The Law
49By UCPR rule 33.2:
"(1)The court may, in any proceeding, by subpoena order the addressee:
(a)to attend to give evidence as directed by the subpoena, or
(b)to produce the subpoena or a copy of it and any document or thing as directed by the subpoena, or
(c)to do both of those things."
50Rule 33.2 enables the "issue" of a subpoena. That is a step separate from serving a subpoena so issued.
51Service of a subpoena is regulated by UCPR rule 33.5(1) which provides that a subpoena must be served personally on the addressee. Because the issue of service of the subpoena does not arise, in this case, it is unnecessary to deal further with the rules in the UCPR that relate to service of a subpoena.
52UCPR rule 33.4, relevantly, provides:
"(1) The court may, on the application of a party or any person having a sufficient interest, set aside a subpoena in whole or in part, or grant other relief in respect of it.
(2) An application under subrule (1) must be made on notice to the issuing party.
(3) The court may order that the applicant give notice of the application to any other party or to any other person having a sufficient interest."
53Service of documents out of the jurisdiction depends on statutory authority, the source of which authority is to be found in rules of court. There is no inherent extra-territorial jurisdiction: Waterhouse v Reid [1938] 1 K.B. 743, per Greer LJ at 747. As will be seen, historically, this jurisdiction has been regarded as an "exorbitant" one.
54UCPR rule 11.5 provides:
"11.5 Service of documents other than originating process
Service outside Australia of a document other than originating process is valid only if it is effected pursuant to the leave of the Supreme Court or is subsequently confirmed by the Supreme Court."
55This rule reproduces the substance of the Supreme Court Rules 1970, Part 10 rule 3 (repealed), which was in the following terms:
"Service outside the State of a document other than originating
process is valid if the service is in accordance with the prior leave of the Court or is confirmed by the Court."
56The UCPR Dictionary defines "document" as including "any part of a document and any copy of a document or part of a document".
57UCPR rule 4.3(1) states "a document must be on standard A4 paper of durable quality, capable of receiving ink writing".
58UCPR rule 6.1 speaks in terms of no step in the proceedings being taken without having filed an "originating process" or an "appearance". The only "originating process" referred to in that rule is "a statement of claim or summons". This is confirmed by UCPR rule 6.2, which provides that subject to the rules, the practice notes, and any other rules of court, a person may commence proceedings in the court by filing a statement of claim or a summons.
59Whilst a subpoena cannot be regarded as "originating process", there is no reason why a subpoena should not be characterised as a "document".
60The question, then, in this case, is whether UCPR rule 11.5 authorises service of a subpoena outside Australia, which subpoena compels the production of documents by a person not within the jurisdiction of the Court.
61Before dealing with that issue, I should deal with the Plaintiff's submission that the Applicant is "present" in NSW.
62The classic statement of the principle regarding "presence" is that of Buckley LJ in Okura & Co Ltd v Forsbacka Jernverks Aktiebolag [1914] 1 KB 715 at 718-719:
"The question in this case is whether the defendants, who are a foreign corporation, can be served with a writ in this country. The answer to that question depends on whether the defendants can be found 'here' for the purpose of being served. In one sense, of course, the corporation cannot be 'here'. The question really is whether this corporation can be said to be 'here' by a person who represents it in a sense relevant to the question which we have to decide. The point to be considered is, do the facts shew that this corporation is carrying on its business in this country? In determining that question, three matters have to be considered. First, the acts relied on as shewing that the corporation is carrying on business in this country must have continued for a sufficiently substantial period of time. That is the case here. Next, it is essential that these acts should have been done at some fixed place of business ... The third essential, and one which it is always more difficult to satisfy, is that the corporation must be 'here' by a person who carries on business for the corporation in this country. It is not enough to shew that the corporation has an agent here; he must be an agent who does the corporation's business for the corporation in this country. This involves the still more difficult question, what is meant exactly by the expression 'doing business'?"
63In South India Shipping Corporation Ltd v Export-Import Bank of Korea [1985] 1 W.L.R. 585, Ackner LJ at 589 said:
"Those expressions [expressions as "reside" or "carry on business"] were used as convenient tests, to ascertain whether the corporation had a sufficient 'presence' within the jurisdiction, since 'generally,' courts exercised jurisdiction only over persons who 'are within the territorial limits of their jurisdiction.' Apart from statute 'a court has no power to exercise jurisdiction over anyone beyond its limits,' per Cotton L.J. in In re Busfield (1886) 32 Ch.D. 123, 131, quoted by Lord Scarman in Bethlehem Steel Corporation v. Universal Gas (unreported), 17 July 1978, House of Lords."
64In Adams v Cape Industries plc [1990] 1 Ch 433, the defendant was an English company and head of a group engaged in mining asbestos in South Africa. A wholly owned English subsidiary was the worldwide marketing body, which protested the jurisdiction of the United States Federal District Court in Texas in a suit by victims of asbestos. The defendant took no part in the United States proceedings and default judgments were entered. Actions on the judgment in England failed. The Court of Appeal, at 523, derived a number of principles from the authorities:
"Phrases referring to residence or presence within the jurisdiction, or equivalent phrases, have been used by way of shorthand reference to the condition (or one of the conditions) which a foreign corporation has to satisfy if it is to be amenable to the jurisdiction of the English court. And indeed they have been used more or less interchangeably by the courts. One typical example is the phraseology used by the Earl of Halsbury L.C. in La Compagnie Générale Transatlantique v. Thomas Law & Co., La Bourgogne [1899] A.C. 431, who said, at p. 433:
"It appears to me that as a consequence of these facts the appellants are resident here in the only sense in which a corporation can be resident - to use the phrase which Mr. Joseph Walton has so constantly referred to, they are 'here;' and, if they are here, they may be served."
