A Pty Ltd v Z

A v Z [2007] NSWSC 899 ACP Magazines Pty Ltd v Motion [2000] NSWSC 1169, [34]; Re Bauhaus Pyrmont Darcey v Pre-Term Foundation Clinic [1983] 2 NSWLR 497 Deposit & Investment Co Limited (Receivers Appointed) v Peat Marwick Mitchell & Co (1996) 39 NSWLR 267 CASES CITED : J Aron Corporation v Newmont Yandal Operations [2004] NSWSC 996 Kumagai Australia Finance v Avarton Ltd (NSWSC, Bryson J, 7 June 1991, unreported) Mancorp Pty Ltd v Baulderstone Pty Ltd (SASC, Debelle J, 5 March 1993, unreported) Marsden v Amalgamated Television Services Pty Ltd [2001] NSWSC 77 R v Barbaro (1992) 108 ACTR 1 Re Bauhaus Pyrmont Pty Ltd (in liq) [2006] NSWSC 879

"A" Pty Ltd (plaintiff) PARTIES : Mr "Z" (first defendant) Mrs "Z" (second defendant) NSW Commissioner for Police (applicant)

Ms J Ghabrial (plaintiff) COUNSEL : Mr M Kelly (solicitor) (defendants) Ms England (NSW Commissioner for Police)

Xenos Lawyers (plaintiff) SOLICITORS : Kemp Strang (defendants) Crown Solicitor (NSW Commissioner for Police)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

3217/06 A Pty Ltd v Z JUDGMENT 1 HIS HONOUR: On 4 July 2007, I rejected the contention of the applicant Commissioner for Police that there was no legitimate forensic purpose for the issue of a subpoena dated 9 March 2007 by the plaintiff A Pty Ltd calling for the documents in paragraphs 1-4 inclusive, 6 and 7 of the schedule to that subpoena, on the footing that those paragraphs were read down in accordance with a letter of 3 April 2007 (Exhibit RX03) - but subject to the objection that provision of those documents to the court and their use in evidence would be prohibited by (CTH) Telecommunications (Interception & Access) Act 1979 ("TIA Act"), s 63, as to which the plaintiff had accepted that, the material sought in paragraphs 1(e) and (f), 2 and 3 of the schedule being "lawfully intercepted information" within the meaning and for the purposes of s 63, those parts of the subpoena would have to be set aside unless avail could be taken of the exception provided by TIA Act, s 75A; but very late after the hearing on 3 July had obtained material which apparently established the exception under s 75A but which the Commissioner had not, as at 4 July, had a reasonable opportunity to investigate and consider. Having held that there was a legitimate forensic purpose for the issue of a subpoena so limited, and upon the undertaking of A to the court that it would call only for the documents referred to in the schedule contained in RX03, and in respect of paragraph 10 of the subpoena only for copies rather than for originals of the documents there specified, I declined to set aside the subpoena on grounds of lack of legitimate forensic purpose, and I adjourned to Tuesday 7 August 2007 the hearing of the balance of the motion, which involved a claim for public interest immunity and the objection under the TIA Act [A v Z [2007] NSWSC 899].

The Telecommunications Interception Act objection 2 TIA Act, s 63 provides relevantly as follows:

No dealing in intercepted information or interception warrant information (1) Subject to this Part, a person shall not, after the commencement of this Part: (a) communicate to another person, make use of, or make a record of; or (b) give in evidence in a proceeding; lawfully intercepted information or information obtained by intercepting a communication in contravention of subsection 7(1). 3 "Lawfully intercepted information" is defined in TIA Act, s 6E, as follows: (1) Subject to subsection (2), a reference in this Act to lawfully intercepted information is a reference to information obtained (whether before or after the commencement of this section) by intercepting, otherwise than in contravention of subsection 7(1), a communication passing over a telecommunications system. 4 TIA Act, s 74, provides that a person may give lawfully intercepted information in evidence in an exempt proceeding. By s 5B, an exempt proceeding includes a proceeding by way of prosecution for a prescribed offence. 5 TIA Act, s 75A provides as follows: Evidence that has been given in exempt proceeding

If information is given in evidence (whether before or after the commencement of this section) in an exempt proceeding under section 74 or 75, that information, or any part of that information, may later be given in evidence in any proceeding.

