The law relating to the use of documents under subpoena
5I have been greatly assisted by the helpful submissions of Mr S A Gregory, counsel for the first defendant. As Mr Gregory points out in his written submissions (page 4), any inspection of subpoenaed documents carries with it a substantive legal requirement to use the documents produced on subpoena, or information contained in them, only for purposes directly connected with the conduct of the litigation (Ritchie's Uniform Civil Procedure NSW (LexisNexis, Australia) at [33.9.15]; Hearne v Street (2008) 235 CLR 125 at [3] per Gleeson CJ, at [56]-[57] per Kirby J, at [105]-[108] per Hayne, Heydon and Crennan JJ. See also Harman v Home Department State Secretary; sub nom Home Office v Harman [1983] 1 AC 280 at 300 per Lord Diplock, 308 per Lord Keith of Kinkel (an order for discovery is subject to an implied undertaking by the solicitor obtaining that order not to use or allow the documents, or copies of them, to be used for any collateral or ulterior purpose)).
6The use and disclosure restriction is not confined to instances of bad faith or deliberate impropriety. It extends to any use or disclosure other than for the purpose of the proceedings. Any wider use will be regarded as collateral and consequently improper, unless authorised by prior leave: Bell Group Ltd (in liq) v Westpac Banking Corp (1998) 86 FCR 215 at 220; 166 ALR 699 (liquidator required leave to use discovered documents and witness statements in the conduct of a examinations under the Corporations Act 2001 (Cth)); also Harman v Secretary of State for the Home Dept [1983] 1 AC 280; [1982] 2 WLR 338; Sybron Corp v Barclays Bank Plc [1985] Ch 299; [1984] 3 WLR 1055 at 1068; Central Queensland Cement Pty Ltd v Hardy [1989] 2 Qd R 509; Sentry Corp v Peat Marwick Mitchell & Co (1990) 24 FCR 463) (improper to use documents obtained in one trial to assist in separate proceedings without leave of the court or consent from the person from whom the document had been obtained); Ainsworth v Hanrahan (1991) 25 NSWLR 155 at 157, 164, 167 and 169; Esso Australia Resources Ltd v Plowman (Minister for Energy and Minerals) (1995) 183 CLR 10; 128 ALR 391; 69 ALJR 404 at 416.
7When the disclosure restriction applies anyone wishing to use them needs leave of the court relieving them from, or modifying, the obligation.
8As the undertaking is to the party producing the documents, and to the court, it is necessary to seek a release of the undertaking, even if the party producing the documents has given a clear informed consent to the use of the document (Hamersley Iron Pty Ltd v Lovell (1998) 19 WAR 316 at 321 per Ipp J; c.f. Dagi v Broken Hill Proprietary Company Ltd [1996] 2 VR 567 at 572).
9It is now accepted law that a court may authorise disclosure in a proper case (Hearne v Street, supra), although the power to do so will be exercised sparingly (Esso Australia Resources Ltd v Plowman (Minister for Energy & Minerals) (1995) 183 CLR 10). The question of what constitutes "special circumstances" was set out by Wilcox J in Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217 at 225, although subsequent statements by the High Court in Hearne v Street, supra, in this regard should be taken into account.
10The applicant for leave should not only identify with particularity the documents which are sought but identify with care the circumstances in which the application has been brought to the attention of the owner of the documents under subpoena and the other parties to the litigation (c.f. Spillane v Curr [2011] NSWDC 150).
11The first defendant/applicant draws my attention to the following reasons for granting leave:
(1)A grant of leave for the First Defendant to use the documents produced on subpoena for the purposes stated in the motion is consistent with the purpose for which the freezing orders were made (namely, to protect the integrity of the Court's processes, specifically the efficacy of execution available to the First Defendant, by preserving the position pending the institution of proceedings under Division 3 of the Bankruptcy Act 1996 (Cth) or the institution of proceedings under s 37A of the Conveyancing Act 1919) ) and therefore the ultimate purpose for which the documents were subpoenaed (see Tagget v Sexton [2009] NSWCA 91 at [131] & [149]-[151], per Sackville JA; [58], [59], [65] & [67], per Beazley JA).
A grant of leave would enable each of the Trustees and the Official Receiver to be informed of everything which was produced to the Court under subpoena which has not been produced to the Trustees and that there was nothing else produced. The documents produced under subpoena are relevant to the Trustees' determination of what constitutes the estate, to their confirmation that under the provisions of the Bankruptcy Act 1996 (Cth) or s 37A of the Conveyancing Act 1919 (NSW) the properties that were transferred to Crest and Ms Hombsch may be recovered and to the prosecution of such proceedings.
(2)In the case of the documents produced on subpoena by Ms Hombsch and B&M Property Transfers, as the documents have been admitted into evidence (on 15.12.11 and 17.1.12, the affidavit of Christopher Garry Bryett sworn 15.12.11, see especially paragraphs 24 and 25 and 18-23, was read and exhibit CGB 1 to that affidavit tendered), the disclosure restriction has ceased to apply. To grant leave avoids debate.
(3)The Bankruptcy Act 1966 provides for various relevant obligations and powers designed to enable the Trustees to identify and get in the estate of the Bankrupt. The documents produced on subpoena are within the classes of documents which the Bankrupt would be obliged to produce to the Trustees or to which the Trustees could obtain access.