Perhaps the most helpful guidance in determining whether a foreign corporation is "here" so as to be amenable to the jurisdiction of our courts is the following passage from the judgment of Buckley L.J. in the Okura case [1914] 1 K.B. 715, 718-719 ..."
65His Lordship also said:
"As [counsel for the defendants] submitted, save in cases which turn on the wording of particular statutes or contracts, the court is not free to disregard the principle of Salomon v. A. Salomon and Company Limited ... merely because it considers that justice so requires. Our law, for better or worse, recognises the creation of subsidiary companies which though in one sense the creatures of their parent companies, will nevertheless under the general law fall to be treated as separate legal entities with all the rights and liabilities which would normally attach to separate legal entities."
66And at 536, his Lordship considered the significance of the relationship between the parent and the subsidiary:
"In deciding whether a company is present in a foreign country by a subsidiary, which is itself present in that country, the court is entitled, indeed bound, to investigate the relationship between the parent and the subsidiary. In particular, that relationship may be relevant in determining whether the subsidiary was acting as the parent's agent and, if so, on what terms."
67In Fiduciary Ltd v Morningstar Research Pty Ltd [2004] NSWSC 381, Gzell J summarised the authorities:
"[30] The concept of presence in a jurisdiction sufficient to subject a corporation to the jurisdiction of the courts has been developed by reference to activities of sufficient significance to make it appropriate that the corporation be amenable to the local jurisdiction.
[31] A not dissimilar approach has been taken in the international law relating to relief from double taxation. It has been a feature of conventions for the avoidance of double taxation that business profits of an enterprise are taxable only in the country of residence unless the enterprise carries on business in the country of source through a permanent establishment. A permanent establishment is a fixed place of business through which the business of an enterprise is carried on or an agent acting on behalf of an enterprise habitually exercising in the country of source an authority to conclude contracts in the name of the enterprise. An agent of independent status acting in the ordinary course of business is excluded (Model Double Taxation Convention on Income and on Capital, OECD, Paris, 1997, Art 5 and Art 7 and commentaries. See, generally, Arvid A Skaar, Permanent Establishment: Erosion of a Tax Treaty Principle, Kluwer, Deventer, 1991).
...
[38]... Presence in Australia requires elements additional to the carrying on of business. A simple example will suffice. A Hong Kong company carrying on a tailoring business that sends a representative to a hotel room in Australia for short periods of time to take measurements for garments and receive orders may carry on business in Australia but, in the absence of a fixed place owned or leased by it and operated for more than a minimal period of time, the company is not in Australia."
68The mere presence of assets of a company within the jurisdiction does not, by itself, constitute presence within the jurisdiction. In this case, merely holding all of the shares in the Defendant does not mean that the Applicant is "present" in NSW. There is no evidence that the Applicant carries on its business here; there is no evidence, in fact, of any activities here, certainly no activities of sufficient significance to make it appropriate that the Applicant could be regarded as being amenable to the local jurisdiction. (I make clear that I am not attempting to define the scope of possible activities that would suffice to demonstrate "presence" within the jurisdiction.)
69I am fortified in this conclusion by the fact that when the subpoena was issued, the Plaintiff sought leave to serve the Applicant out of the jurisdiction. Competent solicitors and counsel represent the Plaintiff, then, and now. If it were obvious that the Applicant was "present" within the jurisdiction, I do not think the point would have then been missed.
70I turn then to UCPR rule 11.5. The invocation of the power under rule 11.5 is controlled by the need for prior leave, or subsequent confirmation, by the Court in the case of service unless the recipient waives objection. However, no criteria are specified in the rule for granting, or not granting, leave, or subsequent confirmation. Nor does the rule identify the facts to be established if leave to serve is to be granted, or subsequently confirmed, so that all the circumstances of the case must be taken into account. The rule suggests, as well, that a discretionary power exists to decline jurisdiction, either by refusing leave to issue the subpoena, or by setting aside the subpoena where it has been issued and served.
71There is no reason why rule 11.5 should not be given its literal and natural meaning. It is widely expressed and the phrase "document other than originating process" is broad enough to include a subpoena.
72However, as has been noted above, the principal argument against exercising the power to grant leave to serve a document outside Australia is that the jurisdiction of domestic Courts is essentially territorial in nature and that legislative permission to serve judicial documents in overseas jurisdictions is an exception to the principle of territoriality.
73The earliest Australian authority that my researches have revealed (to which neither party specifically referred) on the question, is Ward v Interag Pty Ltd [1985] 2 QdR 552, a decision of Master Lee QC, in the Supreme Court of Queensland, in which case the question whether a subpoena, purporting to compel the attendance of a person (an Australian citizen resident in Saudi Arabia) then in a foreign country (Saudi Arabia), to give oral evidence in the Supreme Court of Queensland at a trial of an action, could be served out of the jurisdiction (i.e. out of Australia) in that foreign country was in issue.
74The learned Master noted, at the commencement of the judgment that Counsel had stated that his researches into the law in England, Canada, South Africa, New Zealand and Australia had produced no authority or guidance in relation to this particular point.
75Then, the learned Master discussed the alternatives that might be available. Relevantly, he referred to O. 11, r. 4A of the Rules of the Supreme Court of Queensland which provided:
"Subject to paragraph (2) of this Rule, service out of the jurisdiction of any summons, notice or order issued, given, or made in any proceedings is permissible with the leave of the Court."
76He concluded:
"In all of the circumstances of this case and having regard to the helpful submissions of counsel, I am unable to conclude that a writ of subpoena runs beyond the jurisdiction without statutory extension or that there is power to give leave to serve a subpoena in Saudi Arabia. I therefore conclude as follows:
(1) A writ of subpoena, as with a writ of summons, does not run beyond the territorial jurisdiction of the Court without statutory authorisation such as contained in s. 16 of the Service and Execution of Process Act and s. 49 of the Supreme Court and Judicature (Consolidation) Act 1981 (U.K.). Indeed, these two statutes reinforce the notion that a subpoena cannot otherwise be served out of the jurisdiction. This probably accounts for the lack of discovered authority on the point raised in this application.