6 Prior to the adjourned hearing, the plaintiff served evidence that established that a substantial amount of material that otherwise would have been caught by TIA Act, s 63, was contained in a prosecution brief in a criminal proceeding in the District Court at Parramatta, against one H, in respect of his involvement in the fire at S's rural property. It is not in issue in these proceedings that the prosecution of H was a proceeding by way of prosecution for a prescribed offence, and thus an exempt proceeding, for the purposes of s 5B.

7 For A, Ms Ghabrial submitted that the otherwise restricted material in the H brief had been disclosed in an exempt proceeding for the purposes of s 75A. For the Commissioner, Ms England, while not conceding that that material had been tendered in evidence, adduced no contrary evidence. I am satisfied on the probabilities that this material - relevantly, transcripts of intercepted telephone conversations - was given in evidence in the H trial, an exempt proceeding. Accordingly, pursuant to s 75A, that information "may later be given in evidence in any proceeding", so that the prohibition on any person giving it in evidence in the present proceeding (including by way of producing it on subpoena), otherwise imposed by TIA Act, s 63, does not apply to it. 8 Ms Ghabrial further submitted that the exception under s 75A for "information" given in evidence in an exempt proceeding was not limited to the actual material given in evidence in the exempt proceeding (here, the transcripts of the intercepted conversations), but extended to other material containing the same information, such as the audio tapes of the conversations from which the written transcripts were prepared. 9 Section 63 imposes a prohibition on giving in evidence information obtained by a lawful interception of a communication passing over a telecommunications system. Section 75A creates an exception in the case of information that has already been given in evidence in an exempt proceeding. The exception is created in respect of "that information, or any part of that information" which has been given in evidence in the exempt proceeding. Thus what is given in evidence in the exempt proceeding describes the limit of the exemption. 10 I therefore do not accept that where a written transcript of an intercepted communication is given in evidence in an exempt proceeding, anything more than that written transcript falls within the exception created by s 75A. In particular, I do not accept that the audio tapes from which the written transcript is prepared fall within the exception. Such audio tapes contain different "information" - recordings of sounds - than the written transcript, which contained written words. It is not the same information. Although the distinction might appear artificial, there is no notion of "associated information" in s 75A. The words of the section are plain. Accordingly, insofar as an exception under s 75A is available, it is limited to the material in the H brief. This has the additional practical consequence that as the plaintiff already has access to that material, it does not need it a second time from the Commissioner, and for that matter does not press for production of documents which would duplicate what it already has. 11 That said, the plaintiff obtained that material only in the course of the argument on the subpoena, after the Commissioner had raised the s 63 objection, which if sustained would have resulted in the relevant parts of the subpoena being set aside. Because in fact much of the intercepted material had been given in evidence in the H prosecution, the Commissioner was in large part not entitled to succeed on his s 63 objection, although he was entitled to succeed on it in respect of the audio tapes.

The statutory privilege point 12 However, the Commissioner, on 7 August 2007, pursuant to an affidavit sworn by one of his officers, raised a new claim, being a claim for statutory privilege under (NSW) New South Wales Crime Commission Act 1985 ("the CC Act"), s 29, which relevantly provides as follows: Secrecy

… (c) a member of a police task force assisting the Commission in accordance with an arrangement under section 27A, and (d) a person to whom information is given either by the Commission or by a person referred to in paragraph (a), (b) or (c) on the understanding that the information is confidential. … (3) A person to whom this section applies shall not be required to produce in any court any document that has come into the person's custody or control in the course of, or by reason of, the exercise of functions under this Act, or to divulge or communicate to a court a matter or thing that has come to the person's notice in the exercise of functions under this Act, except where the Commission, or a member in the member's official capacity, is a party to the relevant proceedings or it is necessary to do so: (a) for the purpose of carrying into effect the provisions of this Act, or (b) for the purposes of a prosecution instituted as a result of an investigation conducted by the Commission in the exercise of its functions. 13 On 7 April 2005, a joint task force involving the NSW Police and the NSW Crime Commission was established, in which Detective Senior Constable Walsh was involved ("the joint task force"), to investigate a murder. As a result, one suspect was arrested and charged. Police believe there to be a co-offender still at large. The joint task force was established pursuant to CC Act, s 27A.

