Commissioner of Taxation v Grimaldi

REASONS FOR JUDGMENT 1 The matter before the Court is an application to set aside two Notices to Produce made ore tenus today. The first Notice to Produce is one directed to the third respondent that was issued and served by the applicant upon the third respondent yesterday, 18 May 2009. The other Notice to Produce is one directed to the fifth respondent that is dated 18 May 2009 which was issued and served by the applicant upon the fifth respondent yesterday, 18 May 2009. The fifth respondent is not a party to the proceedings but is a party to a Notice of Motion in which the applicant seeks certain freezing orders, including freezing orders against it. 2 It is said that the third and fifth respondents are companies based in Vanuatu. Counsel for the third and fifth respondents has made an application ore tenus for each of the Notices to Produce to be set aside. 3 The grounds relied upon are said to be firstly that there has been insufficient time for compliance with the Notices, given the location of the records which are said to be in Vanuatu. Secondly, it is said that the Notices to Produce are oppressively wide. Thirdly, it is said that the Notices to Produce, perhaps more accurately the one directed to the fifth respondent, is an attempt to obtain discovery from the fifth respondent. Fourthly, it is said that the applicant has failed to identify any legitimate forensic purpose for which the Notices to Produce have been served. 4 In relation to the last mentioned submission, the third and fifth respondents rely upon a passage from the judgment of Hunt J, as his Honour then was, in R v Saleam (1989) 16 NSWLR 14 at 18 where his Honour, referring amongst other things to Waind v Hill and National Employers' Mutual General Association Ltd [1978] 1 NSWLR 372 at 385 ('Waind'). The passage relied upon in Hunt J's judgment was not concerned with the issue of whether or not a subpoena should be set aside but rather with the issue of whether or not access to documents should be granted to a party who has secured the production of the documents to the court. It is clear that the passage relied upon has nothing whatsoever to do with the issue of whether or not the Notices to Produce should be set aside. The question of apparent relevance arises, as Moffitt P said in Waind at 385 after one has progressed to the second step; namely, whether or not access should be granted to documents over the objection of the party producing them to the court. 5 I will not take time to repeat the principles in relation to the use of notices to produce and whether notices to produce may be judged to be oppressive, which I stated in Telstra Corporation Ltd v Minister for Communications, Information Technology and the Arts [2007] FCA 1398 at [44‑54]. 6 The documents required to be produced under the notice to produce direct to the third respondent were as follows: '1. All journals, ledgers, cash books, and other books of account recording or evidencing:- (a) the receipt of money on account of any of the following:- (i) Phillip Grimaldi [the first respondent] (ii) Garry Bonaccorso [the second respondent] (iii) MCG Capital Pty Ltd [the fourth respondent in its capacity as trustee for WEBTEL Management Super Fund] (iv) Iron Ore Sales and Management, now known as Iron Investments Ltd (v) RLB Investments Limited during the period 1 July 2005 to 11 May 2009 (the relevant period) (b) the payment of money to, or on behalf of any of the persons or entities identified in paragraph (a)(i) - (v) during the relevant period. 2. All records held or maintained by you or on your behalf during the relevant period recording the ownership of shares held in Commonwealth Securities Ltd (CommSec) share trading accounts number 577406 by any of the persons or entities identified in para 1(a)(i) - (v) above' 7 It seems clear that the use of the word 'accounts' in paragraph 2 was inappropriate but I have difficulty in contemplating that it could be read otherwise than as 'account' in the context in which it has been used. 8 The Notice to Produce directed to the fifth respondent called for the production of documents described in the same terms as those chosen in paragraph 1 of the Notice to Produce directed to the third respondent. 9 In my opinion the documents, the production of which is sought, are defined with reasonable particularity, such that the notices to produce are not oppressive. 10 It could not, in my opinion, be suggested that the formulation of the documents to be produced, contained in the Notices to Produce and in particular the Notice to Produce directed to the fifth respondent, amounted to an attempt to obtain discovery from the parties to whom the Notices to Produce were directed and in particular, the fifth respondent. Nothing in the Notices to Produce suggests to me that the burden imposed upon the parties to whom they are directed is oppressive, in the sense in which that term was used by Moffitt P in Waind, to which I have referred in the passages from my judgment in Telstra Corporation Limited v Minister for Communications, Information Technology and the Arts. 11 These proceedings were instituted by an Application filed 11 May 2009 in which the substantive relief sought related, so it would seem, to alleged tax liabilities of the first respondent, the second respondent, the third respondent and the fourth respondent. 12 In relation to the assets of those respondents and also the fifth respondent, freezing orders are sought by the applicant to prevent an abuse or frustration of the process of the court in respect of the primary claims for relief. In relation to applications such as this, I would refer to the applicable principles as summarised in Ron Medich Properties Pty Ltd v Bentley-Smythe Pty Ltd (No 3) [2009] FCA 335 at [10-24]. 13 The Notices to Produce call for the production of the documents covered by the Notices today, that is to say, Tuesday 19 May 2009. When they were called earlier today by senior counsel for the applicant, it was indicated that the third and fifth respondents were not in a position to produce documents pursuant to them today and that the current application to set them aside would be made in respect of them. If it transpires that the documents, the production of which is called for by the Notices to Produce, are not located within the jurisdiction but rather in Vanuatu, it seems to me that a longer period of time should be allowed for compliance with the Notices to Produce before any appropriate action could be taken in respect of a failure to comply with them. 14 Given the clear expression of the documents the production of which is required, in the Notices to Produce, I would have thought that they could be located within a short period of time and that either the originals or copies of the documents required for production could be produced in the Court in Sydney later in the week. 15 I would dismiss the applications made by the third and fifth respondents to have the respective Notices to Produce set aside. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham.