Hancock v Rinehart

Supreme Court of NSW|2014-05-22|Before: Brereton J

(third defendant) DB Studdy SC w C Colquhoun (fourth & fifth defendants) Solicitors: Yeldham Price O'Brien Lusk (plaintiffs) Corrs Chambers Westgarth (first, fourth, fifth defendants) Gadens Lawyers (second defendant) Deutsch Miller (third defendant) File Number(s): 2011/285907

Judgment 1The remaining substantive issue in these proceedings, set down for hearing for a week commencing on 24 June 2014, is the appointment of a replacement trustee of the Hope Margaret Hancock Trust, consequent upon the retirement of the first defendant Mrs Rinehart. There are two competing proposals: the plaintiffs (being two of the four beneficiaries) propose the second plaintiff Ms Bianca Rinehart; and the defendants (who include one and possibly both of the other two beneficiaries, as well as Mrs Rinehart and companies controlled by her) propose a corporate custodian trustee and a professional managing trustee. 2On 3 December 2013, on applications made by the plaintiffs and by the second defendant, I made orders for discovery in respect of a number of classes of documents [Hancock v Rinehart [2013] NSWSC 1998], two of which are relevant for present purposes. The first relevant class ("the wishes discovery order") was: Documents in their possession, custody or control relating to the issue whether the second defendant and/or the thirds defendant are bound by or party to any agreement, arrangement or understanding with the first defendant that limits, restricts or constrains their expression of wishes in respect of a proposed replacement trustee. 3The issue to which that class of documents related was the weight to be the weight to be afforded to the wishes expressed by the second and third defendants. 4The other relevant classes were ("the managing trustee discovery order"): 1. All documents disclosing or recording any communication between 1 September 2013 and the present in relation to the trust, between or among the First Defendant (or any person on her behalf) and or the Second Defendant (or any person on her behalf) and or the Fourth and Fifth Defendants (or any person on their behalf) and any of: 1.1 Australian Executor Trustees Limited; 1.2 Equity Trustees Limited; 1.3 National Australia Trustees Limited. 2. All documents recording or disclosing any relationship between or among any of the First Defendant and or the Second Defendant and or the Fourth and Fifth defendants (or any related entity of the Fourth Defendant) and any of: 2.1 Australian Executor Trustees Limited; 2.2 Equity Trustees Limited; 5The issue to which that class related was the independence and impartiality of the professional managing trustees proposed by the defendants. 6On 21 February 2014, I made pre-trial directions, including relevantly that (1) any party seeking orders by way of further and better discovery or enforcement of discovery arising out of and not inconsistent with the order made by the Court on 3 December 2013 may file and serve a motion to that effect; (2) the balance of the proceedings be provisionally listed for hearing for 4 days commencing on 24 June 2014; (3) the plaintiffs, and the second, third and fourth defendants, file and serve any further evidence by 20 May 2014; (4) the parties file and serve any responsive affidavit evidence by 10 June 2014; and (9) by 27 May any party objecting to any proposed replacement trustee file and serve a notice specifying in summary form the grounds of objection to be relied upon. 7By motion filed on 8 April 2014, the plaintiffs seek orders that the defendants give further and better discovery of, or alternatively produce to the plaintiffs, documents in the following five categories: 1. Documents evidencing or disclosing the provision by the First Defendant and or the Fourth Defendant (or any of its related entities) of any material benefit (directly or indirectly and including, without limitation, gifts, money, indemnity from any liability or obligation to any other person or entity, payment of bills (including legal fees) and or employment or business opportunities) to the Second and / or Third Defendant since 1 September 2011. 2. Documents evidencing, recording disclosing or referring to any offer or promise or undertaking (conditional or unconditional) made by the First Defendant and or the Fourth Defendant (or any of its related entities) since 1 September 2011 to pay money to or confer any material benefit upon the Second and / or Third Defendant at any time in the future (directly or indirectly and including, without limitation, gifts, money, indemnity from any liability or obligation to any other person or entity, payment of bills (including legal fees) and or employment or business opportunities). 3. Documents recording or disclosing communications between the Defendants relating to whether or not any of the Defendants should consent to, object to, oppose, or make a submission in respect of the appointment of the Second Plaintiff as trustee of the Hope Margaret Hancock Trust (HMHT) and the basis for any opposition. 4. Documents recording or disclosing communications between the Defendants relating to whether or not any of the Defendants should consent to, object to, oppose, or make a submission in respect of the Second Defendant's Replacement Trustee Proposal. 5. Documents evidencing or disclosing or recording any analysis by the First, Second or Fourth Defendants of any risk that might arise in relation to the Hope Downs Joint Venture Agreement in relation to: (a) the possible appointment of a custodian and managing trustee as trustee of the HMHT, as proposed by the Second Defendant; and/or (b) the possible appointment of the Second Plaintiff as trustee of the HMHT. 8The plaintiffs' motion is advanced on the alternative bases of (1) further and better discovery, it being contended that the defendants' discovery under the 3 December 2013 orders is incomplete; and (2) additional categories of discovery.

