Supreme Court of WA|2013-08-06|Before: Pritchard J

HANCOCK PROSPECTING PTY LTD -v- HANCOCK [2013] WASC 290 (6 August 2013)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : HANCOCK PROSPECTING PTY LTD -v- HANCOCK [2013] WASC 290

HEARD : 4 SEPTEMBER 2012, 7 MAY 2013 & 25 JULY 2013

GEORGINA HOPE RINEHART in her personal capacity and as trustee of the Hope Margaret Hancock Trust

Application to set aside subpoenas - Whether subpoenas have legitimate forensic purpose - Whether subpoena is oppressive and abuse of process - Application of Evidence and Public Interest Disclosure Amendment Act 2012 (WA) - Application of International Arbitration Act 1974 (Cth) - Commercial Arbitration Act 1985 (WA) s 17(2)

Evidence and Public Interest Disclosure Legislation Amendment Act 2012 (WA)

1 PRITCHARD J: Hancock Prospecting Pty Limited (HPPL), Mr John Langley Hancock and a number of other parties are parties to an arbitration being conducted by an arbitrator pursuant to the Commercial Arbitration Act 1985 (WA) (the CA Act). (Counsel for HPPL submitted that there were in fact a number of separate arbitrations. For ease of reference, I will simply refer to 'the arbitration' to encompass all of the matters before the arbitrator.)

2 In the course of the arbitration, subpoenas were issued by the Court, on HPPL's application, to Mr Stephen Pennells, a journalist employed by West Australian Newspapers Limited (WAN), and to WAN itself, for the production of documents to the arbitrator. The subpoenas were subsequently amended to refine the documents sought by HPPL (the documents sought).

3 Mr Pennells and WAN applied to the Court by Chamber Summons dated 26 March 2012 to set aside the subpoena directed to each of them.

4 Following the hearing on 7 May 2013, counsel for HPPL confirmed that HPPL no longer pursued the production of documents by Mr Pennells in answer to the subpoena directed to him. Accordingly, the resolution of the present application requires consideration only of the amended subpoena directed to WAN (the subpoena).

5 WAN seeks to set aside the subpoena on three grounds. First, WAN contends that the subpoena serves no legitimate forensic purpose because the documents sought to be produced are not relevant to the matters in issue in the arbitration.

6 Secondly, WAN contends that the subpoena is oppressive or constitutes an abuse of process as a result of an accumulation of factors to which I refer below. One of those factors was the amendments made to the Evidence Act 1906 (WA) by the Evidence and Public Interest Disclosure Legislation Amendment Act 2012 (WA) (to which I will refer, using the language adopted by the parties at the hearing, as the Shield Laws) which came into force on 21 November 2012.

7 Thirdly, counsel for WAN submitted that s 17(2) of the CA Act provided an alternative basis to set aside the subpoena, having regard to the operation of the Shield Laws.

8 For the reasons outlined below, WAN's application to set aside the subpoena should be upheld in part, on the ground that the subpoena is oppressive and constitutes an abuse of process, having regard to the Shield Laws.

The factual context and the documents sought under the subpoena;
The Court's jurisdiction to set aside the subpoena;
The grounds for the application to set aside the subpoena;
Principles in relation to objections to the production of documents under a subpoena;
Why WAN's contention that the documents sought have no legitimate forensic purpose because they are irrelevant fails;
Why WAN's contentions in relation to oppression and abuse of process apart from its contentions in relation to the Shield Laws fail;
Why the subpoena should be set aside in part, on the ground that it is oppressive or constitutes an abuse of process, having regard to the Shield Laws;
Why WAN's application to reopen, to permit it to make submissions that the CA Act does not apply to the arbitration was dismissed.

10 Before turning to deal with these matters, I note that almost all details about the arbitration, including the matters the subject of the arbitration, are confidential, as a result of agreements between the parties to the arbitration. Having regard to that confidentiality, what follows is at times expressed at a relatively high level of generality, in so far as it refers to confidential information about the arbitration.

11 The arbitration was commenced on 1 January 2012 pursuant to the terms of a document referred to as the Hope Downs Deed.

12 During 2012, and particularly during the first few months of 2012, Mr Pennells published a number of articles in the West Australian newspaper in which he referred to a dispute between Ms Gina Rinehart and some of her children (which is presently the subject of litigation in the Supreme Court of New South Wales) and more generally to the affairs of the members of the Rinehart family, and to the business of HPPL and related companies (the Articles).

13 In some of the Articles, Mr Pennells makes reference to conversations he has had with Mr Hancock, and attributes a number of comments to Mr Hancock. In another publication, reference has been made to exclusive interviews provided to Mr Pennells by Mr Hancock.

14 The subpoena seeks the production by WAN of documents provided to Mr Pennells (or any other journalist employed by WAN) by Mr Hancock which relate to one or other of a list of subjects, or copies of recordings or notes of conversations between Mr Pennells (or any other journalist employed by WAN) and Mr Hancock which relate to one or other of the same list of subjects.

2. The Court's jurisdiction to set aside the subpoena

15 The subpoenas were issued pursuant to s 17(1) of the CA Act, which provides:

The Court may, on the application of any party to an arbitration agreement, and subject to and in accordance with rules of court, issue a subpoena requiring a person to attend for examination before the arbitrator or umpire or requiring a person to attend for examination before the arbitrator or umpire and to produce to the arbitrator or umpire the document or documents specified in the subpoena.

16 It is also convenient at this point to note the terms of s 17(2) of the CA Act, which provides:

A person shall not be compelled under any subpoena issued in accordance with subsection (1) to answer any question or produce any document which that person could not be compelled to answer or produce on the trial of an action.

17 The 'Court' in s 17(1) includes the Supreme Court.[1]

18 Order 36B of the Rules of the Supreme Court 1971 (WA) (RSC) which deals with the issue and setting aside of subpoenas more generally - applies to the issue of a subpoena under the CA Act.[2] Order 36B r 4(1) permits the Court, on the application of a party or any person with a sufficient interest, to set aside a subpoena in whole or in part, or to grant other relief in respect of it. The Court is also able to set aside a subpoena in the exercise of its inherent jurisdiction.[3] It is well established that a subpoena can be set aside under O 36B r 4, and in the Court's inherent jurisdiction, where the subpoena does not serve a legitimate forensic purpose, or where the subpoena is oppressive or an abuse of process.[4]

3. The grounds for the application to set aside the subpoena

19 As I have already observed, WAN's application to set aside the subpoena was based on three grounds. First, WAN contended the subpoena served no legitimate forensic purpose because the documents sought are not relevant to the matters in issue in the arbitration.

20 Secondly, WAN contended that the subpoenas are oppressive or constitute an abuse of process as a result of an accumulation of the following factors:

(i) The subpoena is too wide, it is premature, and the breadth of the subpoena and its timing are an indication that HPPL is fishing or is engaged in an attempt to discover whether evidence exists, as opposed to obtaining evidence;

(ii) The subpoena requires WAN to draw its own conclusions about the extent to which documents may be required to be produced;

(iii) The subpoena seeks material which on its face may be incriminating or tend to reveal incriminating material;

(iv) The subpoena requires WAN to breach agreements as to confidentiality;

(v) It would be oppressive to require WAN to produce documents which it could not be compelled to produce in the arbitration, or in respect of which it would have highly persuasive arguments to resist production in the arbitration, because of the operation of the Shield Laws.

21 In addition, WAN submitted that s 17(2) of the CA Act provided a basis upon which the subpoena ought be set aside, having regard to the operation of the Shield Laws in the circumstances of this case. That submission was put on the basis that s 17(2) either provided a discrete basis for setting aside a subpoena (which was different from oppression or abuse of process) or alternatively that s 17(2) meant that the subpoena shall be set aside as an abuse of process.

