Federal Court of Australia

Roberts-Smith v Fairfax Media Publications Pty Limited (No 43) [2023] FCA 886

ORDERS

THE COURT ORDERS THAT:

1.    The Subpoena to produce documents directed to Australian Capital Equity Pty Ltd be amended under r 24.15 of the Federal Court Rules 2011 (Cth) as follows:

(a)    the words in paragraph 2 “From document repositories relating to Kerry Stokes AC, Ryan Stokes and Robin Waters” be replaced by “From document repositories in respect of which Kerry Stokes AC, Ryan Stokes or Robin Waters is the custodian”; and

(b)    the words in paragraph 5 “From document repositories relating to Kerry Stokes AC, Ryan Stokes and Robin Waters” be replaced by “From document repositories in respect of which Kerry Stokes AC, Ryan Stokes or Robin Waters is the custodian”.

2.    Paragraphs 1, 2, 3, 4 and 5 of the Interlocutory application brought by Seven Network (Operations) Limited, Seven West Media Limited, Australian Capital Equity Pty Ltd, Mr Kerry Stokes AC and Mr Bruce McWilliam dated 20 July 2023 be dismissed.

3.    The Interlocutory application brought by Mark O’Brien Legal and the applicant dated 21 July 2023 be dismissed.

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

REASONS FOR JUDGMENT

BESANKO J:

Introduction

1    I delivered judgment in three defamation proceedings in this Court on 1 June 2023 (Roberts-Smith v Fairfax Media Publications Pty Limited (No 41) [2023] FCA 555). I made an order in each proceeding that the proceeding be dismissed. That left for consideration the costs of the proceedings. The respondents issued an Interlocutory application on 21 June 2023 seeking an order for the payment of indemnity costs by the applicant and an order for the payment of the costs of the proceedings by two third parties being Seven Network (Operations) Limited (SNOL) and Australian Capital Equity Pty Ltd (ACE). The application was supported by an affidavit of Mr Peter Llewellyn Bartlett affirmed on 21 June 2023. The precise orders sought by the respondents against the third parties are set out in Roberts-Smith v Fairfax Media Publications Pty Limited (No 42) [2023] FCA 750 (Roberts-Smith (No 42)) (at [2]–[3]) and need not be repeated. The reasons in Roberts-Smith (No 42) should be read with these reasons.

2    The respondents then issued a Subpoena to produce documents directed to each of SNOL, ACE, Herbert Smith Freehills and Addisons. Those parties applied to set aside the subpoenas, but I refused to set aside those subpoenas (Roberts-Smith (No 42)). Documents were produced pursuant to those subpoenas.

3    The respondents then sought and obtained leave to issue 10 Subpoenas to produce documents and they issued a Notice to produce directed to the applicant. Each of those subpoenas and the Notice to produce relate to the respondents’ application for an order that SNOL and ACE pay their costs of the proceedings.

4    There are now two Interlocutory applications before the Court. The first Interlocutory application is dated 20 July 2023 and the applicants are SNOL, Seven West Media Limited (SWM), ACE, Mr Kerry Stokes AC and Mr Bruce McWilliam. The application is supported by three affidavits affirmed by Ms Melissa Jane Gladstone who is a solicitor for the applicants. The affidavits were affirmed on 28 June 2023, 20 July 2023 and 25 July 2023 respectively. I will refer to the five applicants as the SNOL and ACE parties.

5    By their application, the SNOL and ACE parties seek orders under r 24.15 of the Federal Court Rules 2011 (Cth) (the Rules) setting aside the subpoenas served on them. The respondents oppose the orders sought by the SNOL and ACE parties. The SNOL and ACE parties also seek an order relating to the filing of a tender list by the respondents. The order which they seek in that respect is not in dispute and need not be mentioned further.

6    In opposition to the application of the SNOL and ACE parties, the respondents rely on an affidavit of one of their solicitors, Mr Dean Aaron Levitan, affirmed on 26 July 2023 and the affidavit of Mr Bartlett previously referred to.

7    The second Interlocutory application before the Court is an application by Mark O’Brien Legal under r 24.15(1) of the Rules to set aside a Subpoena to produce documents addressed to Mark O’Brien Legal. Subpoenas to produce documents were also issued to each of the four counsel who appeared for the applicant in the main proceedings. It was agreed between the parties that whether those subpoenas were set aside would abide the outcome of the application to set aside the Subpoena to produce documents addressed to Mark O’Brien Legal. In the second Interlocutory application, the applicant seeks an order that paragraph 1 of the Notice to produce directed to him be set aside. The second Interlocutory application is supported by an affidavit of one of the applicant’s solicitors, Mr Paul Victor Svilans, sworn on 21 July 2023.