Plaintiffs' application for further and better discovery

9Because, subject to some exceptions, an affidavit of discovery is ordinarily regarded as conclusive [Michael Wilson & Partners Ltd v Nicholls (2008) 74 NSWLR 218, 227 [31]], an order for further and better discovery is made only if the court is persuaded that the discovery given is incomplete (which may appear from the pleadings, the affidavit of documents or documents referred to in it, or any other admission of the existence of a discoverable document), or that a party has misconceived the discovery obligation [Mulley v Manifold (1959) 103 CLR 341, 343]. There must be "reasonable grounds for being fairly certain" that "other relevant documents exist which ought to have been disclosed" [British Association of Glass Bottle Manufacturers Ltd v Nettlefold [1912] AC 709, 714; Beecham Group Ltd v Bristol Myers Co [1979] VR 273, 276]. A speculative possibility that a party has not disclosed a relevant document will not suffice [Martell v Victorian Coal Miners' Association (1903) 9 ALR 231; Pendlebury v O'Neill (1911) 11 SR(NSW) 188; Kent Coal Concessions Ltd v Duguid [1910] AC 452; Dense Medium Separation Powders Pty Ltd v Gondwana Chemicals Pty Ltd [2010] NSWSC 1309, [47]].

10Under the wishes discovery order, the third defendant (and the first defendant) have disclosed only a Deed of Loan dated 28 March 2013, a Confidential Deed of Loan of the same date, and a "non-revocable" letter dated 28 March 2013. The effect of the loan deeds, relevantly, appears to be that the third defendant is not at liberty to act contrary to the wishes or interests of the first and fourth defendants, and that should she do so, she is liable to suffer a loan of $45 million to be called up. The third defendant has also listed, but claimed privilege in respect of, thirteen items of correspondence between her and her solicitor. The second defendant has not disclosed any documents.

11The plaintiffs submit that "there are likely to be documents in existence that have not been produced by the first and second defendants which may rationally affect the assessment of the probability of, or be capable of informing the court, whether or not an agreement, arrangement or understanding exists which could "limit, restrict or constrain" the expression of the second defendant's wishes ...". They point to evidence from which it might well be inferred that the second defendant executed a document to the effect of a Deed or Deed Poll circulated between 3 and 5 September 2011. I would for the purposes of the present application be sufficiently persuaded that the second defendant executed such a document.

12The plaintiffs also submit that no documents have been produced relating to financial support provided for the second defendant; that it should be inferred that the second defendant's substantial legal costs are being paid by the first and/or fourth defendant; and that documents evidencing such support may rationally affect the assessment of the probability of, or be capable of informing the court as to whether, the second defendant is a party to an agreement etc of the type referred to in the wishes discovery order. Again, for the purposes of the present application I would be sufficiently persuaded that the second defendant's legal costs are being paid, directly or indirectly, by the first and/or fourth defendants.

13As to the third defendant, the plaintiffs submit that the documents she has discovered evidence a contractual obligation not to act contrary to the wishes or interests of the first and fourth defendants, including with respect to the identity of the proposed replacement trustee. No doubt it is for the reason that they may support such an argument that the defendants regarded them as discoverable, although the third defendant has made some submissions to the effect that she is not bound to take any positive position or express any wish. The plaintiffs submit that communications between the first, third and fourth defendants may rationally affect the assessment of the probability of, or be capable of informing the court as to how the parties have acted and in particular whether the first and fourth defendants effectively control the position adopted by the third defendant. Further, it is submitted that any communications between the third defendant and the first or fourth defendants must be relevant because the fourth defendant would need to be satisfied that she would not contravene her obligations under the Loan Deeds.