14 During its investigation, the joint task force became aware of and began an investigation into the fire at S's rural property. The Crime Commission provided certain information to the joint task force during those investigations, and certain of that information is caught by the subpoena. Certain documents, such as COPS event entries, were created by members of the joint task force in the course of and for its purposes, and came into the Commissioner's custody and control on a confidential basis by reason of the exercise of functions under the CC Act by members of the joint task force. Others were Crime Commission documents provided to the members of the joint task force on a confidential basis to assist it with its investigations. Others were expert reports requested by members of the joint task force in the course of and for its purposes. I am satisfied that documents in any of those three classes are documents that came into the Commissioner's custody or control in the course of or by reason of the exercise of functions under the CC ACT, and in respect of such documents I would uphold the Commissioner's claim for statutory privilege under s 29(3). 15 I indicated as much on 7 August, but on close examination of Mr Walsh's evidence it became apparent that the claim for statutory privilege did not extend to all the documents caught by the subpoena. As it appeared that there would be some documents not caught by the statutory privilege, but no affidavit or other material had been prepared to show which documents caught by the subpoena were or were not within s 29, it was impossible to resolve the question in the absence of any evidence as to what was and was not within the claim, and I therefore directed that by 21 August the Commissioner serve and lodge an affidavit, specifying in respect of the documents referred to in each of the paragraphs of the subpoena (as circumscribed by the plaintiff's solicitor's letter dated 6 August 2007, which further limited the scope of the call), those documents which were in his possession, custody or power and not the subject of a claim for privilege under s 29, and those documents which were in his possession, custody or power and subject to a claim for privilege under s 29 together with a description of the circumstances in which they came into the possession, custody or power of the Commissioner.

