Australian Securities and Investments Commission v Sweeney [2000] NSWSC 1211 | Case summary

1 HIS HONOUR: This is a motion to set aside a subpoena which has been issued by the defendant against the plaintiff ASIC. 2 The case is a very unusual one. I have already considered some aspects of it when dealing with a preliminary point in a judgment I gave yesterday and I will not repeat what I said then. 3 The defendant is not currently in Australia. The plaintiff's claim is one which relates to the defendant's activities when he was in Australia, those activities allegedly taking place on about 30 September 1993. 4 The defendant left Australia, it would seem, on 26 July 1999 and the present proceedings were issued on 27 July 1999. The significance of that is contained in the judgment I gave yesterday. 5 Where process is to be issued for service outside the State, the Court on the decision needs to be very careful to observe two basic principles: (a) that it should not without due cause trespass into the field that is properly filled by a foreign tribunal; and (b) that it should not harass a person who resides outside Australia. This appears from cases such as Sheldon Pallet Manufacturing Co Pty Limited v New Zealand Forest Productions Limited [1975] 1 NSWLR 141 and Arhill Pty Ltd v General Terminal Pty Ltd (1990) 23 NSWLR 545. 6 More recently the High Court of Australia in Agar v Hyde (2000) 74 ALJR 1219, especially at 1227 and following indicated that broadly speaking three matters are examinable when a Court has to consider whether it should set aside an order permitting service outside the jurisdiction or, even stronger in the present case, substituted service outside the jurisdiction. 7 These are:

(3) that the person seeking the orders has made a full and frank disclosure. 8 In the present case comity towards another Court is not in issue because of the rather peculiar nature of these proceedings that was mentioned in the judgment which I gave yesterday. The plaintiff seeks a declaration that the defendant has contravened certain sections of the Corporations Law by his conduct in 1993, an order prohibiting him from managing a corporation in Australia for a period plus certain injunctions. Accordingly, there is no cause of action in the ordinary sense, nor is there any competition between an Australian Court and an overseas Court because only an Australian Court could deal with the matter. However, the question of whether one should harass a person who resides outside Australia by implying an extended jurisdiction of the Court is a live issue. 9 The authorities make it clear that a person seeking this sort of order must make full disclosure. The consequence of not making full disclosure is unclear on the authorities. However, it is abundantly clear that a person served in situations such as the present is entitled to ventilate the issue. In the present case there is an even greater reason for allowing ventilation to take place, and that is that these proceedings do appear to have been issued when they were because it was perceived that there may be some limitation problem. How one has a limitation problem in a summons for a declaration I don't know, but that perception is there and it may be that that is a matter which also needs to be considered. 10 In accordance with the judgment I gave yesterday, another matter which will need to be investigated is what attempts were made to serve process outside Australia before the order for substituted service was obtained. 11 The present situation, as I understand it, is that the motion under Pt 11 r 8 has been fixed for hearing before Austin J from 27 February to 2 March 2001. There are other matters which can be ventilated between the parties. The defendant could have asked that the order of Deputy Registrar Studdert confirming service be set aside. However that has not happened and Mr Pembroke SC, who appeared for ASIC, said the Court in its discretion should not be particularly helpful to the defendant until he makes all his attempts to deal with the matter on "technical grounds" at the one time. There is then the other question as to whether by now the defendant has in fact been served in the normal way, about which I have got no evidence one way or the other, but it may make the whole proceedings otiose. 12 Further, at the moment there is a motion that has been fixed for four days before a Judge of this Court and that the issues in that hearing are at least the harassment matter in the sense that I have used the word "harass" earlier in these reasons, full disclosure, and what attempts have been made to serve before substituted service was obtained. 13 As a normal rule, a party is entitled to a subpoena to produce material relevant to issues relative to the determination by the Court for which the subpoena may assist counsel in cross-examination on those issues, even if the material is not such as may be tendered in evidence. It is enough that the subpoena may produce material for a legitimate forensic purpose: R v Saleam (1989) 16 NSWLR 14. 14 Having worked out those issues clearly the aspects of the subpoena which are relevant to them in the above sense should be allowed. Mr Pembroke SC has said that the Court, because of the peculiarities of the present case, should exercise its discretion not to allow a subpoena at this stage. However, in light of the fact that when documents are produced under a subpoena a Judge or Master will rule on privilege and will rule on what material the defendant should have access to or what he should not have access to at this stage, Austin J is well able to prevent any abuse of process. I cannot see why I should not rule on the subpoena in the normal way. 15 Another point was obliquely raised, and that was that the defendant has not filed an appearance. He does not have to file an appearance and in fact should not file an appearance under Pt 11 r 8. It is arguable that he cannot issue a subpoena without filing an appearance. However, the purpose of Pt 11 r 8 is to allow the person outside the jurisdiction to protest the matter of service without acknowledging the jurisdiction. It would seem to me that it must be an ancillary right that is comprehended under Pt 11 r 8 that reasonable subpoenas can be issued. 16 I should add that even apart from the problem that the same matter may be argued on any application to set aside the order confirming service, the same point may be argued a third time if the Court deals with the merits and considers whether, in its discretion, it should not grant a declaration: see Denkman v Denkman 14 NYS (2d) 450 (1939) referred to in my judgment of yesterday. 17 I have gone through the schedule in the present subpoena with counsel on both sides in an endeavour to confine it to those matters which are relevant as indicated above. In my view, the subpoena is appropriate with respect to paras 1 to 7 in the schedule though adding in after para 2 "in relation to alleged trading in the statement of claim by the defendant in Bendigo Mining". It is also good so far as paras 18, 21, 22, 23, 29, 30, 31, 32 and 34 are concerned, though after both paras 21 and 22 the words "together with any papers recording the reasons for such decision" should be added. It is clear that there may be some questions of privilege with respect to any documents produced to the Court under para 34 and perhaps some other paragraphs as well. 18 I have not dealt with the submissions by Mr Pembroke SC that the Court should exercise its discretion against the subpoena because the decision has been made at the highest level in ASIC to commence these proceedings. That decision, he put, is non-examinable and thus should not be able to be examined by a side wind. Again I think that is a matter which can well be considered, if it be a valid consideration, by Austin J when he starts the hearing of the motion in February 2001. 19 Accordingly, technically, I should probably set aside the subpoena and allow a new subpoena to be issued, but it is probably more sensible merely to say that I would permit this subpoena to stand in respect of the paragraphs outlined in this judgment and the costs of the motion should be costs in the cause. 20 The subpoena may be made returnable before the Equity Vacation Judge at 10 am on 20 December 2000. 21 I said earlier that the whole matter before Austin J may go away if the defendant has been served. I said that in view of my attempt yesterday to deal with the preliminary point which, on further investigation, did not solve the problem, I was conscious that if in fact the proceedings had been served then the current question might become otiose. Mr Barker QC who appears for the defendant informs me they have not been served. Mr Pembroke SC asks for an order under Pt 7 r 7 to extend the time for service notwithstanding that one year from the date of filing the process has expired. A whole series of considerations would arise on that sort of application. I do not consider I should deal with it at the heel of the hunt. Mr Pembroke SC has indicated the plaintiff will file a motion returnable before Austin J and I will leave that matter to be determined by Austin J without further comment.

Australian Securities and Investments Commission v Sweeney

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Judgment (10 paragraphs)

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