Federal Court of Australia

The Official Trustee in Bankruptcy v Shaw [2023] FCA 298

ORDERS

THE COURT ORDERS THAT:

1.    Compliance by the applicant with the following Notices to Produce be dispensed with:

(a)    Notice to Produce filed in this proceeding on 28 February 2022;

(b)    Notice to Produce served on the applicant on 24 January 2023; and

(c)    Notice to Produce served on the applicant on 22 February 2023.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

COLLIER J:

1    Before the Court the respondent, Mr Shaw, seeks an Order that the applicant comply with three Notices to Produce served by him pursuant to rule 20.31(3) of the Federal Court Rules 2011 (Cth). The Notices to Produce were as follows:

(1)    The 1st Notice to Produce filed in this proceeding on 28 February 2022;

(2)    The 2nd Notice to Produce (being a revised notice to produce) served on the applicant on 24 January 2023 and signed by the respondent on 31 January 2023; and

(3)    The 3rd Notice to Produce served on the applicant on 22 February 2023.

2    It is unclear to me when the 1st Notice to Produce was served on the applicant, however that it was served is not in dispute.

3    The applicant opposed producing the documents sought by the respondent in the Notices to Produce.

4    Before turning to documents sought in the Notices to Produce it is important to set out relevant background facts.

Background

5    On 2 July 2021 the applicant filed an originating application in which it sought the following relief:

1.    An order that pursuant to s 37AO(2) of the Federal Court of Australia Act 1976 (Cth) that the respondent be prohibited from instituting any proceeding in this Court without leave of the Court.

2.    An order that any extant proceeding instituted in this Court by the respondent prior to this order be dismissed, or alternatively be stayed pending leave of the Court to continue the proceeding pursuant to order 1.

3.    Any further or other order that this Honourable Court deems appropriate.

4.    An order for costs.

6    The substantive proceeding remained in abeyance pending determination of related proceedings.

7    On 13 December 2022 the respondent filed an amended interlocutory application (dated 11 November 2022) in respect of which (pursuant to Orders of 24 November 2022) he pressed the following paragraphs:

3.     Leave to enter approved correspondence for the purpose of mediation or marked “without prejudice”, into evidence for the purposes of establishing whether mediation discussions have been unfairly compromised by the applicants demands/conduct and/or if this application constitutes an abuse of process,.

6.     Alternatively…an order that this application be dismissed in accordance with Fed Court rule 26.01 due to an abuse of process in making & maintaining this application for an illegitimate purpose and/or lack of authority or standing.

7.    Alternatively… an order for the applicants to provide further & better particulars of the grounds of their application in a document that identifies with reasonable precision the dates & description of each instance of conduct alleged to be vexatious & brief reasons supporting each allegation.

(errors in original)

8    Prior to hearing the interlocutory application, it was common ground that issues referable to compliance with the Notices to Produce required resolution. This is because:

    On 24 November 2022 I ordered that “no applications or material be filed in these proceedings until determination of the respondent’s amended interlocutory hearing”; however

    The respondent wished to rely on the documents sought by him in the Notices to Produce in relation to both the amended interlocutory application filed 13 December 2022 and the originating application filed by the applicant on 21 July 2021.

9    In the 1st Notice to Produce the respondent sought production of:

1.     Copy of the (ASFA) OR-OT Bankruptcy Act Delegation instrument, effective at the time of filing VID361/2021;

2.     Copy of the Schedule to the delegation of the powers & functions of the Official Receiver & Official Trustee, effective at the date of filing VID361/2021;

3.     Copy of any email or document indicating or confirming that proceedings VID361/2021 has been commenced with the authority of the Official Trustee;

4.     Copy of any email or document indicating or confirming that Ms Meghan Sullivan of Harris Carlson has delegated authority to give evidence &/or speak for & on behalf of the Official Trustee in proceeding VID 361/2021; and

5.     AFSA practice guide OTPG18 – Powers & Duties of the Trustee, effective at the time of filing VID361/2021.

10    At the hearing the respondent advised the Court that, in circumstances where he was informed by the applicant that the document described in para 4 of the 1st Notice to Produce did not exist, he did not press para 4 of the 1st Notice to Produce, and accordingly no longer sought production of the document described in that paragraph.

11    In the 2nd Notice to Produce the respondent sought production of:

1.     Copy of any email or document indicating or confirming the name &/ or public service grade of the AFSA public servant that authorised commencing proceedings VID361/2021 on behalf of the Official Trustee.

2.     Copy of any email or document or authority indicating or confirming that Mr Hasan of AFSA and/or a grade APS 6 public servant is authorised to instruct solicitors in litigation of this proceeding on behalf of the OT.