8    Counsel addressed the principles relating to setting aside Subpoenas to produce documents and the principles relating to orders for costs against third parties.

Relevant Principles

Setting aside a subpoena

9    Counsel for the SNOL and ACE parties submitted that the subpoenas served on those parties were far too wide and they lacked the necessary particularity. He submitted that they were in the nature of general discovery against a non-party, they were not issued for a legitimate forensic purpose and they required the recipients to undertake a “trawling” exercise in the nature of discovery.

10    Counsel for the SNOL and ACE parties submitted that in the case of a subpoena against a third party, the party issuing the subpoena carries a very heavy onus to particularise specific documents that have apparent or adjectival relevance to an identified issue in the case and that the subpoenas against the SNOL and ACE parties failed to meet that standard. Counsel referred to the expression of principle by Jordan CJ in Commissioner for Railways v Small (1938) 38 SR (NSW) 564 at 573; (1938) 55 WN (NSW) 215 as follows:

A writ of subpoena duces tecum may be addressed to a stranger to the cause or to a party. If it be addressed to a stranger, it must specify with reasonable particularity the documents which are required to be produced. A subpoena duces tecum ought not to be issued to such a person requiring him to search for and produce all such documents as he may have in his possession or power relating to a particular subject matter. It is not legitimate to use a subpoena for the purpose of endeavouring to obtain what would be in effect discovery of documents against a person who, being a stranger, is not liable to make discovery. A stranger to the cause ought not to be required to go to trouble and perhaps to expense in ransacking his records and endeavouring to form a judgment as to whether any of his papers throw light on a dispute which is to be litigated upon issues of which he is presumably ignorant: Lee v Angas (1866) LR 2 Eq 59; Burchard v Macfarlane [1891] 2 QB 241 at 247; Attorney-General v Wilson (1839) 9 Sim 526; Newland v Steer (1865) 13 LT 111; 13 WR 1014. And if a subpoena duces tecum is issued to such a person in an objectionable form, the witness may apply to the court to have it set aside …

(See also Broadway Plaza Investments Pty Ltd v Broadway Plaza Pty Ltd [2019] NSWSC 410 (Broadway Plaza Investments) at [51]–[52] per Ward CJ in Eq.)

11    The SNOL and ACE parties submitted that it is necessary to show that it is “on the cards” (Alister v The Queen (1984) 154 CLR 404 at 414 per Gibbs CJ) that all the documents sought will materially assist the issuing party’s case. Counsel submits that it is not sufficient merely to show that some documents are or may be relevant to an issue for decision. Counsel referred to the decision of the Full Court of this Court in Wong v Sklavos [2014] FCAFC 120; (2014) 319 ALR 378 (Wong v Sklavos). I note that the Full Court in that case said the following (at [12]):

… Other cases have used different terminology, but with essentially the same effect, for example, by requiring that, viewed realistically, the documents sought have a bearing on an issue which is not unreal, fanciful or speculative (R v Barton (1981) 2 NSWLR 414 at 420), or that the material sought is reasonably likely to add in some way to the relevant evidence in the case (Spencer Motors Pty Ltd v LNC Industries Ltd (1982) 2 NSWLR 921 at 927), or that it be “on the cards” that the documents sought will materially assist the party at whose request the subpoena has been issued: Allister v The Queen (1984) 154 CLR 404 at 414; Tamawood Ltd v Habitare Developments Pty Ltd [2009] FCA 364 at [13], [35]-[38].

12    Counsel for the SNOL and ACE parties referred to Rinehart v Rinehart [2018] NSWSC 1102 at [43]–[50] per Ward CJ in support of the proposition that it must be shown that it is likely the documentation will materially assist on an identified issue or that there is a reasonable basis beyond speculation that it is likely that the documentation will do so. Again, counsel emphasised the point that it is all of the documentation falling within the subpoena which must meet this test not, as he put it, “some speculative imagination that there might be something in there that might be relevant”.

