A v Z [2007] NSWSC 899 | Case summary

A v Z [2007] NSWSC 899 | Case summary | Zoe

[10]

The original documents enclosed to the facsimile dated 5 July 2006 from Detective Senior Constable Andrew Brennan of NSW police, North Shore Local Area Command to Matthew Kelly of Kemp Strang Legal Group, together with the results of any and all ninhydrin testing or any other forensic testing undertaken on the documents. 2 As will become apparent, the plaintiff has indicated that it is prepared to accept, in satisfaction of the subpoena, production of more limited classes of documents than were originally called for by the subpoena, as I shall come to describe. By Notice of Motion filed on 18 May 2007, the Commissioner moves for an order setting aside the subpoena and alternatively, an order excusing the Commissioner from production of documents called for by the subpoena to the extent they attract a claim of public interest immunity. The issues that arise on the application to set aside the subpoena are, first, whether the subpoena was issued for a legitimate forensic purpose; and secondly, whether the subpoena is an abuse of process insofar as it calls for telephone intercept information within the meaning of (CTH) Telecommunications (Interception and Access) Act 1979. So far as the claim for public interest immunity is concerned, by agreement between the parties, that is to be deferred for further consideration in the event that I come to the conclusion that the subpoena should not be set aside. 3 The power of the Court to set aside a subpoena in whole or in part is but an instance of its power to regulate its processes and, in particular, to intervene in a case of abuse of its process [Botany Bay Instrumentation & Control Pty Limited v Stewart [1984] 3 NSWLR 98, 100 (Powell J); Portal Software v Bodsworth [2005] NSWSC 1115, [19]]. A subpoena will self-evidently be an abuse of process if it is not issued for a legitimate forensic purpose, of which it is an instance if it has not been issued bona fide for the purpose of obtaining relevant evidence [Botany Bay v Stewart, 100C; Commissioner for Railways v Small (1938) 38 SR (NSW) 564, 573-575]. 4 The Commissioner submits that a subpoena is not issued for a legitimate forensic purpose unless there is a reasonable basis for believing that the material called for by it will materially assist the case of the issuing party. There is no doubt that, at the least, a subpoena is not issued for a legitimate forensic purpose unless there is a reasonable basis for supposing that the material called for will likely add, in the end, in some way or another, to the relevant evidence in the case [National Employers' Mutual General Insurance Association v Waind and Hill [1978] 1 NSWLR 372, 384] or could possibly throw light on the issues in the case [Trade Practices Commission v Arnotts Ltd (1989) 21 FCR 306]. However, there is room for doubt as to whether the requirement goes further, such that rather than merely adding in some way or other to the relevant evidence in the case or possibly throwing light on the issues in the case, it is necessary that it be likely that the material called for will "materially assist the case of the issuing party", although I acknowledge that at first sight, there is significant authority for that proposition. It appears to have its origin in Air Canada v Secretary of State for Trade [1983] 2 AC 394. But there are two significant features to be noted about that case. The first is that the question in issue was, in the context of a Crown objection to the production of a class of documents on the ground of public interest immunity, in what circumstances should the judge inspect the documents. The second is that the process in question was a summons for an order for production of documents for inspection, which is a form of discovery, as distinct from a subpoena. The historical and jurisprudential distinction between these processes is well established [Waind, 383-4]. 5 That the case was concerned with discovery is clear in the speech of Lord Wilberforce who said, at 437, "We are concerned with a claim for discovery of documents ... ". Later, at 438 his Lordship said, "The appellant's claim for discovery and production rests, as it must, upon their assertion that they are necessary for the disposal fairly of the case ... ". There was a difference of opinion in Air Canada as to whether it was sufficient that the documents be likely to affect the outcome one way or the other, or as to whether they would give support to the case of the party seeking discovery [see at 438E]. Lord Wilberforce found no binding authority on the issue and concluded [at 439E] "We are, therefore, free to decide this case upon a common sense interpretation of the rules and upon principle." The majority of the House of Lords, including Lord Wilberforce, preferred the narrower view that in the context of the question there under consideration, there must be a likelihood that the documents would support the case of the party seeking discovery. 