The current status of the subpoena 16 Mr Walsh swore a further affidavit on 22 August 2007. He deposed that there was nothing to produce in relation to paragraphs 1(a), (b), (i), (l) and (m), 6(c), and 7. It will be necessary to return to paragraph 7. He said that there was nothing further to produce for paragraphs 2, 3 and 4 that was not covered by paragraph 1. He said that the Commissioner did not claim privilege over the documents caught by paragraph 6(f), but that in relation to the remainder of the documents caught by paragraphs 1 and 6, privilege was claimed pursuant to CC Act, s 29, and TIA Act, s 63. 17 Of course, the response that there is "nothing to produce" under a particular paragraph of the subpoena is an answer to the subpoena and not a reason to set the subpoena aside. The current position therefore maybe summarised, in respect of the various paragraphs of the schedule (as limited by the letter of 3 April 2007, RX03). 18 The Commissioner has no documents to produce within paragraphs 1(a), (b), (i), (l), and (m). 19 In respect of paragraph 1(c), the Commissioner has ERISP tapes in relation to investigations concerning the fire at S's rural property. These were created by members of the joint task force in the course of its investigations. By CC Act, s29(3), the Commissioner cannot be required to produce them. 20 In respect of paragraph 1(d), the Commissioner has ERISP transcripts in relation to the investigations into the fire. They were created by members of the joint task force in the course of its investigations. By CC Act, s29(3), the Commissioner cannot be required to produce them. Copies of the same transcripts are in the H brief and the plaintiff has access to them by that means, although production from the Commissioner cannot be required. 21 Paragraph 1(e) calls for telephone intercept tapes in relation to investigations into the fire. Any such tapes would be "lawfully intercepted information", which could not be given in evidence because of TIA Act, s 63. The circumstance that transcripts from those tapes have been given in evidence in the H proceedings, so as to fall within the exception under s 75A, does not, as I have explained, mean that the tapes themselves fall within the exception. Moreover, the tapes were prepared in the course of the joint task force operation, and the Commissioner cannot be required to produce them, by reason of CC Act, s 29. 22 Paragraph 1(f) calls for telephone intercept transcripts in relation to investigations concerning the fire. Such transcripts are in the H brief and were given in evidence in the H proceedings. To the extent that they were otherwise caught by s 63, they are now within the s 75A exception, and the plaintiff may access them via the District Court brief. However, they were obtained by members of the joint task force in the course of its operations, and the Commissioner cannot be compelled to produce them, by reason of CC Act, s 29(3). 23 Paragraph 1(g) calls for "COPS events" in relation to investigations concerning the fire. The Commissioner has such documents in his possession. Some, but not all, of them were created by members of the joint task force in the course of its operations. The Commissioner cannot be compelled to produce those that were, by reason of s 29(3). The others must be produced. 24 In respect of paragraph 1(h), the Commissioner has Eagle.1 or TIMS investigation management system entries in relation to the investigation into the fire. They were created by the members of the joint task force in the course of its operations, or received by members of the joint task force from the Crime Commission in the course of its operations. The Commissioner cannot be compelled to produce them, by reason of s 29(3). 25 As to paragraph 1(j), the Commissioner has note book and duty book entries in relation to the fire investigation. They were created by members of the joint task force in the course of its operations. The Commissioner cannot be required to produce them, because of s 29(3). 26 As to paragraph 1(k), the Commissioner has statements in relation to the fire investigation. Some were created by members of the joint task force in the course of its operations, and others by police officers under the supervision of the joint task force in the course of its operations and in confidence. The Commissioner cannot be required to produce them, because of s 29(3). 27 As to paragraph 1(n), the Commissioner has expert reports relating to the fire investigations. They were requested and obtained by members of the joint task force in the course of its operations. The Commissioner cannot be required to produce them, because of s 29(3). However they were included in the H brief and the plaintiff is able to access them via that means, thought not from the Commissioner. 28 The Commissioner has no further documents, not already caught by paragraph 1, that fall within paragraphs 2, 3 and 4 of the schedule. 29 The plaintiff has previously indicated that paragraph 5 of the subpoena would not be pressed. 30 As to paragraph 6(a), the Commissioner has COPS event entries in relation to allegations against Z concerning the alleged stalking of S. One such entry was created by members of the joint task force in the course of its operations and the Commissioner cannot be required to produce it because of s 29(3). The others must be produced. 31 As to paragraph 6(b), the Commissioner has Eagle.1 or TIMS entries in relation to the stalking allegations. One of these was created by the Crime Commission and given to members of the joint task force on a confidential basis in the course of its operations, and the others were created by the members of the joint task force. The Commissioner cannot be required to produce them, because of s 29(3). Some of these documents were included in the H brief and can be accessed by the plaintiff via that means, but not from the Commissioner. 32 The Commissioner has nothing to produce under paragraph 6(c). 33 In respect of paragraph 6(d), the Commissioner has note book and duty book entries in relation to the stalking allegations. They were created by members of the joint task force in the course of its operations, and the Commissioner cannot be required to produce them, because of s 29(3). 34 In relation to paragraph 6(e), the Commissioner has statements in relation to the stalking allegations, some of which were created by members of the joint task force in the course of its operations and others by police officers under the supervision of the joint task force and in confidence. The Commissioner cannot be required to produce them, because of s 29(3). 35 Although in Mr Walsh's affidavit it was said that no claim for privilege was made in respect of the documents in paragraph 6(f), it subsequently transpired that one document was a Crime Commission report provided to the joint task force in the course of its operations, which the Commissioner cannot be required to produce them, because of s 29(3). Any other documents caught by paragraph 6(f) must be produced. 36 Paragraph 7 calls for documents relating to Z's conviction "dated 15 December 2003" for malicious damage to property by fire, relating to a different fire. The Commissioner says that he has no documents caught by this paragraph. While the technical reason advanced is that the subpoena is mistaken in referring to 15 December 2003, because the relevant conviction was on 15 December 1993, the Commissioner has in any event indicated by his counsel that a search has been carried out for such documents relating to the 1993 conviction and nothing has been found. Although it is surprising that the Commissioner would have no records of documents relating to a conviction for arson in 1993, it is conceivable that documents relating to an investigation 15 years ago might have been mislaid.