13    Counsel for the SNOL and ACE parties also referred to Australian Competition and Consumer Commission v Shell Co of Australia Ltd [1999] FCA 212; (1999) 161 ALR 686 (ACCC v Shell) at [53] and [67]. I note that in that case, the subpoena sought 14 categories of documents. Justice Cooper found that each of the paragraphs of the subpoena, other than paragraphs 1, 10 and 13, failed to describe the documents requested with sufficient particularity or were such as to require the recipient to make fine judgments regarding the relevance of the documents. Paragraphs 1, 10 and 13 did not suffer from this deficiency. Those paragraphs were as follows:

(1)    Copy and/or original diary notes of Mr Thomas Llora noting attendances upon Mr John Bird and Mrs Karen Bird from September 1993 onwards;

…

(10)    Original and/or copy records, file notes, memoranda, correspondence or other record or document recording visits by employees of the Respondent to the Shell Benowa Self Serve site while that site was operated by Deramone Pty Ltd;

…

(13)    Original and/or copy notes, memoranda, correspondence, file notes and any other document or record passing between the Respondent and Mr Llora in relation to the operation of the Shell Benowa Self Serve site between 1 July 1992 and 30 June 1995;

14    I refer to my discussion of the relevant principles in Roberts-Smith (No 42) at [27], including the reference to the important case of Trade Practices Commission v Arnotts Ltd (No 2) [1989] FCA 340; (1989) 88 ALR 90.

15    There was considerable debate before me about the use of the phrase in the subpoenas “refers to or relates to”. This is a connecting phrase often used in the context of the discovery process. In Lucas Industries Ltd v Hewitt (1978) 45 FLR 174 (Lucas Industries), the Full Court of this Court considered an appeal from a decision relating to the infringement and validity of a patent. Subpoenas were issued and there was an application to set them aside. The application was successful before the primary judge. On the appeal, various arguments were considered, including the following: (1) in substance, the subpoena was an attempt to subject the respondents who were not parties to the action to an obligation to make discovery; and (2) the subpoena was oppressive and fishing. The subpoena used the phrase “relating to” in the case of a number of categories of documents identified in the subpoena. Justice Smithers, with whom Bowen CJ and Nimmo J agreed, addressed the first argument and described the difference in the task required of the addressee of a subpoena and a party who receives a notice for discovery as follows (at 188):

No doubt, if the terms of a subpoena are such that although purporting to be a subpoena it is in substance a notice for discovery, it should be set aside. But I am not satisfied that the subpoena before the court is of this kind. The task it imposes on the respondents is to identify documents as relating to particular subjects. This is quite a different task from that ascertaining issues and identifying the relationship of documents thereto …

16    With respect to the argument that the subpoena was oppressive and fishing, Smithers J noted that in a subpoena duces tecum the documents required to be produced must be specified with reasonable particularity. His Honour went on to say the following (at 188–189):

But a degree of generality in the description of the documents may according to circumstances be compatible with reasonableness in this respect. Thus, in respect of documents concerning the treatment of a hospital patient, production of which is required from the hospital, a description such as “the hospital records relating to treatment of Mr X between January and July 1977” would be acceptable. Such a description places upon the hospital the burden of searching for the records but, having regard to modern business organization and practices, such a burden is reasonable …

17    In Spencer Motors Pty Ltd v LNC Industries Ltd [1982] 2 NSWLR 921 (Spencer Motors), Waddell J considered a subpoena which identified categories of documents using the phrase “referring to”. His Honour made it clear that the use of the phrase “relating to” was not necessarily objectionable. His Honour said (at 929):

It is, of course, important not to read the passage cited as forbidding the use of expressions such as “relating to”. Taken as a whole, the passage indicates that what is objectionable is placing on the person to whom a subpoena is addressed the same kind of burden as is placed on a party required to give discovery of documents. Broadly speaking, that burden is to go through the documents in his possession or power and list each document which relates to the matters in question in the proceeding in the sense that “it contains information which may — not which must — either directly or indirectly enable the party requiring the discovery either to advance his own case or to damage the case of his adversary, or which may fairly lead to a train of inquiry which may have either of these two consequences”: Halsbury's Laws of England, 4th ed, vol 13 par 38, at p 34.

Use of expressions such as “relating to” need not result in there being any oppression or abuse of process. It all depends on the context in which the expression is used. For instance, it could hardly be said to be objectionable to require a person to produce all “invoices” relating to sales of a particular item to the defendant on a particular day. The use of the word “invoices” would restrict the potential width of the expression “relating to”. Similarly, in American Express Warehousing Ltd v Doe [1967] 1 Lloyd’s Rep 222, the Court of Appeal held that a requirement to produce the “contract slips” and “quote slips” relating to each of a number of insurances was not objectionable …

18    I also refer to the discussion in McColl v Lehmann [1987] VR 503 at 510–513 and, in particular the passage as follows (at 512):

… It seems to me all the circumstances must be looked at including the identity and situation of the recipient of the subpoena. The fact is that he may well know from his very position the nature of the documents which he is required to produce . . . The fundamental consideration, in my view, is whether, in all the circumstances including the identity and situation of the recipient, the class of documents is sufficiently clearly identified.