6 Traditionally, the obligation of a party required to give discovery was to give discovery of documents which assisted the case of the requesting party or impugned the case of the party giving discovery. A party giving discovery was not obliged to discover documents which related only to that party's own case - that is, which only supported that party's case. Conversely, a party seeking discovery was entitled to discovery only of documents which would assist the requesting party's case or impugn the case of the party giving discovery. The approach which Lord Wilberforce and the majority of the House of Lords took in Air Canada, in a case analogous to discovery, was entirely consistent with that position. 7 This is no longer, at least in this State, the test for discovery: now, the obligation is to give discovery of any document relevant to a fact in issue in the proceedings, the rules adopting the definition of relevance from the (NSW) Evidence Act 1995, to the effect that a document is relevant if it rationally makes the probability of a fact in issue more or less likely. There is no longer any "own case" privilege in discovery in this State. Thus the rationale which informed the decision in the House of Lords in Air Canada, at least except insofar as it depended on the particular context of a claim for public interest immunity, no longer exists in NSW. Moreover, in my view, that rationale never existed in respect of a subpoena, as distinct from the process of discovery. 8 I do not think that the authorities referred to by the Commissioner compel a different conclusion. 9 The first was Alister v The Queen (1984) 154 CLR 404, in which the High Court was admittedly concerned with a subpoena. However, the context was, as in Air Canada, an objection by the Crown to production of documents on the grounds of public interest immunity, and the issue was the circumstances in which the judge should inspect the documents - an issue on which Air Canada provided direct authority. Gibbs CJ said (at 414-415): Just as in the balancing process the scales must swing in favour of discovery if the documents are necessary to support the defence of an accused person whose liberty is at stake in a criminal trial (see Sankey v. Whitlam (1978) 142 CLR 1 at 42, 62), so, in considering whether to inspect documents for the purpose of deciding whether they should be disclosed, the court must attach special weight to the fact that the documents may support the defence of an accused person in criminal proceedings. Although a mere "fishing" expedition can never be allowed, it may be enough that it appears to be "on the cards" that the documents will materially assist the defence. If, for example, it were known that an important witness for the Crown had given a report on the case to ASIO it would not be right to refuse disclosure simply because there were no grounds for thinking that the report could assist the accused. To refuse discovery only for that reason would leave the accused with a legitimate sense of grievance, since he would not be able to test the evidence of the witness by comparing it with the report, and would be likely to give rise to the reproach that justice had not been seen to be done.

10 Reading that passage as a whole - and having regard to the example to which his Honour refers in it - its effect is not that there must be a serious basis for supposing that the document sought will assist the case of the issuing party, but that it will be sufficient if, for example, the documents sought would enable the evidence of an opposing witness to be tested. 11 In any event, that was in the context of a claim for public interest immunity. The approach seems to have migrated from cases of public interest immunity to objections to subpoenas on the ground of absence of legitimate forensic purpose in R v Saleam (1989) 16 NSWLR 14, in which Hunt J, with whom Carruthers and Grove JJ agreed, said (at 18): In my view, the criterion finally suggested by Gibbs CJ in Alister v The Queen as that which had to be satisfied before a court should inspect documents in relation to which a claim for public interest immunity had been made is appropriate to be applied also when the trial judge has to determine whether access should be granted to documents subpoenaed from the police in relation to which objection has been taken that no legitimate forensic purpose exists for their production. He must be satisfied that it is "on the cards" that the documents would materially assist the accused in his defence. 12 It is noteworthy that his Honour's observations were limited to the context of "documents subpoenaed from police", and the context was that they had been subpoenaed in the proceedings in which the police or the Crown were prosecuting the accused. The point of what his Honour said was not addressed to the precise scope of the test - whether it was that the documents sought might illuminate significantly issues in the case generally, or that they might materially assist the accused in his defence - but rather to how legitimate forensic purpose was to be established in the context of a criminal trial and specifically the "on the cards" test as opposed to some more liberal one. 13 In Carroll v Attorney-General of New South Wales (1993) 70 ACrimR 162, Mahoney AP said (at 182): But mere relevance is not enough: thus, it is not enough for the party to show only and without more that the document plainly shows and shows only that his case cannot be made out. It is not enough for the party to say: "The documents are relevant in the sense that prima facie they establish the case against me: therefore I am entitled to see them and to tender them." 14 His Honour, consistently with Saleam, although not referring to it, concluded that the party must be able to indicate that the document is relevant in the sense "that it may assist his case". Kirby P, though in dissent in the result, was content to accept for the purposes of the case the same view of the law: his Honour said, at 170, with reference to Alister: But access may be granted if it appears to be "on the cards" that the documents would materially assist the accused. 