Counsel for Plaintiff: Mr P M Jacobson QC/Mr R J Powell

Solicitors for Plaintiff: Gye Associates Lawyers

The Commissioner for Railways v Small [1938] NSWStRp 29; (1938) 38 SR (NSW) 564 referred to: National Employers' Mutual General Association Limited v Waind and Hill [1978] 1 NSWLR 372; Spencer Motors Pty Limited v LMC Industries Limited [1982] 2 NSWLR 921 and Woods & Anor v Hanoldt (Court of Appeal - 9 March 1995 - unreported) followed. Botany Bay Instrumentation & Control Pty Limited v Stewart & Anor [1984] 3 NSWLR 98 doubted in part; Southern Pacific Hotel Services Inc v Southern Pacific Hotel Corporation Limited [1984] 1 NSWLR 710 followed.

Compsyd Pty Limited v Streamline Travel Service Pty Limited (1987) 10 NSWLR 648.

(b) The Position Concerning The Production of Documents 2

(b) The Subpoenas Addressed To Mr and Mrs Chapman 25

(c) The Subpoenas Addressed To The Other "Strangers" 26

(v) Department Of Urban Affairs and Planning 29

LAKATOI UNIVERSAL PTY LIMITED & ORS v WALKER & ORS

I am concerned with three Notices of Motion, which were filed on 23 June 1998 by the solicitors for the defendants, whereby the applicants, for whom and which Mr P.M. Jacobson of Queen's Counsel and Mr R.J. Powell of Counsel appeared, sought orders that subpoenas to produce documents issued on behalf of the respondents/plaintiffs, ("the plaintiffs"), for whom and which Mr V.R.W. Gray of Counsel appeared, be set aside. Three of the applicants, namely Chris Burke & Co Pty Limited and Mr and Mrs Chapman, are not parties to the proceedings and they have not, as I understand it, produced any documents in answer to the subpoenas addressed to them. The applicants in the third Notice of Motion are six of the seven defendants and they seek orders that subpoenas to produce documents addressed to the following entities, which are not parties to the proceedings, be set aside:-

Blake Dawson Waldron Solicitors incorporating Rosenblum & Partners

Commissioners of Inquiry for Environment and Planning

(b) The Position Concerning The Production Of Documents

In their written submissions the applicants stated that they did not pursue their objections to the subpoenas addressed to AGC Limited, Westpac Banking Corporation, KPMG, Commissioners of Inquiry for Environment and Planning, and Messrs Russell, McClelland & Brown, which is a firm of Wollongong solicitors. In their oral submissions the position in relation to the subpoena addressed to Messrs Russell, McClelland & Brown seemed to change. I was informed by Counsel that each of these parties, save for Messrs Russell McClelland & Brown, have produced documents to the Court in answer to the subpoenas, there is no claim for privilege in relation to the production of those documents to the parties for inspection and, in the result, I see no prima facie reason why the legal representatives of the plaintiffs should not be entitled to inspect them. The parties have put in place a regime whereby inspection will not take place until a determination of the Notices of Motion favourable to the plaintiffs.

I was further informed that the following parties have produced documents in answer to the subpoenas without any complaint about the terms of the subpoena, any claim for any type of privilege in relation to the documents, and without having made any application that the plaintiffs should not otherwise be entitled to inspect the documents; namely Messrs Blake Dawson Waldron, Wollongong City Council, Shellharbour City Council, Sutherland Shire Council, Baulkham Hills Shire Council, Leichhardt Municipal Council and the Department of Urban Affairs and Planning. Mr Gray stated that he did not wish to pursue the subpoena against Leichhardt Municipal Council and, accordingly, I shall direct that any documents produced by it be returned to it by the Registrar without inspection of them taking place. Mr Gray took the same position in relation to the subpoena to Messrs David Finkelstein & Co and, in the event of their having produced any documents, I will make the same order as I have proposed in relation to Leichhardt Municipal Council. Messrs AWM Dickenson & Son, a firm of solicitors, have produced documents but with a claim for client professional privilege and, in due course, it will be necessary for the Court to determine whether that claim, which, I assume, is made on behalf of a client of that firm, has been made out. No documents have been produced by Colgate-Palmolive Pty Limited or by Patricia Holdings Limited.

The documents have been produced, as I understand it, by the procedure which is available under a subpoena to produce documents and which is frequently availed of, namely forwarding the documents to the Registrar of the Court.

In relation to the subpoena addressed to Chris Burke & Co Pty Limited I was informed that the plaintiffs no longer press for the production of the documents sought in paragraph 1 to the Schedule, but that they do require the production of those referred to in paragraph 2 of the Schedule.

The applications are made pursuant to Part 37 rule 8 of the Supreme Court Rules, which provides:-

"The Court may, of its own motion or on the motion of any person having a sufficient interest, set aside the subpoena, wholly or in part."

There can be no doubt that Chris Burke & Co Pty Limited and Mr and Mrs Chapman have a sufficient interest to apply to have the subpoenas addressed to them set aside. There was an issue as to whether the defendants had such an interest in relation to the subpoenas addressed to third parties, particularly where there is no suggestion that they are unable or unwilling to produce the documents.