3.     Copy of any email or document or authority indicating or confirming that Ms Rebecca Longford of AFSA was authorised to delegate her authority to Mr Hasan of AFSA to attend mediation & settle this proceeding on 27 Sep 2022 in accordance with her letter of 26 Sep 2022.

4.     Copy of any email or document or authority indicating or confirming that the proceeding has been authorised in accordance with s61 of the Judiciary Act

5.     Copy of the internal AFSA submission supporting the initiation of vexatious litigant proceedings.

6.     Copy of the approval of the submission.

(tracked changes in original)

12    At the hearing, and after inquiry by me, the respondent stated that he no longer pressed paras 2 and 4 of the 2nd Notice to Produce, and accordingly no longer sought production of the documents described in those paragraphs.

13    The 3rd Notice to Produce required the applicant to produce:

1.     Copies of Harris Carlson advice(s) provided to the OT & /or AFSA in relation to FOI requests made by John Shaw to AFSA under the provisions of the Freedom of Information Act 1982.

Consideration

14    At the hearing the applicant was represented by Counsel, while the respondent was self-represented. Both parties relied on written and oral submissions.

15    Rule 20.31 of the Federal Court Rules provides:

Notice to produce document in pleading or affidavit

(1) A party (the first party) may serve on another party (the second party) a notice to produce, in accordance with Form 39, for the inspection of any document mentioned in a pleading or affidavit filed by the second party.

(2) The second party must, within 4 days after being served with the notice to produce, serve the first party with a notice:

(a) stating:

(i) a time, within 7 days after service of the notice, when the document may be inspected; and

(ii) a place where the document may be inspected; or

(b) stating:

(i) that the document is not in the second party's control; and

(ii) to the best of the second party's knowledge--where the document is and in whose control it is; or

(c) claiming that the document is privileged and stating the grounds of the privilege.

(3) If the second party does not comply with paragraph (2)(a) or (b) or claims that the document is privileged, the first party may apply to the Court for an order for production for inspection of the document.

Note: Control is defined in the Dictionary

16    Legal principles in relation to service of and compliance with Notices to Produce are well settled. A notice to produce has the same coercive effect as a subpoena duces tecum: Tyco Australia Pty Ltd v Leighton Contractors Pty Ltd [2005] FCAFC 115; (2005) 142 FCR 428 per Conti J at [58]. The test for relevance of documents sought by a Notice to Produce is the same as that applicable in respect of applications to set aside subpoenas, namely whether the documents sought are of apparent relevance to the issues in the proceeding: Tyco Australia at [58], Seven Network Limited v News Limited (No 5) [2005] FCA 510; (2005) 216 ALR 147 at [10], Enares Pty Ltd v Nimble Money Ltd [2021] FCA 1616 at [16].

17    Further, to the extent that the applicant resists production of documents on the basis of legal professional privilege, principles of legal professional privilege are not in dispute. As explained in such cases as Mann v Carnell [1999] 201 CLR 1, [1999] HCA 66 at 13 [28]:

…Legal professional privilege exists to protect the confidentiality of communications between lawyer and client. It is the client who is entitled to the benefit of such confidentiality, and who may relinquish that entitlement. It is inconsistency between the conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege…

18    I also note the following observations of the High Court in Osland v Secretary to the Department of Justice [2008] 234 CLR 275; [2008] HCA 37:

83.    The privilege belongs to the client, not to the lawyer. A client concerned about a legal question is protected in seeking advice on that question. The protection extends to communications between the client and the lawyer. It upholds the facility of candid, confidential exchanges, essential to the provision of accurate and effective legal counsel.

19    I further note the qualification to this principle explained by Kirby J in Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543; [2002] HCA 49 at 585 [114]:

The foregoing conclusion does not mean that a mere claim of legal professional privilege will be sufficient to attract the privilege. In the case of each communication alleged to be privileged the party making the claim must bring it within the applicable principles. Legal professional privilege will not be available where a conclusion is reached that particular communications were not prepared for the dominant purpose of giving or receiving legal advice. Similarly, legal professional privilege may not apply where an ulterior purpose for the communication is demonstrated, for example, where the communication was made in furtherance of a criminal or fraudulent purpose. The extent to which the privilege would extend to a joint practice of lawyers and non-lawyers (where that is permissible) has not been considered…

20    In the present case the power to serve the Notices to Produce on the applicant is not in issue. What is in issue is whether the Notices to Produce are an abuse of process, referable to documents which are not relevant or privileged, and/or constitute a fishing expedition by the respondent.