22 In support of its application, WAN relied on two affidavits of Mr Pennells sworn on 21 May 2012 and 20 June 2012, and an affidavit of Mr Robert Cronin, the Group Editor in Chief of the newspapers published by WAN, sworn on 22 May 2012. The deponents of those affidavits were not cross examined and I accept the evidence set out in their affidavits for the purposes of the present application.

4. Principles in relation to objections to the production of documents under a subpoena

23 The Court has jurisdiction to set aside a subpoena on the basis that it would be an abuse of the process of the court. The authorities establish that that conclusion will be warranted in a variety of circumstances,[5] such as where the subpoena does not have a legitimate forensic purpose, where the documents sought in the subpoena have no apparent relevance to the issues in dispute, where the subpoena may be characterised as a 'fishing' exercise (on the basis that it does not seek to obtain evidence to support a party's case, but rather to assist that party to discover whether he or she has a case at all) or where the subpoena has been used for the purpose of obtaining discovery against a third party. A subpoena will also be an abuse of process where it would be oppressive to require a party to comply with the subpoena. These are not exhaustive categories. The power of the Court to control and supervise its process to prevent injustice is not restricted to defined and closed categories.[6]

24 In considering whether a proceeding, or a step in a proceeding (such as the issue of a subpoena) is an abuse of process, the purpose for that step will be relevant, as will the consequences for the those invoking the power of the Court to act (in this case the recipient of the subpoena).[7] Furthermore, in determining whether a subpoena is an abuse of the court's process, the court will need to balance the conflicting rights of the party to the proceedings, who issued the subpoena, with those of the third party who objects to it. On the one hand, the issuing party has a right to obtain access to documents in the hands of a third party in order to further the ends of justice, and so that he or she may, therefore, prepare a case meeting each issue arising in the proceedings. On the other hand, compliance with a subpoena to produce will inevitably have consequences for a third party, such as the inconvenience of identifying, collating and producing the documents sought, the invasion of the subpoenaed party's right to privacy, or an undermining of the confidentiality of information contained in the documents required to be produced.[8]

25 The Court will also need to weigh in the balance any relevant public interests which may be invoked to resist the production of documents (such as claims to public interest privilege, for example), with the public interest in the administration of justice which may be frustrated or impaired if documents relevant to an issue in dispute are withheld, having regard to the evidentiary value and importance of those documents in the particular litigation.[9]

5. Why WAN's contention - that the subpoena has no legitimate forensic purpose because the documents sought are irrelevant fails

26 In this part of my reasons, I deal with three matters:

(a) legitimate forensic purpose the degree of relevance required;

(b) whether it is open to WAN to rely upon irrelevance as a ground for concluding that the documents have no legitimate forensic purpose;

(a) Legitimate forensic purpose - the degree of relevance required

27 The legal principles relevant to the question whether a subpoena issued in support of an arbitration serves a legitimate forensic purpose were summarised by Beech J in Alinta Sales Pty Ltd v Woodside Energy Pty Ltd.[10] Although that case concerned an application for the grant of leave to issue a subpoena returnable before trial, and the prior grant of leave is no longer required for the issue of a subpoena, the principles outlined by his Honour nevertheless remain applicable to assessing whether a subpoena serves a legitimate forensic purpose. I gratefully adopt his Honour's summary of the principles. His Honour observed:[11]

There is a legitimate forensic purpose for the issue of a subpoena for documents in respect of a document or class of documents that is apparently relevant.

Apparent relevance is a low threshold. It is not a question of whether it appears that the party issuing the subpoena could, or could probably, tender the document in evidence. Rather it is enough to establish apparent relevance if a document or class of documents gives rise to a line of enquiry relevant to the issues before the trier of fact, including for the purpose of meeting the opposing case by way of cross-examination.

In determining relevance, the difficulty of assessing relevance prior to trial must be taken into account. The necessity for having a document in order to fairly dispose of the issues at trial might well not become apparent before trial.

Ultimately the relevance of the documents produced is for the arbitrator. It is not appropriate for the court to embark on a detailed preliminary inquiry involving evidence from the party seeking to issue the subpoenas and the company (or companies) against whom the subpoenas are sought to be issued.

...

Apparent relevance is to be assessed by reference to the issues in the arbitration taking into account the competing contentions of the parties.

Generally, at least in considering questions of apparent relevance, the court should not attempt to resolve questions of construction that arise between the parties ... . (case references omitted)

28 Before dealing with the question whether the documents sought under the subpoena have apparent relevance, it is necessary to mention HPPL's contention that it was not open to WAN to resist production of the documents sought on the basis that they are irrelevant to the issues in the arbitration.

(b) Whether it is open to WAN to rely upon irrelevance as a ground for concluding that the documents have no legitimate forensic purpose

29 Counsel for HPPL submitted that it was not appropriate for a subpoenaed party to seek to set aside a subpoena on the ground of irrelevance of the documents sought. I understood that to amount to a submission that it was not appropriate for a subpoenaed party to make such a submission if it did not have a real or legitimate basis for that contention, and that WAN was not able to object on the ground of relevance in this case.

30 Counsel for HPPL submitted that in this case it was difficult to see how WAN could have any real or proper basis for objecting to the production of the documents sought when no objection was pursued by any of the parties to the arbitration. That submission cannot be given any weight. The failure by any party to the arbitration to object at this stage cannot be viewed as an indication of the acceptance by any of them of the relevance of any documents which might be produced to the arbitrator under the subpoena. A failure to object at this stage does not preclude a party to the arbitration from raising an objection to the inspection of the documents, or objecting to the admission of any documents, the tender of which is sought in the course of the arbitration.

31 In support of its primary submission, HPPL relied upon an observation made by Perry J in Santos v Pipelines Authority of South Australia,[12] where his Honour said:[13]

The concept of relevance, for the purposes of discovery or production of documents is, of course, wider than the concept of relevance for the purposes of admission. Be that as it may, generally speaking, a stranger to an action who is asked to produce documents will not be heard to object on the ground of relevance, as it is not appropriate for a non-party to peruse pleadings and the like and attempt to assess what may or may not be relevant to proceedings to which he or she is not a party.

For similar reasons, it will be difficult for a third party to justify resistance to production on the ground that production is not necessary for disposing fairly of proceedings in which he or she is not otherwise involved.

32 Counsel for HPPL submitted that the observations of Perry J were referred to with approval by the Full Court of this Court in Apache Northwest Pty Ltd v Western Power Corporation.[14]

33 I am unable to accept HPPL's submissions, for five reasons.

34 First, I respectfully observe that there is a considerable degree of ambiguity in the remarks made by Perry J. His Honour did not say that a nonparty could not object to production of documents under a subpoena on the grounds of relevance. Read in context his Honour's remarks tend to suggest that his real intention was to emphasise that it would be difficult for a nonparty to make such an objection, given that the nonparty would not be familiar with the issues in the litigation, and might (at best) be restricted to an examination of the pleadings in an action as the basis for submissions about relevance.

35 Secondly, I do not accept that the observations of the Full Court in Apache can accurately be described as approving the remarks made by Perry J. Prior to quoting from his Honour's judgment, the Full Court observed that '[i]n the Santos (No 2) case, in the judgment of Perry J (at 22) his Honour went so far as to suggest that ...' (emphasis added).[15] In addition, after quoting his Honour, the Full Court observed:[16]

The respondent did not seek to maintain that position [that is, the position set out by Perry J] before [the judge at first instance], or before this Court, but the point still remains that, ultimately, the relevance of the material is for the arbitrator, and it is not appropriate at the present stage of the arbitration proceedings to embark upon a detailed preliminary inquiry involving evidence from the respondent and the companies against whom subpoenas are sought to be issued, although not from the sellers, as to whether the documents would ultimately be admissible in the arbitration. Without having the information contained in the documents, the respondent would be placed at a grave disadvantage in any such inquiry.

