Canadian Pacific Tobacco Co Limited v Stapleton

Supreme Court of NSW|2011-11-18|Before: Hislop J, Schmidt J

Introduction 1The plaintiff, by summons filed on 14 June 2011, sought orders pursuant to s 33 of the Evidence on Commission Act 1995 against Export Finance and Insurance Corporation (EFIC) in respect of a request received from the Second Court of Commerce of First Instance of Istanbul. 2The summons was heard by Schmidt J. The hearing was conducted ex parte, no person being required to be joined as a defendant - UCPR 52.1(2). Counsel for the plaintiff informed her Honour that the plaintiff believed EFIC would seek to rely upon s 87 of the Export Finance and Insurance Corporation Act 1991 (Cth) ("the Act") to contest the orders, if made. 3On 22 July 2001 her Honour made the orders sought by the plaintiff but added some introductory words to address the possibility that EFIC may wish to contest the orders. 4The orders made by her Honour were as follows: "1. Unless within 14 days of service of a sealed copy of this Order upon Export Finance and Insurance Corporation ('EFIC') makes an application by way of notice of motion in these proceedings to set aside this Order, EFIC is within 28 days of service of a sealed copy of this Order upon the Proper Officer of EFIC to produce to the Court a copy of: a. the contents of its file reference number 102605, and b. copies of all correspondence, contracts, records of payments made and received and records of claims made and received by EFIC as subrogee of a debt owed to Yavuz Pty Ltd (Australia) by Oktay Omurtak Deri Isletmeleri ve Ticaret AS. 2. The plaintiff be given photocopy access to the documents produced in response to order 1. 3. Leave be granted to the plaintiff to provide a copy of the documents produced in response to order 1 to the 2nd Court of Commerce of First Instance of Istanbul ('the Turkish Court')." 5EFIC responded by notice of motion filed on 9 August 2011. It sought the following orders: "1.The orders made by Schmidt J on 22 July 2011 be set aside. 2.In the alternative, the Proper Officer of the Export Finance and Insurance Corporation be excused from producing the documents described in the orders made by Schmidt J on 22 July 2011 on the ground that production of the documents would breach s 87 of the Export Finance and Insurance Corporation Act 1991 (Cth)." 6EFIC relied upon s 87(4) and (5) of the Act and s 33 of the Evidence on Commission Act 1995 in support of its motion. 7The plaintiff opposed the orders sought by EFIC.

EFIC 8EFIC is a statutory corporation set up under the Act with various functions, duties and general powers (ss 6, 7, 8 and 11). It is managed by the EFIC Board and, subject to direction by the Board, its operations are conducted by the managing director (ss 33 and 77). EFIC may employ such persons as the EFIC Board thinks necessary for the performance of its functions and duties, and the exercise of its powers (s 90(1)). 9The Act provides that the functions of EFIC are to facilitate and encourage Australian export trade by providing insurance and financial services and products to persons involved directly or indirectly in such trade and to encourage banks and other financial institutions carrying on business in Australia to finance, or assist in financing, export contracts or eligible export transactions (s 7). It is to perform its functions in such a manner as will best assist the development of Australian export trade (s 8). EFIC has power to do all things necessary or convenient to be done for or in connection with, or incidental to, the performance of its functions. In particular, it may enter into contracts and do anything incidental to any of its powers or the exercise of any of those powers (s 11). EFIC may enter into export payments insurance contracts with, or for the benefit of, persons carrying on business or other activities in Australia (s 14).

The Turkish proceedings 10In her judgment Schmidt J described the proceedings in the Turkish court as follows: "The case advanced for the Attorney-General was that the material reveals that the Turkish proceedings relate to an Australian company, Yavuz Pty Ltd, which was trading internationally. Money paid into an account in its name, appears to have been paid out of a bank, to a third party, as the result of certain fraudulent documentation. The proceedings involve the Turkish Bank which disbursed the funds. An issue has arisen in the proceedings as to money paid by the Export Finance and Insurance Corporation ('EFIC') pursuant to a trade insurance company, relevant to an assessment of loss and whether there has been any fraud committed in respect of EFIC or the Bank."