15 A little later, on the same page, after citing the passage to which I have referred from Saleam, his Honour said: I am prepared to accept these criteria in the present case. Is there a legitimate forensic purpose? Is it "on the cards" that access to the police affidavits would be of assistance to the plaintiff's case? 16 It seems to me that the application of a rule, originally applicable in the context of discovery under rules which no longer apply, has migrated in the decisions to which I have referred to the context of a subpoena for production without recognition of the distinction of the processes, in a context which has been complicated by an overlapping claim for public interest immunity. 17 Other authority, of no less standing, points to a wider test. I have already referred to the tests stated in National Employers' Mutual General Insurance Association v Waind and Hill, and to Trade Practices Commission v Arnotts. Reference might also be made to Brand v Digi-tech (Australia) Ltd [2001] NSWSC 425 in which Hunter J, on an application to set aside a subpoena in civil proceedings, referred to National Employers' Mutual General Insurance Association v Waind and Hill (at 385), in which Moffitt P had said: As I understand past practices where, however, objection is raised by owners of the documents, the judge examines the documents with some care to ensure there is no abuse of the subpoena, and to determine whether the documents appear relevant in the sense they relate to the subject matter of the proceedings, in which event, he will permit inspection by one or both parties at an appropriate time ... 18 Carroll and Saleam were both decisions in the special context of a subpoena addressed to police for the production of documents in connection with the prosecution in which those documents might be used. In my view, Waind states the general test. The stricter test would require an issuing party to be able to predict the contents of documents potentially relevant, and would unduly constrain the ability of litigants to investigate the facts. In a medical negligence case, for example, one cannot know in advance whether the doctor's and hospital's notes are likely to assist one party or the other, but no-one could suggest that there would be no legitimate forensic purpose in issuing a subpoena for their production. In Brand, Hunter J concluded (at [36]): I think it is indisputable that, if the subpoenaed documents are by their description arguably relevant or capable of providing a legitimate basis for cross examination on credit matters, then an application to set aside a subpoena on the grounds of irrelevance of the documents to the proceedings is misconceived. It is equally clear, in my view, that, if the description of the documents is such as to admit of a finding that the documents are manifestly irrelevant and incapable of touching matters of credit, then the issuing of such a subpoena represents an abuse of process. 19 In my view, that is the test which ought to be applied in the present circumstances where, although what is sought are documents from the custody of the police, they are not sought in the context of a prosecution. Indeed, it is known that the defendant, to whose potential prosecution they might otherwise relate, has been granted immunity. Accordingly, I would approach the question primarily on the basis of asking whether, on the one hand, the documents called for are apparently relevant or capable of providing a legitimate basis for cross-examination, in which case there is a legitimate forensic purpose for the issue of subpoena, or whether on the other, they are manifestly irrelevant and incapable of touching matters of credit, in which case the subpoena would be an abuse of process. However, ultimately, it seems to me that even on the narrower test, in the context of this case, I would reach the same result. In order to understand why, it is necessary to refer to some of the history and issues in this litigation. 20 The proceedings were commenced by Summons filed by A Pty Ltd whose principal is S, on 19 May 2006 claiming an order that a caveat in respect of land at Drummoyne, of which Z and his wife are the registered proprietors, be extended until further order, and a declaration that A had an equitable interest in that land. The caveat in question had been lodged by A and was dated 30 January 2006. It was stamped on 20 February 2006 with duty on advances of $300,000, and it claimed an interest in the land "as equitable mortgagee" by virtue of a "written loan agreement (since destroyed by fire) entered into between the caveator and the registered proprietor in June 2005 in the amount of $300,000." 