36 Thirdly, the observations made by the Full Court in respect of the remarks made by Perry J constitute obiter dicta. In my respectful view, when seen in their context, the Full Court's reference to those remarks was made in the course of emphasising the difficulties which arise in assessing the relevance of documents far in advance of a trial, and in the absence of consideration by all parties of the content of those documents.

37 Fourthly, there are a number of authorities which establish that the recipient of a subpoena can raise the question of the apparent relevance of the documents sought under a subpoena, even though that person, who will not be a party to the litigation, will not have a full appreciation of the issues so as to be able to demonstrate the irrelevance of the documents sought.[17]

38 Fifthly, one of the difficulties which may arise if a nonparty is permitted to seek to set aside a subpoena on the grounds that it does not serve a legitimate forensic purpose is that such an application, if made without a real or proper foundation, has the potential to be used in such a way as to interfere with the administration of justice.[18] However, in the course of modern litigation subpoenas are able to be issued without the leave of the Court, and may be used to seek a wide range of documents, the production of which may incur considerable inconvenience, if not expense, for the subpoenaed party. To deny that person the opportunity to set aside a subpoena on the grounds that the documents do not have any apparent relevance to the issues in dispute in the proceeding (to the extent that that person has any knowledge of those issues) would potentially work an injustice.

39 In any event, the resolution of this issue is not determinative of WAN's application to set aside the subpoena. HPPL submitted that the documents sought were apparently relevant to the issues in the arbitration and that the subpoena therefore served a legitimate forensic purpose. In so far as HPPL bears an onus of establishing the apparent relevance of the documents sought,[19] I am satisfied that it has done so, for the reasons set out below.

(c) Why the documents sought are apparently relevant to the issues in dispute in the arbitration

40 WAN submitted that the 'pleadings' in the arbitration were not settled, with the result that the issues in dispute in the arbitration have not yet been determined. That submission cannot be accepted, having regard to the affidavit evidence adduced by HPPL, which reveals that the parties to the arbitration have now filed points of claim and points of defence. Those documents contain allegations of obligations owed by certain parties, including Mr Hancock, under the Hope Downs Deed and another agreement referred to as the Deed of Obligation and Release (the Deed of Obligation), and allege conduct by those parties in breach of those obligations. For present purposes, it suffices to say that the nature and effect of the obligations under those Deeds which are said to be relevant to the issues in the arbitration are disputed, and there are pleas of nonadmission or denial in respect of the allegations of the breach of those obligations and the material facts relied upon as giving rise to those breaches.

41 Counsel for WAN also submitted that some of the documents sought did not appear to be relevant to the issues in dispute, because the subject matter to which the subpoena specifies that the documents relate (for example certain shareholdings, and documents relating to certain tenements) does not have any obvious connection to the matters referred to in the points of claim and defence.

42 I am unable to accept that submission. As the principles set out above make clear, it is not appropriate to undertake a detailed enquiry into the relevance of the documents sought. Although the proper construction of the Hope Downs Deed and the Deed of Obligation is in issue in the arbitration, at first blush it appears that the obligations created by those Deeds which are said to be relevant in this case have a wide application. If that is correct, it is difficult to see why documents as described in the subpoena would not relate to the matters referred to in the points of claim and defence. In so far as the documents sought include documents relating to certain shareholdings, and documents relating to certain tenements, if documents of that kind are held by WAN, that may give rise to a line of enquiry in relation to the matters in dispute, such as the allegations made in [65] - [71] of the Third Amended Points of Claim.

43 Bearing in mind the low threshold for apparent relevance, I am satisfied that the documents sought are apparently relevant to the issues in dispute in the arbitration. The matters referred to in the Articles suggest that Mr Pennells (and thus WAN) may have documents falling within the scope of the subpoena and that, at the least, any such documents may give rise to a line of inquiry concerning the obligation referred to in clause 10 of the Hope Downs Deed, and in clause 4 of the Deed of Obligation, or may assist HPPL to make out its case. In my view, therefore, it cannot be said that the subpoena would not serve a legitimate forensic purpose.

6. Why WAN's contention that the subpoena is oppressive and an abuse of process (other than having regard to the Shield Laws) fails

44 WAN contended that the subpoena was oppressive and an abuse of process having regard to a number of factors. Counsel for WAN made clear that those factors were not relied upon separately and alternatively but rather that WAN's case for oppression and abuse of process depended upon an accumulation of all of the factors set out in [20] above.

45 Initially, the factors on which WAN relied did not include any reference to the Shield Laws (because the Shield Laws did not come into operation until 21 November 2012. Once the Shield Laws came into operation, counsel for WAN relied upon the Shield Laws as providing an additional factor which, when considered together which all of the other factors on which he relied, supported the conclusion that the subpoena was oppressive and an abuse of process.

46 For the purposes of this part of my reasons, it is convenient to deal with all of the factors relied upon by WAN, other than the Shield Laws, in support of its contention that the subpoena is oppressive and an abuse of process. I am not persuaded that the factors relied upon by WAN (other than the Shield Laws), whether considered individually or collectively, support the conclusion that the subpoena should be set aside.

(i) WAN's contention that the subpoena is too wide, it is premature, and the breadth of the subpoena and its timing are an indication that HPPL is fishing or is engaged in an attempt to discover whether evidence exists, as opposed to obtaining evidence

47 Counsel for WAN submitted that the subpoena was too wide because the documents sought were described as those 'relating to' certain matters which themselves were very general in nature. I am unable to accept that submission for the reasons outlined above, particularly as the subpoena seeks only such documents as were received by Mr Pennells, or any journalist employed by WAN, from Mr Hancock, on or after a particular date.

48 Counsel for WAN submitted that the subpoena was premature in that the issues in the arbitration were not yet defined, and that the time frame applicable to the documents sought under the subpoena, which extended beyond the commencement of the arbitration and the filing of points of claim in the arbitration, suggested that any documents produced would go to allegations not yet formulated in the arbitration. Those submissions cannot be accepted. As I have already noted, the issues in the arbitration have now been defined by the exchange of points of claim and defences to points of claim.

49 Counsel for WAN also submitted that the subpoena was premature in that the orthodox methodology of obtaining disclosure from the parties to the arbitration had not been exhausted. The fact that documents sought pursuant to a subpoena might also be sought in discovery does not of itself mean that the subpoena is an abuse of process. In any event, I am unable to accept the submission that all of the documents sought in the subpoena could have been obtained in discovery from Mr Hancock. In so far as the subpoena seeks the production of documents provided by Mr Hancock to Mr Pennells, it is possible that copies of those documents may also be in the possession of Mr Hancock, but that is not inevitable. In so far as the subpoena seeks notes or recordings of conversations between Mr Pennells and Mr Hancock, it appears to be very unlikely that any such documents (or even copies thereof) would be in the possession of Mr Hancock.

50 Counsel for WAN also submitted that the breadth of the subpoenas and their timing were indications that HPPL was 'fishing', and attempting to ascertain whether evidence existed, rather than to obtain evidence. This submission cannot be accepted. The content of the Articles, in light of the pleadings in the arbitration which are in evidence, suggests that WAN is likely to have documents of apparent relevance to the matters in issue. There is no requirement that to avoid the stigma of 'fishing', a party must already be in possession of some evidence before issuing a subpoena. In the interests of fairness, litigation should be conducted on the footing that all relevant documentary evidence is available.[20]

51 It was also submitted that there was no justification for an early return of the subpoena. I do not accept that submission. One object of permitting the early return of subpoenas is to enable the parties to appraise the strengths and weaknesses of their case at an early stage in the proceedings.[21] That being so, the mere fact that the subpoena requires the production of the documents sought in advance of any hearing is not, of itself, oppressive.