(See also IO Group Inc v Prestige Club Australasia Pty Ltd [2008] FCA 1147 at [42] per Flick J and Oswal v Carson [2013] VSC 355 at [60].)

The principles relating to orders for costs against a third party

19    I refer to Roberts-Smith (No 42) at [6]–[9].

20    The respondents placed particular reliance on the decision of the Full Court of this Court in Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations (No 4) [2012] FCAFC 50; (2012) 200 FCR 154 and, in particular, the observations of the Full Court as follows (at [88]–[89]):

88    The Court has power to make an order for costs against a non-party where the non-party is connected with the unsuccessful party to the proceeding, and has caused that party to start, continue or prosecute the proceeding in circumstances where the non-party’s conduct makes it just and equitable that the non-party be visited with an order for costs in favour of the successful party either in addition to such an order against the unsuccessful party or in substitution for such an order. As Gobbo J said in Bischof v Adams, a statement which the Full Court has approved, the categories of cases are not closed.

89    We think that the only precondition to the exercise of power would have to be that the    non-party has a sufficient connection with the unsuccessful party and the litigation to warrant    the Court exercising its jurisdiction. The connection between the non-party and the unsuccessful party and the litigation must be material to the question of costs: Vestris v Cashman (1998) 72 SASR 449 at 467 per Lander J. In that case Lander J attempted to identify some of the matters to which the Court might have regard in the exercise of the Court’s discretion: at 468.

21    Counsel for the SNOL and ACE parties submitted that the Full Court was not laying down a test of “sufficient connection”. He submitted that this was a reference at a high level of abstraction of the principles which are set out in the authorities and which the Full Court considered at [75]–[85]. With respect, I think that is correct to a point because the authorities articulate the relevant principles and the reference to a sufficient connection invites attention to the principles which inform what is sufficient. At the same time, the decision involves the exercise of a discretion, the Full Court’s statement is quite clear and there is authority that the categories of case which may attract the exercise of the power to award costs against a third party are not closed and should not be (Kebaro Pty Ltd v Saunders [2003] FCAFC 5 at [103]; FPM Constructions Pty Ltd v City of Council of Blue Mountains [2005] NSWCA 340 at [210] per Basten JA). I must have regard to the relevant principles in order to determine the issue of relevance, but I do not consider that a statement of the relevant principles beyond what I have said is called for, or perhaps even possible, at this stage.

22    For completeness, I mention that the SNOL and ACE parties relied on an observation by Callinan J in Arundel Chiropractic Centre Pty Ltd v Deputy Commissioner of Taxation [2001] HCA 26; (2001) 179 ALR 406, that mere encouragement of litigation would not suffice to attract a liability for costs. That was a case where his Honour did make an order, describing it as a case par excellence for an order. The case illustrates how important it is to consider the facts of the particular case.

The Application by the SNOL and ACE parties

23    The respondents have refined the scope of the subpoenas in some respects, but this has not led to a resolution of the dispute. It is unnecessary for me to refer to the details of these refinements at this stage. They may be relevant to the issue of costs. Counsel for the SNOL and ACE parties approached the issues in dispute by first addressing the subpoena to Mr Bruce McWilliam. The subpoena to Mr Kerry Stokes is in similar terms. Counsel then addressed the subpoena directed to SWM. The issues raised with respect to the subpoenas to SNOL and ACE are similar, although counsel made some additional points with respect to the subpoena directed to ACE. That is a convenient approach having regard to the categories of documents sought in the various subpoenas.

24    The terms of the subpoenas which I address below are at pp 52 to 61 in Exhibit “MJG-3” to the affidavit of Ms Gladstone affirmed on 25 July 2023.

25    The subpoena directed to Mr McWilliam seeks documents or things as follows:

1.    One copy of each document (including emails, file notes, written correspondence, text messages, and messages sent over encrypted messaging services including WhatsApp, Signal and Telegram) that comprises, or records the contents of, a communication that refers to or relates to the proceedings and to which you and at least one of the following people are parties:

(a)    Ben Roberts-Smith; and/or

(b)    Mark O’Brien, Paul Svilans and/or Monica Allen of Mark O’Brien; and/or

(c)    Arthur Moses SC; and/or

(d)    Bruce McClintock SC; and/or

(e)    Matthew Richardson SC.

