Federal Court of Australia

SNX Pty Ltd v Commissioner of Taxation [2024] FCA 1270

ORDERS

THE COURT ORDERS THAT:

Examination of Subpoenaed Persons    

1.    Each of the persons listed in Schedule 1 (each a subpoenaed person) attend before a Registrar of the Court at a date or time to be fixed, for the purpose of being examined in respect of the subpoena to produce documents issued on 2 April 2024 to that subpoenaed person.

2.    Order 1 is made without prejudice to any claim for legal professional privilege or privilege against self-incrimination which may be made by a subpoenaed person.

3.    None of the evidence given in any such examination be accepted as evidence at the final hearing of these proceedings or in any proceeding for contravention or failure to comply with any of the subpoenas.

4.    A copy of the following documents be served on each of the persons listed in Schedule 1 by 5:00pm on 11 November 2024:

(a)    the interlocutory application filed 29 October 2024;

(b)    the affidavit of Liliia Samysheva affirmed 29 October 2024;

(c)    Exhibit 1;

(d)    these orders; and

(e)    a copy of the reasons for judgment given in relation to these orders;

(together, the Documents).

5.    The respondent pay the reasonable costs of attendance and of the examination of each of the subpoenaed persons.

6.    Reserve liberty to each of the subpoenaed persons to apply to set aside Order 1, such liberty to be exercised within 14 days of service or substituted service of these orders.

7.    The costs of the interlocutory application filed on 29 October 2024 be costs in the cause.

Substituted Service

Najib (Jimmy) Nehme

8.    Pursuant to rule 17.03 of the Federal Court Rules 2011 (Cth) (the Rules), service of the Documents pursuant to order 4 be effected on Najib (Jimmy) Nehme (Mr J Nehme) by:

(a)    sending the Documents by email to the email address used by Mr J Nehme to communicate with this Court’s registry on 21 May 2024, being “europeanmotori@live.com.au”; or

(b)    handing the Documents to any person over the age of 16 years old at 131 Fairford Road, Padstow NSW 2211 (Padstow Address);

(c)    if 8(b) is not possible:

(A)    leaving the Documents affixed to the front gate or letterbox at the Padstow Address in a sealed envelope addressed to Mr J Nehme;

(B)    posting a copy of the Documents by pre-paid Express Post to Mr J Nehme at the Padstow Address; and

(C)    contacting Mr J Nehme by sending a text message to him on 0406 100 000 stating:

9.    The Documents are taken to have been served at the time substituted service has been effected in accordance with Order 8.

Elias Nehme

10.    Pursuant to rule 17.03 of the Rules, service of the Documents pursuant to order 4 be effected on Elias Nehme (Mr E Nehme) by:

(a)    sending the Documents by email to the email address used by Mr E Nehme to communicate with this Court’s registry on 21 May 2024, being “europeanmotori@live.com.au”; or

(b)    by handing the Documents to any person over the age of 16 years old at the Padstow Address; and

(c)    if 10(b) is not possible:

(A)    leaving the Documents affixed to the front gate or letterbox at the Padstow Address in a sealed envelope addressed to Mr E Nehme; and

(B)    posting a copy of the Documents by pre-paid Express Post to Mr E Nehme at the Padstow Address.

11.    The Documents are taken to have been served at the time substituted service has been effected in accordance with Order 10.

Rami Younes

12.    Pursuant to rule 17.03 of the Rules, service of the Documents pursuant to order 4 be effected on Rami Younes (Mr Younes) by:

(a)    sending the Documents by email to the email address used by Mr Younes to communicate with this Court’s Registry on 12 July 2024, being “rami80@live.com.au”; or

(b)    handing the Documents to any person over the age of 16 years old at 56 Christian Road, Punchbowl NSW 2196 (Punchbowl Address); and

(c)    if 12(b) is not possible:

(A)    leaving the Documents affixed to the front gate or letterbox at the Punchbowl Address in a sealed envelope addressed to Mr Younes;

(B)    posting a copy of the Documents by pre-paid Express Post to Mr Younes at the Punchbowl Address; and

(C)    contacting Mr Younes by sending a text message to him on 0432 444 443 stating:

13.    The Documents are taken to have been served at the time substituted service has been effected in accordance with Order 12.