52 It was submitted that the width of the subpoena and its prematurity suggested that the documents sought were at the periphery of, rather than central to, the arbitration. I am unable to accept that submission. Having regard to the terms of clause 10 of the Hope Downs Deed and clause 4 of the Deed of Obligation, and the allegations at par [62] [71] of the Points of Claim, if WAN holds any documents of the kind described in the subpoena, such documents may be directly relevant to some of the factual issues in dispute in the arbitration.

(ii) WAN's contention that the subpoena requires WAN to draw its own conclusions about the extent to which documents may be required to be produced

53 Counsel for WAN submitted that the subpoena required WAN to draw its own conclusions about the extent to which material was required to be produced. This was said to result from the fact that the documents sought were described as documents 'relating to' other matters which were not defined with precision.

54 It is well established that it is not legitimate to use a subpoena for the purpose of endeavouring to obtain what would, in effect, be discovery of documents from a nonparty who is not liable to make discovery. This ensures that a nonparty, who will ordinarily be ignorant of the issues in dispute between other parties to litigation, is not to require to go to the trouble and expense of searching through his or her records and endeavouring to form a judgment as to whether any of those records throw light on the dispute.[22] But it does not follow that a subpoena requiring the production of documents 'relating to' a specified subject matter is necessarily objectionable on the ground that it calls for discovery.[23]

55 In my view, the subpoena does not require WAN to engage in an exercise tantamount to discovery. Although some of the subject matter to which the documents sought in the subpoena must relate is described in broad terms, the scope of the documents sought is narrowed by other criteria referred to in the subpoena including the origin of the documents, and the time frame in which the documents were received. In my view, the documents which must be produced are described with sufficient specificity that the subpoena does not necessitate WAN making a determination of the extent to which particular documents might shed light on the issues in dispute in the arbitration.

(iii) WAN's contention that the subpoena seeks material which on its face may be incriminating or tend to reveal incriminating material

56 Counsel for WAN submitted that the documents sought under the subpoena may be incriminating, because those documents pertained to a period of time in which suppression orders made by the Supreme Court of New South Wales were in place.

57 I am unable to accept that submission. It is entirely speculative whether any of the documents sought would themselves constitute, or contain, evidence which is incriminating. The time frame to which the documents sought must pertain does not appear to coincide in its entirety with the period during which the suppression order made by the New South Wales Supreme Court was in place. Given the suppression order has been lifted, it is far from apparent how the mere possession of a document containing information which might have been subject to that suppression order could, of itself, constitute evidence of a breach of the suppression order.

(iv) WAN's contention that the subpoena requires WAN to breach agreements as to confidentiality

58 Counsel for WAN submitted that it was apparent from the evidence that production of the documents sought would reveal confidential information imparted in circumstances of confidence, and the confidential sources of that information.

59 He submitted that any public benefit in requiring production of the documents sought was outweighed by the public interest in maintaining agreements of confidentiality made between journalists and their sources, and in protecting the identity of confidential sources of information. Counsel relied on a practice which is often referred to as 'the newspaper rule' which he submitted was to the effect that neither a media owner nor its journalists will ordinarily be required to disclose confidential information, at least at the interlocutory stage, unless necessary in the interests of justice, or for some other similarly compelling reason.

60 Counsel for WAN noted that HPPL did not contend that the production of the documents sought was necessary to do justice between it and the other parties to the arbitration, or in the interests of justice. Counsel for WAN also submitted that it could not be said that production of the documents sought was necessary to do justice between the parties to the arbitration or was otherwise in the interests of justice because the documents sought could have been obtained from Mr Hancock by way of discovery in the arbitration, and it was oppressive to seek material from nonparties when another, simpler means of obtaining them was available, but had not been pursued. I have dealt with the substance of the latter submissions already. In this section of my reasons, I deal with the following matters:

(a) the evidence as to the confidentiality of the information and the sources of the information;

(a) The evidence as to the confidentiality of the information and the sources of information

61 Having regard to the evidence set out in the affidavits of Mr Pennells and Mr Cronin, I accept that Mr Pennells has given undertakings of confidentiality to a number of persons who have provided him with information either to preserve the confidentiality of their identity, or of the information provided, or both. I also accept that Mr Pennells is subject to an obligation of confidence with respect to that information, and to an ethical obligation as a journalist to maintain the confidentiality of that information.

62 I accept that each of the communications in which Mr Pennells was provided with information by other people took place in the course of his employment as a journalist with WAN.

63 I accept Mr Pennells' evidence that production of the documents sought would cause him to breach those obligations of confidence with more than one source, as production would require him to reveal information that is confidential and which was given to him on condition that he not reveal it, or the name of the person who gave the information to him, without their prior approval.

64 I accept Mr Pennells' evidence that as a journalist, he is bound by an ethical obligation to respect and observe undertakings of confidence given to any sources, and that observing undertakings of confidentiality is fundamental to his obligation as a journalist to act in the interests of the public to ensure the open communication of information on issues of public importance.

65 I also accept that WAN regards itself as bound by the same ethical obligations as its journalists, and that it therefore regards itself as bound to respect the confidentiality of information received by Mr Pennells on the basis of an undertaking to keep that information confidential.

66 Counsel for HPPL submitted that the affidavit evidence was insufficient to establish any claim to confidentiality or to some form of 'privilege' with respect to the documents sought. There were three planks to this submission. First, counsel emphasised that the terms of the subpoena made clear that the only documents sought under the subpoena were documents provided to Mr Pennells by Mr Hancock. Secondly, counsel for HPPL submitted that the subpoena did not seek any documents revealing the confidential identity of any informant, because the subpoena only sought information provided by Mr Hancock (whose identity as an informant to Mr Pennells was known by virtue of the fact that in some of the Articles Mr Pennells attributed certain information to Mr Hancock). Thirdly, counsel for HPPL submitted that the affidavit evidence relied upon by WAN was inadequate to support a claim for the confidentiality of any documents sought because Mr Pennells did not specify the source of any obligation of confidentiality.

67 Given that it appears that WAN holds documents which fall within the scope of the subpoena, then by virtue of the description of the documents sought, those documents will necessarily have been provided to Mr Pennells (or another journalist employed by WAN) by Mr Hancock, or contain references to communications between Mr Pennells and Mr Hancock.

68 The question arises as to whether any of those documents may be subject to an obligation that either the source of the information in them, or the content of that information, remain confidential. Mr Pennells does not depose that all of the information or documentation which was provided to him by third parties was provided on the basis of his undertaking that that information or documentation, or the source of it, would be kept confidential.

69 Having regard to other evidence before the Court, the latter claim could not be made. In a number of the Articles, Mr Pennells attributed information to individuals such as Mr Hancock. Mr Pennells deposes that he has only ever attributed information to particular persons where he has the express authority of those persons. It follows that the information attributed to Mr Hancock in the Articles was not provided to Mr Pennells in circumstances where either his identity or the content of the information, was subject to an obligation of confidentiality.

70 Nevertheless, the second plank of HPPL's submissions as to the adequacy of the affidavit evidence must be rejected. The fact that a journalist attributes information to a source does not exclude the possibility that other information or documentation was provided by that source on the basis that it, or the identity of the source, be kept confidential. Mr Pennells' evidence, which was not contested, is that if documents are produced under the subpoena, that will involve the breach of an agreement with more than one source to keep the information provided, and the identity of the source, confidential.

71 The third plank of HPPL's submissions as to the adequacy of the affidavit evidence must also be rejected. Counsel for HPPL submitted that Mr Pennells' evidence was deficient because Mr Pennells did not specify the identity of the persons to whom he provided undertakings of confidentiality. However, Mr Pennells deposed that production of material pursuant to the subpoena issued to him would cause him to breach agreements of confidentiality as it would require Mr Pennells to reveal information given on the condition that Mr Pennells not reveal the information, or the name of the person who provided that information to him. Given the terms of the amended subpoena, I am unable to see how Mr Pennells could have given more specific evidence in relation to the persons to whom he provided undertakings of confidentiality, without breaching those undertakings.

