Consideration
12 As I have already noted, Mr Hislop alleges that there are three bases on which the Notice to Produce should be set aside: first, because the documents sought are irrelevant to the proceeding and the Notice to Produce seems to be no more than a fishing expedition; secondly, because of the sheer volume of the documents that it captures and the time and cost that would be incurred in responding to the Notice to Produce means that it is unreasonably burdensome; and, thirdly, the documents that would be produced are prima facie privileged (a matter about which, subject to one issue, there is no dispute) and the defendants' claim that privilege has been waived is unsustainable.
13 At the outset I note that, even if the defendants were successful in maintaining the Notice to Produce and it was not set aside on any of the grounds raised by Mr Hislop, paragraph 2 of the Notice to Produce would, in any event, be set aside. This is because the documents called for by paragraph 2 of the Notice to Produce are clearly privileged. If the defendants were successful in their argument that, by reason of [47] of his affidavit, Mr Hislop had waived privilege then that waiver could only extend to those documents that recorded instructions to his lawyers to commence the proceedings as described in [47] of his affidavit. The waiver could not extend to the documents in paragraph 2 (or for that matter paragraph 3). Waiver of legal professional privilege in the documents called for by paragraph 2 of the Notice to Produce would depend on the documents produced in answer to paragraph 1 and whether the terms of any documents so produced led to a waiver of the privilege in some or all of the documents falling within paragraph 2 of the Notice to Produce.
14 Leaving that issue to one side, in my opinion, the Notice to Produce should be set aside in its entirety. This is because the documents sought in it are not relevant to the proceeding. My reasons for reaching this conclusion follow.
15 In Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (No 3) [2012] FCA 61 (CFMEU v BHP) at [6] Collier J set out the principles relevant to setting aside a notice to produce. In doing so her Honour said:
(1) The party which has issued the Notice to Produce bears the onus of establishing that the documents the subject of the Notice are sufficiently relevant to justify production.
….
(4) It is necessary that the material sought has an apparent relevance to the issues in the principal proceedings. The test of apparent relevance in this context is whether the documents are reasonably likely to add, in the end, in some way or other, to the relevant evidence in the case.
…
(citations omitted)
16 The defendants submitted that the claim that the Notice to Produce is an abuse of process because the documents sought are irrelevant is untenable. They further submitted that whether an applicant under s 237 of the Corporations Act could obtain relief by bringing proceedings in his or her own name, without requiring the company to be brought into litigation, is relevant in considering whether to grant relief under s 237. That submission was based on the judgment in Swansson v R A Pratt Properties Pty Ltd (2002) 42 ACSR 313; [2002] NSWSC 583, where Palmer J, in addressing the requirement in s 237(2)(c) of the Corporations Act that the applicant satisfy the court that the proposed action is in the best interests of the company, set out those matters about which an applicant would normally be required to adduce evidence. In doing so his Honour said at [59]:
Third, there should be evidence enabling the court to form a conclusion whether the substance of the redress which the applicant seeks to achieve is available by a means which does not require the company to be brought into litigation against its will. So, for example, if the applicant can achieve the desired result in proceedings in his or her own name it is not in the best interests of the company to be involved in litigation at all. This was the case in Talisman Technologies in which it appeared from the evidence that the most desirable outcome for the applicant was to obtain an order for specific performance of a contract, which it could do in a suit in which the company did not need to be a party.
17 That the ability to obtain the redress that an applicant seeks to achieve is available by a means that does not involve bringing the company into litigation against its will is a relevant consideration is not in dispute. What is in dispute is whether the documents called for by the Notice to Produce would be relevant to that consideration.
18 The defendants referred to the Proposed Claim at some length. They submitted that the wrongdoing alleged by Mr Hislop commenced with the events that took place in the US. Those events related to the conduct of Nation Wyoming and, they submitted, it is the conduct of Nation Wyoming and its board that is the subject of the allegations of illegality upon which the subsequent equitable fraud, breaches of directors' duties and other alleged breaches are said to emerge. The defendants further submitted that the foundation for the Proposed Claim is the conduct of Nation Wyoming and its directors. That, in turn, is said to be the foundation for the case that there was unlawful conduct in connection with Nation Australia.