There is equally no doubt that the Court has power to set aside a subpoena if it comes to the view that its issue constitutes an abuse of process, which may arise, for example and relevantly for present purposes, if it has not been served bona fide for the purpose of obtaining relevant evidence, or where it is being used as a substitute for discovery from a stranger to the litigation. This is obviously not, nor does it purport to be, an exhaustive list of the circumstances which might, in this context, constitute an abuse of process. In their written submissions the applicants asserted that the subpoenas had not been issued for the bona fide purpose of obtaining relevant evidence or for any legitimate forensic purpose and, therefore, constituted such an abuse. They further submitted that the plaintiffs were using the subpoenas in an attempt to obtain documents relating to business and commercial activities of the defendants "unconnected with any issue in the Commercial Division proceedings and to obtain documents which the Court has already ruled irrelevant to any issue in the proceedings".

It is necessary to note that in addition to these proceedings there are various proceedings in the Equity Division and the District Court involving some or all of the parties to the proceedings in the Commercial Division. Basically they arise from the same factual matrix as has given rise to those proceedings. I shall now consider, albeit in outline but I think sufficiently for present purposes, the Commercial Division proceedings.

The three corporate plaintiffs have been and are engaged in various forms of land development and are essentially controlled by the second plaintiff, Mr R.M. Hogarth. The fourth plaintiff is, and has been, at all material times since 1980, the owner of a parcel of approximately 1,100 acres of land at Helensburgh within which it is alleged there is an area suitable for residential re-development known as "Lady Carrington Estate". The corporate defendants are engaged in various forms of land development and ancillary activities and, save for the seventh defendant, Rosamond Pty Limited, ("Rosamond"), are controlled by Mr L.A. Walker and, albeit perhaps to a lesser extent, Mr P.J. Dransfield, the first and second defendants respectively.

It is not in issue that on or about 22 November 1993 Mr Hogarth and Mr Walker entered into Heads of Agreement, which created between them the relationship of joint venturers, and that it was agreed that a company and joint venture structure mutually acceptable to them would be developed by Mr Walker, pursuant to which Mr Walker caused Ibenmore Pty Limited, which is now known as Rosamond, to be incorporated. Rosamond's shareholders have been at all relevant times the first plaintiff and the third defendant. Its directors have been, at all material times, Messrs Walker, Dransfield, Hogarth and Kidd. Mr Kidd is the son-in-law of Mr Hogarth.

It is not in issue that in pursuance of the Heads of Agreement the parties caused the Helensburgh Unit Trust Unitholders Agreement, ("the HUTA"), to be entered into, nor that, on 6 April 1994, Mr Hogarth caused the fourth plaintiff to grant Rosamond an option to purchase the Helensburgh land.

The purpose of the arrangement, which seems to have been entered into in consequence of some financial difficulties being experienced by Mr Hogarth and the corporate plaintiffs the details of which are in dispute, was to seek to obtain a re-zoning of at least part of the Helensburgh land with a view to its ultimate development for residential purposes. The land is adjacent to a national park and the application for re-zoning was referred to a Commission of Inquiry, which ultimately recommended that it should not be allowed.

It is alleged by the plaintiffs that the conduct of the matter before that Commission was committed to the defendants, but that they failed to properly pursue it particularly in regard to the provision of adequate and suitable settling ponds within the area to ensure that water from any development on the re-zoned land was subjected to a purifying process before being allowed to run into natural and other waterways in the area and, in particular, in the national park. It is alleged that the defendants had experience, at about that time, in relation to settling ponds and failed in their duties to the plaintiffs to establish a satisfactory solution to the problem before the Commission of Inquiry. Whilst the obligations on the defendants may not be in issue, breach of them is.

There are several other issues, which it is appropriate to note in the present context. It is alleged by the plaintiffs that it was agreed by the defendants that they would not obtain other land in the Helensburgh area, at least in the immediate vicinity of the Helensburgh land, other than as part of the joint venture. It is also alleged that political donations were made to the three major political parties by Rosamond, but that they were not paid for its benefit, but for the benefit of the defendants. These matters are in issue in various ways.

The pleadings have now basically concluded. Many of the substantive allegations made by the plaintiffs are denied by the defendants or, alternatively, they are sought to be answered by their assertions that their conduct was carried out pursuant to agreements entered into between Mr Hogarth and Mr Walker or with the concurrence and/or acquiescence of Mr Hogarth. The entry into these agreements is denied by Mr Walker. Similarly Mr Hogarth disputes any of the alleged concurrence or acquiescence. Hence, on the hearing, there will be a very real issue of credit as between those two gentlemen. I am prepared to assume that these proceedings will be heavily and bitterly contested by both parties.

The plaintiffs assert that they are entitled to relief against Mr Walker and Mr Dransfield for breach of their duties as directors and for breach of fiduciary duties; that they are entitled to recover moneys allegedly wrongly paid from Rosamond and to equitable compensation for all loses sustained by it by reason of the breaches of duty alleged against Mr Walker and Mr Dransfield; to an order for damages in favour of the fourth plaintiff; to an order that the third defendant pay to the third plaintiff $2.75m and transfer to Rosamond the benefit of a certain option; to an order that the fifth defendant establish a study of the effectiveness of the settling ponds proposed for Lady Carrington Estates; to an order that the sixth defendant transfer to Rosamond the benefit of a development consent it has obtained; and to an order that the fourth defendant transfer to Rosamond the benefit of land acquired from Mr and Mrs Chapman.