21    The applicant summarised the documents sought in the Notices to Produce by category. In relation to the documents which the respondent continues to press, those documents can be described as follows:

(1)    Documents in relation to the Official Trustee representative who authorised the commencement of the proceeding against Mr Shaw, and who authorised the conduct in the proceeding: 1st Notice to Produce at [1], [2], [3], [5], 2nd Notice to Produce at [1];

(2)    Documents in relation to the authorisation of Mr Hasan to attend the mediation: 2nd Notice to Produce at [3];

(3)    Internal submissions/memorandum discussing/advising the proceeding: 2nd Notice to Produce at [5], [6]; and

(4)    Advice of solicitors in relation to FOI requests: 3rd Notice to Produce at [1].

22    It is convenient to deal with the documents sought in these categories.

(1) Documents in relation to the Official Trustee representative who authorised the commencement of the proceeding against Mr Shaw, and who authorised the conduct in the proceeding: 1st Notice to Produce at [1], [2], [3], [5], 2nd Notice to Produce at [1]

23    Mr Shaw submitted that the question whether actions taken by staff of the Australian Financial Security Authority (AFSA) in initiating and conducting the substantive proceeding against him were valid and authorised, was fundamental to his application.

24    It is difficult to identify how these documents sought by Mr Shaw are relevant to the substantive proceedings. The Official Trustee is a body corporate created under the Bankruptcy Act 1966 (Cth) which administers bankruptcies and other personal insolvency arrangements in Australia. The Official Trustee became trustee of Mr Shaw’s bankrupt estate and took control of his property: Yarranova Pty Ltd v Shaw (No 2) [2014] FCA 616. The Official Trustee has a statutory role that is undertaken by AFSA, which is an agency of the Commonwealth executive. AFSA provides personnel and resources that allow the Trustee to perform its role.

25    Plainly, this is not the first time that Mr Shaw has challenged the authority of AFSA and its employees to make decisions or take action on behalf of the Trustee, however his previous arguments in this respect have been described as being “far from pellucid or persuasive”: Shaw v The Official Trustee in Bankruptcy of the Australian Financial Security Authority (No 3) [2021] FCA 1569 at [38].

26    Notwithstanding the paucity of Mr Shaw’s argument I note that the Official Trustee is content to produce the documents sought in the 1st Notice to Produce at [1], [2] and [5] given that the documents are in the nature of general powers, delegations and duties, and are not specific to the proceeding. However I also note that the applicant reserves the right to object to the tendering of such documents into evidence at the trial of the proceeding.

27    In my view the documents sought in the 1st Notice to Produce at [1], [2] and [5] are irrelevant. While the Official Trustee is content to produce them to Mr Shaw, I am not prepared to order compliance by the Official Trustee in respect of these paragraphs of the 1st Notice to Produce.

28    In relation to documents sought by the respondent in para [3] of the 1st Notice to Produce and para [1] of the 2nd Notice to Produce, I am not prepared to order compliance. The respondent has sought copies of any email or document indicating or confirming that proceedings VID361 of 2021 were commenced with the authority of the Official Trustee, or identifying the name and/or public service grade of authorising AFSA public servants. However as the applicant submitted, the proceedings against the respondent were plainly commenced with the authority of the Official Trustee. In this respect I also note the affidavit of Ms Meghan Sullivan, a lawyer in the employ of Harris Carlson Lawyers, solicitors for the Official Trustee, filed 2 July 2021, who deposed that she has the care and conduct of this matter on behalf of the Official Trustee. To the extent that the present litigation is conducted by the lawyers for the Official Trustee, in his name, and were instructed by the Official Trustee to act, I am satisfied that the proceedings were commenced with authority, and that production of documents confirming that authority would be a fishing exercise and an abuse of process.

(2) Documents in relation to the authorisation of Mr Hasan to attend the mediation: 2nd Notice to Produce at [3]

29    Again, this is plainly not the first time that Mr Shaw has sought to challenge the authority of Mr Hasan in this matter. In Shaw v The Official Trustee in Bankruptcy of the Australian Financial Security Authority (No 3) [2021] FCA 1569 for example, Wigney J observed:

123. As for the question of Mr Hasan’s authority (order 6 in the interlocutory application) Mr Shaw had every opportunity to cross-examine Mr Hasan on that topic at the hearing. There was no proper basis for allowing that issue to be further agitated. It is, in any event, difficult to see the relevance, let alone the cogency, of Mr Shaw’s arguments concerning Mr Hasan’s authority.