(2) There is no inherent power to give leave to serve a subpoena out of the jurisdiction. Nor, it would seem, is there a power to validly serve a subpoena out of the jurisdiction without leave. This may depend upon whether there is an exception in the case of a British subject, but also upon the law of the country where service is sought to be effected.
(3) A writ of subpoena does not fall within the expression "summons, notice or order" in O. 11, r. 4A. Whether or not a subpoena which the first defendant might elect to issue will be voluntarily obeyed if notice of it comes to the attention of the witness is a question on which I express no opinion. Nor do I express any view as to whether or not service of a subpoena without leave on the witness would otherwise comply with the laws of Saudi Arabia, there being no evidence on that subject before me."
77In the circumstances, Master Lee QC refused the application.
78Ward v Interag Pty Ltd was referred to by McLelland J in Re Austral Oil Estates Ltd (in liq) (1986) 7 NSWLR 440. In that case, an application was made, ex parte, to the Registrar on behalf of the liquidator of Austral Oil Estates Limited (the company) by summons filed 24 September 1986 for an order under s 541 of the Companies (NSW) Code that a former director of the company attend before the Court for examination. The director was then a resident of Victoria and any order made would have had to be served on him there. In consequence of a reference to the Court by the Registrar pursuant to Part 61 rule 2A of the Supreme Court Rules, it was necessary for his Honour to determine the means by which an examination order under s 541 could properly be served in another State in the light of the provisions of Part 10 of the Supreme Court Rules and of the Service and Execution of Process Act 1901 (Cth).
79So far as is relevant to the present case, his Honour noted that an examination order could not be effectively served outside the State except in pursuance of some statutory authority: Re Anglo-African Steamship Co 32 Ch D 348, referred to with approval in Gosper v Sawyer (1985) 58 ALR 13 at 18; and Ward v Interag Pty Limited. Nor was it "originating process" within the meaning of Part 10 of the Supreme Court Rules, but would be a "document other than originating process" within the meaning of Part 10 rule 3.
80His Honour then considered whether, and if so how, service of an examination order may be effected in another State under the Service and Execution of Process Act and concluded that an examination order fell within the description of "any writ (other than a writ of summons) notice decree or other process" within the meaning of s 14 of that Act and, therefore, that service in another State of an examination order could be effected without any leave for such service being necessary.
81The authority to which each party referred was Arhill Pty Ltd v General Terminal Co Pty Ltd, a decision of Rogers CJ in Comm Div in which his Honour dealt, specifically, with the service of subpoenas requiring the production of documents which had been issued against a company in Japan. It was submitted that the Court had no power to give leave for the issue of a subpoena for service on a Japanese company in Japan.
82His Honour said, commencing at 550:
"It is at the heart of exercise of jurisdiction, by courts taking their system from England that, jurisdiction rests on presence or submission. Relevantly that is recognised in the concept that the courts of a State will exercise jurisdiction over persons upon whom service may be effected within the boundaries of the State, or those who submit. Admittedly, that concept has received some extension or enlargement. ... Today, almost ever sophisticated court system permits the service of process outside the territorial jurisdiction of the State, in certain specified circumstances. However, these circumstances are, in every case, most carefully defined in a manner which maintains a relationship between the action, in relation to which the process is sought to be served, and the State. Even so, the exercise of such jurisdiction has been described as "exorbitant" jurisdiction: The Siskina; Siskina (Owners of cargo lately laden on board) v Distos Compania Naviera SA [1979] AC 210 at 254 per Lord Diplock.
...
Another way of stating the point is, "that a foreigner, resident abroad, will not lightly be subjected to a local jurisdiction". The basis of that approach lies essentially in the respect which a State has for the sovereignty of another State. In other words, without the consent of the other State, the sovereign does not seek to exercise its rights and powers, in relation to legal proceedings, within the territory of another ..."
83However, his Honour went on to say, at 553:
"Part 10, r 3 is in terms clear authority for the Court to give leave to serve a subpoena outside Australia. The fact that an order made pursuant to it could, in some instances, involve an infringement of the sovereignty of another country does not mean that it is a reason for holding the rule to be invalid. Nonetheless, the rule should be construed consistently with "the established criteria of international law with regard to comity": cf Re Tucker (at 758; 611). Whichever way the rule is read down it will not authorise giving leave to serve a Japanese company in Japan."
84As will be seen later, Rogers CJ in Comm Div went on to say that even if an order for leave could be made under the rule, there would be a strong argument for setting aside any order for service as a matter of discretion.
85Despite the submission to the contrary by counsel for the Applicant, I am satisfied that Rogers CJ in Comm Div made clear that rule 10.3 of the Supreme Court Rules was "clear authority for the Court to give leave to serve a subpoena outside Australia". It would be futile to give leave to serve a subpoena outside Australia if issuing the subpoena for service overseas was of no legal effect.
86In Re Deposit and Investment Co Ltd (1991) 30 FCR 463, Lockhart J considered that an order to attend for examination under s 597 of the Corporations Law, was "a document other than originating process" within the meaning of Order 8 of the Federal Court Rules 1979 (Cth). His Honour dealt with the issue saying:
"Rule 3 provides: "Service outside Australia of a document other than originating process is valid if the service is in accordance with the prior leave of the Court or is confirmed by the Court." Counsel for the applicant relies entirely on r 3 as the statutory source of the court's jurisdiction to authorise the service of the s 597 examination orders on persons resident in Hong Kong and Japan.