72 Having regard to the affidavit evidence, I draw the following conclusions. If WAN holds documents falling within the scope of the subpoena, the affidavit evidence suggests that at least some of those documents may be the subject of an obligation of confidentiality, either as to the source of the information (that is, the informant's identity) or as to the content of the information itself. However, it is not possible to say that all of the documents held by WAN would necessarily be subject to an obligation of confidentiality. That is because there is no information before the Court to indicate whether documents held by WAN contain information which has been publicly disclosed as having been provided by Mr Hancock. If WAN holds documents of that kind, then those documents (to that extent) could not be the subject of any claim to confidentiality.

73 However, even though WAN holds documents within the scope of the subpoena which contain information which is subject to an obligation of confidence, the existence of that obligation, of itself, does not mean that the subpoena is oppressive.[24] The risk to the confidentiality of documents sought under a subpoena must ordinarily be tolerated in the interests of the administration of justice.[25] Nevertheless, confidentiality is a factor which is to be taken into account in considering whether a subpoena should be set aside on the ground that it is oppressive.[26]

74 Accordingly, although I accept that some of the documents sought are subject to an obligation of confidentiality, any such confidentiality, of itself, would not warrant setting the subpoena aside on the grounds that it is oppressive.

(c) Why WAN's submissions as to the newspaper 'rule' fail

75 I am unable to accept WAN's submissions that having regard to the newspaper rule, the subpoena should be set aside on the ground that it is an abuse of process, or oppressive. At the outset, it is appropriate to make two observations. First, the socalled newspaper 'rule' is not, in fact, a rule at all, but simply a practice which has developed over time to inform the exercise of a court's discretion whether to require a journalist or news media defendant to disclose a confidential source of information.[27]

76 Secondly, despite the existence of the newspaper rule, it remains the position at common law:

that the media and journalists have no public interest immunity from being required to disclose their sources of information when such disclosure is necessary in the interests of justice ... . The point is that there is a paramount interest in the administration of justice which requires that cases be tried by courts on the relevant and admissible evidence. This paramount public interest yields only to a superior public interest, such as the public interest in the national security. The role of the media in collecting and disseminating information to the public does not give rise to a public interest which can be allowed to prevail over the public interest of a litigant in securing a trial of his action on the basis of the relevant and admissible evidence. No doubt the free flow of information is a vital ingredient in the investigative journalist which is such an important feature of our society. Information is more readily supplied to journalists when they undertake to preserve confidentiality in relation to their sources of information. It stands to reason that the free flow of information would be reinforced, to some extent at least, if the courts were to confer absolute protection on that confidentiality. But this would set such a high value on a free press and on freedom of information as to leave the individual without an effective remedy in respect of defamatory imputations published in the media.

That is why the courts have refused to accord absolute protection on the confidentiality of the journalist's source of information, whilst at the same time imposing some restraints on the entitlement of a litigant to compel disclosure of the identity of the source. In effect, the courts have acted according to the principle that disclosure of the source will not be required unless it is necessary in the interests of justice.[28]

77 With these observations in mind, I turn to consider the content of the newspaper rule. Although the precise area of operation of the 'rule' has been described as being 'shrouded in uncertainty,'[29] the rule has been stated as applying in a 'defamation or related action', or in proceedings for 'defamation and, perhaps, other analogous actions'.[30] Within that context, the rule will ordinarily be applied in relation to interlocutory proceedings, typically in relation to applications for discovery or interrogatories, although it has been suggested that even at trial the court will not compel disclosure unless it is necessary to do justice between the parties.[31]

78 What actions can be said to constitute 'analogous actions' or 'related' actions (vis a vis a defamation action) has not been fully explored, but despite suggestions that the newspaper rule should be understood as a rule of general application, a broad view of the rule has been rejected.[32]

79 I turn, then, to consider whether the newspaper rule assists WAN in its contention that the subpoena is oppressive. I am unable to accept that the newspaper rule, or the authorities in relation to the newspaper rule, provide support for WAN's case, because the arbitration does not involve an action for defamation, nor can the arbitration be characterised as a 'related' or 'analogous' action (as compared with a defamation action).

80 Some of the issues in dispute in the arbitration to which the documents sought are said to be relevant concern issues of confidentiality. However, the authorities do not provide support for the conclusion that the 'related' or 'analogous' actions to which the newspaper rule may extend include an action for, or arising from, an alleged breach of confidence.

81 In British Steel Corporation v Granada Television Ltd[33] a majority of the House of Lords held that the newspaper rule had no application in the context of an action for the delivery up of documents said to have been given to the defendant in breach of an obligation of confidence.[34]

82 The High Court in John Fairfax and Sons Ltd v Cojuangco[35] approved the decision in Granada in several respects, but the Court did not expressly address the question whether the newspaper rule extended to actions for breach of confidence. That is not surprising the issue before the Court did not concern whether the newspaper rule applied in actions for breach of confidence. However, in view of the Court's strong endorsement of the rejection of a broad application of the newspaper rule in British Steel Corporation v Granada Television Ltd it is difficult to discern any basis upon which it might now be said that in Australia the newspaper rule applies to actions for, or arising from, a breach of confidence. In this respect, I respectfully agree with the observations made by Brereton J in AMI Australia Holdings Pty Ltd v Fairfax Media Publications Pty Ltd.[36]

83 The decision of the Court of Appeal in West Australian Newspapers Ltd v Bond is not inconsistent with this conclusion.[37] Buss JA, with whom Owen JA and Wheeler JA agreed, noted that the newspaper rule only applies in the context of a 'defamation or related action' or proceedings for 'defamation and, perhaps, other analogous actions'. In support of this proposition he relied on Cojuangco and Granada. The Court of Appeal (like the trial judge) dealt with the appeal on the assumption that the newspaper rule applied. Given that the pleadings involved an allegation of defamation (as well as an action for breach of confidence) that assumption is not difficult to understand. The reasoning of the Court does not support the conclusion that the newspaper rule has a wider application outside the defamation context.

7. Why the subpoena should be set aside, having regard to s 17(2) of the CA Act and the Shield Laws

84 For the reasons set out below, I have concluded that having regard to the operation of the Shield Laws, the subpoena should be set aside on the ground that it is oppressive and an abuse of process, other than in so far as any of the documents sought contain information which has been attributed in the Articles to a particular informant or informants.

85 Although WAN relied on the operation of the Shield Laws, in conjunction with all of the other factors I have addressed above, as warranting the conclusion that the subpoena should be set aside, in my view the operation of the Shield Laws is a factor sufficient of itself to warrant the conclusion that the subpoena is oppressive and an abuse of process. In order to explain that conclusion, I deal with the following matters in this part of my reasons:

(b) WAN's contentions in relation to the Shield Laws;

(d) The meaning and operation of s 17(2) of the CA Act;

(e) Why the subpoena should be set aside on the basis that it is oppressive and an abuse of process.

86 The Shield Laws came into operation on 21 November 2012. They have two parts. First, s 20B s 20F of the Evidence Act (the PCRP provisions) are concerned with protecting the confidentiality of 'protected confidences' and 'protected identity information' in a variety of circumstances. The second plank of the Shield Laws is concerned with whether journalists can be compelled to give evidence of the identity of their informants (the journalists' informants provisions).

87 Subsection 20C(1) is the source of the protection afforded to protected confidences. It provides:

(1) A court may direct that evidence not be adduced in a proceeding if the court finds that adducing it would disclose

(b) the contents of a document recording a protected confidence; or

89 'a communication made by a person in confidence to another person (the confidant)

(a) in the course of a relationship in which the confidant was acting in a professional capacity; and

(b) when the confidant was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law or can be inferred from the nature of the relationship between the person and the confidant.