14However, that does not mean that such documents were discoverable under the wishes discovery order, which required disclosure only of documents relating to the issue whether the second defendant and/or the thirds defendant are bound by or party to any agreement, arrangement or understanding with the first defendant that limits, restricts or constrains their expression of wishes in respect of a proposed replacement trustee. As is apparent from the judgment of 3 December 2013, that order was deliberately made in somewhat narrower terms than the order sought. Importantly, it is confined to documents relating to agreements etc that limit etc the expression of wishes. The phraseology "agreement ... that limits etc" describes an agreement that makes provision directly to that effect, and does not extend to arrangements that in some indirect way may be produce that result. The description was informed by the even more explicit category originally proposed by the plaintiffs, which sought only "agreements that include terms prohibiting or restricting the second or third defendant from propounding or supporting a replacement trustee without the approval of the first defendant" [see the 3 December judgment, at [8]].

15The evidence simply does not establish that any document executed by the second defendant between 3 and 5 September 2011 contained provisions that "limit, restrict or constrain" the second defendant's expression of her wishes in respect of a proposed replacement trustee. The draft documents circulated at about that time did not do so, and they do not tend to show that the second defendant is or is not a party to an agreement etc having the specified characteristic. While financial dependence on the first or fourth defendants, or the expectation of inheritance, may well influence the attitude of the second defendant, they do not of themselves show, or tend to show, that the second defendant must be bound by or party an agreement etc of the type described. The strongest point for the plaintiffs is the inference that the second defendant's defence is being funded by the first and/or fourth defendant; but even that does not establish that there must be in existence an agreement or understanding having the relevant characteristic. Unless one concludes that there must be such an agreement etc, the requisite proof to overcome the otherwise conclusive affidavit of discovery is not established. And while communications between the first, third and fourth defendants may well reveal that the first defendant has sought to influence the third defendant's position, that does not mean that there is an agreement etc - other than those already disclosed - that constrains the expression of the third defendant's wishes. Just because communications may, in some way, relate to the Loan Deeds which the third defendant has discovered, does not mean that they relate to the issue, whether or not she is bound by an agreement of the specified kind. Indeed, those Loan Deeds having been discovered, the issue seems prima facie to be closed, because they appear to show that she is so bound.

16Accordingly, there are not reasonable grounds for being fairly certain that other relevant documents exist which ought to have been disclosed under the wishes discovery order, properly construed.

17Under the managing trustee discovery order, the defendants have discovered documents that show, inter alia, that the first defendant was involved in sourcing National Australia Trustees Ltd as a potential managing trustee. The plaintiffs submit that the documents discovered should, but do not, include communications between the defendants relating to the development of the defendants' proposal - as distinct from communications between one or more of the defendants on the one hand, and a proposed trustee on the other.

18But assuming that such documents exist, it does not follow that they are caught by the discovery order. Properly construed, the order catches only communications between one or more of the defendants on the one hand, and any of the three proposed trustee on the other; and not inter se communications between the defendants relating to the development of the defendants' proposal. This construction is supported by the structure of order (1), which differentiates in the manner in which it deals with the defendants, using the conjunction "and or", and the trustees, which are individually and separately listed; the circumstance that on the plaintiffs' construction, all communications between the defendants would be discoverable without limitation as to subject matter, which could not have been intended; the analogy with order (2), under which, if the plaintiffs' construction were correct, all documents disclosing any relationship between the defendants would be discoverable, which also could not have been intended; the course of proceedings on 3 December, when a wider category which would have caught inter se communications of the defendants relevant to their proposal was abandoned; and the rationale for the order, which was the relevance of eliciting any pre-existing relationship between any of the defendants - particularly the first defendant - and any proposed managing trustee.