A s 597 examination order has frequently been called the exercise of an extraordinary power: see Re North Australian Territory Co (1890) 45 Ch D 87 at 93; Re Rolls Razor Ltd (No 2) [1970] 1 Ch 576 at 591-2. However, I am satisfied that an order to attend for examination before this court pursuant to s 597 is "a document other than originating process" within the meaning of r 3: see Re Austral Oil Estates Ltd (in liq) (1986) 7 NSWLR 440 at 441, a decision of McLelland J of the Supreme Court of New South Wales to the same effect with respect to an examination order under s 541 of the Companies (New South Wales) Code, the predecessor of the present s 597: See also B P Exploration Co (Libya) Ltd v Hunt [1980] 1 NSWLR 496 at 501-504, a decision of Hunt J of the Supreme Court of New South Wales.
Rule 3 of O 8 of this Court's Rules relates to matters of procedure, not jurisdiction. The present question is one of jurisdiction, not procedure. Rule 3 is a very different provision to rr 1 and 2. The extensions found in r 1 to the common law rule that jurisdiction is based on presence within the geographical jurisdiction of the court provide significant connecting factors sufficient to justify the court exercising jurisdiction in relation to persons outside the jurisdiction. The connecting factors are necessary to respect the sovereignty of foreign jurisdiction. However, once they are shown, the court has power to assume jurisdiction. Rule 3 is couched in very wide terms and would include an examination order, but it must be read as a procedural provision and not as an extension of the court's jurisdiction to those served persons. To invade the sovereignty of another country's jurisdiction and interfere with its sole power over persons present within it, stronger and clearer language is needed than appears from r 3: see for example, ss 32G and 32L of the Federal Court of Australia Act 1976 (Cth). There is therefore no statutory authority to authorise the making of the examination order in this case. (emphasis added)"
87(I should mention that rules 1 and 2 of Order 8 to which his Honour referred, related to the service of originating process outside Australia and contained detailed provisions as to the cases in which such process may be served. Such cases generally involved some link between the forum and the subject matter involved. Rule 2(2) stated the matters of which the court must be satisfied before authorising service. Apart from requiring that a circumstance mentioned in rule 1 be made out, the court was required to be satisfied that the proceeding is a proceeding in which the court has jurisdiction.)
88In Aetna Pacific Securities Ltd v Hong Kong Bank of Australia Ltd (29 April 1993, Giles J, unreported), by notice of motion, the defendant Bank applied in the alternative for (i) leave to serve subpoenas outside Australia on Aetna International Inc and Aetna Investment Management (Hong Kong) Ltd; or (ii) an order directing Aetna to procure from Aetna International Inc and Aetna Investment Management (Hong Kong) Ltd copies of all documents of the nature described in a particular schedule in the possession, custody or control of those companies, and to file and serve a supplementary list of the documents so procured.
89Giles J, in dealing with the service of a subpoena overseas, and having referred to what Rogers CJ in Comm Div had said in Arhill Pty Ltd v General Terminal Company Pty Ltd, said:
"However, in the present case it is unnecessary to decide whether or not Pt 10 R 3 authorises the grant of leave sought by the Bank (and no other basis for the grant of leave was put forward). In my opinion, even if leave could be given it ought not be given.
A significant reason for that, perhaps sufficient in itself, is that the Court's command could not be enforced against Aetna US or Aetna HK, and concern for the integrity of the Court's commands requires that it not make futile orders. Extra-territorial service of subpoenas may or may not be particularly at odds with the respect to be had for the sovereignty of another State (see the discussion in Arhill Pty Ltd v General Terminal Company Pty Ltd), but on any view before this Court issued a command to a corporation in a State outside Australia requiring that it produce documents in this State it would have to be satisfied at the least that the documents were of great significance, that their production was necessary for the just disposition of these proceedings, and that an undue burden would not be imposed upon the corporation. Taking up the matters to which I refer later in these reasons, I am not so satisfied. Quite apart from the question of enforcement, I consider that regard to the sovereignty of the foreign States, the status of Aetna US and Aetna HK as foreign corporations which should not lightly be subjected to the jurisdiction of this Court, and the lack of satisfaction just mentioned, require that the first limb of the Bank's motion should be refused."
90In News Corporation Ltd v Lenfest Communications Inc (1996) 40 NSWLR 250, Giles CJ Comm D, noted, in circumstances quite different from the present, that, as a matter of principle, a foreigner should not lightly be subjected to the Court's extraterritorial jurisdiction and that a court must be cautious in exercising its local sovereignty over a foreigner. His Honour also noted that the court has no power to make orders against a person outside its territorial jurisdiction unless authorised by statute and that there is no inherent extra-territorial jurisdiction.
91His Honour, at 257-258, observed:
"Accepting that the court has no power to make orders against persons outside its territorial jurisdiction unless authorised by statute and that there is no inherent extra-territorial jurisdiction (see Waterhouse v Reid [1938] 1 KB 743 at 747, cited in Mercedes Benz AG v Leiduck (at 296-297)), under the authority of statute Pt 36, r 16 confers a power. The invocation of the power is controlled by the need for prior leave or confirmation in the case of service of a notice to produce upon a foreign defendant who does not have an address for service (see Pt 10, r 3), and by the provision for an order otherwise in the case of service of a notice to produce upon a foreign defendant who has, by applying pursuant to Pt 11, r 8, provided an address for service and is at least to the extent of his application participating in the proceedings. Production of documents is part of the court's procedures to arrive at a final judgment including the steps towards that result such as resolving any dispute over the court's jurisdiction or the exercise of its jurisdiction, and differs from the grant of a Mareva injunction; further, absence of power when there is no jurisdiction over the defendant for a substantive judgment does not mean that there is no power for the purpose of determining whether there is jurisdiction or whether jurisdiction should be exercised: compare Altertext Inc v Advanced Data Communications Ltd [1985] 1 WLR 457 holding that an interlocutory injunction of the Anton Piller kind (Anton Piller K G v Manufacturing Processes Ltd [1976] Ch 55) against a foreigner before service of originating process had a "provisional" or "suspended" effect until the assumption of jurisdiction was complete; but note the doubt expressed in ANZ Grindlays Bank PLC v Hussein (1991) 4 WAR 296 at 300.