37 Ms Ghabrial sought leave to amend paragraph 7 to substitute the correct date. Although I do not think that it is usually appropriate to amend a subpoena in that way after it has been served and debated at length, in the context of this case, where search and inquiry has already been made on the basis of the subpoena as if it had been so amended, the just quick and cheap resolution of the proceedings favours acceding to that application. Absent further order of the Court, there is no requirement for any affidavit that there are no such documents; if there are none there will simply be no documents produced pursuant to that paragraph of the schedule. Based on what the Commissioner has informed the court, no further action on the part of the Commissioner would be required. 38 The plaintiff does not press paragraph 8 of the schedule. 39 The Commissioner has already produced the documents sought by paragraph 9. 40 The Commissioner does not oppose production of copies of the documents referred to in paragraph 10. 41 (NSW) Uniform Civil Procedure Rules 2005, r 33.4 provides that the court may, on the application of a party or any person having a sufficient interest, set aside a subpoena in whole or in part, or grant other relief in respect of it. The power to "grant other relief" in respect of a subpoena authorises an order limiting the scope of production required by the subpoena. The appropriate course is to make such an order limiting and varying the operation of the subpoena according to the conclusions I have reached above. Costs

42 That leaves the question of costs, which arises in two respects: the costs of the Commissioner's motion, and the costs of the Commissioner's compliance with the subpoena (including obtaining legal advice).

43 The court has inherent jurisdiction to award costs of an application to set aside a subpoena, either for or against the applicant [Darcey v Pre-Term Foundation Clinic [1983] 2 NSWLR 497; R v Barbaro (1992) 108 ACTR 1; Re Bauhaus Pyrmont Pty Ltd (in liq) [2006] NSWSC 879], and likewise in respect of a claim for privilege concerning the documents sought by a subpoena [ACP Magazines Pty Ltd v Motion [2000] NSWSC 1169, [34]; Re Bauhaus Pyrmont]. 44 UCPR r 33.11 provides as follows: (1) The court may order the issuing party to pay the amount of any reasonable loss or expense incurred in complying with the subpoena.

(2) If an order is made under subrule (1), the court must fix the amount or direct that it be fixed in accordance with the court's usual procedure in relation to costs.

(3) An amount fixed under this rule is separate from and in addition to: (a) any conduct money paid to the addressee, and (b) any witness expenses payable to the addressee. 45 The expenses that may be allowed under this rule include time incurred in dealing with the subpoena [Deposit & Investment Co Limited (Receivers Appointed) v Peat Marwick Mitchell & Co (1996) 39 NSWLR 267, 289; J Aron Corporation v Newmont Yandal Operations [2004] NSWSC 996], legal advice reasonably incurred in relation to confidentiality and privilege issues pertaining to the subpoena [Marsden v Amalgamated Television Services Pty Ltd [2001] NSWSC 77] on a solicitor/client basis [Kumagai Australia Finance v Avarton Ltd (NSWSC, Bryson J, 7 June 1991, unreported)], and the cost of photocopying [Mancorp Pty Ltd v Baulderstone Pty Ltd (SASC, Debelle J, 5 March 1993, unreported)]. 46 So far as the Commissioner's motion is concerned, the salient considerations are: · The Commissioner succeeded in significantly limiting the scope of production required. This was achieved partly by agreement (insofar as the plaintiff agreed to limit the scope of the subpoena), and partly as a result of adjudication. To this extent, the Commissioner may be regarded as having ultimately succeeded. · However the basis on which the Commissioner principally succeeded was s 29, which was not referred to at the outset, but was raised only on the second day of the hearing. · The first day of the hearing was occupied by the legitimate forensic purpose issue, on which the Commissioner failed. · The plaintiff was less than helpful in providing information to the Commissioner which would have facilitated elucidation of its legitimate forensic purpose. So far as the plaintiff was concerned not to contravene any suppression order it was always open for it to make an application to the court, but it did not do so. · The plaintiff was not in a position to deal with the TIA Act issue on the first hearing date.