90 The term 'protected identity information' means 'information about, or enabling a person to ascertain, the identity of the person who made a protected confidence'.[38]

91 A 'confidant' includes a journalist,[39] namely a person engaged in the profession or occupation of journalism in connection with the publication of information in a news medium.[40] A 'news medium' is 'a medium for the dissemination to the public or a section of the public of news and observations on news'.[41]

92 Section 20C does not mandate the exclusion of evidence in a proceeding on the basis that the evidence would disclose a protected confidence or protected identity information. Instead, the Court has a discretion whether to give such a direction.[42] However, the court must give the direction contemplated in s 20C(1) if it is satisfied of two things:

(a) it is likely that harm would or might be caused, whether directly or indirectly, to the protected confider if the evidence is adduced; and

(b) the nature, extent and likelihood of the harm outweigh the desirability of the evidence being given.[43]

93 The court has a wide discretion with respect to the matters to which it may have regard for the purpose of determining whether to make a direction under s 20C but in exercising that discretion it must have regard to ten factors, which are set out in s 20C(4) of the Evidence Act. The transparency of that weighing process is secured by the requirement that the court must state its reasons for giving or refusing to give a direction under s 20C of the Evidence Act.[44]

94 For completeness, I note that the protection afforded by s 20C may be lost (if the protected confider consents to the disclosure[45]) or unavailable (in the case of misconduct[46]).

95 In his second reading speech for the Evidence and Public Interest Disclosure Legislation Amendment Bill (the Bill)[47] the Attorney General indicated that the PCRP provisions:

are intended to assist professionals in reconciling their ethical obligations to preserve their client's confidentiality and their legal obligations to give evidence when required to do so by a court. The bill reconciles these conflicting obligations by vesting a guided discretion in the court to exclude evidence of a confidential communication. The discretion vested in the court consists of two components. The first component is a threshold component, providing that the protection can apply only when the communication was made in the course of a professional relationship in which the confidant was under an express or implied obligation not to disclose its contents. The protected information can be information about the content of the communication, documents that would reveal that content or information that would make it possible to discover the identity of the maker of the communication.

...The bill also confirms that the PCRP provisions apply to journalists acting in a professional capacity when information was disclosed to them in circumstances of express or implied confidentiality.

Under the second component, the bill requires the responsible court to determine whether or not the nature and extent of the harm that may be caused to the confidant, either directly or indirectly, outweighs the desirability of the evidence being given. If the harm outweighs the desirability of the evidence being given, a court must give a direction that evidence not be adduced. As part of this essential balancing exercise, the bill contains a series of factors that a court must take into account, including the nature of the proceedings, the importance of the evidence, and the means available to the court to limit the harm that is likely to be caused by disclosing the evidence.

96 Section 20I of the Evidence Act is the source of the protection afforded to journalists from being compelled to give evidence as to the identity of confidential informants. Section 20I provides:

If a journalist has promised an informant not to disclose the informant's identity, neither the journalist nor a person for whom the journalist was working at the time of the promise is compellable to give evidence that would disclose the identity of the informant or enable that identity to be ascertained (identifying evidence).

97 An 'informant' is 'a person who gives information to a journalist in the normal course of the journalist's work in the expectation that the information may be published in a news medium'.[48] The terms 'journalist' and 'news medium' are defined in terms identical to their definition in relation to the PCRP provisions.[49]

98 In the case of evidence which would disclose the identity of a confidential informant (identifying evidence), s 20I creates a presumption that neither the journalist nor his or her employer can be compelled to give that evidence. That protection is not, however, absolute. A person acting judicially may direct a journalist or his or her employer to give identifying evidence, but only if satisfied that 'having regard to the issues to be determined in the proceeding, the public interest in the disclosure of the identity of the informant outweighs

(a) any likely adverse effect of the disclosure of the identity on the informant or any other person; and

(b) the public interest in the communication of facts and opinions to the public by the news media and, accordingly also, in the ability of the news media to access sources of facts.[50]

99 As is the case under s 20C(4), the person acting judicially has a wide discretion with respect to the matters to which he or she may have regard for the purpose of determining whether to make a direction of this kind, but must have regard to ten factors set out in s 20J(3). The transparency of this weighing process is secured by the requirement that reasons must be given for giving or refusing a direction under s 20J.[51]

100 The protection afforded by s 20I may be lost if the informant consents to the journalist giving the identifying evidence (s 20L) or in the case of misconduct on the part of an informant or a journalist (s 20K).

101 In his second reading speech for the Bill, the Attorney General indicated that:

This bill serves the public interest of preserving appropriate confidentiality while recognising that journalists play a vital role in ensuring the free flow of facts and information to the public. It follows that the public interest in the free flow of information is served by supporting journalists in their professional capacity. In many instances, the role that journalists play is assisted by the provision of information by sources. Such sources may often wish to remain anonymous and indeed, in some cases, a source may provide information only on the condition that their identity remains confidential.

...

The new journalist protection provisions strengthen the capacity of journalists to maintain the anonymity of their sources by introducing a presumption that a journalist is not compellable to give identifying evidence when they have promised not to disclose the identity of their source. As with the PCRP provisions, however, the protection afforded to journalists is a qualified protection. The public interest in the free flow of information and news must always be balanced against the public interest in courts and tribunals being properly informed of all matters that could legitimately affect their decisions. The bill achieves this balance by outlining the circumstances in which a person acting judicially may direct that identifying evidence be given, notwithstanding the general presumption of non-compellability on the part of a journalist.

102 The Shield Laws do not contain a provision which indicates that they are to be applied directly in respect of an objection to the production of documents under a subpoena. That is a curious omission, to say the least, for two reasons.

103 First, at least in so far as the PCRP provisions are concerned, the Shield Laws were apparently modelled on the provisions in pt 3.10, div 1A of the Evidence Act 1995 (NSW). The journalists' protection provisions were enacted in response to the Evidence Amendment (Journalists' Privilege) Act 2010 (Cth) and the Evidence Amendment (Journalist Privilege) Act 2011 (NSW).[52] The Evidence Act 1995 (NSW) and the Evidence Act 1995 (Cth) each contain a provision which expressly extends the protections afforded by the substantive protection provisions to pre-trial procedures including subpoenas. Section 131A of the Evidence Act 1995 (NSW) expressly permits an objection to the production of documents under subpoena to be determined by applying the protection provisions (that is, those equivalent to the Shield Laws) 'as if the objection to giving information or producing the document were an objection to the giving or adducing of evidence'. There is nothing in the second reading speech or explanatory memorandum for the Bill to indicate the reason for the omission of an equivalent provision in the Shield Laws.

104 Secondly, if the Shield Laws do not apply in respect of the production of documents under a subpoena, the very protections the Shield Laws are designed to provide could be significantly undermined, if not rendered nugatory.

105 It may be that the Parliament considered that the Shield Laws were capable of direct application in the case of subpoenas, and that the Shield Laws, properly construed, have this effect. However, it is not necessary to decide the latter point because counsel for WAN made very clear that he did not contend that the Shield Laws applied directly in this case, so as to permit WAN to apply to set aside the subpoena on the bases set out in the Shield Laws.

(b) WAN's contentions in relation to the Shield Laws

106 Instead, counsel for WAN relied on the Shield Laws in two ways. First, he submitted that the Shield Laws were a further factor which, cumulatively with the other factors to which I have already referred, support the conclusion that the subpoena is oppressive. Counsel for WAN submitted that the Shield Laws provide a protection against the compulsory disclosure of information, including information as to the identity of an informant, which is provided in confidence to a journalist, and the production of the subpoenaed documents would defeat the evident purpose of the Shield Laws, and would be oppressive or an abuse of process for that reason.