In short the proceedings involve the attempted unravelling of an obviously complicated series of transactions into which the parties entered, which has become necessary by dint of their having fallen out. Hence, it was not inappropriate to describe the way in which I foresee the matter proceeding in the terms in which I did.

I do not overlook the existence of the proceedings in the Equity Division and the District Court. They, no doubt, will not only add to the intensity of the proceedings I am now considering, but I also have to bear in mind that there is a possibility that the plaintiffs may have sought to subpoena documents in these proceedings for use in the other proceedings. At the outset I would make three observations:-

(i) all the proceedings have an essentially common basis, so it is likely that, almost of necessity, there will be some overlap;

(ii) the existence of the other proceedings would, in any event, provide vehicles in which subpoenas could be issued; and

(iii) as all the proceedings seem to be running more or less contemporaneously documents properly obtained in one set of proceedings may be used in other proceedings for legitimate forensic purposes.

These factors militate strongly against the allegation that the subpoenas have not been issued bona fide in pursuit of the Commercial Division proceedings. The evidence does not satisfy me that the plaintiffs have not acted bona fide.

I find it convenient to commence a consideration of the principles involved by a repetition of what was stated by Clarke J, who had extensive experience in the Commercial Division, in Southern Pacific Hotel Services Inc v Southern Pacific Hotel Corporation Limited [1984] 1 NSWLR 710. At p.716 his Honour said:-

"The practice of requiring a party to make subpoenas returnable days, weeks or months before the trial, as is appropriate, has been followed by judges administering the Commercial List for many years. It is a practice designed to further the ends of justice, in particular by avoiding the time wasting and distractions during the trial involved in dealing with objections, sometimes lengthy, to the production of documents. It is also designed to minimise the need for amendments of pleadings, for wasteful adjournments, and overall to enable the Commercial Court to carry out its task of providing an expeditious hearing of commercial disputes. This is an important service to the commercial community and the judges involved are ever anxious to institute appropriate procedures to ensure both an expeditious hearing and one conducted with the minimum of time wasting and consequent cost.

The submission which was made that there was nothing about the case which made it desirable that the documents be produced to the Court before the trial is utterly incompatible with the practice followed. For this reason it should be rejected in terms that make it clear that the Court requires, as a matter of general practice, that subpoenas be made returnable before the trial."

The wholly beneficial practice to which his Honour referred now has the sanction of an express Rule, Part 37 rule 2(2) providing:-

"A subpoena for production, except a subpoena to which Part 72A rule 7 applies (which rules relates to an arbitrator), may, with the leave of the Court, require production on any day."

This sub-rule was inserted by Amendment 211, which was published in the Government Gazette on 23 September 1988. Hence, the Court, in my experience, frequently directs that the parties have leave to have subpoenas returnable before the Registrar well in advance of the hearing. By taking this course many of the potential problems, which Clarke J identified, will be avoided. Further, his Honour did not suggest that the use of subpoenaed material, for the purposes specified, constituted, in any way, an abuse of process. Accordingly, he accepted that subpoenaed material could properly be used to meet the problems to which he referred. In my respectful opinion, it is very important that these matters be kept firmly in mind.

It is against this background that the authorities, which I consider to be relevant to the present case, can be considered. Whilst The Commissioner for Railways v Small [1938] NSWStRp 29; (1938) 38 SR (NSW) 564 is frequently taken as the starting point for consideration of the relevant principles I am content, in the present case, to commence my consideration with the decision of the Court of Appeal in National Employers' Mutual General Association Limited v Waind and Hill [1978] 1 NSWLR 372. The judgment on the relevant point was given by Moffitt P, with whom Hutley and Glass JJA agreed. It is worth remembering, in my respectful view, that the Court of Appeal was confronted with a primary submission that a subpoena for production could be used only to compel a stranger to bring a document to Court to enable the party invoking that process to have that document for the purpose of tendering it in evidence. At p.378 the President said:-

"It is argued, therefore, that it is a misuse of the subpoena to have the document brought to Court for use for some different purpose, even a purpose connected with the litigation; and, hence, that the Judge ought not permit a party to have access to a document, unless it is one capable of being tendered, or the party concerned gives an undertaking to tender it. It follows, so it is said, that, to permit a party to look at unprivileged documents, for the purpose of making a decision whether the document or its contents can be used in connection with the litigation, such as to determine whether it supports his case and can be tendered; or by other evidence made admissible; or such as to use its contents as a basis for putting questions to a witness; or such as using its contents for the purpose of deciding whether a witness could or should be called to give oral evidence in terms of the contents, is a use of documents so produced beyond the power of the Judge to permit. The basis of this submission is that so to use the documents, when before the Court, is a misuse of the subpoena to bring the documents to Court. It was submitted that to do so amounts to using the subpoena for the purpose of discovery or `fishing'. The submission went as far as that a party should not be allowed to see even a relevant and admissible document in order to decide whether or not to tender it, and that all that could be done was to have the document produced for the purpose of tender. The party who sought to have it produced had, as it were `on the blind', to tender it, or undertake to do so. The argument at this point seeks to subject a document of a stranger sought to be inspected to the rules applicable to a call by one party for a document of the other. Indeed rules for the inspection of documents produced under subpoena would be more stringent, if the allied submission is also correct that the document must be admissible. It was argued, in the alternative, that inspection could not be had unless, at least, the document either was capable of being used in evidence by tender, or by having its contents admitted in evidence by admission in cross-examination."