Mohamad Harmouche

14.    Pursuant to rule 17.03 of the Rules, service of the Documents pursuant to order 4 be effected on Mohamad Harmouche (Mr Harmouche) by:

(a)    serving the Documents on Mr Raed Rahal, a legal representative of Mr Harmouche in employ of Cambridge Law, by email to the email address used by Mr Rahal to communicate with this Court’s Registry on behalf of Mr Harmouche on 28 May 2024, being “raedr@cambridgelaw.com.au” and providing Mr Rahal with 24 hours to confirm with the respondent’s solicitors that he is instructed to accept service (Service Confirmation);

(b)    if Service Confirmation is not received, then:

(i)    by handing the Documents to any person over the age of 16 years old at 7 Kawana Street, Bass Hill NSW 2197 (Bass Hill Address); and

(ii)    if 14(b)(i) is not possible:

A.    leaving the Documents affixed to the front gate or letterbox at the Bass Hill Address in a sealed envelope addressed to Mr Harmouche; and

B.    posting a copy of the Documents by pre-paid Express Post to Mr Harmouche at the Bass Hill Address.

15.    The Documents are taken to have been served at the time substituted service has been effected in accordance with Order 14.

Alexandros (Alex) Macris

16.    Pursuant to rule 17.03 of the Rules, service of the Documents pursuant to order 4 be effected on Alex Macris (Mr Macris) by:

(a)    sending the Documents by email to the email address used by Mr Macris to communicate with this Court’s registry on 17 May 2024, being “alexmacris@hotmail.com”; or

(b)    handing the Documents to any person over the age of 16 years old at 39 Captain Pipers Road, Vaucluse NSW 2030 (Vaucluse Address); and

(c)    if 16(b) is not possible:

(A)    leaving the Documents affixed to the front gate or letterbox at the Vaucluse Address in a sealed envelope addressed to Mr Macris;

(B)    posting a copy of the Documents by pre-paid Express Post to Mr Macris at the Vaucluse Address; and

(C)    contacting Mr Macris by sending a text message to him on 0401 884 477 stating:

17.    The Documents are taken to have been served at the time substituted service has been effected in accordance with Order 16.

Other

18.    These orders be entered forthwith.

Schedule 1

Person 1    Nick Papalexandris

Person 2    Brett Hogden

Person 3    Terence McNamara

Person 4    Proper Officer, Tenjay Pty Ltd

Person 5    Elias Nehme

Person 6    Najib Nehme

Person 7    Alexandros Macris

Person 8    Mohamad Harmouche

Person 9    Ross Pendergast

Person 10    Rami Younes

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

REASONS FOR JUDGMENT

(Ex tempore)

THAWLEY J:

1    By an interlocutory application filed on 29 October 2024, the respondent applies for orders that 10 people who have been served with a subpoena attend before a Registrar of the Court, at a date and time to be fixed, for the purpose of being examined in respect of a subpoena issued to the person, each of which was issued on 2 April 2024. The interlocutory application was listed for a case management hearing today, the parties being informed that the interlocutory application would be heard if that could be achieved.

2    The interlocutory application and affidavit have not yet been served on the 10 people who have been issued with a subpoena. The applicant neither consents to, nor opposes, the relief sought.

3    The respondent relies on an affidavit of Lilia Samysheva affirmed 29 October 2024, together with a “bundle of material” which was admitted as Exhibit 1.

4    On the material before the Court, the Court is satisfied in relation to each of the subpoena recipients that a sufficient basis has been shown for it to be said that the respondent has sufficient cause for wishing to test the sufficiency of the person’s compliance with the subpoena for production: Quach v Vu [2009] NSWSC 131 at [10]. In particular, having regard to that material, the Court is satisfied that there is a sufficient basis for the respondent to doubt (as the respondent submits that he does) that each of the subpoenaed recipients understood what was required and the scope of the inquiries each was obliged to make in order to produce documents in the person’s custody, power or control.