21 The proceedings continued on pleadings, and, in the Statement of Claim filed on 25 July 2006, A claims an order for payment of the sum of $300,000 and interest, and a declaration that the Drummoyne property is charged with payment of those sums. The Statement of Claim pleads a cause of action based on an agreement that A would lend Z and his wife $250,000, and that the defendants would repay $300,000. 22 The Defence, which appears to have been signed by the solicitor for the defendants on 1 August 2006, but so far as I can tell has not yet been filed, denies any agreement to borrow $250,000 or any other sum; denies receipt of the sum of $250,000 or any other sum; and denies any agreement to the effect alleged; it also denies that A has a caveatable interest in the Drummoyne property. In view of the matters to which I am about to come, it is curious that it does not raise any defence of illegality of purpose, and the defendants may be well advised to consider whether, given the issues which they apparently intend to raise at trial, the defence in its present form would permit them to do so. 23 Nonetheless, it is clear from the affidavit material that has been filed that the defendants accept that the plaintiff advanced - to use a neutral word - a sum of $250,000, but say that it was not a loan at all, but a contribution to a purchase price of $400,000 for a quantity of pseudoephedrine for the intended purpose of a "speed cook" by which it would be converted into marketable drugs. The defendants apparently wish to contend that the transaction is thus tainted by an illegal purpose. In any event, whether or not that is raised as a specific defence, the defendants wish to argue it was in those circumstances, as distinct from those asserted by the plaintiff, that the $250,000 was advanced by the plaintiff. 24 It will be remembered that the caveat referred to a "written loan agreement (since destroyed by fire)". In S's affidavit sworn 18 May 2006, he deposes that, at the time that he says the loan agreement was made, he recorded the agreement on a piece of paper on which he made provision for signature by Z and his wife. He says that Z returned a couple of hours later with the document duly signed. Later in the same affidavit, he says that he placed the signed original in an office area next to his bedroom with other documents in his rural property, which was completely destroyed by fire on 22 June 2005. He then describes circumstances in which police played to him a recording of a conversation, in which he recognised the voice of Z, which would implicate Z in that fire. 25 Before me on this application, as Exhibit RX06, is a document which appears to be a memorandum from the plaintiff's insurers and suggests that the persons involved in setting the fire were Z and another. That, of course, would be little, if any, evidence on final hearing, but all I am concerned with here is whether there is reason to suppose that the documents, the subject of the subpoena, would illuminate the issues in the case, or alternatively materially assist the plaintiff's case. 26 In Z's affidavit sworn 10 July 2006, he says that he stayed at S's rural property on about four occasions, and that on the occasions that he travelled there, there were no files or papers. He then adds "I have neither been interviewed nor charged with respect to a fire at [S's rural property], or at all". He annexes to his affidavit a number of communications which he says were received in his post office box which, on their face, convey threats, including suggestions that the caveat will be removed if "you stop being a witness"; the obvious inference is that A Pty Ltd, or its principal S, was the source of those threats. Also in evidence before me on this application, as Exhibit RX05, is a file note of A's solicitor of a conversation with the informant in the prosecution of H, the other alleged participant in the fire, who has since been convicted, attributing to the police officer, in respect of Z: "He does have complete immunity for threatening calls to S, murder - involvement in, arson". 27 After the subpoena was issued, there was an exchange of correspondence between A's solicitor and the Crown Solicitor on behalf of the Commissioner. In a letter of 3 April 2007 that, for some inexplicable reason, was marked "without prejudice", A's solicitors indicated that they would accept a limited production as specified in an annexure to that letter in satisfaction of the subpoena:

28 The present position is that A no longer presses paragraphs 5 and 8 of the subpoena; the Crown does not object to paragraph 9 of the subpoena; in respect of paragraph 10, A agrees to accept copies as distinct from originals of the documents called for; and that leaves for resolution paragraphs 1-4 inclusive, 6 and 7. 29 The ensuing correspondence represented plainly reasonable attempts on the part of those representing the Commissioner to obtain further information in order that they could understand the purpose for which the subpoena was issued, and, it seems to me, quite unreasonable refusals on the part of those representing A to advance that course. That attitude has, it seems to me, put the parties to unnecessary expense in the ultimate resolution of this dispute. 