· However, the plaintiff ultimately succeeded on the TIA Act issue, because most of the relevant documents had been disclosed in an exempt proceeding for the purposes of s 75A. · The matter could not be resolved on the second hearing day, because the Commissioner had not identified and segregated those documents which were protected from production by s 29 and those that were not. 47 I agree with Ms Ghabrial's submission that, had s 29 been raised at the outset, it is likely that the time occupied and costs incurred would have been significantly less, and confined to part of a day. The costs have been substantially increased by the Commissioner's failure to raise s 29 at the outset, and his unsuccessful pursuit of the legitimate forensic purpose issue and the TIA Act issue. On the other hand, costs on that issue might well have been reduced, if not avoided, had the plaintiff been more forthcoming at an earlier stage. And the plaintiff has progressively narrowed the scope of the subpoena as the matter has proceeded. Having regard on the one hand to the Commissioner's ultimate success on the s 29 issue, but on the other to the additional costs inflicted on the plaintiff by the Commissioner's pursuit of issues on which he was or would have been unsuccessful, there should be no order as to costs of the motion. 48 The costs of compliance with the subpoena, however, are a different matter. A subpoena is an invasive process which puts third parties to costs and trouble for the benefit of the parties to litigation, and in particular the issuing party. The price that an issuing party pays for the privilege of being able to issue subpoenas more or less as of course is the liability to pay a recipient its reasonable costs of compliance. It was entirely reasonable for the Commissioner to seek and obtain legal advice as to issues of privilege. However, once he moved from obtaining legal advice as to whether or not documents should be produced, to agitating a motion to set aside the subpoena, that passed beyond the scope of compliance with the subpoena, to an application not to comply with it. 49 In my view the Commissioner is entitled to recompense for searching and assembling the documents called for, and obtaining advice as to the subpoena up to the time a decision was made to file a motion to set aside the subpoena; but not in respect of the motions. I appreciate that the distinction is not always clear, but in my view, the costs of legal advice between 18 May 2007 (when the motion was originally filed) and 6 September 2007 (when this judgment is delivered) should be regarded as costs of the motion. Legal costs related to the subpoena before the commencement and after the completion of that period, together with all costs of searching, assembling, copying and producing documents called for by the subpoena, should be regarded as costs of compliance.

Orders 50 My orders are: 1. Order, pursuant to Uniform Civil Procedure Rules , r 33.4, that in respect of the subpoena for production issued on behalf of the plaintiff to the Commissioner of Police dated 9 March 2007, the Commissioner of Police:

1.1 subject to 1.2 below, is not required to produce any document which: a. does not fall within any of paragraphs 1, 2, 3, 4, 6, or 9 of the schedule to the letter dated 3 April 2007 from Xenos Lawyers to the Crown Solicitor; or b. was created by members of Strike Force Lyttle, or provided to Strike Force Lyttle by the Crime Commission, or requested by members of Strike Force Lyttle, in the course of the operations of Strike Force Lyttle; or c. comprises lawfully intercepted information within the Telecommunications (Interception & Access) Act , other than a document referred to in the "list of material on the H committal Police brief" annexed to the letter dated 10 August 2007 from Xenos Lawyers to the Crown Solicitor. 1.2 the Commissioner is required to produce: a. copies of the documents referred to in paragraph 10 of the schedule; b. the documents referred to in paragraph 7 of the schedule as if it referred to a conviction on 15 December 1993 rather than 15 December 2003. 2. Adjourn the subpoena to 17 September 2007 at 9.45am before me, upon which date I expect it to be answered.

3. Reserve liberty to apply in the event of any difficult arising in the implementation of orders 1 and 2.

4. No order in respect of the costs of the motion, to the intent that each of the plaintiff and the Commissioner bear its own costs.

5. Order that the plaintiff pay the Commissioner the amount of the reasonable expenses incurred by the Commissioner in complying with the subpoena, excluding the costs of the motion to set aside the subpoena (which exclusion covers costs of legal advice incurred from 18 May 2007 to 6 September 2007), such costs (if not agreed) to be fixed in accordance with the court's usual procedure in relation to costs.

6. Adjourn the proceedings to 28 September 2007 at 9.30 before me, for directions and if practicable allocation of dates for hearing. **********

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