19Accordingly, no failure to discover relevant documents under this order, nor any misapprehension of the order, is established. Indeed, the order achieved precisely what it was intended to achieve - to elicit documents revealing any involvement of the first defendant in sourcing candidates for appointment as managing trustee.

20It follows that the plaintiffs' application fails, insofar as it is in the nature of one for further and better discovery. However, the plaintiffs submit, in the alternative, that the same discovery should be ordered by way of additional categories of discovery.

21Although it has on occasion been pointed out that where it is desired, after discovery under the present regime by classes of documents, to obtain further documents, the appropriate course is not to go behind the discovery order - which is deliberately confined to specified classes - by serving a notice to produce, but to seek to add additional classes, there is so far as I am aware little if any guidance to be found in the authorities as to when the court will order additional categories of discovery beyond those originally ordered.

22As it seems to me, it is important to preserve the flexibility to order additional categories of discovery, and not too rigidly to confine it. This is because discovery is a very important element of the court's armoury to elicit the truth, and the requirement of the rules that it be limited to specified classes is a restriction on the previous entitlement of a party to general discovery. The court should therefore be disposed to order additional discovery where, after the original order has been made, it is established that discovery of an additional class or classes of documents is necessary in the interests of a fair trial. Relevant discretionary considerations are, without being exclusive, likely to include whether new issues have emerged since the original order, and if so by which party they have been raised (it being more likely that discovery would be ordered in respect of new issues against a party who raises them, than at the request of a party who could have raised them earlier); whether documents produced under the original order point to a need for additional discovery, the stage and state of the proceedings, the extent and burden of the additional discovery, the importance of the issue in the case, and the forensic course of the proceedings (for example, where a deliberate decision had been made to limit the scope of the discovery sought at an earlier stage, the court would not likely permit that to be revisited in the absence of some material change of circumstances). 23The first four proposed additional categories are said to relate to the weight to be afforded to the wishes of the second and third defendants. In respect of the first two, it is said that documents which reveal financial dependence on the part of those defendants on the first defendant, or the expectation of financial benefits from her, may tend to show that their position in the case is the result of influence or pressure by the first defendant, which would detract from the weight to which they were entitled. The third and fourth categories are said potentially also to show that the managing trustee proposal is, in reality, the proposal of the first defendant, in respect of which the second defendant is said to have "ceded the issue" to the first defendant, and the third defendant to be bound, or pressured, to acquiesce. 24In the 3 December judgment, I reasoned - without reference to authority - that as the wishes of the beneficiaries were relevant to the selection of a replacement trustee, then so long as the second and third defendants sought to have their wishes taken into account, matters which bore on the weight to be afforded those wishes were relevant; accordingly, the discovery sought by the plaintiffs of agreements that include terms prohibiting or restricting the second or third defendant from propounding or supporting a replacement trustee without the approval of the first defendant should be ordered. (Subsequently, the plaintiffs sought and obtained the wider "wishes" order referred to above, reliant on that reasoning). 25It is appropriate now to review what will be the issues on the hearing, and the relevance of the beneficiaries' wishes and factors that may affect their weight. 26In Re Tempest (1866) LR 1 Ch App 485, Turner LJ said that the three considerations that should move the court in appointing new trustees were (1) the wishes of the persons by whom the trust was created, if expressed or implicit in the trust instrument; (2) that a trustee should not be appointed with a view to the interests of some of the beneficiaries in opposition either to the wishes of the settlor or the interests of the other beneficiaries; and (3) that in appointing a trustee regard should be had to whether the appointment would promote or impeded the execution of the trust. The Re Tempest considerations were endorsed by Rolfe J as "general guidelines" in Global Funds Management (NSW) Ltd v Burns Philp trustee Co Ltd (in prov liq) (1990) 3 ACSR 183. In Walters v Ryan [1933] NZLR 821, Reed J said that the dominant consideration was the interests of the beneficiary, which called for consideration of two matters: first, security; and secondly, facilities for administration. 