The Evidence on Commission Act 1995 11The Evidence on Commission Act, ss 32 and 33, states: "32 Application to the Supreme Court for assistance in obtaining evidence for proceedings in other court (1) The following provisions of this Part apply if an application is made to the Supreme Court for an order for evidence to be obtained in the State and the Court is satisfied: (a) that the application is made in pursuance of a request issued by or on behalf of a court or tribunal exercising jurisdiction in a place outside the State, and (b) that the evidence to which the application relates is to be obtained for the purposes of proceedings which either have been instituted before the requesting court or whose institution before that court is contemplated. (2) This Part does not apply in respect of proceedings relating to the commission of an offence or an alleged offence unless the requesting court is a court of a place in Australia or of New Zealand. 33 Power of the Supreme Court to give effect to application for assistance (1) The Supreme Court has power, if an application is made under section 32, by order to make such provision for obtaining evidence in the State as may appear to the Court to be appropriate for the purpose of giving effect to the request in pursuance of which the application is made. (2) An order under this section may require a specified person to take such steps as the Court may consider appropriate for that purpose. (3) Without limiting the generality of subsections (1) and (2), an order under this section may, in particular, make provision as follows: (a) for the examination of witnesses, either orally or in writing, (b) for the production of documents, (c) for the inspection, photographing, preservation, custody or detention of any property, (d) for the taking of samples of any property and the carrying out of any experiments on or with any property, (e) for the medical examination of any person, (f) without limiting paragraph (e), for the taking and testing of samples of blood from any person. (4) An order under this section is not to require any particular steps to be taken unless they are steps that can be required to be taken by way of obtaining evidence for the purposes of proceedings in the Supreme Court (whether or not proceedings of the same description as those to which the application for the order relates). (5) Subsection (4) does not preclude the making of an order requiring a person to give testimony (either orally or in writing) otherwise than on oath if this is asked for by the requesting court. (6) An order under this section must not require a person: (a) to state what documents relevant to the proceedings to which the application for the order relates are or have been in the person's possession, custody or power, or (b) to produce any documents other than particular documents specified in the order and appearing to the court making the order to be, or likely to be, in the person's possession, custody or power. (7) A person who, because of an order under this section, is required to attend at any place is entitled to similar conduct money and payment for expenses and loss of time on attendance as is a witness in proceedings before the Supreme Court."

Section 87 of the Act 12Section 87 of the Act states: "(1) This section applies to the following persons: (a) a person holding an appointment as Chairperson or Deputy Chairperson; (b) a person acting as Deputy Chairperson; (c) a person holding an appointment as Managing Director or Deputy Managing Director; (d) a person acting as Deputy Managing Director; (e) a member of the Board referred to in paragraph 34(1)(e) or (f); (f) a person employed by EFIC. (2) A person to whom this section applies is authorised: (a) to disclose information concerning the affairs of another person acquired by the firstmentioned person because of his or her duties under this Act; or (b) to produce a document containing such information; to the Minister, to the Secretary of the Department, or to an officer of the Department designated by the Secretary. (3) A person to whom this section applies is authorised to disclose information, or produce a document, referred to in subsection (2) to another person if the disclosure or production is for the purposes of this Act. (4) Subject to subsections (2) and (3), it is the duty of a person to whom this section applies not to publish or communicate any information of the kind referred to in paragraph (2)(a) or a document containing any such information. (5) A person to whom this section applies must not make a record of any information of the kind referred to in paragraph (2)(a) except for the purposes of this Act. Penalty: Imprisonment for 6 months. (6) This section does not prevent EFIC from communicating to another person particulars of: (a) a guarantee given, or proposed to be given, under this Act; or (b) a contract entered into, or proposed to be entered into, under this Act; or (c) a loan made, or proposed to be made, under this Act. (7) In this section: produce includes permit access to."

Explanatory memorandum 13The Explanatory Memorandum accompanying the EFIC Bill states: "The purpose of this Bill is to establish an independent Export Finance and Insurance Corporation (EFIC) to effect the separation of the export finance and insurance function from the other operations of the Australian Trade Commission... Clause 87 Secrecy 115 Requires Board members and employees of EFIC to observe secrecy in relation to information relating to the affairs of other persons which they acquire as part of their duties. Such information may however be disclosed to the Minister, the Secretary to the Department and officers in the Department nominated by the Secretary and to a court where this is necessary for the purposes of, or a prosecution for an offence against, the proposed Act."

The Second Reading Speech 14The Second Reading Speech records: "EFIC will continue to work with the financial sector and not in competition with it, to provide Australian exporters with access to competitive credit insurance and export finance facilities. This is an essential part of the international trade environment and especially of the Asia-Pacific region."