2.    One copy of each document (including emails, file notes, written correspondence, text messages, and messages sent over encrypted messaging services including WhatsApp, Signal and Telegram) that refers to or relates to:

(a)    the loan facility between Ben Roberts-Smith and Seven Network Operations Limited (SNOL) which was recorded in writing on 6 August 2019; or

(b)    the loan agreement between Ben Roberts-Smith and Australian Capital Equity Pty Ltd dated 24 June 2020.

As I have said, the subpoena directed to Mr Stokes is in similar terms. Mr Roberts-Smith was the applicant in the main proceeding and Mark O’Brien Legal were his solicitors. The persons identified in paragraph 1(c), (d) and (e) were his counsel. Details of the loan facility and the loan agreement referred to in paragraph 2 are set out in Roberts-Smith (No 42) at [15]–[18].

26    Paragraphs 1 and 2 of the subpoenas directed to SWM and SNOL respectively are in similar terms to paragraph 1 of the subpoenas directed to Mr McWilliam and Mr Stokes respectively, save and except that in the former case, the subpoena seeks the corporate records involving Mr McWilliam and Mr Stokes, and in the latter case, the personal records of each of those persons is sought.

27    Paragraph 1 of the subpoena directed to ACE is in similar terms to paragraph 1 of the subpoenas directed to Mr McWilliam and Mr Stokes respectively, and paragraphs 1 and 2 of the subpoenas directed to SWM and SNOL respectively, save and except that in the case of ACE, no specific person is identified and the reference is to any person acting on behalf of ACE.

28    Paragraph 5 in the subpoenas directed to SWM and SNOL respectively (there are no paragraphs 3 and 4) is in the same terms and is as follows:

5.    From document repositories in respect of which Bruce McWilliam, Kerry Stokes AC, or Ryan Stokes is the custodian, each document that comprises, or records the contents of, a communication between any person acting on behalf [of] SNOL, and any person acting on behalf of ACE, that refers or relates to:

(a)    the inclusion of clause 7 in the ACE Loan Agreement; and/or

(b)    ACE’s understanding that “the SNOL legal team have considerable experience with the defamation proceeding”, as referred to in clause 7 of the ACE Loan Agreement; and or

(c)    ACE’s view that “the SNOL legal team’s continued oversight and management of the defamation proceedings and inquiry is important for a successful outcome to the proceeding”, as referred to in clause 7 of the ACE Loan Agreement; and/or

(d)    “the SNOL legal team’s continued oversight and management of the defamation proceedings”, as referred to in clause 7 of the ACE Loan Agreement.

29    Paragraph 2 of the subpoena directed to ACE is in different terms, albeit it deals with a similar subject matter. It is as follows:

2.    From document repositories relating to Kerry Stokes AC, Ryan Stokes and Robin Waters, each document:

(a)    recording or referring to ACE’s reasons for including clause 7 in the ACE Loan Agreement.

(b)    recording the basis for ACE’s understanding that “the SNOL legal team have considerable experience with the defamation proceeding”, as stated in clause 7 of the ACE Loan Agreement.

(c)    recording or referring to the reasons for ACE’s view that “the SNOL legal team’s continued oversight and management of the defamation proceedings and inquiry is important for a successful outcome to the proceeding”, as stated in clause 7 of the ACE Loan Agreement.

(d)    that comprises, or records the contents of, or records or refers to the existence of, a communication between a person acting on behalf of ACE, and a person (including an in house or third party lawyer) acting [on] behalf of SNOL, that refers or relates to:

i.    the inclusion of clause 7 in the ACE Loan Agreement; and/or

ii.    ACE’s understanding that “the SNOL legal team have considerable experience with the defamation proceeding”; and/or

iii.    ACE’s view that “the SNOL legal team’s continued oversight and management of the defamation proceedings and inquiry is important for a successful outcome to the proceeding”; and/or

iv.    “the SNOL legal team’s continued oversight and management of the defamation proceedings”, as referred to in clause 7 of the ACE Loan Agreement.

30    Counsel for the respondents said that the reference in the chapeau of this paragraph was not intended to be any different from the reference in the chapeau to paragraph 5 of the subpoenas directed to SWM and SNOL respectively. It is appropriate that an order be made amending paragraph 2 of the subpoena directed to ACE so that it reads as follows:

From document repositories in respect of which Kerry Stokes AC, Ryan Stokes or Robin Waters is the custodian, each document

The same amendment should be made to paragraph 5 of the subpoena directed to ACE as the same error has been made in this paragraph.