In my view, therefore, unless on its proper construction it does not extend to that situation (which was Lenfest's second argument), Pt 36, r 16 empowers service of a notice to produce where one of the parties is a foreigner who has not submitted to the jurisdiction of the court and has on foot an unresolved contest over that jurisdiction. It is not excluded simply because jurisdiction or the exercise of jurisdiction is in question. It might be observed that if the argument were correct there would be no power for the court to make interlocutory orders, at Lenfest's request, binding upon News, for the purposes of or pending the outcome of its application pursuant to Pt 11, r 8. The validity of the notices to produce served by a party in the position of Lenfest, at least so far as it was seeking a favourable discretion not to exercise jurisdiction, was upheld in Cigna Insurance Australia Ltd v CSR Ltd (Rolfe J, 10 November1995, unreported), with the observation that it may well be that a similar conclusion would be reached if the application were brought under the other provisions of Pt 11, r 8."
92At 259, his Honour, also observed:
"It is not entirely clear whether Arhill Pty Ltd v General Terminal Co Pty Ltd relevantly involved construction of the rule providing for service of subpoenas to exclude service on a foreigner (no power) or refusal of leave to serve the subpoena (power but adverse exercise of discretion). "
93In Gao v Zhu [2002] VSC 64, an application was made by the Bank of China to set aside a subpoena that had been served on it by the plaintiff. Habersberger J referred to rule 7.06(c) of Chapter 1 of the Supreme Court (General Civil Procedure) Rules 1996 (Vic) which provided that the Court may, by order, allow service out of Australia of "any summons, order or notice in any proceeding". At [12], his Honour pointed out that a subpoena for production of documents is in the form of an order of the Court and then referred to Arhill Pty Ltd v General Terminal Co Pty Ltd saying that the equivalent New South Wales rule authorised the Court to grant leave for service of a subpoena outside of Australia.
94Habersberger J concluded at [13] that "it is clear ... regardless of which Shanghai branch the documents may be at, what was being sought was an infringement of the sovereignty of the People's Republic of China. The subpoena was an attempt to compel a foreigner, under threat of punishment for contempt, to produce documents in respect of conduct outside the jurisdiction". His Honour, therefore, concluded that the subpoena to the Bank of China should be set aside.
95In Stemcor (A/sia) Pty Ltd v Oceanwave Line SA [2004] FCA 391, Allsop J (as his Honour then was) sitting in the Federal Court, was dealing with an application seeking leave under O 27 of the Federal Court Rules to issue a subpoena for production to a foreign company, present in Germany and not present in Australia. His Honour did not decide the question of power saying:
"[7] A subpoena for production is an order of the court to attend before the court and produce documents. Failure to comply with the order is said by the subpoena to be (as depending on the facts, it may be) a contempt of court punishable by arrest or sequestration.
[8] The Convention in question deals with service. It does not provide or evidence agreement by Germany of courts in Australia ordering German citizens or corporations to comply with their orders on pain of punishment.
[9] The first question, as a matter of logic, is whether s 38(1) of the Act and O 27 r 2 of the Rules purport to authorise the issue of a subpoena outside Australia: that is, whether there is power to grant leave. The defendant says that they do not extend so far. Reliance was placed on Laurie v Carroll (1958) 98 CLR 310 and Ward v Interag Pty Ltd [1985] 2 Qd R 552.
[10] Though the Act and Rules are in a different form from that dealt with by Rogers CJ Comm D in Arhill Pty Ltd v General Terminal Company (1991) 23 NSWLR 454, significant assistance is to be gained from his Honour's reasons in that case.
[11] It is unnecessary for me to decide the question of power. At the moment I am not prepared to grant leave to issue the subpoena even assuming that the court has power. I do not refuse to do so for any discretionary reason attendant upon an appreciation of the issues of the case. Rather, I would adopt the approach of Rogers CJ Comm D in Arhill and view the service of an order upon a German company demanding that it do something in Australia on pain of punishment in proceedings to which it has not submitted as such an invasion of German sovereignty as not to be contemplated except in the most exceptional circumstances (assuming there to be power). See also Mackinnon v Donaldson, Lufkin and Jennrette Securities Corporation [1986] Ch 482; and Gao v Zhu [2002] VSC 64.
[12] Such a subpoena, if served, even using the methods contemplated by the Convention, is not capable of enforcement. Without other steps being taken to enlist German governmental assistance (whether executive or judicial), Australian courts cannot enforce compliance on pain of punishment. In the absence of enforcement procedures the order is an empty threat, or the equivalent of a mere request couched in imperative terms. The court should not be seen to be engaged in such conduct. A similar view was expressed by Giles J in Aetna Pacific Securities v Hong Kong Bank of Australia Ltd (29 April 1993, NSWSC, unreported).
[13] These matters may be seen to go to power as well as discretion. They may inform the more limited construction of s 38 and O 27 for which the defendant contends I need not decide this.
[14] I indicated to the parties that I would hear the plaintiffs on discretion if I thought the court had power. The discretion that I was then contemplating was one, which attended the circumstances of the case. Giles J in Aetna Pacific Securities put the matter in broad context, which includes the utility of the documents and the interests of justice. I would focus more upon the fact that in the absence of some method of eliciting the assistance of the German courts or authorities the subpoena is an order with a threat of punishment, which cannot be enforced.
[15] Nevertheless, I should not foreclose the plaintiffs seeking to persuade me that I should exercise a power (which I only assume to exist for the purpose of the argument). However, it seems to me that the apparent interference with the sovereignty of another country and the lack of enforcement mechanisms make the exercise of any discretion inappropriate. Nevertheless, if the plaintiffs wish to put anything further to me, on discretion, they may do so."