I have set forth the submissions to show, perhaps unnecessarily, the issue with which the Court of Appeal was confronted in that case. Their Honours declined to follow the decision in McAuliffe v McAuliffe (1973) 4 ACTR 9, and distinguished, at least to some extent, the decisions in The Commissioner for Railways v Small and Burchard v Macfarlane [1891] 2 QB 241. In relation to those two decisions Moffitt P said, at pp.379-380:-

"It might be observed that both Lord Esher and Jordan CJ were dealing with a situation where the witness objects to a party seeing his document, and that they do not deal with an objection by a party that his opponent be not permitted to see a stranger's documents."

It was with the latter case, being the type of case with which I am concerned essentially, that the Court dealt. At p.381 the President said that when a subpoena to produce documents was issued three steps were involved, namely:-

"The first is obeying the subpoena, by the witness bringing the documents to the Court and handing them to the Judge. This step involves the determination of any objections of the witness to the subpoena, or to the production of the documents to the Court pursuant to the subpoena. The second step is the decision of the Judge concerning the preliminary use of the documents, which includes whether or not permission should be given to a party or parties to inspect the documents. The third step is the admission into evidence of the document in whole or in part; or the use of it in the process of evidence being put before the Court by cross-examination or otherwise. It is the third step which alone provides material upon which ultimate decision in the case rests. In these three steps the stranger and the parties have different rights, and the function of the Judge differs."

His Honour considered the first step, which provided the right of the subpoenaed party to have the subpoena set aside on the ground that it was improperly issued and an abuse of the power to compel production of documents. He instanced a number of circumstances in which that point can be taken to which I shall return.

He then identified the second step in the following terms:-

"The second step is when the documents are produced to the Court by the witness, the subpoena not having been set aside, and any other objection to their production, such as on the ground they were privileged, having been rejected. At this point documents are in the control of the Court, pursuant to the valid order of the subpoena. As pointed out in Small's case at this time the witness may state he objects to their being handed to the parties for inspection. If he states he does not object to the parties inspecting the documents, or by lack of objection is taken to have no objection, no doubt normally there would be little reason not to permit inspection by either party. However, the documents are under the control of the Judge and, even if the witness has not objected, there may be good reason in the elucidation of the truth why the Judge may e.g. defer inspection by one party or the other. Indeed, no doubt, he will normally defer inspection by a party who has not issued a subpoena until his opponent has had an opportunity to use the documents in cross-examination. There may be good reason why he may, or indeed should, refuse inspection of irrelevant material of a private nature, concerning a party to the litigation, or, concerning some other person who is neither a party nor the witness. It may well be that the documents are the property of some institution, but relate to private matters concerning some person and the officers of the institution do not take objection on the basis that the responsibility for disclosure rests with the Court. The documents are in its control and are used on its responsibility so far as properly required for the purpose of the proceedings.

The critical question for present purposes, however, arises in relation to this second step, as to the exercise of the power of the Judge to permit inspection. Does he have a judicial discretion to permit the use of the documents in any such way as he considers will aid a proper decision of the issues between the parties, by facilitating the elucidation of the truth in respect of relevant facts, or is his power restricted, so the documents can only be used in a more limited way, so access is given to them only to enable their tender in evidence or in some of the other limited ways submitted?"

His Honour then pointed out the problems which would arise from the taking of the latter view, which would include the inability of the party subpoenaing the documents to have any idea of the use to which the documents may be put in the proper pursuit and conduct of the litigation. This would be totally inimical with the proper use of subpoenas for the purpose of assisting in the proceedings.

After referring again to Small and Burchard, his Honour said, p.384:-

"In my view these dicta, longstanding as they are and impressive as is their source, should not be understood as laying down, as would a rule of Court, some arbitrary limitation on the exercise of the wide discretion of the Judge to permit the documents to be used for the purpose of providing him or the jury, in the end, with the best available evidence testing by the accepted procedures of cross-examination."

"The crucial question in relation to the exercise of the discretion to permit inspection in the second step is whether the documents have apparent relevance to the issues." (My emphasis.)

It is unnecessary for me to consider the third step, which involves the question of the admission of documents into evidence. That can await another day.

In so far as documents have been produced in the present case by strangers without objection or any claim for privilege, and no assertion has been made that they should not be inspected, the question arises as to why, in the exercise of my discretion, I should not allow the plaintiffs to inspect them. In having regard to the fact that the documents were produced in the manner to which I have referred and without any restriction asserted in relation to inspection, I consider it relevant to bear in mind that they were produced by parties well able to determine, or to obtain legal advice to enable them to determine, whether it was appropriate, in all the circumstances, for them to answer the subpoenas. In some cases, particularly where documents are produced at the hearing to the Court, the circumstances in which they are produced may cause a Judge to consider whether they should be made available for inspection and, from my experience, when such circumstances manifest themselves further enquiry is made of the producing party to ensure that he or she understands that if the documents are produced then, generally speaking without more, they will be made available to the parties for inspection. Provided the Court is satisfied that the subpoenaed party understands that and takes no objection to the parties to the litigation looking at his or her documents, access is usually granted. I say "usually" because it will appear either from the face of the subpoena that the documents are clearly relevant, in the sense to which I shall refer in a moment, or, alternatively, it is inappropriate at that stage of the hearing for a Judge to be making any concluded ruling on relevance: Dubbo Base Hospital v Jones [1979] 1 NSWLR 225. It is often difficult to make that determination at the commencement or soon after the commencement of a trial, notwithstanding that at that stage, particularly in matters in the Commercial list, the Judge will have a good appreciation of the issues. It is even more difficult to do so before the commencement of the hearing when the matter is still in the interlocutory stage.