31    Paragraphs 6, 7 and 8 in the subpoenas directed to SWM and SNOL respectively are in the same terms and are as follows:

6.    One copy of each minute of a meeting of the Board of Directors of SWM that refers to:

a.    the proceedings; and/or

b.    the loan facility provided by SNOL to Ben-Roberts-Smith; and/or

c.    the ACE Loan Agreement.

7.    One copy of each resolution of the Board of Directors of SWM that refers to:

(a)    the proceedings; and/or

(b)    the loan facility provided by SNOL to Ben Roberts-Smith; and/or

(c)    the ACE Loan Agreement.

8.    From document repositories in respect of which Bruce McWilliam, Kerry Stokes AC, or Ryan Stokes is the custodian, one copy of each document provided to a director of SWM, or the Board of Directors of SWM, that refers to:

(a)    the proceedings; and/or

(b)    the loan facility provided by SNOL to Ben Roberts-Smith; and/or

(c)    the ACE Loan Agreement.

32    Paragraphs 3, 4 and 5 of the subpoena directed to ACE is in materially similar terms to paragraphs 6, 7 and 8 of the subpoenas directed to SWM and SNOL save and except that the custodians in the case of ACE are Mr Kerry Stokes, Mr Ryan Stokes and Mr Robin Waters.

33    The documents sought can be divided into the following categories.

34    The first category are documents involving communications between Mr McWilliam or Mr Stokes, or a person acting on behalf of ACE, on the one hand, and the applicant or any one or more of his solicitors and counsel on the other, that refers or relates to these proceedings. Paragraph 1 of the subpoenas directed to Mr McWilliam and Mr Stokes, paragraphs 1 and 2 of the subpoenas directed to SWM and SNOL, and paragraph 1 of the subpoena directed to ACE fall into this category.

35    The second category are documents which refer or relate to the loan facility between the applicant and SNOL and the loan agreement between the applicant and ACE. Paragraphs 1 and 2 of the subpoenas directed to Mr McWilliam and Mr Stokes fall into this category.

36    The third category is related to the second. It seeks documents in document repositories with respect to which certain named persons are custodians and which refer or relate to clause 7 in the loan agreement between ACE and the applicant and various statements therein. Paragraph 5 of the subpoenas directed to SWM and SNOL and paragraph 2 of the subpoena directed to ACE fall into this category.

37    The fourth and final category seeks documents which, speaking generally, arise from the proceedings of and concerning the directors of the relevant company and refers to the main proceedings or the loan facility or the loan agreement. Paragraphs 6, 7 and 8 of the subpoenas directed to SWM and SNOL and paragraphs 3, 4 and 5 of the subpoena directed to ACE fall into this category.

38    Mr Stokes is the Chairman of SNOL. Although the letter is not signed, he is said to have guaranteed repayment pursuant to the funding arrangements embodied in the SNOL loan facility. Mr McWilliam in an affidavit sworn earlier in these proceedings stated that he was General Counsel and Commercial Director of SWM. It is clear that he was the active party in the negotiations for the SNOL and ACE parties in their dealings with the applicant. As I have said, the essential details of the loan facility between SNOL and the applicant, and the loan agreement between the applicant and ACE are set out in Roberts-Smith (No 42) (at [15]–[18]). I refer to those reasons.

39    In his affidavit in support of the third party costs orders, Mr Bartlett referred to Mr McWilliam’s attendance at the hearing, either in person on 12 occasions or via the online streaming of the hearing on 71 occasions. There is also evidence that Addisons was providing reports about the proceedings to SNOL and Mr McWilliam. A representative of Addisons was viewing the proceedings.

40    The respondents have identified in correspondence the broad basis of their claim for costs against SNOL and ACE. In a letter to ACE dated 14 May 2021, and repeated in a letter to ACE’s solicitors on 19 June 2023, the respondents referred to the following matters:

1.    ACE is Mr Roberts-Smith’s primary, if not sole, source of funds for the Defamation Proceedings;

2.    ACE has a substantial financial interest in the outcome of the Defamation Proceedings;

3.    SNOL’s legal team retains oversight and management of the Defamation Proceedings;

4.    SNOL has a significant non-financial interest in the outcome of the Defamation Proceeding as a commercial rival of the corporate Respondent to the Defamation Proceeding; and

5.    Mr Roberts-Smith is the moving party in the Defamation Proceeding, not a defendant.

41    At the time the arguments with respect to the subpoenas took place, the application for third party costs was listed for hearing on 5 September 2023.