27As to the second consideration, pertaining to avoiding conflict of interest, while the court prefers not to appoint a beneficiary (or relative) [Ex parte Conybeare's Settlement (1853) 1 WR 458; Johnstone v Johnstone (1902) 2 SR(NSW) Eq 90; Re Cunningham's Settled Estates (1909) 27 WN(NSW) 28; Re Roberts (1983) 70 FLR 158; Saul v Lin (No 2) (2004) 60 NSWLR 275; [2004] NSWSC 332, [9]], this yields to necessity in exceptional circumstances [Waddell v Patterson (1865) 2 WW & A'B Eq 36; Re Ferrett's Trusts (1894) 6 QLJ 183; Re Simmonds [1954] QWN 3; Re Neeve [1956] QWN 21; Re Paroz [1956] QWN 37]. If it were concluded in this case that appointing a trustee who is not a lineal descendant involved unacceptable risk to the trust assets, this may be such an exceptional case. 28As to the third consideration (whether the appointment will promote or impeded the execution of the trust), Ford & Lee suggest (at [8290] that "it would appear that ... the court may wish to ascertain the acceptability of the proposed trustee to the beneficiaries of the trust; for it may well be that their relationship will bear upon the efficiency with which the trust can be carried out". In Wallace v Wallace (No 2) (1899) 24 VLR 893, Hood J said (at 895) that "the court ought not appoint a trustee - there being no reason for it - who is obnoxious to the whole of the cestuis que trustent". 29While the precise grounds on which each proposal is opposed have not yet been notified, as presently appears the main issues will be (1) the respective risk each proposal poses to the trust assets (the plaintiffs contending that the defendants' proposal involves significant risk of jeopardy to the trust assets through triggering a right of pre-emption); and (2) the respective suitability of each proposed trustee (which includes questions of competence, experience, independence and impartiality). Subsidiary considerations may include the respective costs of the appointment, and - as the authorities to which I have referred confirm - the attitudes of the beneficiaries to the appointee. But as things presently appear, the court would not likely appoint the second plaintiff, a beneficiary, if it could safely appoint an independent trustee. On the other hand, it would not likely accede to the defendants' proposal, if it involved an unacceptable risk of triggering the pre-emption provisions. In that context, the wishes of the beneficiaries, divided as they are, are unlikely to be of much significance. That particularly applies to the reasons why the second and third defendants are opposed to the second plaintiff's appointment, as the desirability of an impartial and independent trustee is such - particularly in the circumstances of the conflict that besets these parties - that the second plaintiff will really be a viable candidate only if the defendants' proposal fails on account of the risk associated with appointing a non-lineal descendant, or concerns at the independence of the proposed managing trustee. That does not leave much room for the wishes of the beneficiaries to play a significant role. 30Moreover, it now emerges that, time for service of affidavit evidence having expired, neither the second nor the third defendant proposes to give evidence. Thus there will be no sworn evidence of their wishes, but only the submissions of their counsel. In circumstances where their wishes are not supported by sworn evidence and their rationale cannot be tested, they could have little if any weight beyond the merits of the arguments that their counsel may advance. 31Theoretically, if their wishes are relevant, matters affecting the weight to be attributed to them must also be relevant. The relevance of wishes appears from the authorities to which I have referred to be essentially that the administration of the trust will not be facilitated by appointing a trustee who is "obnoxious" to the beneficiaries. A beneficiary's wishes will typically be founded in self-interest. In this case, the wishes of the second and third defendants may be founded in or influenced by affection for their mother, financial dependence on her, expectation of inheritance, antipathy to the plaintiffs, and many other matters. But so long as the wishes expressed are their wishes, their motives are of marginal if any relevance. Mr Hutley SC encapsulated the point, submitting that while the wishes discovery order was appropriate because it was directed to whether the wishes were freely expressed, which was a legitimate area of inquiry, the motives that informed freely expressed wishes were not. 32Given the evolution of the wishes order from that originally proposed by the plaintiffs on 3 December 2013, I do not accept that the plaintiffs reasonably expected that it would catch documents of the type described in proposed categories 1 and 2. It was only ever intended to capture agreements containing terms of the relevant effect. As financial dependence or expectation is but one of many matters that may influence the second and third plaintiffs' attitude, discovery on that issue alone would be of questionable utility. 