30    I note that Mr Shaw has filed an amended interlocutory application in which he seeks leave to rely on “approved correspondence for the purpose of mediation or marked ‘without prejudice’ into evidence for the purposes of establishing whether mediation discussions have been unfairly compromised by the applicants demands/conduct and/or if this application constitutes an abuse of process”.

31    The applicant has commenced proceedings against Mr Shaw pursuant to s 37AO(1) of the Federal Court Act. This section provides:

(1) This section applies if the Court is satisfied:

(a) a person has frequently instituted or conducted vexatious proceedings in Australian courts or tribunals; or

(b) a person, acting in concert with another person who is subject to a vexatious proceedings order or who is covered by paragraph (a), has instituted or conducted a vexatious proceeding in an Australian court or tribunal.

32    For the purposes of s 37AO, "vexatious proceeding" includes:

(a) a proceeding that is an abuse of the process of a court or tribunal; and

(b) a proceeding instituted in a court or tribunal to harass or annoy, to cause delay or detriment, or for another wrongful purpose; and

(c) a proceeding instituted or pursued in a court or tribunal without reasonable ground; and

(d) a proceeding conducted in a court or tribunal in a way so as to harass or annoy, cause delay or detriment, or achieve another wrongful purpose.

33    Section 37AO focuses on the conduct of a respondent to such proceedings – in this case Mr Shaw. Copies of internal AFSA documents supporting and approving participation by Mr Hasan in a mediation with Mr Shaw are irrelevant to those proceedings.

34    In respect of Mr Shaw’s amended interlocutory application – at this interlocutory stage I am prepared to infer that Mr Hasan has responsibility in AFSA for matters involving Mr Shaw, and was authorised to attend the relevant mediation with Mr Shaw.

35    I cannot identify how the document sought by Mr Shaw at [3] of the 2nd Notice to Produce is relevant to either the substantive originating application filed by the applicant or the amended interlocutory application and dispense compliance by the applicant with that paragraph.

(3) Internal submissions/memorandum discussing/advising the proceeding: 2nd Notice to Produce at [5], [6])

36    I have already observed that the material before the Court supports a finding that the proceedings against Mr Shaw were properly instituted by the Official Trustee through its lawyers. Further, the substantive proceedings focuses on the respondent rather than the conduct of the applicant.

37    An application for production of documents will amount to fishing where the evidence to which it is directed is sought in order to establish whether the party seeking the documents has a case that might be run, as opposed to establishing an evidential basis for a case for a case for which a proper basis already exists: WA Pines Pty Ltd v Bannerman (1980) 41 FLR 175 at 181-182; Nestle Australia Limited v Commissioner of Taxation (1986) 10 FCR 78 at 82; Fried v National Australia Bank [2000] FCA 911; (2000) 175 ALR 194 at 200-201 [30]; Jilani v Wilhelm [2005] 148 FCR 255; [2005] FCAFC 269; Shaw v Official Trustee in Bankruptcy (No 2) [2019] FCA 1574 at [36].

38    In my view the documents in paras [5] and [6] of the 2nd Notice to Produce constitute a fishing expedition by the respondent in respect of his amended interlocutory application.

39    I am not prepared to order compliance by the applicant with these paragraphs.

(4) Advice of solicitors in relation to FOI requests: 3rd Notice to Produce at [1])

40    Mr Shaw submitted that:

Given the obvious conflict of interest in the solicitors in this proceeding advising the OT regarding my FOI applications & the subsequent refusal of AFSA FOI to respond to my applications such advice is reasonably expected to be prejudicial to my rights to discover evidence from a witness.

41    This submission is riddled with speculation, scandalous comment, and illogic. The prospect of the lawyers for the Official Trustee in this matter also providing advice concerning freedom of information requests from Mr Shaw is entirely unremarkable. I also consider it irrelevant to the substantive proceedings.

42    Further, based on Mr Shaw’s description of the documents he seeks in the 3rd Notice to Produce, I consider that such documents are also subject to legal professional privilege. They were plainly produced by the law firm for the purposes of providing legal advice to the Official Trustee in respect of matters involving the Official Trustee’s administration of Mr Shaw’s bankrupt estate. Materially, Mr Shaw has also clearly been involved, extensively, in litigation with the Official Trustee as identified by Ms Sullivan in her affidavit. It is reasonable to infer that the advice sought in the 3rd Notice to Produce was relevant to legal proceedings between the Official Trustee as the law firm’s client, and Mr Shaw. I cannot identify any factor which would prevent the advice being subject to privilege.

CONCLUSION

43    Compliance by the applicant with the Notices to Produce is dispensed with.

44    I will hear the parties in respect of costs.

Associate:

Dated:    4 April 2023