The submissions 15The initial issue joined between the plaintiff and EFIC was whether the production of the documents the subject of the orders or the making of copies of such documents was "for the purposes of this Act". 16EFIC submitted the production of the documents was not "for the purpose of this Act" as: (a)the Act was limited to purposes directly arising out of its provisions and which directly promoted one of the functions of the corporation as set out in the Act; (b)the production sought was for the purposes of private litigation about a debt to which EFIC was not a party and which was wholly outside the purposes of the Act; (c)there was no evidence that EFIC could take some indirect benefit out of the litigation in Turkey that would suffice to bring the disclosure within the purposes of the Act. 17EFIC further submitted: (a)the prohibition in sub-s (4) was very wide being a general prohibition against publishing or communicating the information; (b)to "publish or communicate" was broader than to "disclose" or "produce"; (c)sub-s (4) was not limited to publication or communication to "another person" (see Canadian Pacific Tobacco Co Limited v Stapleton (1952) 86 CLR 1) and thus, in the absence of a specific provision to the contrary, applied to publication and communication to a court; (d)the provision of copies of information to the court or to the Attorney-General was clearly a publication or communication. That was the only sensible construction of those terms. The making of a copy as a record was plainly within sub-s (5). 18The plaintiff submitted, in essence, that the production of the documents sought was for the purposes of the Act as - (a)"the participation of EFIC in private commercial litigation is necessarily incidental to the performance of its functions in promoting Australia's export trade. It is incidental to the purpose of promoting that trade to enable its documents and its records for payment and its records of its insurance arrangements with those private trade individuals to be used for an appropriate purpose where disputes arise between those same private trade individuals. If that is so then the provision of documents to the court is authorised by s 87(3)"; (b)"it would be astonishing if the secrecy provisions operated differently simply because EFIC was or was not a party to the litigation in which the provision of its documents was sought. Section 87 could not be construed as prohibiting the court from ordering the production of documents in proceedings in which EFIC was a party"; (c)"there is nothing in the commercial sensitivity of the information obtained by EFIC that puts EFIC in any different position to any other trade insurer"; (d)The cases that address the question of whether disclosure to a person includes disclosure to a court do not assist because they do not say that if the words "to a person" were not there, that that would result in the prohibition extending to production to courts. Had it been the intent of the legislature, the Parliamentary Draftsman could have chosen to include a provision which prohibited production of documents to a court as had been done in other cases. The court should not too readily find that sub-s(4) prohibited production of documents to a court in any event. 19The plaintiff further submitted: (a)sub-s (3) applies to the disclosure of information or the production of the documents. Sub-section (4) only prohibits the publication or communication of information or a document containing such information. The subject matter of sub-s (4) should be construed "as being of a narrower class than the subject matter of sub-s (3). That being so, the publication or communication of information or the publication or communication of the document containing any such information is not to be equated with the production of a document which appears in sub-s (3)"; (b)the production of a document to the Supreme Court is not the publication of the document and it is not a communication of the document. Once the documents are produced to the court the secrecy provision in s 87 does not apply; (c)"making a record of any information" within sub-s (5) should not be construed so as to prohibit a person from making a copy of the document. The recording of information properly considered refers to the reduction of information obtained by a person to material form.

Determination of s 87 issue 20Sub-sections (2), (3), (4) and (5) of s 87 apply to information, or a document containing information "concerning the affairs of another person acquired by [a person identified in sub-section (1)] because of his or her duties under this Act" - sub-s 2(a). The plaintiff conceded the documents the subject of the orders were documents concerning the affairs of another person acquired by [a person identified in sub-s (1)] because of his or her duties under the Act. 21I accept EFIC's submission that the language of the Act is such as to limit "the purposes of this Act" to purposes directly arising out of its provisions and which directly promote one of the functions of EFIC as set out in the Act. 22The production of documents for the assistance in litigation between third parties in another jurisdiction was not for the purposes of the Act. Neither sub-ss (2) nor (3) has application. 23The intent of the Act is that such information or a document containing such information should not be published or communicated unless its disclosure or production is authorised by sub-ss (2) or (3). A record of such information shall not be made except for the purposes of the Act (sub-s (5)). 24In my opinion sub-s (4) applies in all circumstances other than where disclosure is permitted under sub-ss (2) and (3) (subject to the application of sub-s (6)). "Publication" and "communication" in sub-s (4) are wider in their ambit than "disclose" or "produce" in sub-ss (2) and (3). Sub-section (5) prevents the making of a copy of a document containing proscribed information. This construction is consistent with the Explanatory Memorandum.

The Evidence on Commission Act issues 25EFIC submitted that the Court, in its discretion under s 33(1) of the Evidence on Commission Act or pursuant to s 33(4), would not require the production of documents and information prohibited by s 87(4) of the Act or the making of a record pursuant to s 87(5). 26The plaintiff conceded the exercise of the discretion under s 33 would miscarry if the Court required the production of documents contrary to the prohibition or clear terms of s 87(4) or the making of a record contrary to the prohibition in s 87(5). 27In The Application of Monier Inc [2009] NSWSC 986; 76 NSWLR 158 Mathews AJ held the requirement of s 33(6)(b) of the Evidence on Commission Act 1995 that documents to be produced under the section be "particular documents specified in the order" meant that individual documents had to be separately described. It was not sufficient that the subpoena specified an objective criterion by reference to which the documents could be identified, such as documents that "record or refer to" particular matters. 28EFIC submitted that order 1(b) of the subject orders failed to specify the documents with the degree of particularity required by s 33(6)(b). 29Plaintiff's counsel stated that he did not wish to be heard against EFIC's submissions in this regard. He did however submit that Schmidt J had, in the terms of her orders, permitted only a challenge pursuant to s 87. I do not read her Honour's orders as being so limited. In my opinion, once the application was brought by EFIC each of the orders was open to challenge. Indeed, it is arguable that once the application was made by EFIC within the time specified by her Honour, her Honour's other orders had no application. 30In my opinion, EFIC's challenge to order 1(b) is well founded as is its reliance on sub-s (4) of the Act. 31In his submissions counsel for the plaintiff stated that if the Court was against the plaintiff on the substantive issue raised by the notice of motion the plaintiff would consent to the setting aside of the orders of Schmidt J. 32In my opinion, the orders made by Schmidt J on 22 July 2011 should be set aside.

Orders 331. The orders of Schmidt J made on 22 July 2011 are set aside. 2. The plaintiff is to pay EFIC's costs of, and associated with, the notice of motion filed on 9 August 2011.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 18 April 2012

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