However, there is a real prospect that, as a consequence of the issue of the subject subpoenas and consequent production of the subject documents to the Court for the purpose of the freezing orders, the Trustees would not obtain all of the documents produced on subpoena and the information contained in them. The various material obligations and powers for which the Bankruptcy Act 1966 provides are, at least in the first instance, constrained to documents in possession. Documents produced under subpoena are in the possession of the Court, rather than the person who produced them.
The following provisions of the Bankruptcy Act 1966 are material.
Section 77 of the Bankruptcy Act 1966 obliges a bankrupt to give to his trustee all books in his possession ['books' are defined in s 5 as including any account, paper, writing or document and any record of information however compiled, recorded or stored] that relate to any of his examinable affairs ['examinable affairs' are defined in s 5 to mean the person's dealings, transactions, property and affairs]. Cf s 77(1)(ba). Section 129 requires a trustee to take possession of all the property of the bankrupt capable of manual delivery, including all deeds, books and documents of the bankrupt. The Trustees have required the Bankrupt to produce such documents to them (see exhibit JLP 01-003). The Bankrupt is overseas and they remain to be produced.
Section 77A empowers the Trustees to require a person to produce specified books, or classes of books, of an associated entity [as defined in ss 5, 5B, 5C & 5E], which are in his possession and, if the books are produced, to explain any matter to which the books relate. Cf s 77A(3)(b).
Section 5 of the Bankruptcy Act 1966 defines an 'examinable person'. Section 81 empowers the relevant Court to require an officer to produce at an examination 'books' [ie any account, paper, writing or document and any record of information however compiled, recorded or stored] in his possession that relate to the Bankrupt or to any of the Bankrupt's examinable affairs [i.e. the person's dealings, transactions, property and affairs (see s 5)] and to be examined on oath about the Bankrupt's examinable affairs.
(4)Insofar as the documents produced under subpoena, or the information contained in them, have otherwise been obtained by the Trustees, to grant leave to use the documents produced under subpoena by B&M Property Transfers Pty Ltd, or the information contained in them, avoids debate about whether the First Defendant and its legal advisers are free to use the alternative source of information.
(5)No relevantly interested person objects to a grant of leave.
Ms Hombsch consents to a grant of leave (see the copy of the Notice of Motion on which the solicitor for Ms Hombsch has noted her consent to the orders sought).
Crest Australia Pty Ltd submits to such orders as the Court proposes to make (paragraphs 16-19, Bamford, 6.12.12 and Submitting Appearance).
B&M Transfers does not object to the documents it produced being used in 'proceedings or procedures under the Bankruptcy Act 1966 or other legislation for asset recovery or other purposes of the Bankruptcy' and, although notified of the application, has not voiced opposition to anything else.
Westpac does not oppose the grant of leave and does not wish to be heard on the application.
The Bankrupt has not been formally served with the Notice of Motion. However, given his Bankruptcy and his obligations under s 77 and the duties of the Trustees under s 129, it is doubtful that the Plaintiff has a material interest in the application which would entitle him to be heard in opposition to it. In any event, it ought not prevent the Court now granting leave to use the subpoenaed documents in the manner sought.
(6)It is convenient to put to one side a possible, but misconceived, response to the application. The mere fact that, as trustees of the bankrupt estate of the Plaintiff, the Trustees might have a right to inspect documents produced to the Court under subpoenas issued in the proceedings to which the Plaintiff is a party, does not greatly assist. Having done so they too would nevertheless be subject to any extant substantive legal requirement not to use the documents produced on subpoena, or information contained in them, for purposes other than purposes directly connected with the conduct of the litigation.
12The documents to which access are sought are as follows:
Documents Ms Hombsch produced under subpoena
(a)The material portion of the subpoena is at pp 89-90 of exhibit JGB 02.
(b)The few documents produced are at pp 94-6 of exhibit JGB 02.
(c)As the documents were admitted into evidence on 15.12.11 and 17.1.12, the disclosure restriction has ceased to apply.
(d)Ms Hombsch is an "associated entity" within s5C(2) of the Bankruptcy Act and were the documents in her possession, (under s 77A of the Bankruptcy Act 1966) the Trustees would be entitled to seek them from Ms Hombsch and she would be obliged to produce them to the Trustees.
(e)Ms Hombsch consents to the grant of leave with respect to the documents which she produced (see the copy of the Notice of Motion on which the solicitor for Ms Hombsch has noted her consent to the orders sought).
Documents B&M Property Transfers Pty Ltd produced under subpoena
(a)Certain documents were admitted into evidence and the disclosure restriction has ceased to apply. The additional material produced under subpoena by B&M Property Transfers Pty Ltd should also be the subject of access to ensure that the Trustee and Official Receiver have been informed of everything produced to the court, in the interest of both accuracy and fairness.
Documents Westpac Banking Corporation produced under subpoena
(a)These documents are narrow in compass and consists essentially of statements of account, a copy of a registered mortgage, and a copy of a certificate of title. As is noted above, Westpac, as is the case with B&M Property Transfers Pty Ltd, neither consents to nor opposes the granting of leave, and Ms Hombsch has in fact consented.
13Taking into account all of the above matters, I am satisfied that this is an appropriate case for the granting of leave in accordance with the orders sought.