96I interrupt the references to Australian authority by mentioning that Hoffmann J (as his Lordship then was) held in Mackinnon v Donaldson, Lufkin and Jenrette Securities Corporation [1986] 1 Ch 482, held that an order requiring a foreigner, particularly a foreign bank, not party to the English litigation, to produce documents outside the jurisdiction relating to business transacted outside the jurisdiction should not be made, save in exceptional circumstances. He said at 493:
"In principle and on authority it seems to me that the court should not, save in exceptional circumstances, impose such a requirement upon a foreigner, and, in particular, upon a foreign bank. The principle is that a state should refrain from demanding obedience to its sovereign authority by foreigners in respect of their conduct outside the jurisdiction."
97In Sweeney v Howard [2007] NSWSC 262, Windeyer J was dealing with a notice of motion under which the applicant, who was then residing in the United Kingdom, sought orders setting aside an order made by Gzell J, the effect of which was that a subpoena addressed to her be served on her by way of substituted service by delivery to Messrs Mallesons, Solicitors. His Honour said:
"[6] ... Rule 11.5 provides that service outside Australia of a document other than originating process is valid only if it is effected pursuant to the leave of the Court or if service is subsequently confirmed by the Court.
[7] Mr Kunc, counsel for the applicant for the subpoena, argues that there is no problem with this because the subpoena was issued under r 33.2 so that if the court makes an order confirming service, albeit that it has been served pursuant to an order for substituted service - that is sufficient. In my view that is not correct.
[8] I do not think that the matter can be so pulled up by the shoelaces. I consider r 11.5 is clear in its terms, and that for service to be valid, if the person whose attendance is required is overseas, then there must be leave of the Supreme Court or confirmation of service where leave was not obtained. That is not, I think, confirmation of substituted service.
[9] It may be that if leave is given to serve a subpoena on someone outside the jurisdiction, then substituted service may be valid. I have not had sufficient time to consider this fully, and I am of the tentative view that this will only apply in cases of submission to the jurisdiction. That, however, is not a matter which I need to go into further.
[10] Gzell J was never asked for leave to serve the subpoena overseas. What he was asked to do was to make an order for substituted service. He gave leave to Ms Koffel to apply to have that order set aside, or discharged, and that is the basis upon which we are here today.
[11] I consider that r 11.5 does give authority for a subpoena to be served outside Australia and, in the circumstances of the present case, there is nothing in the comity of nations which would require the court to resist this. According to information made public by the Attorney-General, the government of the United Kingdom does not consider service in the United Kingdom of a subpoena issued out of a foreign court to be an interference with the governance of that country, or an interference in its sovereign affairs. Nevertheless, the position has at least ordinarily been accepted that there is no jurisdiction to serve this type of process overseas. It is true that in cases where the court has assumed extended jurisdiction under Pt 11 of the Rules originating process can, as a matter of course, be served overseas. However, in such a case, if there is no appearance, leave to proceed is necessary before the matter can be taken further.
...
[14] I should also say that apart from bankruptcy cases, counsel has not been able to refer me to any occasion on which a subpoena has been issued in the circumstances here. As I understand it, the position has always been that if you have a recalcitrant witness in a foreign country, to get the evidence of that witness, it is necessary to take it on commission, or on some equivalent basis. Whilst that is not the determining factor, it is at least something to be taken into account.
[15] It is also of relevance when considering the exercise of discretion and the discussion of the question in Arhill Pty Ltd v General Terminal Co Pty Ltd, (1990) 23 NSWLR 545 that there may be different conditions applicable to a subpoena to produce documents than apply to a subpoena to give evidence. Compliance with the former is far less onerous than compliance with the latter, but the enforcement problem still exists."
98In Ives v Lim [2010] WASCA 136, there was an appeal against what was described in the appeal notice as a refusal of an "application for foreign subpoena". It was an appeal against the dismissal of the appellant's application for leave to serve a subpoena on an incorporated body in Russia. The Court of Appeal (comprising Pullin and Newnes JJA) said:
"[17] As to para 3, the appellant draws attention to O 10 r 7 which reads:
The Court may allow service outside the jurisdiction of any originating process other than a writ, or of any summons, order, or notice in any proceedings duly instituted, whether by writ of summons or otherwise, and the provisions of Rules 3, 4, 5 and 6 of this Order shall apply, mutatis mutandis, to such service.
[18] It is true that a subpoena is an order: see O 36B. However, there are authorities which make it clear that even if there is authority to grant leave to serve a subpoena out of the jurisdiction, the court will be very slow to exercise its discretion: see Arhill Pty Ltd v General Terminal Co Pty Ltd (1990) 23 NSWLR 545; Stemcor (A/sia) Pty Ltd v Oceanwave Line SA [2004] FCA 391. The decision in Ward v Interag Pty Ltd [1985] 2 Qd R 552 prompts the question as to whether there is any jurisdiction to grant leave at all. As the subject has not been debated, it is best not to express any opinion on the subject. Instead, this court's decision proceeds by assuming (but not deciding) that the court does have jurisdiction."
99In Levy Schneider v Caesarstone Australia Pty Ltd [2012] VSC 126, the Plaintiff applied to the Prothonotary to serve a subpoena to give evidence on a foreign citizen who was resident in Israel. The Plaintiff relied on O 80 of the Supreme Court (General Civil Procedure) Rules (Vic) as the source of the authority to serve the subpoena outside Australia. Davies J concluded that O 80 of the SCR was not the source of authority for service of a subpoena outside Australia and that the leave of the Court was first required under rule 7.06 of the SCR. Her Honour concluded that the Court had power to give leave to a person to serve a subpoena outside Australia, saying:
"[5] Contrary to the Plaintiff's submission, Order 80 does not abrogate the need for a party to obtain the leave of the court pursuant to r 7.06(c) of the SCR to allow service out of Australia. Rule 7.06(c) provides that the court, by order, may allow service out of Australia of, relevantly, "any summons, order or notice in a proceeding." A subpoena is an order: Rule 42.01. As a subpoena is an order, it is within the terms of r 7.06(c). The Court thus has the power under r 7.06(c) to give leave to a person to serve a subpoena outside Australia."