19 The defendants contended that if, for example, Mr Hislop could bring a proceeding in the US that could attack the April Board Stacking (of the Nation Wyoming board) and declare it unlawful then the resolutions made by that impugned board could be set aside, including the resolution by Nation Wyoming to direct Nation Australia to enter into the agreements that are said to have resulted in the asset stripping. In those circumstances, the defendants contended that Mr Hislop would be in a position, depending on what causes of action and relief are available to him, to redress the wrong, so far as there is wrong, and that it is his claim to make in the US proceeding. The defendants submitted that if Mr Hislop has the opportunity to claim whatever loss he might recover as a result of the Proposed Claim through an oppression-type suit in the US via his shareholding in Nation Wyoming then he would be left in the same position. The defendants contended that whether he has such claims and the extent of them is the matter that they wish to explore through the Notice to Produce.
20 It may well be that Mr Hislop can seek some form of redress by other means. That may include redress by commencing a proceeding in the US against Nation Wyoming. But such a proceeding may not result in the same outcome or relief as the Proposed Claim, particularly given that it would be brought under US law. The Proposed Claim in the name of Nation Australia is against Paltar, an Australian company, and its three directors. It seeks damages and other relief arising out of the entry into certain agreements by Nation Australia by which it is alleged that it relinquished all of its valuable assets. Only Nation Australia can seek relief in relation to the agreements into which it entered.
21 But perhaps more fundamental and fatal to the defendants' position is that the documents sought by the Notice to Produce are simply not relevant to the issue whether Mr Hislop can seek the redress he wishes to achieve via the Proposed Claim by other means. As Mr Hislop submitted, if the defendants wish to adduce evidence that there is a viable alternative available then the way to do that is by considering the applicable law in the US, applying it to the facts and bringing evidence in admissible form before the trial judge of any such viable alternative by which it is alleged that Mr Hislop could achieve the same redress as that sought in the Proposed Claim. The documents sought in the Notice to Produce would not inform the Court of what alternative course is available to Mr Hislop in the USA. They would do no more than show what, if any, instructions Mr Hislop had given his US lawyers, what advice was given to Mr Hislop and the drafts of any proposed claim. They would not be evidence of whether those communications and documents presented a viable alternative to the Proposed Claim. Thus, in my opinion, adopting the test in CFMEU v BHP, the documents sought by the Notice to Produce are not reasonably likely to add, in some way or other, to the relevant evidence in the case.
22 I should also briefly address the defendants' submission that Mr Hislop must have thought that [47] of his affidavit was sufficiently relevant given that it is included in his affidavit and that, when the matter came before Foster J on 11 August 2017 on the application for an ex parte injunction, senior counsel appearing for Mr Hislop informed the Court about the proposed US proceeding. The submission made at that time to the Court was:
It looks on its face like a fraud on the minority oppression sort of case and we disclosed to your Honour that there is contemplation of proceedings being commenced by the minority shareholders against Nation Wyoming, in Wyoming, for the Wyoming equivalent of an oppression suit. But we say that these rights in these agreements relating to -
23 It does not follow that, because Mr Hislop included [47] in his affidavit or because senior counsel appearing on 11 August 2017 frankly disclosed the possibility of a US proceeding to the Court, the documents sought in the Notice to Produce are relevant to the issues to be determined. What use [47] will be put to at the final hearing is not yet known. As I have already found, the documents sought in the Notice to Produce are not relevant to proving whether there is an alternative way of achieving the redress.
24 As to the disclosure made by senior counsel on 11 August 2017, as is evident from the transcript, he did not finish his submission. Thus, it is not apparent from the transcript for what purpose the disclosure was being made. Before me, senior counsel for Mr Hislop submitted that in fact he intended to finish the submission on 11 August 2017 by making the point that, although there were proceedings in the US, his Honour did not need to be concerned by that because the Proposed Claim was a discrete set of claims which could only be propounded by Nation Australia in Australia.
25 Given the conclusion I have reached I do not propose to consider the alternative grounds raised by Mr Hislop for the setting aside of the Notice to Produce.