5    Taking into account the overarching purpose in s 37M of the Federal Court of Australia Act 1976 (Cth), the appropriate course is to make the orders sought by the respondent, but reserve liberty to the subpoena recipients to apply to set the orders aside should the subpoena recipient be so advised. A period of 14 days from service on the relevant subpoena recipient should be allowed for that liberty to be exercised. It is not in the interests of the efficient disposal of the interlocutory application, or the proceedings more generally, to hear first from each of the subpoenaed persons as to whether the orders should be made with the consequent delays and risk of significantly increased costs. Both the respondent and applicant accepted this course as appropriate. Reserving liberty to the subpoena recipients to apply preserves an appropriate opportunity for the subpoena recipient to be heard in the event the subpoena recipient considers the orders should not have been made.

6    I would observe that the questions which might be asked on the examination before the Registrar, whilst a matter for the Registrar, are the subject of recognised limits, albeit perhaps not brightly defined in all respects. In this regard, the observations of Brereton J in Quach at [8] and [9] are relevant:

[8]    … In Hexiva [Hexiva Pty Ltd v Lederer [2006] NSWSC 561], I referred to the observations of Moffitt J in his Honour’s extrajudicial writing in Seminars on Evidence (1970), and to the judgment of Beaumont J in Trade Practices Commission v Arnotts Limited (No 2) (1989) 21 FCR 306. In particular, Moffitt J wrote that there seemed no reason why the court should not have a discretion to ask, of a person required to produce documents on subpoena, questions to ascertain the sufficiency of compliance, either informally or on oath. His Honour elaborated:

In exercising such a discretion, the court would not infringe the privilege of a person not to incriminate himself, having regard to the fact that deliberate non compliance with a subpoena is a contempt of court with penal consequences ... Any such discretion could not extend as far as conducting a discovery process ... The precise limits of questions of a person subpoenaed to produce documents are debatable, but it seems that a judge could ask and possibly permit to be asked, questions informally or on oath to ensure the party understood the terms of the subpoena and the documents referred to and his obligation thereunder, including his obligation regarding documents in his possession or power and relating to search ... It would seem, however, that questions could not extend to establishing proof that the person was in contempt of court, nor could they be of the search and inquiry type such as to the person’s knowledge as to the location of documents not in his present possession or control, or as to the nature of other documents in his possession not within the scope of the subpoena, or as to his system of books or the like, so that this material could be used to search for other evidence or to enable a different subpoena to be framed.

[9]    In Arnotts, Beaumont J concluded that, an issue having arisen as to whether or not documents of the type called for by the subpoena in question existed, the appropriate method to be adopted or the determination of that adjectival issue was a matter for judicial discretion. His Honour concluded that the appropriate course in that case was that the witness who had been subpoenaed to produce documents should be sworn, not in the substantive proceedings but in the ancillary application for production of documents pursuant to the subpoena; that that witness should then be examined by counsel for the party calling on the subpoena (implicitly in chief, by non-leading questions, albeit that the witness was the proper officer of the opposing party in the litigation); that counsel for the party with whom the witness was aligned might then also examine the witness; and that directions to that effect were without prejudice to any claim for privilege against self-incrimination which might be made in the course of the examination and also without prejudice to any claim for confidentiality, and on the basis that none of the evidence so given was to be evidence in the principal proceedings or in proceedings in which it might be alleged that there had been a failure to comply with the subpoena. This approach sought to preserve a fair balance between permitting Arnotts, who had issued the subpoena, and to pursue their inquiries as to the existence of the documents sought, without depriving the other party of its rights to claim privilege in a proper case. His Honour observed that Arnotts may not be able to pursue their inquiries exhaustively but, on the other hand, the respondent to the subpoena would have to make out a proper foundation for any claim for privilege.

7    Both parties accepted that the costs of the interlocutory application should be costs in the cause.

Associate:

Dated:    4 November 2024