In determining the question of relevance the Court must bear in mind that the parties are entitled to build up an evidentiary mosaic. Generally that cannot be done, particularly in complicated commercial litigation, by the tender of one piece of evidence or the assertion that only limited material is relevant to the issues involved. Particularly is that so when one must have regard to the desirability of as full a cross-examination as possible, assisted by the availability of documents which will aid that. Both as to issues and the issue of credit the Court should not be astute to find irrelevance at an early stage of the proceedings, especially when, as Clarke J pointed out, the production of documents pursuant to a subpoena may lead to, inter alia, legitimate amendments to the pleadings. I think it is necessary to distinguish between the utilisation of subpoenaed material to permit amendments to increase the scope of an existing sustainable action, on the one hand, and discovery before suit to determine whether there is a right of action, on the other. In my opinion, it is not correct to characterise the subpoenas here in issue as seeking discovery before suit.

In Spencer Motors Pty Limited v LMC Industries Limited [1982] 2 NSWLR 921 Waddell J considered the extent to which, at the subpoena stage, a document must be shown to be relevant. At p.296 his Honour said:-

"In my opinion the passage cited from Small's case should be regarded as applying to a subpoena to a person not a party to the proceedings which should be held to be oppressive or an abuse of process if the production of the documents which it describes is excessively burdensome and the documents appear not to be `sufficiently relevant' to the proceedings. I appreciate that this is a very vague proposition but there seems to be no way in which it can be stated more precisely. Each case must, of course, depend upon its own circumstances."

At p.297 after quoting from the judgment of Moffitt P in Waind at p.383, Waddell J said:-

"His Honour goes on to explore the questions posed at pp.383, 384. His views may, perhaps, be summarised by saying that inspection should be granted so far as is necessary in the proper conduct of the litigation and this means where it is reasonably likely to add, in the end, in some way or other, to the relevant evidence in the case. In my opinion this is the test which should be applied to the question whether the present subpoenas are oppressive or an abuse of process in the sense submitted." (My emphasis.)

After referring to what his Honour said about the "crucial question in relation to the exercise of the discretion", which I have quoted from p.385, Waddell J continued, at p.928:-

"His Honour's views on relevance should, in my respectful opinion, be applied to the question now under consideration."

In South Pacific Hotels Clarke J said, at pp.719-720:-

"Whilst his Honour" (referring to the judgment of Rath J in Finnie v Dalglish [1982] 1 NSWLR 400) "was referred to Waind, counsel seem to have overlooked Lucas, which highlights the distinction between a subpoena calling for documents relating to a particular subject, whether or not it is an issue, and one calling upon the recipient to ascertain the issues between the parties and then form a judgment as to whether particular documents relate to that issue. In this respect also it is apparent from both Lucas and Spencer Motors that whilst the phrase `relating to' might be thought to be quite wide it does not necessarily invalidate or make oppressive a subpoena containing the phrase.

On the other hand, there is no doubt that a subpoena, particularly one addressed to a stranger, must be couched in terms of reasonable particularity. It may call for the production of such a large number of documents of doubtful possible relevance that it should be regarded as oppressive and an abuse of process: see the example given by Moffitt P in Waind (at 382). If a Court is called upon to rule that a subpoena is an abuse of process in this sense, it will need to carry out an exercise of judgment upon the particular facts in each case, including but not limited to the terms of the subpoena, bearing in mind the need to balance the reasonableness of the burden imposed upon the recipient and the invasion of his private rights with the public interest in the due administration of justice and, in particular, that all material relevant to the issues be available to the parties to enable them to advance their respective cases. ... On the other hand, a subpoena couched in vague or wide terms and requiring production of many documents will be open to the objection that it probably calls for many documents that can have no possible relevance to the issue and may well be set aside." (My emphasis.)

Mr Jacobson relied upon the decision of Powell J in Botany Bay Instrumentation & Control Pty Limited & Anor v Stewart & Anor [1984] 3 NSWLR 98. In that case his Honour set forth a number of examples of abuse of process at p.100, and then considered the way in which he should exercise his discretion. He concluded that the issue of the subpoenas ought to be regarded as an abuse of process, notwithstanding that certain documents had been produced to the Court apparently without objection or any claim for privilege prior to the hearing of the motions. In coming to that conclusion he took into account three matters, which he specified at p.101. Firstly, he noted that the plaintiffs had had the benefit of discovery by the defendants, but had not sought, in a proper manner, either further or better discovery or particular discovery, but were seeking to use the subpoenas addressed to the defendants as a means of obtaining what he considered to be further and better discovery. The use of a subpoena for this purpose is not, generally, permitted. Secondly, his Honour was of the view that the plaintiffs were seeking to obtain documents from entities which were not parties to the litigation, who and which were thus not liable to give discovery, and, in substance, the subpoenas amounted to discovery "at a time when no trial, hearing or application is pending". The conclusion that the subpoenas went to the extent of seeking discovery would be sufficient to hold them to be an abuse of process.