107 Counsel for WAN submitted that the operation of the Shield Laws meant that WAN could not (by virtue of s 20I) nor would not (under s 20C) be compelled to adduce or give evidence reflecting the information in the documents, or would have 'highly persuasive arguments' in the arbitration to resist doing so, and for that reason the subpoena served no legitimate purpose or was an abuse of process, or was oppressive. He also submitted that the pursuit of the subpoena in light of the Shield Laws constituted an attempt to circumvent the operation of the Shield Laws because the documents sought could not be adduced in evidence in the arbitration.

108 Secondly, counsel for WAN submitted that WAN could not be compelled to produce the documents sought under the subpoena, by virtue of the operation of s 17(2) of the CA Act, when that provision is read in conjunction with the Shield Laws. He submitted that the effect of s 17(2) of the CA Act is that evidence which could not be given or produced to a court at trial (by virtue of the operation of the Shield Laws) cannot be the subject of an enforceable subpoena. Accordingly, he submitted that s 17(2) requires a consideration of whether the documents sought could be produced to a court on the trial of an action, having regard to the operation of the Shield Laws.

109 It is convenient to consider the meaning and operation of s 17(2) of the CA Act, before turning to consider whether the Shield Laws support the conclusion that the subpoena is oppressive or an abuse of process.

(c) The meaning and operation of s 17(2) of the CA Act

110 Counsel for WAN submitted that s 17(2) provides a basis upon which a subpoena may be set aside. As I understood the submission, it was to the effect that s 17(2) makes clear that a subpoena that seeks to compel the giving of evidence or production of documents that could not be compelled to be given to, or produced to, a court 'on the trial of an action' is unenforceable. Consequently, it was submitted that the operation of the Shield Laws in 'the trial of an action' had to be considered, so that evidence that could not be given in, or produced to, a court in a trial because of the operation of the Shield Laws could not be the subject of an enforceable subpoena, irrespective of whether the Shield Laws actually apply in the forum for which the subpoena has been issued (that is, the arbitration).

111 Counsel for WAN submitted that the reference to 'the trial of an action' indicated that the focus of s 17(2) is not on what would be admissible were the matters the subject of the arbitration heard by a court. Instead, he submitted that in considering whether the production of documents under a subpoena would be compelled, the question was whether the documents could be produced having regard to the rules applicable to courts generally. Because the Shield Laws clearly apply to proceedings before the courts, counsel for WAN saw s 17(2) as overcoming any potential issues (in relation to s 20C of the Evidence Act in particular) as to whether the Shield Laws were capable of application in an arbitration.

112 I am unable to accept the latter part of these submissions.

113 The questions raised by WAN's submissions do not appear to have been the subject of any judicial consideration. Accordingly, it is necessary to construe those words using well established principles of statutory construction. The starting point in the construction of any statutory provision is to consider the ordinary meaning of the words used, within their context.[53]

114 In so far as it concerns the production of documents, s 17(2) provides that a person 'shall not be compelled' to produce documents to an arbitrator under a subpoena issued under s 17(1) if the criterion in s 17(2) is satisfied. In other words, s 17(2) makes clear that a subpoena cannot be enforced if the recipient of the subpoena could not be compelled to produce documents in the circumstances described. A subpoena which could not be enforced should be set aside. In my view, s 17(2) confirms that a subpoena which is issued under s 17(1) may be set aside.

115 Subsection 17(2) then goes on to set out the circumstances in which a person will not be compelled to produce documents under a subpoena in an arbitration. The criterion is relevantly whether the person could be compelled to produce the documents 'on the trial of an action'. Although there is an ambiguity in this part of s 17(2), I have reached the conclusion that the words should be understood as referring to whether the person could be compelled to produce the documents under a subpoena returnable on the trial of an action. Consequently, s 17(2) confirms that the grounds on which a subpoena issued in respect of an action in the Court may be set aside will also apply in respect of a subpoena issued by the Court for the purpose of an arbitration. I have reached that conclusion for four reasons.

116 First, that conclusion is supported by a consideration of s 17(2) within the context of s 17 as a whole. The purpose of s 17 is clearly to enable a party to an arbitration agreement to secure the attendance of witnesses, or the production of documents, in an arbitration. Subsection 17(1) makes clear that the subpoena will be issued 'subject to and in accordance with' the rules of court. The legislature has thus adopted, in a shorthand way, the provisions of the rules of court which govern the issue of subpoenas. (Those provisions extend to applications to set aside a subpoena.[54]) As I have already observed, s 17(2) then goes on to provide for when a subpoena issued by the Court will be enforceable, and sets out the circumstances in which the recipient of the subpoena will not be compelled to produce the documents. In those circumstances, it is to be expected that the grounds for setting aside a subpoena would be referable to the grounds on which a subpoena for the production of documents to a court might be set aside.

117 Secondly, the conclusion is more consistent with existing authority in relation to s 17(2) and equivalent provisions elsewhere. In Re Commissioner of Water Resources[55] Byrne J held that the equivalent provision in the Queensland commercial arbitration legislation at the time had the effect that 'the reach of [subpoenas] when deployed in aid of arbitrations [is] to be coextensive with their effect in litigation'.[56] Furthermore, existing authority within Western Australia, while not addressing specifically the operation of s 17(2) of the CA Act, has proceeded on the basis that subpoenas issued in an arbitration may be set aside on the same bases as subpoenas issued in proceedings before the Court.[57]

118 Thirdly, in so far as s 17(2) refers to whether documents could be produced 'on the trial of an action' those words appear to reflect the position which existed when s 17(2) of the CA Act was enacted, which was that it was not then possible to obtain the production of documents on subpoena prior to the trial of an action. Rather, the subpoena required the production of documents to the Court at the commencement of the trial of the action.

119 Fourthly, WAN's contention contemplates that the Court would determine whether a subpoena in an arbitration should be set aside by reference to what would occur in the trial of any action, apparently without reference to the particular circumstances of the arbitration and without taking into account the reasons why a document cannot be produced in a court (including cases - such as s 20C of the Evidence Act where the provision on its face applies only to a court). The difficulty with that contention is immediately apparent. A decision as to whether documents will be required to be produced, or evidence given, in a trial of an action will always depend upon the particular legal principles applied to the particular facts of the case.

120 Consequently, in my view, the effect of s 17(2) is that the well recognised bases for setting aside a subpoena in an action in the Court on the basis that it is an abuse of process such as that the subpoena is oppressive or that the documents the subject of the subpoena are privileged from production apply also to subpoenas issued for the purpose of an arbitration.

121 I turn, then, to consider WAN's submissions that having regard to the Shield Laws, the subpoena is oppressive or an abuse of process.

(d) Why the subpoena should be set aside on the basis that it is oppressive and an abuse of process

122 I understand the effect of WAN's submission to be that in considering whether the subpoena is oppressive and an abuse of process, I should consider whether the documents sought could be adduced in evidence, or whether an officer of WAN could be compelled to give evidence reflecting the content of those documents, in the arbitration. Counsel for WAN submitted that the effect of the Shield Laws was that no such evidence could be adduced nor given in the arbitration pursuant to s 20C and s 20I of the Evidence Act, and in those circumstances, to seek the production of the documents sought under the subpoena was oppressive or an abuse of process. In addition, counsel for WAN submitted that the Shield Laws were a statutory example of a further protection in respect of the documents sought, akin to the newspaper rule, and in that sense advanced the submission as an analogy to the newspaper rule.

123 Assessing the merit of WAN's submissions requires a consideration, first, of whether the Shield Laws would be capable of application to the documents sought, or to the information contained in those documents, and secondly, whether the likely application of the Shield Laws to the documents sought means that the subpoena is oppressive or an abuse of process.

