Australian Competition and Consumer Commission v Unique International College

1. The subpoena issued to Commonwealth Bank of Australia dated 4 March 2016 be set aside.
2. The applicants pay the respondent's costs of the application to set the subpoena aside. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

PERRAM J: 1 By an application dated 19 April 2016 the respondent seeks an order setting aside a subpoena issued to the Commonwealth Bank of Australia ('CBA') dated 4 March 2016. On 4 May 2016, I pronounced orders acceding to this application and ordering the applicants to pay the respondent's costs of it. These are my reasons for taking that course. 2 The subpoena to the CBA seeks the production of financial records which relate to the financial position of the respondent from the period from 1 January 2014 to 4 March 2016 (but narrowed in the applicants' submissions to 1 July 2014). The issues in the case concern, broadly, whether the respondent has behaved unconscionably by procuring disadvantaged persons to enrol in educational courses funded by loans from the Commonwealth. No part of any of these allegations relates to the finances of the respondent. There is no pleaded issue, therefore, to which the financial position of the respondent is apparently relevant: cf. Trade Practices Commission v Arnotts Limited (1989) 88 ALR 90 at 103 ('Does the material sought have an apparent relevance to the issues in the principal proceedings…'). 3 The applicants' response to this difficulty was to submit that some of the relief claimed against the respondent was monetary in nature and that the subpoena would allow it to gauge whether the pursuit of the proceeding against the respondent was worthwhile. However, the capacity of a respondent to meet a judgment sum arising from the case in which it is being sued is not, without more, an issue in the proceeding itself. No doubt, if the respondent were being wound up, then its capacity to meet any judgment would be part of its examinable affairs which a liquidator could seek to probe even though the proceeding in question was on foot: cf. Grosvenor Hill (Qld) Pty Ltd v Barber (1994) 48 FCR 301 at 304. But the existence of the debate in cases such as that only underscores that the capacity of a respondent to meet a judgment is not ordinarily an issue in a proceeding. 4 It was submitted by the applicants that the reasons of Stone J in Dorojay Pty Limited v Aristocrat Leisure Ltd [2005] FCA 588 at [18] went someway to showing that gauging a respondent's capacity to meet a judgment debt was a matter which was relevant as an issue in the proceedings. The passage is as follows: 'These authorities show that the criteria by which one determines whether a subpoena should be set aside, in whole or in part, may be expressed in different ways but ultimately, they all come down to whether such action is required to prevent an abuse of the processes of the court to prevent injustice. As Deane and Gaudron JJ recognised in the comments quoted by Beaumont J (see [16] above), various terms may be used in focusing these concerns on the circumstances of a particular case. In this case, whether the documents are relevant (in the sense used by Beaumont J) will determine the issue provided that the requirements of the subpoena are not otherwise oppressive.' 5 I do not think this provides any support for the submission. Nor do I think that Dorajay considered more generally assists the applicants either. In that case, Stone J permitted a subpoena to require production of litigation funding agreements relating to a representative proceeding. Ordinarily, these could not be relevant to the proceeding. However, Stone J was not concerned with the underlying proceeding, but instead with an application that the proceeding no longer continue as a representative proceeding under s 33N of the Federal Court of Australia Act 1976 (Cth). In the case before her Honour, entry into the funding agreements was a requirement which had to be met in order for a person to be a group member. Her Honour accepted that the funding agreements therefore went to an issue under s 33N because they affected the class definition and hence consideration of the proper exercise of the power in s 33N. In that context, it should be noted that whilst the authorities in this area are usually couched in terms of an issue arising in the principal proceeding, it is just as meaningful to speak of an issue which arises on an interlocutory application. This is because under r 24.12 of the Federal Court Rules 2011 (Cth), a subpoena may be issued in 'any proceeding', where proceeding is defined to mean 'a proceeding in a court, whether between parties or not, and includes an incidental proceeding in the course of, or in connexion with, a proceeding, and also includes an appeal.' I do not doubt that a subpoena may be issued in respect of such an issue. 6 In fact, the applicants' motives for seeking to issue the subpoena may, I think, be more proximately discerned elsewhere. There is, at the moment, something of a non-dispute between the parties in relation to an application for freezing orders by the applicants against the respondent. It is a non-dispute because no such application is on foot and hostilities have progressed no further than an invitation by the applicants to the respondent to reveal its assets and liabilities and a corresponding declining of that invitation by the respondent. I have no particular difficulty in accepting that if such an application were actually on foot then the materials sought in the subpoena would be relevant in the requisite sense (although, inevitably in this case, this would invite further debate as to whether the subpoena was to be seen as a fishing expedition). Any such inquiry might also need to address how the approach to the issue of fishing expeditions and subpoenas in New South Wales sits with this Court's jurisdiction to order non-party party discovery under r 20.23, a procedure which seems to have fallen into desuetude. 7 It was for these reasons that I made the orders which I did. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.