30 The documents called for by paragraphs 1, 2, 3 and 4 of the subpoena relate to the police investigation of the fire. S says that the written record he made on behalf of A of the loan was destroyed in that fire. He wishes to allege, moreover, that Z was involved in setting that fire. Z implicitly, though not explicitly, denies that he was involved in that fire. I say "implicitly", because the paragraph to which I have referred in his affidavit is, at least on one view, calculated to convey that, although he never says so much in words, that he was not involved. It seems to me as plain as could be that in the context of this case, it is relevant for the plaintiff to explain why he no longer has a document in which he says the loan agreement on which he sues was recorded, and the loss of which by fire was referred to in the caveat which precipitated the litigation. Further, the plaintiff's case in that respect must be enhanced if the plaintiff can show that it was the defendant who was responsible for the destruction of the document by fire. Thus both showing that there was a fire, and that Z was responsible for it, is part of the plaintiff's case. I do not accept that the relevance of the fire, and the defendant's involvement in it, is contingent upon showing that the defendant's motive in setting the fire was to destroy the loan document, although to do so would enhance the plaintiff's case further, and as I understand the plaintiff's case, it proposes to show that the defendant knew that the plaintiff kept his documentation at the rural property, and it is for that purpose that S gives evidence about Z's visits to the rural property. But even short of that, it seems to me manifestly relevant for the plaintiff to prove that the rural property, in which the written agreement was contained, was destroyed by fire, and that the defendant was implicated in it. The purpose of obtaining evidence which may prove that the defendant was a party to the fire is therefore plainly a legitimate forensic purpose. 31 I do not accept that the subpoena is so widely drawn that it must necessarily catch a large amount of irrelevant material as well as some relevant material. In its modified form, the documents which the plaintiff has indicated will be accepted in satisfaction of the subpoena are all documents which are likely to contain information as to who set the fire. Any information bearing on who set the fire is of potential relevance. Nor do I accept that, at this stage, it is necessary for the plaintiff to prove that the defendant was implicated in the fire. In an interlocutory adjectival application of this type, the most required is that it be shown that there is a reasonable basis for supposing that the document may tend to show that the plaintiff was involved - or, as I would put it, simply throw light on whether or not the plaintiff was involved. To require anything more would require substantive hearings on contested evidence with cross-examination before the plaintiff could even set about assembling the evidence to prove its case. To my mind, given that the fire apparently destroyed a crucial document in the case, there is a very high degree of probability on the material before me - very much more than it merely being "on the cards" or a reasonable chance - that the documents for which these paragraphs call will materially assist the plaintiff's case, and a fortiori that they will throw light on a relevant question in the proceedings. 32 I turn then to paragraph 6 of the subpoena. The documents called for by paragraph 6 relate to allegations made by S to the police that Z has been stalking or intimidating him and the investigation of those allegations. It will be remembered that in his affidavit, Z alleges, at least implicitly, that he received threats from A. S apparently wishes to say, though it does not appear in any of the evidentiary material so far, that he was not responsible for any such threats and, moreover, that it is he who has been stalked and intimidated by Z, not vice versa. At first, I doubted whether this was a reasonable basis, in the light of S's affidavit evidence, for supposing that such documents existed, they would illuminate or advance the plaintiff's case. However, RX O5, from which it appears that Z has been given an immunity from threatening calls to S, removes those doubts. It is a legitimate forensic purpose for A to obtain evidence which may assist S to refute an allegation made adverse to his credit, and to impugn the credit of Z. It would potentially impugn the credit of Z to show that in the context of these proceedings and the dispute between the parties, Z has resorted to making threatening calls. Of course, I have no idea whether he, in fact, did or did not do so, but if S is able to show that he did, there would be a potential to impugn adversely on Z's credit. 