33Whereas the second plaintiff is a candidate for appointment as trustee, so that her fitness is necessarily an issue, the second and third defendants are not. Their independence and impartiality are not relevant issues. The independence and impartiality of the proposed professional managing trustee is an issue, but what matters is the independence and impartiality of the proposed trustee - not which of the defendants proposes or supports its appointment. Thus it matters not merely that the proposed trustee might be sourced, enlisted and supported by the first defendant - so long as it is independent of her. Nor does it matter much that the second and third defendants might support the proposal because they are beholden to their mother, if that be the case. That is not to say that communications between the first defendant and a proposed trustee are not relevant - they are, because they are likely to cast light on the question of the proposed trustee's independence and impartiality, and the managing trustee discovery order was addressed precisely to that issue, by requiring discovery of communications between any of the defendants on the one hand and any proposed trustee on the other. 34Moreover, there is already significant material available to the plaintiffs to deploy in support of any submission that the wishes of the second and third defendants are either not freely expressed or are influenced by matters extraneous to the best interests of the trust. In respect of the third defendant, the documents already discovered provide a firm basis for a submission that she is not at liberty to act contrary to the wishes of the first and fourth defendants, and that should she do so, she is liable to suffer a loan of $45 million to be called up. There is also substantial material to found a submission that the second defendant is financially dependent on the first defendant, and that her legal costs are being paid by the first and/or fourth defendants. I do not think that the absence of discovery on these issues will unduly constrain the plaintiffs in presenting a case that the second and third defendants are beholden to, and under the influence of, the first defendant. 35The plaintiffs submitted that an issue had emerged since 3 December 2013, because under the amended corporate trustee proposal, as revised on 3 February 2014, the director of the proposed custodian trustee could be removed and replaced only by the unanimous agreement of the shareholders, who would be the four beneficiaries, and this it was said would be unworkable if the second and thirds defendants were precluded from agreeing freely because they were beholden to the first defendant. The short answer to this is that it does not need discovery on that issue to demonstrate, as the plaintiffs seek to establish, that there is a high prospect of conflict between the beneficiaries. In my view, establishing the extent of financial benefits received or expected by the second and third defendants would not significantly affect the resolution of this issue. 36Proposed categories 3 and 4 closely reflect a category of documents originally sought by the plaintiffs in their motion of 27 November 2013, as follows: All documents disclosing or recording any communication between or among the Second defendant (or any person on her behalf) and or the First defendant (or any person on her behalf) and or the Fourth and or Fifth defendants (or any person on their behalf) in relation to any proposal concerning the appointment of a replacement trustee of the Trust. 37After argument on that day, that category was abandoned in their amended motion of 3 December 2013, upon which the orders for discovery of that date were made. The amended motion was deliberately framed, in the light of objections that had been taken, to narrow the scope of discovery sought. That tells against permitting the same ground to be re-traversed now, at least in the absence of a material change of circumstances. 38In my view, the issues said to be informed by documents in proposed categories 1, 2, 3 and 4 are of very minor import in the context of these proceedings as a whole, particularly in circumstances where neither the second nor third defendant will give evidence on oath of their wishes. They are not new issues that have emerged since the original discovery order, nor does necessity for them emerge from documents discovered to date. There is no reason why they could not have been agitated on 3 December 2013, and indeed in part at least they were, and were intentionally abandoned; there is no good reason to permit the forensic judgment then made to be revisited, at this the stage of the proceedings when the final hearing is imminent. Absence of discovery will not unduly affect the plaintiffs' ability to advance the case they seek to make. 39Proposed category 5 is supported by the plaintiffs on the basis that the risk associated with the appointment of a non-lineal descendant under the corporate trustee proposal is an important issue in the case, and that the defendants must have considered the risk and have a plan to deal with it should Rio Tinto endeavour to exercise the pre-emptive rights. I accept that the risk associated with the proposal is a relevant issue, but that risk is essentially a question of law, not a question of fact upon which discovery would be ordered. In any event, any assessment by the defendants of any such risk is likely to be intertwined with, and inextricable from, privileged legal advice. Moreover, if the defendants indeed do have a good plan to address any such risk, that may reduce the risk and would support their case for a corporate trustee; but if they chose not to put it forward, I do not see how the plaintiffs' case is prejudiced by not knowing it. Discovery of that category is not necessary in the relevant sense. 40Again, this category does not arise from a new issue, or from documents discovered under the 3 December order. I would not order additional discovery in proposed category 5.