124 WAN's contentions thus require consideration of the possible application of the Shield Laws that is, whether Mr Pennells or WAN could be compelled to give evidence reflecting the information in the documents, or whether the documents could be adduced in evidence, in the arbitration. However, the Shield Laws do not absolutely prohibit such evidence being adduced or given. In those circumstances, in order to conclude that the subpoena would be oppressive and an abuse of process, the Court would require a high degree of confidence that the Shield Laws would operate as WAN contends. Accordingly, it seems to me that unless it can be said that the Shield Laws would be very likely to apply with the result that the documents sought could not be adduced in evidence, or that neither Mr Pennells nor an officer of WAN could be compelled to give evidence reflecting the contents of the documents sought, the conclusion could not be reached that the subpoena is oppressive and an abuse of power.

125 It is convenient to consider, first, the journalists' protection provisions.

126 For the reasons set out below, I have concluded that having regard to the operation of the journalists' protection provisions, the subpoena should be set aside on the ground that it is oppressive and an abuse of process, save to the extent that any of the documents sought contain information which has been attributed in the Articles to a particular informant or informants.

127 To explain that conclusion I deal with the following matters:

(i) Are the Shield Laws capable of applying, given that the Shield Laws commenced operation after the arbitration had commenced and after the subpoena had issued?

(ii) Does the evidence support the conclusion that the documents sought contain identifying evidence as defined in s 20I of the Evidence Act?

(iii) Does the evidence support the conclusion that neither Mr Pennells nor WAN could be compelled to give that identifying evidence in the arbitration, having regard to the journalists' protection provisions?

(iv) If so, why would it be oppressive and an abuse of process to require the production of the documents sought under the subpoena, to the extent that they contain identifying evidence?

(i) Are the Shield Laws capable of applying temporal application?

128 The journalists' protection provisions apply in relation to information given by an informant whether given before or after the commencement of those provisions.[58] However, those provisions do not apply in relation to a 'proceeding' the hearing of which began before the commencement of those provisions.[59]

129 A 'proceeding' is defined for the purposes of the Evidence Act as including an arbitration.[60] However, the definitions in the Evidence Act apply 'unless the context or subject matter otherwise indicates or requires'.[61] Counsel for HPPL submitted that the context and subject matter indicated that an arbitration of the kind in the present case was not a 'proceeding' as defined in the Evidence Act, to which s 20I applied. For the reasons explained below, nothing in the context or subject matter suggests that the arbitration is not a 'proceeding' for the purposes of the journalists' protection provisions.

130 Subsection 20H(1) draws a distinction between a 'proceeding' and 'the hearing' of that proceeding. The ordinary meaning of the word 'hearing' is capable of encompassing the trial of an action, as well as those occasions on which evidence may be received or submissions made in order to resolve interlocutory disputes within a proceeding. The word 'hearing' does not appear to be used with a consistent meaning throughout the Evidence Act. On some occasions it appears to refer to a final hearing or trial, while in other cases it appears to refer to a hearing of an interlocutory dispute.[62]

131 In order to determine the meaning of the word 'hearing' in s 20H(1) it is therefore necessary to focus on the precise way that that word is used in that subsection. Section 20H(1) refers to 'the hearing' rather than 'a hearing' of a proceeding. That context supports the conclusion that the word 'hearing' is there intended to refer to the trial (or the equivalent substantive or final hearing) of the proceeding in question. In other words, if a trial had already commenced when the Shield Laws came into operation, the Shield Laws would not apply in relation to that proceeding. Other than in that circumstance, the journalists' protection provisions are capable of application to all 'proceedings' to the extent that the words used in those provisions permits.

132 Although the 'proceeding' in this case, namely the arbitration, has commenced, there was no evidence before the Court to suggest that the substantive hearing of the arbitration has commenced. In my view, therefore, s 20H(1) does not operate to preclude the operation of the journalists' protection provisions in relation to the arbitration, if on their proper construction those provisions are capable of applying in that context.

(ii) Does the evidence support the conclusion that the documents sought contain identifying evidence as defined in s 20I of the Evidence Act?

133 To constitute 'identifying evidence' for the purpose of s 20I of the Evidence Act, three requirements must be met. First, the information must disclose the identity of a person, or permit that person's identity to be ascertained. Secondly, the information must identify an 'informant'. Thirdly, it must be the case that a journalist promised the informant that he or she would not disclose the informant's identity. The evidence of Mr Pennells supports the conclusion that the documents contain 'identifying evidence' as described in s 20I. Having regard to Mr Pennells' evidence that the production of the documents sought would involve the breach of an undertaking of confidentiality Mr Pennells has given to an informant (or informants), namely that he would keep the identity of that informant (or informants) confidential, it can be inferred that the documents sought contain information which identifies an individual or individuals, or which would permit the identity of an individual or individuals to be ascertained.

134 In addition, Mr Pennells' evidence establishes that he was given information from a number of people in the course of his work as a journalist and it can be inferred that that information was given in the expectation that it may be published in a news medium. In so far as the documents sought contain information which would identify any of those persons, that information would identify an informant. Those who gave Mr Pennells information, in that context, are 'informants' for the purposes of s 20I of the Evidence Act.

135 Further, Mr Pennells' evidence establishes that the documents sought contain information given to him on the condition that he not disclose that information, or the name of the person who gave it to him, without their prior approval. His evidence was that disclosure of the documents sought would result in the breach of that obligation of confidentiality.

136 Counsel for HPPL submitted that the latter requirement was not met because Mr Pennells' evidence did not establish that he was under an express or implied obligation not to disclose the contents of a communication with Mr Hancock specifically.[63] I am unable to agree with the foundation for this submission. I accept Mr Pennells' evidence that he reached agreement with more than one person that as a condition of their providing information to him in the course of his employment as a journalist, he would keep their identity, and the information they had provided, confidential. The link between that promise of confidentiality and the documents sought in the subpoena is established by Mr Pennells' evidence that production of the documents under the subpoena would require him to breach an undertaking or undertakings of confidentiality which he has given. Given the specific description of the documents sought in the subpoena, it is difficult to see how Mr Pennells could have given evidence which was any more specific about the persons to whom he had given undertakings of confidentiality without breaching the very promises he had made to keep their identity confidential.

137 Counsel for HPPL also submitted that Mr Hancock could not be said to be an 'informant' for the purposes of s 20I because his identity as a person who had provided information to Mr Pennells was already known and disclosed in the Articles.[64] Counsel for HPPL submitted that for the purposes of the Evidence Act 1995 (Cth) if the identity of a person as the source of information is already known, that person cannot considered an 'informant'.[65]

138 To the extent that WAN has in its possession documents containing information which has been published in the Articles, including information which has been attributed to Mr Hancock in those Articles, clearly any reference to Mr Hancock in relation to that information would not be amenable to the protection afforded by s 20I of the Evidence Act. Mr Hancock could not be considered an informant in respect of that information in the documents.

139 However, as I have already observed, a person may provide information to a journalist in circumstances where the person does not require that that information, or his or her identity as its source, be kept confidential. On other occasions, the same person may give different information to a journalist on condition that the information, or his or her identity as its source, or both, be kept confidential. Whether s 20I applies to information which is sought to be given in evidence will depend upon whether that particular information was given in the circumstances referred to in s 20I.

140 In this respect, the purpose of s 20I, like that of s 126H(1) of the Evidence Act 1995 (Cth) (which is in similar terms) is 'to ensure that a person who provides particular information can do so knowing that his or her identity as its source can be protected by the journalist because he or she is not compellable to disclosure that identity'.[66] Accordingly, there must be a connection between the particular information to be produced, and the promise by the journalist to keep confidential the identity of the informant as the source of that information. Mr Pennells' evidence that production of the documents sought would involve the breach of an undertaking of confidentiality given to a source or sources of the information in those documents supports the conclusion that the information in at least some of the documents sought was received on condition that the identity of the person who provided that information be kept confidential.

HANCOCK PROSPECTING PTY LTD -v- HANCOCK [2013] WASC 290 (6 August 2013)

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HANCOCK PROSPECTING PTY LTD -v- HANCOCK [2013] WASC 290 (6 August 2013)

Legislation Cited (8)

Cases Cited (33)