42    I turn now to the paragraphs in the subpoenas starting with paragraph 1 in the subpoenas directed to Messrs McWilliam and Stokes, paragraphs 1 and 2 in the case of the subpoenas directed to SWM and SNOL, and paragraph 1 of the subpoena directed to ACE. The essence of what is sought are communications between, on the one hand, Messrs McWilliam and Stokes (save that in the case of ACE, it is any person acting on behalf of the company) and on the other hand, one or more of the applicant and his legal team, both solicitors and counsel that refer or relate to the proceedings. The issue of legal professional privilege has not been raised at this stage and whether it is later, remains to be seen. This is in a context in which SNOL and, at times, ACE, had their own solicitors (i.e., Addisons) viewing the trial and providing regular reports about it. It is known from Ms Gladstone’s affidavits that a search of Mr McWilliam’s mailbox at SNOL by the solicitors for SNOL and ACE has resulted in the identification of 8,650 emails (including attachments) between Mr McWilliam and one or more of the applicant and his counsel. It is known from Mr Bartlett’s affidavit affirmed on 21 June 2023 that the SNOL loan facility was said to be prompted in part by SNOL’s wish (for reasons set out) that the applicant be represented by experienced solicitors and senior counsel “who may be more expensive than you would ordinarily engage as an individual” and that in the case of the ACE loan agreement, ACE took the view which it recorded in the agreement that the SNOL legal team’s continued oversight and management of the defamation proceedings and inquiry is important for a successful outcome to the proceedings and that the applicant agreed to pay ACE 15% of the proceeds received by the applicant should the defamation proceedings be successful. It is the case that at least SNOL and ACE accept that the applicant does not have the means to pay a costs order in the main proceedings.

43    For the reasons which follow, I am satisfied that the first category of documents satisfy the test for a subpoena to issue documents.

44    First, the documents have an apparent relevance and could possibly throw light on the issues which arise on the application for orders for the payment of costs by third parties. It is “on the cards” that they will do so (Roberts-Smith (No 42) at [27]). Whilst it is true that the party which seeks the issue of a subpoena may satisfy the test by showing that it is “on the cards” that the documents sought will materially assist its case (Broadway Plaza Investments at [52]), that is but one aspect of the test as the passage in Wong v Sklavos set out above (at [11]) makes clear.

45    Secondly, whilst the use of the phrase “refers to, or relates to” calls for a careful examination of whether there is, in effect, a request for general discovery, the use of the phrase is not necessarily objectionable (Lucas Industries) and it all depends on the context in which the phrase is used (Spencer Motors).

46    Thirdly, the terms of the relevant paragraphs do provide a clear dividing line in that they do not seek all Mr McWilliam’s communications in relation to the proceedings, but only those involving a communication with the applicant and his legal advisers, or one or more of those persons. Furthermore, I accept the respondents’ submission that the fact that a properly defined category of documents happens to capture a large number of documents does not mean that the subpoena is bad. It seems to me that it is likely that the whole of the relationship will need to be examined to determine whether there is a connection or involvement sufficient to warrant a third party costs order. For example, it may be relevant that there is no direction or instruction because the third party fully informed approves of the course of action proposed. Those are matters to be considered when all the circumstances are before the Court. The possibility of a subpoena limited to directions and instructions was canvassed in argument. I put to one side the submission that that places an unreasonable burden on those making the judgment as to relevance and that, in fact, such a limitation may increase the time needed to answer the subpoena. The response to such a limitation is that such communications are likely to be relevant, but they are not the only communications which may be relevant, a point I made in Roberts-Smith (No 42) at [40].

47    Finally, and perhaps it is no more than an observation, I note the similarities between the paragraphs in issue and the paragraphs which survived a challenge of insufficient particularity in ACCC v Shell and, in particular paragraph 16 (at [13]) above.

48    I have considered Ms Gladstone’s evidence as to the time and effort required to collect and collate the required documents in categories one, two and three (the issue does not arise in relation to category four) insofar as the SNOL and ACE parties put a residual argument about oppression in complying with the subpoenas. On the evidence, it is difficult to be precise about times and efforts involved, although it is clear enough that the task is a reasonably substantial one. However, I do not consider the requests to be oppressive having regard to the issues and all the circumstances.