He seems to have elaborated on this point in his third point, namely:-

"since the right to have a subpoena issued is conferred upon parties to litigation to enable them to have evidence available to tender during, or to have access to documents which might be used during, and for the purposes of, a trial, hearing or application which is then pending, the subpoenas in question have been issued for a purpose other than that to achieve which the right is conferred on litigants."

His Honour cited from the judgment of Bowen LJ in Elder v Carter (1890) LR 25 QBD 194 in support of this conclusion. This matter was argued before his Honour on 28 August 1984 and judgment was given on 17 October 1984. It appears from the list of cases at p.98 that his Honour was not referred to the decision of Clarke J in Southern Pacific Hotel Services and, in my respectful opinion, the remarks his Honour made as to when it is appropriate to call on a subpoena to produce documents is not supported by either the practice or what Clarke J said, which, in my respectful opinion, more accurately reflects the practice at least in the Commercial Division. As I have pointed out the matter has now been put beyond doubt by the Rules in a way, which is not supportive of the third proposition.

However, it was submitted that Clarke JA, with whom the other members of the Court of Appeal agreed, adopted what Powell J had said in Woods & Anors (trading as Turner Freeman) v Hanoldt (Court of Appeal - 9 March 1995 - unreported). I agree that his Honour did so in the context that where a Court concludes that the power to issue a subpoena has been misused it will, on the application of the recipient or even of its own motion, set it aside as an abuse of process. I do not, with respect, consider that his Honour adopted the passage concerning when a subpoena should issue. The Court of Appeal's decision is also of assistance because of the way in which it deals with the test of relevance, which his Honour stated at p.6 thus:-

"What the appellants say in this case is that the documents the production of which is sought and which fall within the first category are reports produced at the cost of a particular litigant for use in specific litigation to which they had direct relevance and that they could have no possible relevance to different litigation between different parties."

"The highest that the respondent can put its case is that the material may bear some relevance to the issue concerning the knowledge that the defendant had, or ought to have had, of the dangers of asbestos at varying periods of time."

Subsequently, at p.7, his Honour referred to the ground "of obvious irrelevance", as constituting an abuse of process.

In submissions I was referred at some length to various authorities dealing with the position of subpoenas in criminal matters. I prefer to apply the principles to which I have referred, which have been developed in relation to civil proceedings. However, on analysis, I do not discern any real difference on the question I am called on to consider.

(a) The Subpoena Addressed To Chris Burke & Co Pty Limited

As I have said it is only paragraph 2 of the subpoena to Chris Burke & Co Pty Limited, which is now pressed. The basis is that it may produce documentation, which may assist in a submission that Mr Walker acted in breach of his fiduciary duty to the third defendant in the somewhat tortuous way set forth in a written submission, which Mr Gray furnished to me. It is not suggested that the documents arose out of the transactions, which are the subject of the Commercial Division proceedings, or have any relevance to any issue in those proceedings. The only possible relevance is on the issue of credit. The matters referred to in that submission are clearly capable of proof in other ways and, in my opinion, it would be oppressive to require Chris Burke & Co Pty Limited to produce the documents set forth in paragraph 2 of the Schedule. In my view if they have any relevance it is so marginal as to create that oppression.

In coming to that conclusion I not only have regard to other ways of proving matters upon which Mr Gray relies, but also to the fact that certain conveyancing documents as between the parties, which could be far more relevant to the credit issue, have been produced to the Court and, for reasons I shall give in due course, I do not propose to set aside the subpoena addressed to and answered by Messrs Blake Dawson Waldron.

(b) The Subpoenas Addressed To Mr and Mrs Chapman

The "Chapman land" was in near vicinity to Lady Carrington Estate. It is pleaded, in relation to that land, that in or about November 1993 and on or about 6 April 1994 Mr Walker orally represented to Mr Hogarth that neither he nor the third defendant nor any of its subsidiaries or associated companies would undertake any land development activities in and around Helensburgh, except on the basis that such land would form part of the land subject to the joint venture between them and, in paragraph 71, that in reliance on that representation Mr Hogarth entered into the heads of agreement and caused the parties to execute the HUTA and did and refrained from doing certain other things. All these matters are denied.

In paragraph 73 it is alleged that contrary to the representations Mr Walker, through the fourth defendant, acquired the Chapman land, which is admitted, although it is alleged that it was done with the knowledge of Mr Hogarth.

The issue pleaded, therefore, is the acquisition of the land, which is admitted. There is no pleading as to the price at which or the circumstances in which it was acquired. For the purposes of the allegation made the issue is that it was acquired contrary to the representation alleged.

In these circumstances I do not see that the documents held by Mr and Mrs Chapman relating to the acquisition of the land and their dealing with it has any relevance to the case as pleaded nor, in my opinion, has it been shown that the documents would have relevance to the credit of any parties or potential witnesses to the proceedings. In my opinion Mr and Mrs Chapman are entitled to have the subpoena addressed to them set aside.

(c) The Subpoenas Addressed To The Other "Strangers"

My prima facie view is that the defendants are not entitled to set aside the subpoenas addressed to the parties set forth in Schedule A, who and which have produced documents without any objection. It is very difficult to see, in those circumstances, why the Court should, in the exercise of its discretion, order that such documents not be inspected by the parties: Waind. However, it is necessary to look, albeit briefly, at the subpoenas addressed to those parties to see whether they fit within the concept of relevance to which the authorities refer. Somewhat repetitiously I remind myself that the recipients of the subpoenas have not asserted that they had any difficulty in understanding the terms of the subpoenas or the documents they were required to produce. Nor have they asserted that compliance with the subpoenas is in any way oppressive.