Fourth defendant's application to set aside notice to produce 41By claim 2 in its motion filed on 9 May 2014, the fourth defendant sought an order setting aside a notice to produce served on it by the plaintiff dated 1 May 2014, which required production of any draft of a letter from the third defendant's solicitor dated 30 January (by which the possibility that the third defendant might withdraw from the proceedings was canvassed with the other defendants. Ultimately, the fourth defendant did not press for that relief, and simply answered that there was nothing to produce. However, it submitted that the notice to produce was misconceived, and had previously pointed out the nature of the misconception. In my view, the notice to produce was misconceived, for that reason and also because it effectively went behind the discovery order of 3 December 2013. However, filing a motion to set it aside was unnecessary overkill, where it could simply be answered that there was nothing to produce. This claim in the fourth defendant's motion should be dismissed, but neither party should have costs in connection with it.

Second defendant's application to vary 22 May discovery order 42The second defendant submitted that the order for discovery made on 22 May should be varied (1) so that the defendants were required to give discovery to each other as well as to the plaintiffs, and (2) so that the plaintiffs were required to give discovery in respect of the same issues. 43I accept that, where discovery is ordered, it is generally desirable that the list of documents and inspection be available to all other parties in the proceedings, and not only those on whose application the order was made. The order of 22 May was not intended to confine the benefit of the discovery so ordered to the plaintiffs, and to make that clear will be varied to provide for discovery also to the other defendants. 44The plaintiffs submitted that discovery by them on the issues covered by that order would be premature, as it was not clear that those issues would in fact be pressed. That submission sits uncomfortably with the basis on which the plaintiffs obtained the 22 May order, namely that the allegations contained in the 1 March and 4 April 2014 letters, which pertained to Bianca's fitness, gave rise to issues in the proceedings. The argument that those allegations are insufficiently particularised at this stage is of greater merit. Whereas the defendants, who make the allegations, can be assumed to know the scope of what is alleged, what is relied on the establish them, and what was tend to rebut them, from the perspective of the plaintiffs the position is quite different: many of the allegations are of a very high degree of generality, and an order for discovery framed by reference to those allegations would be burdensome and potentially catch an enormous range of documents of which a significant proportion might well relate to aspects not genuinely in dispute. 45Moreover, the defendants have not until this point sought discovery in respect of those issues. They could have done so by framing appropriate categories for discovery at the time of when discovery was addressed culminating in the 3 December judgment. At the time, the defendants sought and obtained discovery against the plaintiffs of some classes of documents that related to, in general terms, the fitness of Bianca. The defendants did not then, and until after the order was made against them have not since, sought discovery against the plaintiffs in respect of the allegations in the 1 March and 4 April 2014 letters. There is no explanation as to why they did not do so at the appropriate time. 46I decline to vary the 22 May order to provide for discovery by the plaintiffs.