33 I, therefore, turn to paragraph 7 of the subpoena. A document otherwise in evidence tends to show, if it does not conclusively prove, that Z has a previous conviction for arson. The plaintiff wishes to advance a case that a conclusion that Z was implicated in the fire may all the more readily be reached on account of similar fact evidence, namely, his predisposition or tendency to engage in arson. It seems to me that if it came to a question of admissibility, the mere involvement of Z in a previous fire would not of itself meet the standard required to render that evidence admissible as tendency evidence. Whether it does so would depend on the similarity of the modus operandi and other facts and circumstances surrounding the fire. It may also depend on what evidence there is of any other fire in which the defendant might have been involved. I do not suggest that there is one, but what the whole of the evidence will ultimately reveal cannot be foretold at this stage. 34 I am not, at this stage, concerned about the admissibility of evidence, but whether there is a legitimate forensic purpose for this subpoena. To obtain documents which, ultimately, with other evidence, might support a submission based on tendency, is a legitimate forensic purpose. Moreover, in the passage in Z's affidavit to which I have referred, he says on oath that he has neither been interviewed nor charged with respect to a fire at S's rural property "or at all". The documents called for by paragraph 7 of the subpoena would plainly go to refute the allegation that he has neither been interviewed nor charged with respect to a fire "at all", and would plainly be relevant to impugning Z's credit. As I have indicated, Brand v Digi-tech makes clear that in the context of a subpoena (as distinct from that of discovery), it is a legitimate forensic purpose to seek to obtain documents which might be used for cross-examination on credit alone. 35 Accordingly, I am satisfied that there is a legitimate forensic purpose for the issue of a subpoena calling for the documents in paragraphs 1-4 inclusive, 6 and 7 of the subpoena, on the basis that these paragraphs are read down in accordance with the letter of 3 April 2007, but subject to the objection that provision of those documents to the Court and their use in evidence would be prohibited by Telecommunications (Interception and Access) Act, s 63 , to which I now turn. 36 Kizon v Palmer (1998) 82 FCR 310 establishes that a subpoena which calls for information, the admissibility of which in evidence would be prohibited by Telecommunications (Interception and Access) Act, s 63, would be an abuse of process, because the material sought could not be used by the issuing party and could not ultimately find its way into evidence. It seems tolerably clear that material sought in paragraphs 1(e) and (f), 2 and 3 of the subpoena is lawfully intercepted information within the meaning, and for the purposes, of s 63. I do not understand the contrary to have been argued, and the position of Ms Ghabrial, for A, has been that unless avail can be taken of the exception under s 75A, it is accepted that these parts of the subpoena would have to be set aside. 37 Yesterday, Ms Ghabrial sought an adjournment of the application generally, including for the purpose of obtaining evidence that she had reason to believe might exist to the effect that one of the exceptions in s 75A was satisfied. Overnight, it appears that further inquiries have been made that may well have justified that belief. However, it has to be said that the notice of this comes unacceptably late, so far as the Crown is concerned, to allow it to be fairly dealt with today. 38 I was minded, in any event, that, having reached the conclusion that I have on the question of legitimate forensic purpose, and knowing that the Crown in that event wished to consider advancing a claim of public interest immunity, I would adjourn the question of whether an exception was established under the Telecommunications (Interception and Access) Act until the hearing of the public interest immunity issue. The parties this morning announced that, in the light of the material which has been discovered overnight, they both acceded to such a course. Accordingly, I will do so. 39 It follows that, having held that there is a legitimate forensic purpose for the issue of a subpoena for production of the documents referred to in paragraphs 1-4 inclusive, 6 and 7, as limited by the letter of 3 April 2007 contained in RX03, and upon the undertaking of A to the Court that it will call only for the documents referred to in the Schedule contained in RX03, and in respect of paragraph 10 only for copies rather than for originals of the documents there specified, I would decline to set aside the subpoena on grounds of lack of legitimate forensic purpose. I would stand over to a date to be fixed for hearing the claim in paragraph 2 of the Notice of Motion (which relates to public interest immunity), and the balance of the claim in paragraph 1(c) (which relates to the Telecommunications (Interception and Access) Act). I would also stand over to that date the subpoena itself, to the intent that any remaining question in connection with access to the documents caught by the subpoena may be addressed on that occasion. I will make a direction that any further affidavit evidence, either in connection with the claim for public interest immunity or in connection with the exception to the prohibition in the Telecommunications (Interception and Access) Act, or otherwise in connection with any limitation sought to be imposed on access, should be served a reasonable time prior to that date. 40 My orders are:

A v Z

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