I am satisfied that the documents relating to the re-zoning of Lady Carrington Estate and to a Development Application lodged on behalf of the sixth defendant clearly meet the test of relevance.

It is convenient at this point to deal with the issue concerning the settling ponds. It was submitted by the defendants that Giles CJCommD had held that this was an irrelevant issue. I was referred to what his Honour said at p.14 of the transcript of the directions hearing held on 22 May 1998. I have some doubt whether, in itself, what his Honour said amounted to any concluded, as opposed to a tentative, view of the type for which the defendants contend. However, if I be wrong, that view has been overtaken by uncontested affidavit evidence of an expert, Mr Rowbottom, who has been retained by the first defendant to prepare a report for the purposes of the proceedings in relation to the settling ponds issue. Mr Rowbottom said, in paragraph 3, that in preparing his report he would obtain assistance from access to documents relating to the establishment, operation and ascertained results achieved by settling ponds using the same or similar technology at Engadine, which is operated by the Sutherland Shire Council; at the Rouse Hill Infrastructure Development, subject to the jurisdiction of the Baulkham Hills Shire Council; at West Dapto, subject to the jurisdiction of the Wollongong City Council; and at Shell Cove, subject to the jurisdiction of the Shellharbour City Council.

In the light of this uncontradicted evidence, although I think the same result would have been achieved in any event having regard to the pleadings, it seems to me that the settling ponds issue is one in respect of which the plaintiffs are entitled to issue subpoenas because, it is clearly relevant.

In all these circumstances I am of the view that the documents produced by Wollongong City Council may be inspected by both parties.

This subpoena seeks, but is not limited to, documents relating to settling ponds at the Shell Cove development at Shellharbour. In my opinion, essentially for the reasons I have given, there is no ground, on the basis of relevance either as to the settling ponds or other issues, to set aside the subpoena and to prevent the plaintiff's legal representatives inspecting the documents produced.

This subpoena seeks any report or recommendation in relation, generally speaking, to settling ponds installed in The Royal National Park area at Engadine. In my opinion this subpoena clearly goes to a matter of relevance.

I make the same observations as I have in relation to the other Councils. The plaintiffs' legal representatives are entitled to inspect the documents referred to in sub-paragraphs (i) to (iv).

This subpoena is in a different category. It seeks all correspondence between the Department and the first, third and fifth defendants in relation to Development Consent granted by The Minister for Planning and Housing on 20 May 1995 in relation to the Balmain Cove development, and the Development Application made by the third and/or the fifth defendants in respect of which that was granted; all correspondence between The Minister for Planning and the defendants to which I have just referred in relation to those documents; and all internal memoranda, briefing papers, Departmental advices, Ministerials, minutes and meeting notes in relation to those matters.

Mr Gray submitted that this subpoena went in part to the issue of political donations and, in part, to the question of the amount of development being carried out by some of the defendants. I consider the test of relevance, which I think should be adopted, has been met and that this subpoena should not be set aside. The plaintiffs' legal representatives are entitled to inspect these documents.

This subpoena relates to the sale of Unit 104 in the Cronulla development. I have referred to this subpoena in considering the position of Chris Burke & Co Pty Limited. The documents have been produced without any claim for client professional privilege. Whilst I was of the view that the subpoena to Chris Burke & Co Pty Limited was too wide, I consider that this subpoena is sufficiently confined to meet the test of relevance to which I have referred. Accordingly, I do not consider that it should be set aside, and I do consider the plaintiffs' legal representatives are entitled to inspect those documents.

This subpoena relates to Unit 105 at the Cronulla premises and raises essentially the same issue as that addressed to Messrs Blake Dawson Waldron. I do not consider that this subpoena should be set aside and, if the claim for client professional privilege is not upheld, I consider that the plaintiffs' legal representatives are entitled to inspect these documents.

"1. All documents (including correspondence, file notes, memoranda, notes of any meetings, reports, original and drafts of documents) in connection with the sale by Colgate-Palmolive Pty Limited to Waterview Properties Pty Limited of the property comprised in Folio Identifiers 1/723846; 1/303124; D/303124; F/303124; G/303124; 2/450024; 11/3447; 12/3447; Auto Consols 5776-159; 4396-74;5545-207; 2248-188; 2170-90; 7877-6 (hereinafter referred to as `the Property') on or about 21 March 1997.

2. All documents evidencing or recording any dealing with the Property (including all options and/or contracts for sale and/or agreements dealing with the Property) from 1 January 1995 up to and including the time of final disposal of the land at Mort Bay, Balmain."

Prima facie these documents have nothing to do with the present proceedings. There is no reference to either Colgate-Palmolive Pty Limited or Waterview Properties Pty Limited in the pleadings. There is no suggestion that any of the defendants have any interest in or association with either company.

By letter dated 2 July 1998 the solicitors for Colgate-Palmolive Pty Limited wrote to the solicitors for the defendants stating that if any documents were to be produced pursuant to the subpoena, an issue of confidentiality would arise.