49    The second category of documents encompasses documents that refer to or relate to the loan facility or the loan agreement. I have referred above (at [38]) to Mr Stokes’ position and that of Mr McWilliam. I accept the respondents’ submission that it is on the cards that the documents will shed significant light on the connection between the applicant and the SNOL and ACE parties, or put another way, the involvement of the SNOL and ACE parties in the proceedings, including by revealing negotiations on the terms on which Mr Stokes or Mr McWilliam agreed for SNOL and ACE to fund the proceedings, such as the requirement that SNOL exercise oversight and management of the proceedings. The SNOL and ACE parties made that clause 7 in the loan agreement speaks for itself and there is no need to consider any negotiations that took place. If this was an action by one of the parties on the agreement and it was clear that the agreement was wholly in writing, there might be some force in that, but it is not and, in any event, we have not reached that point.

50    I reach the same conclusion in relation to the third category of documents and largely for the same reasons. I would also add that the words “oversight and management” are words of somewhat indefinite scope.

51    I consider that the position with respect to the fourth and final category of documents is clear. The SNOL and ACE parties (SNOL is a subsidiary of SWM) are corporate entities which act through, among other organs, the board of directors.

52    Subject to the amendments I have identified, the application to set aside the Subpoenas to produce documents directed to the SNOL and ACE parties is dismissed.

The Application by Mark O’Brien Legal and by the Applicant

53    The Subpoena to produce documents directed to Mark O’Brien Legal as refined by the respondents is in the following terms:

1.    One copy of each document (including emails, file notes, written correspondence, text messages, and messages sent over encrypted messaging services including WhatsApp, Signal and Telegram) that comprises, or records the contents of, a communication that refers to or relates to these proceedings and to which at least one principal or employee of Mark O'Brien Legal and at least one of the following people are parties:

(a)    Bruce McWilliam; and/or

(b)    Kerry Stokes; and/or

(c)    Ryan Stokes; and/or

(d)    an in-house or third-party lawyer representing Seven Network (Operations) Limited; and/or

(e)    an in-house or third-party lawyer representing Seven West Media Limited; and/or

(f)    an in-house or third-party lawyer representing Australian Capital Equity Pty Ltd.

54    This paragraph is in similar terms to the first category of documents in the case of the SNOL and ACE parties and I uphold the subpoena for the same reasons I gave in that context.

55    Paragraph 1 of the Notice to produce directed to the applicant is as follows:

1.    One copy of each document (including emails, file notes, written correspondence, text messages, and messages sent over encrypted messaging services including WhatsApp, Signal and Telegram) that comprises, or records the contents of, a communication that refers to or relates to this proceeding and to which you and at least one of the following people are parties:

a.    Bruce McWilliam; and/or

b.    Kerry Stokes; and/or

c.    Ryan Stokes; and/or

d.    an in-house or third-party lawyer representing Seven Network (Operations) Limited; and/or

e.    an in-house or third-party lawyer representing Seven West Media Limited; and/or

f.    an in-house or third-party lawyer representing Australian Capital Equity Pty Ltd.

56    Again, I reach the same conclusion.

57    The application to set aside the Subpoena to produce documents directed to Mark O’Brien Legal and the Notice to produce directed to the applicant are dismissed.

Conclusions

58    I will make the following orders:

(1)    The Subpoena to produce documents directed to Australian Capital Equity Pty Ltd be amended under r 24.15 of the Federal Court Rules 2011 (Cth) as follows:

(a)    the words in paragraph 2 “From document repositories relating to Kerry Stokes AC, Ryan Stokes and Robin Waters” be replaced by “From document repositories in respect of which Kerry Stokes AC, Ryan Stokes or Robin Waters is the custodian”; and

(b)    the words in paragraph 5 “From document repositories relating to Kerry Stokes AC, Ryan Stokes and Robin Waters” be replaced by “From document repositories in respect of which Kerry Stokes AC, Ryan Stokes or Robin Waters is the custodian”.

(2)    Paragraphs 1, 2, 3, 4 and 5 of the Interlocutory application brought by Seven Network (Operations) Limited, Seven West Media Limited, Australian Capital Equity Pty Ltd, Mr Kerry Stokes AC and Mr Bruce McWilliam dated 20 July 2023 be dismissed.

(3)    The Interlocutory application brought by Mark O’Brien Legal and the applicant dated 21 July 2023 be dismissed.

Associate:    

Dated:    8 August 2023

SCHEDULE OF PARTIES