AMD Far East and Ors v Doan and Anor

LOWER COURT Local Court JURISDICTION : LOWER COURT FILE NUMBER(S) : LOWER COURT Magistrate Longley JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION Shaw J

10308 of 2004 AMD Far East Ltd (First Plaintiff)

John Stanley Robinson (Second Plaintiff) Steven Fraser (Third Plaintiff)

Nicola Bond (Fourth Plaintiff) v Ngat Doan & Anor (First Defendant)

1 Shaw J: In this matter a summons filed on 6 February 2004 seeks, in summary, orders setting aside orders of the Local Court which dismissed the application made by AMD Far East Ltd (the first plaintiff) for an order setting aside the subpoena served on that corporation in proceedings which may be described as the Director of Public Prosecutions v Ngat Doan. 2 Other related orders were sought to set aside orders made by Magistrate Longley to grant subpoenas directed towards John Stanley Robinson (the second plaintiff in these proceedings), directed to Steven Fraser (seeking to set aside subpoenas served upon him) and, similarly, orders seeking to set aside the orders made in the Local Court in relation to a subpoena served on Nicola Bond in the same proceedings.

3 Mr Singleton of counsel for the plaintiffs said that there was a misapplication of the relevant test applicable to determining whether or not a subpoena has a legitimate forensic purpose. He argued that there was no evidence supportive of that requisite purpose, that the subpoenas were oppressive, and that there was an error of law by reason of the failure of the court below to give reasons or adequate reasons for its decision not to set aside the subpoenas in question.

s53 Crimes (Local Courts Appeal & Review) Act 2001 4 The plaintiffs relied upon s 53(3) of the Crimes (Local Courts Appeal & Review) Act 2001 as a vehicle by which the decisions of the Local Court not to set aside these subpoenas can be challenged in this Court. The provision is as follows: 53 Appeals requiring leave (1) Any person who has been convicted or sentenced by a Local Court, otherwise than with respect to an environmental offence, may appeal to the Supreme Court against the conviction or sentence on a ground that involves: (a) a question of fact, or (b) a question of mixed law and fact, but only by leave of the Supreme Court. (2) Any person who has been convicted or sentenced by a Local Court with respect to an environmental offence, may appeal to the Supreme Court against the conviction or sentence, but only on a ground that involves a question of law alone, and only by leave of the Supreme Court. (3) Any person against whom: (a) an order has been made by a Magistrate in relation to the person in any committal proceedings, or (b) an interlocutory order has been made by a Local Court in relation to the person in summary proceedings, may appeal to the Supreme Court against the order, but only on a ground that involves a question of law alone, and only by leave of the Supreme Court. (4) An application for leave to appeal must be made within such period after the date of the conviction, sentence or order as may be prescribed by rules of court.

Legitimate Forensic Purpose 5 Whilst there are complaints about the width and oppressiveness of the subpoena, I think that it is fair to say that the thrust of the argument presented by the plaintiffs concerns whether or not there was a legitimate forensic purpose for seeking the material specified by the subpoenas. There is also an argument about the adequacy of the reasons given by the primary tribunal for declining to set aside the subpoenas. 6 The proceedings below are by way of committal in relation to indictable offences and involve allegations of 47 counts of fraud. Putting it more precisely, and adopting the submissions of the plaintiffs in this Court, it is said that: In the proceedings below the second defendant is being prosecuted by the first defendant on 47 counts of fraud (contrary to s 176A of the Crimes Act 1900). It appears that the victim is alleged to have been advanced Micro Devices Inc (AMD) a company related to the plaintiff AMD Far East Limited (AMDFE). The offences are indictable. The proceedings below are proceeding by way of committal inquiry. 7 I accept the submissions of the plaintiffs that a subpoena needs to be sustained by some legitimate forensic purpose, and the test of whether, in a criminal case, the subpoena has legitimate forensic purpose is whether it is "on the cards" that the subpoenaed matter will materially assist the case of the accused. This does appear to be a relaxation of the test in civil cases, which often talk about definite, concrete or reasonable grounds to believe that the subpoenaed material would materially assist the party issuing the subpoena's case. 8 It is true that a committal is merely a preliminary step in the criminal justice process and has often been characterised as "administrative". Nevertheless, important rights are at stake and I think a relatively liberal approach should be taken to allowing orders that documents be brought the court. It was not argued before me that a committal should be placed in some special category for presently relevant purposes. 9 It seems that the prosecution case is, in summary form, that Mr Doan, the first defendant, submitted to the first plaintiff (AMD) false invoices and thus secured payments to which his company was not entitled. It is alleged that the invoices sought payment pursuant to the scheme whereby AMD would reimburse its sales agents for marketing schemes directed at increasing sales of AMD products.