100However, her Honour also concluded that it was a separate question whether that power should be exercised. She pointed out that the cases showed a general reluctance by the courts to exercise the power where the document to be served was a subpoena to give evidence or to produce documents and that leave should not be given in the particular circumstances of the case.
101The conclusion I draw from this survey of authority is that the Court, under UCPR rule 11.5, has power to authorise a subpoena to be served outside Australia, with the leave of the Court, and it has power to subsequently confirm service of that subpoena. The burden of convincing the Court to accept jurisdiction is on the Plaintiff. Doubt should be resolved in favour of the recipient located outside Australia and the Court should be careful in acceding to jurisdiction.
102I then turn to the question whether leave in this case should have been granted, or whether having been granted, the subpoena should be set aside, now, on discretionary grounds. In doing so, I recognise the special need for care when exercising an extra-territorial discretionary power and the use of the phrase "exceptional circumstances" in some of the authorities. (I take that phrase to apply to a variety of circumstances. It generally means circumstances that are unusual, or special, or uncommon, or out of the ordinary. They need not be unique, or unprecedented, or very rare, but they cannot be circumstances that are regularly, routinely or normally encountered. The circumstances may be considered either singularly or combined. No definition that limits the application of the phrase should be adopted.)
103In considering these matters, I refer to s 56 of the Civil Procedure Act 2005, which identifies that the overriding purpose of the Act and of rules of court, in their application to a civil dispute or civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the dispute or proceedings. It imposes upon the court an obligation to seek to give effect to the overriding purpose when it exercises any power given to it by that Act or by rules of court, and when it interprets any provision of the Act or of any such rule.
104Thus, even in an adversary system, the fundamental principle is to enhance the prospect that the truth should be found and that justice should be done as expeditiously and as inexpensively as possible.
105At the outset, it is to be noted that the issue of the subpoena was regular. The Plaintiff sought and obtained the leave of the Court to issue the subpoena. Also, there is no question in this case of practical inconvenience or annoyance in complying with it. The Applicant, subject to the determination of its challenge, has accepted service of the subpoena; it has not advanced any evidence that it would be difficult to comply with it; there is no suggestion that the transmission of documents to Australia from the United States of America would be burdensome upon the Applicant; it has also accepted that the subpoena is not too wide and that the documents sought have apparent relevance to the issues in the proceedings.
106Section 56 also provides that a party to civil proceedings is under a duty to assist the court to further the overriding purpose and, to that effect, to participate in the processes of the court and to comply with directions and orders of the court as well as to take reasonable steps to resolve or narrow the issues in dispute in accordance with the provisions of Part 2A (if any) that are applicable to the dispute or proceedings in a way that is consistent with the overriding purpose.
107Of course, the Applicant is no longer a party to the proceedings.
108However, "any person with a relevant interest in the proceedings commenced by the party" must not, by their conduct, cause a party to a civil dispute or civil proceedings to be put in breach of the duties identified. For the purposes of the section, a person has a "relevant interest" in civil proceedings if the person (a) provides financial assistance or other assistance to any party to the proceedings, and (b) exercises any direct or indirect control, or any influence, over the conduct of the proceedings or the conduct of a party in respect of the proceedings.
109In the present case, there is no evidence that the Applicant is "a person with a relevant interest".
110There is no doubt that the role of subpoenas in the administration of justice is crucial. The power to secure the attendance of a witness to give evidence, or to produce documents, is "a power which has long been recognised as an essential adjunct to adjudication": Commonwealth of Australia v The Hospital Contribution Fund of Australia [1982] HCA 13; (1982) 150 CLR 49, per Brennan J, at 82.
111The importance of the process to the proper resolution of curial conflicts is also acknowledged. For example, in Wilson v United States (1911) 221 U.S. 361 Hughes J, delivering the judgment of the Court, said (at 372-373):
"As was said by Lord Ellenborough in Amey v Long ... 'The right to resort to means competent to compel the production of written, as well as oral, testimony seems essential to the very existence and constitution of a Court of common law, which receives and acts upon both descriptions of evidence, and could not possibly proceed with due effect without them' ... In Summers v Moseley ... the function of the writ was carefully considered ... Bayley B. said:
'The origin of the subpoena duces tecum does not distinctly appear. It has been said on the part of the defendant that it was not introduced or known in practice till the reign of Charles II, and it may be that in its present form the subpoena duces tecum was not known or made use of until that period; but no doubt can be entertained that there must have been some process similar to the subpoena duces tecum to compel the production of documents, not only before that time, but even before the statute of the 5th of Elizabeth. Prior to that statute, there must have been a power in the crown (for it would have been utterly impossible to carry on the administration of justice without such power) to require the attendance in courts of justice of persons capable of giving evidence, and the production of documents material to the cause, though in the possession of a stranger."
112However, all of the authorities to which I have referred, have discussed the caution that is required where there is an intrusion upon the sovereignty of a foreign state.
113Rogers CJ in Comm Div in Arhill emphasised the need for restraint upon subjecting a foreign entity to local jurisdiction and the need to construe any powers conferred upon the court "consistently with the established criteria of international law with regard to comity". His Honour concluded that "whichever way the rule is read down, it will not authorise giving leave to serve a Japanese company in Japan".
