is necessary to observe that the production is to the Court - for the Court to craft orders which might limit the use which might be made of documents so produced for purposes other than those incidental to the present proceedings. 

28                  It seems to me that the question to hand is one which falls for resolution in light of, firstly, the breadth of capture which is sought in the notice as presently drafted, and an assessment of that breadth of capture, accepting that adjectival relevance is sufficient, having regard to the admissions which are already made and to which I have referred. 

29                  When one takes into account the end to which the documents sought by notice might be sought, that end, it seems to me, is one which is already the subject of a conclusive factual finding which the Sunland parties do more than invite to be found, but, rather, concede should be found in relation to the cooperation with the Dubai authorities and in relation to the use which might be made in the Emirate, to the extent lawfully possible, of evidence in this case.

30                  When one has regard to the breadth of capture that is sought, in light of that conceded position, it seems to me that the notice to produce is truly, even having regarding to what has been said to be a modern approach to the concept of “fishing”, nonetheless, a “fishing expedition”.  In other words, the legitimate forensic purposes to which the notice might be seen to be directed in relation to a hearing of a stay application have been overcome by the conceded position on the part of the Sunland parties.  What would remain, then, are purposes extraneous to a hearing on 14 December.  That, to me, constitutes “fishing”. 

31                  That is so even in respect of so much of the notice as relates to a civil proceeding, or as may relate to a civil proceeding, in Dubai.  Again, the existence of such a proceeding is no secret and, indeed, is conceded by the Sunland parties.  It is, further, inherently likely that, to the extent lawfully possible, the Sunland parties would seek to utilise evidence in this proceeding in the civil proceeding in Dubai.  I am certainly prepared to infer the same, and, again, in so inferring, the caveat to the extent lawfully possible. 

32                  As to the aspect of complaint to Australian authorities and the prospect of proceedings, perhaps, in this country by Australian authorities against Mr Joyce, that, too, in terms of complaint having been made, is no secret.  Whether or not there is any such proceeding is a matter which is not presently in evidence, and it is not in any way appropriate for me to speculate as to the actions of the Australian authorities by way of response to the Sunland parties’ complaint.

33                  In the event that there is some action taken, that will, doubtless, be the subject of evidence lead before me on 14 December. 

34                  Thus, it seems to me that however one approaches the notice to produce, it is, in light of admission or necessary inferences, seeking the production of material which is not any longer of adjectival relevance.  That is quite apart from the sweeping nature of the production request made in the notice.  It is by no means impossible to see how, in the face of such a request for production, the Sunland parties would seek to characterise it as oppressive. 

35                  I note that the Sunland parties have not taken the attitude that voluntary disclosures in respect of aspects of the criminal proceeding in Dubai or, for that matter, the civil proceeding cannot and should not be made.  Further, it seems that a more refined request than that made in sweeping terms in the notice may be the subject of a quite different response.  It is not for me to seek to micromanage relations between the parties in that regard, but rather to determine whether or not the notice in the form in which it has been delivered should be the subject of an order for production, and then a determination of such objections that may be made in relation to the documents sought to be produced. 

36                  The notice is one which has issued.  If leave had been sought in advance, I would not have been disposed, in light of the factors I have mentioned, to grant leave.  If only out of an abundance of caution, I set the notice aside.

37                  In relation to costs there are a number of options that are open to the way in which a costs discretion should be exercised.  One might regard the fate of the application today as inherently bound up with the fate of the application for a stay.  Equally, one might take the view that the admissions made in open court were not as precisely given at an anterior stage, either by way of media release or correspondence.  Finally, one might take the view that the application itself, in the face of that which was already evident by way of admission in correspondence or media release, was such that, either at the stage of making the application to the Court or at least at the stage of pressing the application further beyond the evidence of admissions, was an unnecessary step. 

38                  There are certainly factors which tell in favour of taking what one might term a benign approach to the ordering of costs by way of reserving them, having regard to admissions which were made today by the Sunland parties’ counsel.  On balance, though, it seems to me that the material already evident in media release or correspondence as to the Sunland parties’ disposition vis-à-vis the proceedings civil and criminal in the Emirate is such that the costs of today ought to follow the event. 

Associate:

Dated:         22 October 2009