The Proceedings before the Magistrate 10 In a letter of 23 January 2004, the first defendant articulated what it asserted were the legitimate forensic purposes of the subpoena as follows: The documents sought under the subpoena will reveal that a culture of deception and fraud existed and was tolerated within AMD and its subsidiaries from 1997 - 2002 based on the distributors' fraudulent promotional and advertising expenses invoicing as a background to which the Defendant was required to particular under pain of having the distributorship of APD terminated. The documents sought under the subpoenas will also reveal that AMD and AMDFE and [AMD International Sales and Services Limited] at all times were aware or ought to have been aware of the alleged fraudulent invoicing and demanded it and encouraged it through its key sales executives as a means of boosting sales and sales performance. The documents sought under the subpoena will also reveal that the complaint against Ngat Doan and each and every charge lacks bona fides and is an abuse of process conceived for the ulterior design of gaining some leverage in the Supreme Court Commercial List action sub nom - APD International Pty v Advanced Micro Devices Inc & 2 Ors. Supreme Court of NSW Commercial List No. 050170/02 11 Regrettably, there appears to be no official transcript available of the reasoning of the learned magistrate at first instance when his Worship dealt with the application to set aside the subpoenas. However, an unofficial transcript has been tendered, without objection, reflecting various reasons given by the magistrate on 10 February 2004 which include the following passages: The principal determination, if not the exclusive determination, certainly the principal determination, is whether there is a legitimate forensic purpose for the issue of these subpoenas. Now a quote from its decision of the Roads & Traffic Authority v Connelly , which refers to decision in Alister v Ors v The Queen 1983, 1984 154 Commonwealth Law Reports at 404, and I'm quoting from page 3 of the Connelly decision referring to the decision of Alister. " Just as in the balancing process the scales must swing in favour of discovery of the documents are necessary to support the defence of an accused, first his liberty is at stake in a criminal trial, so in considering whether to inspect documents for the purpose of deciding whether or not they should be disclosed, a court must attached 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 that to be on the cards that the documents may materially assist the defence." The discretions have been made under then section 48E, now section 91 of the Justices Act regarding specific witnesses who are and have material involvement in the companies which are alleged to be involved with the defendant as well as AMD. You'll have specific knowledge, that is these witnesses and would be involved at meetings which it is suggested they were involved in, at material times during this particular contractual period of 1997 to 2001. It just seems to me on the basis of the specific nature of the items that are outlined in the subpoenas both to AND more specifically the specific subpoenas to Fraser, Robinson and Bond, that a (sic) legitimate forensic reasons had been advanced in terms as it is outlined in the subpoena which has been recently amended, more specifically the AND subpoena, and in relation to those four applications they are dismissed. 12 In my opinion these reasons, in the context of the conduct of a busy trial court, are adequate to articulate the basis upon which the subpoenas should not have been set aside, and I decline to uphold the criticism of the Magistrate's decision in that respect.

'Fishing expedition' 13 I would apply the reasoning of Adams J in this Court in Roads and Traffic Authority of NSW v Connolly [2003] NSWSC 327, delivered on 27 April 2003. In that judgment, his Honour considered what I would regard to be a cliché in debates about subpoenas as to whether they constituted a "fishing expedition". His Honour cited the judgment of Hunt J in R v Saleam (1989) 16 NSWLR 14 at 17 in which case his Honour said the subpoena in question: gave every appearance of a fishing expedition, in the sense that the appellant had no evidence that fish of a particular kind were in the pool but wanted to drag the pool in order to find out whether there were any such fish there or not. However, Hunt J noted that "it is appropriate to adopt a more liberal approach to such matters in a criminal case" citing the observations of Brennan J in Alister & Ors v The Queen (1984) 154 CLR 404 at 455 - 456. Adams J said at [6]: I consider that the identification of the legitimate forensic purpose together with the reasonable chance that the documents in question might support the defence, is sufficient to justify a subpoena seeking the documents. It is not necessary for a party to show that it is more probable than not that either that the particular defined documents exist or that they will assist his or her case. His Honour also said at [7]:

It should be noted that, merely because the outcome of the subpoena may not be known, does not mean that it is therefore an attempt to obtain discovery. 14 His Honour disagreed with the approach of the Supreme Court of Victoria in Fitzgerald v Magistrates' Court of Victoria and Ors [2000] VSC 348; 34 MVR 448 which focussed on whether it was "on the cards" and equated that rather colloquial expression as meaning "within the range of probability". Adams J said that this area of the law "is bedevilled with metaphors." As his Honour said that: The mode by which a legitimate forensic purpose established will not doubt vary according to the character of the questions to be decided, but it seems to me that there is every reason for accepting statements by the legal representatives of the parties as to the issues in the case. This is especially so in criminal cases where the onus of proof on the prosecution, an onus which, I hasten to add, is not reversed in cases such as the present by the provision which assists the prosecution to prove a technical but vital aspect of its case by way of a certificate. 15 Bell J in Frugtniet v Magistrate Garbutt & Anor [2003] NSWSC 770 at [34] noted the decision of Brennan J in Alister v The Queen (1984) 154 CLR 404 at 451 where His Honour stated: This is a criminal case. The obligation to produce documents under a subpoena issued to a government instrumentality in a criminal case is not merely an obligation incurred by the Crown or a Crown instrumentality as a party to litigation to give such discovery to its adversary as is necessary to dispose fairly of the cause. In a criminal case, it is appropriate to adopt a more liberal approach to the inspection of documents by the court. The more liberal approach is required to ensure, so far as it lies within the court's power, that the secrecy which is appropriate to some of the activities of government furnishes no incentive to misuse the processes of the criminal law. 16 I respectfully adopt these observations and those of Adams J, above. Although the complaint is made that there was a lack of an evidentiary basis for the "legitimate forensic purpose" it seems to me that the articulation both in the letter of the solicitor and by experienced counsel before the Local Court provides an adequate basis for determining that there was the requisite purpose and that it was legitimate in all of the circumstances of the case.

Findings in respect of each ground of appeal 17 The grounds of appeal propounded by the plaintiffs are five in number. First it is said that there is a failure to give reasons. As I have said, it is my view that the reasons although shortly expressed, are adequate in the circumstances. 18 Secondly, it is said that the court below either misunderstood or misapplied the "legitimate forensic purpose" test in relation to subpoenas. For the reasons I have given, I am of the view that there was such a legitimate purpose. 19 I also conclude in relation to the third ground of appeal that each paragraph of the subpoena had an appropriate forensic purpose. 20 Nor do I think that the subpoena should be characterised as oppressive. It is well understood that there are three steps in the process of dealing with documents in litigation: bringing the documents to court, access to or inspection by the parties and then, critically, whether the documents are admitted into evidence: Waind v Hill & National Employers Mutual General Association Limited [1978] 1 NSWLR 372 at 381. I accept the plaintiffs' submission, in reliance upon the judgment of Barr J in Principal Registrar of the Supreme Court v Tastan (1994) 75 A Crim R 498 at 504 that a party calling on a subpoena should identify "expressly and precisely" the alleged legitimate forensic purpose; see also R v Saleam (1989) 16 NSWLR 14 at 18; Commissioner of Police v Tuxford [2002] NSWCA 139 AT [22]. In my view, this criterion has been sufficiently satisfied in the circumstances of this case.

I also take account of the observations of Levine J, in Scott v Jones & Anor [2003] NSWSC 169 at [31] - [33] where his Honour said: 31 …the position for which the defendants contended is that in civil proceedings, it is not open for the third party recipient of a subpoena merely to state that it objects to production (that is, compliance with a peremptory order of the Court) on the basis that the issuing party must show legitimate forensic purpose in the issue of a subpoena otherwise regular on its face. There is no authority one way or another on this point. Such authority as exists both in the criminal sphere and in the civil sphere, in my view does point to circumstances in which a third party recipient of a subpoena (regular on its face) may ask the Court to have the issuing party show sufficiently a basis in terms of legitimate forensic purpose to warrant the enforcement at the production stage of the peremptory order of the Court. The reality of modern litigation is that the third party recipient (whilst taking no objection as to the form of the subpoena) would have no information as to why it is that the affairs of that party have been intruded upon the peremptory order of the Court for the production of documents in an action to which it is a stranger. 32 whilst the general principles stated by Moffit P in Waind v Hill are unchallengeable in their correctness as a matter of law, it does seem especially from the judgment of Brownie AJA in Tuxford (noting his adoption of the statement Barr AJ - in a criminal case - cited above), that the third party recipient of a subpoena in civil actions can take that objection, or 'position' in relation to legitimate forensic purpose. 33 It is not an objection or position that the Court should permit to be taken lightly in the absence of any other flaw in the subpoena as a document not least by reason of the potential for mischief in the interference in the administration of justice in terms of the litigation between the actual parties in the course of which the subpoena has been issued. 21 The fifth ground of appeal, namely that the Local Court had erred by failing to set aside the subpoena, is merely a rolled up version of the preceding complaints.

Orders 22 In short, I am of the view that the appeal should not succeed. Indeed, I do not think that leave to appeal should be granted. 23 The plaintiffs are to pay the defendant's costs of the application.

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