114His Honour referred to Mackinnon v Donaldson, Lufkin and Jenrette Securities Corporation, where the plaintiff in an English action had obtained an order against an American bank, served on its London office, requiring production of books and papers at its New York head office. Hoffmann J, at 493, pointed out the distinction between "personal jurisdiction, i.e. who can be brought before the court" and "subject matter jurisdiction, i.e., to what extent the court can claim to regulate the conduct of those persons". His Lordship, at 493, said:
"I think that this argument confuses personal jurisdiction, i.e. who can be bought before the court, with subject matter jurisdiction, i.e. to what extent the court can claim to regulate the conduct of those persons. It does not follow from the fact that a person is within the jurisdiction and liable to be served that there is no territorial limit to the matters which a court may properly apply its own rules or the things which it can order such a person to do. ... The content of the subpoena and order is to require the production by a non-party of documents outside the jurisdiction concerning business which it has transacted outside the jurisdiction."
115In Gao v Zhu, Habersberger J, at [14], spoke of the Court's reluctance to infringe the sovereignty of a foreign country by allowing a subpoena taking effect in that foreign country, and relating to business transacted in that foreign country, to stand.
116In CSR Ltd v Cigna Insurance Australia Ltd [1997] HCA 33; (1996-7) 189 CLR 345, the High Court considered what is meant by "comity", referring to the explanation given by the Supreme Court of the United States in Hilton v Guyot [1895] USSC 185; (1895) 159 US 113 at 163-164:
"'Comity', in the legal sense, is neither a matter of absolute obligation, on the one hand, nor of mere courtesy and good will, upon the other. But it is the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens or of other persons who are under the protection of its laws."
117In this day and age, in a highly integrated world economy, I am of the view that the principle of comity may have less weight than it did in the past. Developments in communication and transport are practical considerations that should also be considered. Issues of extraterritoriality must now be viewed in the light of the substantial changes that have taken place, in recent times, in the way businesses communicate with each other. As is obvious from the connection between the Defendant and the Applicant, the business of each operates in a global economy.
118This view is supported by what was noted by Gaudron, McHugh, Gummow and Hayne JJ in Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552, at 570-1, albeit dealing with service of originating process outside the jurisdiction:
"Considerations of comity, and consequent restraint, have informed many of the reported decisions about service out of the jurisdiction. It is, however, important to notice that rules of court, or local statutes, providing for service outside the jurisdiction are now commonplace - at least in jurisdictions whose legal systems have been formed or influenced by common law traditions. Further, as the Court of Appeal rightly noted in its reasons in these matters, contemporary developments in communications and transport make the degree of "inconvenience and annoyance" to which a foreign defendant would be put, if brought into the courts of this jurisdiction, "of a qualitatively different order to that which existed in 1885"
The considerations of comity and restraint, to which reference has so often been made in cases concerning service out of the jurisdiction, will often be of greatest relevance in considering questions of forum non conveniens. The starting point for the present inquiry, however, must be the terms of the Rules, not any general considerations of the kind just mentioned."
119I accept, however, that whilst the principle of comity should be adjusted in the light of a changing world order, this is not to say that those principles should be ignored or diminished. They are clearly relevant at the discretionary phase. I have borne these principles in mind.
120Another explanation for the Court's reluctance was provided by Allsop J in Stemcor (A/sia) Pty Ltd v Oceanwave Line SA, at [11], who said that "the service of an order upon a German company demanding that it do something in Australia on pain of punishment in proceedings to which it has not submitted is such an invasion of German sovereignty as not to be contemplated except in the most exceptional circumstances".
121In Schneider v Caesarstone Australia Pty Ltd, Davies J referred to Arhill and to Stemcor (A/sia) Pty Ltd v Oceanwave Line SA, noted that other authorities had followed and applied those cases, and concluded that:
"The Court should be reluctant to give leave to allow the service of a subpoena that would require a person to attend court in Australia with sanctions applying for non-attendance, in circumstances where the Court is unable to enforce compliance."
122In this case, however, a connection has been established between the Applicant and the jurisdiction. The Applicant's absolute ownership of all of the issued shares in the Defendant is something that represents its connection with Australia.
123In News Corporation Ltd v Lenfest Communications Inc, Giles CJ in Comm D observed:
"Restraint in the imposition of the Court's compulsory processes on Lenfest is rather qualified by its involvement, via subsidiaries, in the commercial pursuits in Australia with which these proceedings have a strong connection... Nor would it necessarily be futile to leave on foot compliance with the notice to produce (concern for the integrity of the Court's commands requires that it not make futile orders, and that has been seen as reason enough for refusing leave to serve subpoenas on persons outside Australia where the subpoenas could not be enforced: see Arhill Pty Ltd v General Terminal Co Pty Ltd and Aetna Pacific Securities Ltd v Hong Kong Bank of Australia Ltd (Giles J, 29 April 1995, unreported)). Failure to comply with the notice to produce could be sanctioned by, for example, refusal to entertain Lenfest's application. All these are reasons for declining to make an order otherwise."
124The Plaintiff submits, in this case, and I agree, that the Court can enforce compliance with the subpoena because the Applicant has property in NSW (the shares in the Defendant). It is accepted by the Plaintiff that the subpoena should not be set aside upon the basis that any order for sequestration based upon the Applicant's failure to comply with the subpoena is limited to sequestration against the property of the Applicant situated in Australia.
125It follows that the futility argument does not apply in the present case.
126In all the circumstances of this case, as a matter of discretion, I consider that the subpoena addressed to the Applicant should not be set aside.
127It follows that the Applicant's Notice of Motion should be dismissed with costs.
128In accordance with the agreement of the parties, the Applicant should inform the Plaintiff, in writing, within 7 days, of its estimate of the reasonable costs that would be incurred by the Applicant in complying with the subpoena. Liberty is granted to either party to apply to the Court to determine the issue of reasonableness of those costs in the event of disagreement.