Plaintiffs' application to set aside subpoena 47By motion filed on 19 May 2014, the plaintiffs apply to have a subpoena issued at the request of the second defendant to the Department of Immigration and Border Protection, which requires production of exit and entry cards and other documents evidencing the second plaintiff's exit from and entry to Australia since January 2009, set aside. 48The second plaintiff submitted that the subpoena was not issued for a legitimate forensic purpose. A subpoena may be set aside, including on the application of party to the proceedings who is not the recipient, if it is an abuse of process. It may be inferred that a subpoena is an abuse of process, and/or is issued for a collateral purpose, if it calls for production of documents "which have no conceivable relation to the proceedings" [Waind v Hill [1978] 1 NSWLR 372, 382]. 49The second defendant supports the subpoena on the basis that, in circumstances where Bianca's husband appears to have strong connecting factors with the United States and Bianca has spent time outside Australia, there is a reasonable basis to suppose that Bianca may be, or may in the future become, resident outside Australia, which would bear upon her suitability as a trustee as (1) the court would not normally appoint a trustee resident outside the jurisdiction, at least unless the beneficiaries also reside in the foreign jurisdiction [cf Re Freeman's Settlement Trusts (1887) 37 Ch D 148; Re Simpson [1897] 1 Ch 256; Re Mitchell's Trust (1900) 17 WN(NSW) 164; Re McPhillamy's Trusts (1909) 10 SR(NSW) 42; Re Mayne (dec'd) (1928) 28 SR(NSW) 157]; (2) if she became resident outside the jurisdiction she may be liable to be removed as trustee [cf Re Bignold's Settlement Trusts (1872) 7 Ch App 223; Re James Jackson [1926] NZLR 499; Sapio v Carter [1959] NZLR 848], with the prospect of further disputation and litigation a bout appointment of a replacement; and (3) the trust may become exposed to the US tax regime, with unfavourable consequences. 50While Bianca deposes on affidavit that she is resident in New South Wales, and noting that the former rule that by marriage she acquired her husband's domicile has been abrogated by statute [(CTH) Domicile Act 1982, s 6; (NSW) Domicile Act 1979, s 5; (WA) Domicile Act 1981, s 5], nonetheless Bianca's denial of foreign residence cannot be conclusive of the issue. Indeed, one of the purposes of discovery is to enable assertions made a party to be tested. It cannot be said that the subpoena is an abuse of process as calling for production of documents that have no conceivable relation to the proceedings. 51I decline to set aside the subpoena. The plaintiff's motion should be dismissed with costs.

Conclusion and orders 52On the plaintiffs' application for further and better discovery: there are not reasonable grounds for being fairly certain that other relevant documents exist which ought to have been disclosed under the wishes discovery order, properly construed. No failure to discover relevant documents under the managing trustee discovery order, nor any misapprehension of the order, is established. It follows that the plaintiffs' application fails, insofar as it is in the nature of one for further and better discovery. 53On the plaintiffs' application for additional discovery: the issues said to be informed by documents in proposed categories 1, 2, 3 and 4 are of very minor import in the context of these proceedings as a whole, particularly in circumstances where neither the second nor third defendant will give evidence on oath of their wishes. They are not new issues that have emerged since the original discovery order, nor does necessity for them emerge from documents discovered to date. There is no reason why they could not have been agitated on 3 December 2013, and indeed in part at least they were, and were intentionally abandoned; there is no good reason to permit the forensic judgment then made to be revisited, at this the stage of the proceedings when the final hearing is imminent. Absence of discovery will not unduly affect the plaintiffs' ability to advance the case they seek to make. The issue encompassed by proposed category 5 is not an issue of fact in respect of which discovery is appropriate or necessary. On paragraph 2 of the fourth defendant's motion filed 9 May 2014: the notice to produce was misconceived, but applying to set it aside was unnecessary overkill. The claim should be dismissed, but neither party should have costs of it. 54On the second defendant's application to vary the discovery order of 22 May 2014: that order was not intended to confine the benefit of the discovery so ordered to the plaintiffs, and to make that clear will be varied to provide for discovery also to the other defendants. I decline to vary the 22 May order to provide for discovery by the plaintiffs. 55On the plaintiffs' motion filed on 19 May 2014: it cannot be said that the subpoena is an abuse of process as calling for production of documents that have no conceivable relation to the proceedings. I decline to set aside the subpoena. 56The court orders that: (1)the plaintiffs' motion filed 8 April 2014 be dismissed with costs. (2)paragraph 2 of the fourth defendant's motion filed 9 May 2014 be dismissed. (3)the fourth defendant pay the plaintiff's costs of its motion filed 9 May 2014, save insofar as they are attributable to the claim in paragraph 2 of that motion. (4)order 1 made on 22 May 2014 be varied to provide as follows: (1) Pursuant to UCPR r 21.2, by 29 May 2014 the first, second, fourth and fifth defendants give discovery to the plaintiffs and each other of all documents that are or have been in their respective possession custody or power that are relevant to the allegations contained in the letters from Corrs Chambers Westgarth to Yeldham Price O'Brien Lusk dated 1 March and 4 April 2014 and from Gadens to Yeldham Price O'Brien Lusk dated 17 April 2014; (5)the plaintiffs' motion filed on 19 May 2014 be dismissed with costs.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 23 May 2014

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