In his submissions Mr Gray stated that the documents "go to an issue of credit affecting Mr Walker" in that the plaintiffs propose to contend, and this is nothing more than an unsubstantiated allegation, that Mr Walker received a substantial sum of money in relation to this transaction in breach of his duties to the third defendant. From this, I assume it would be sought to be argued that Mr Walker acted in breach of his fiduciary duties to the plaintiffs. There is an obvious danger in allowing relevance, particularly on an issue of credit, to be pushed so far. This would open up another case, viz whether Mr Walker did act in this way.

In the absence of any pleading identifying either of the companies I am of the view, notwithstanding I understand the submission was made on instructions, that the potential for totally irrelevant distraction which the subpoena creates makes it oppressive, in the sense that it does not demonstrate any matter of relevance in the way in which I have identified it. I shall order that it be set aside.

This subpoena seeks a number of documents relating to Mr Francis Joseph Thompson, who owned land known as the "Thompson land", which was situated within Lady Carrington Estate. The allegations in respect of this land commenced at paragraph 58 of the Summons. It was alleged that on 6 April 1994 Mr Thompson was the owner of the relevant land, which was located in the centre of and was entirely surrounded by the Helensburgh land; that on the same date Lady Carrington Estates Pty Limited, a company associated with Mr Hogarth, held an option granted to it by Mr Thompson to purchase that land, which was to expire on or about 6 May 1994, which right Mr Hogarth made available to the joint venture; and that between 6 April and 6 May 1994 Mr Hogarth repeatedly asserted to the fifth defendant the necessity for Rosamond, before the expiry of that option, to secure a further option or to exercise the original option. All of these matters are admitted without qualification. It was then pleaded that between 6 April and 6 May 1994 the fifth defendant did not secure a renewal in the name of Rosamond, which is admitted. It is asserted that the renewal was not secured in the name of Rosamond, but it was denied that it was not secured for the benefit of Rosamond or the joint venture. In paragraph 62 it was alleged that an option was granted to the fifth defendant "for its own benefit" over the Thompson land and that the actions in that regard were in breach of Mr Walker's and Mr Dransfield's respective duties as directors of Rosamond, and that the failure of the fifth defendant to secure the option for Rosamond was in breach of the covenant pleaded in paragraph 37 and in breach of fiduciary obligations. In answer to this it is pleaded that the renewal was purchased in the name of the fifth defendant, but it is denied that it was held for its benefit, and asserted by the defendants that the renewal was purchased in the name of the fifth defendant with the knowledge and consent of Mr Hogarth. In paragraph 63 it was pleaded that the fifth defendant held the benefit of the option upon trust for Rosamond, which was admitted.

My initial reaction to the subpoena to Messrs Russell, McClelland and Brown, which seeks documentation from them in relation to, at least arguably, this transaction, was that the admissions removed any issue. However, on reflection, I am not certain that is so because there may be a question going to the credit of Mr Walker and Mr Dransfield. This would be on a matter which is the subject of the proceedings. The mere admissions cannot remove the right of the plaintiffs to explore what happened at and, more importantly, what was the motivation for what happened, at the time. I would accordingly require compliance with paragraphs 1 and 2 of the subpoena, and paragraph 3 in so far as it related to a copy of all correspondence passing between Messrs Russell McClelland and Brown and the third defendant in relation to Lot 23 in Deposited Plan 752033. I would not, however, allow the more expanded version of paragraph 3.

In making these observations I am not to be taken as in any way giving a direction that a claim for client professional privilege cannot be taken if it is appropriate. Upon compliance with the subpoena and subject to any claim for client professional privilege, or any other valid claim that the plaintiffs' legal advisers not be permitted to inspect the documents, I consider that they are entitled to do so.

Apparently this company was retained to ascertain the availability of the name of the fourth defendant and then to take the necessary steps to incorporate it. I am not satisfied that anything in paragraph 1 of the Schedule is relevant, but I can see a relevance in paragraph 2 and I would require compliance with the subpoena to that extent. Upon compliance, and subject to any valid claim that the documents not be inspected by the plaintiffs' legal representatives, I consider that they will be entitled to inspect them.

In so far as I have ordered that one subpoena be set aside at the instance of the defendants I consider they have a sufficient interest, in the sense explained by McLelland J in Compsyd Pty Limited v Streamline Travel Service Pty Limited (1987) 10 NSWLR 648, to move for that order. That interest is that the hearing should not be allowed to expand beyond a trial of the issues raised by the pleadings and matters necessarily ancillary thereto.

In my opinion Chris Burke & Co Pty Limited and Mr and Mrs Chapman, which and who have been wholly successful, are entitled to their costs of their Notices of Motion. The defendants had very limited success on their Notice of Motion, such that I consider that the plaintiffs were the successful parties, and thus the defendants should pay their costs. I note for the assistance of the costs' assessor that all matters were argued together.

(a) The Registrar of the Court return to Leichhardt Municipal Council any documents produced by it in answer to a subpoena to produce documents issued by the plaintiffs in these proceedings without permitting inspection of them.

(b) The Registrar of the Court return to Messrs David Finkelstein & Co any documents produced by them in answer to a subpoena to produce documents issued by the plaintiffs in these proceedings without permitting inspection of them.

(c) The subpoenas to produce documents issued by the plaintiffs in these proceedings addressed to:-

(d) In relation to the application by the defendants that the subpoena to produce documents issued by the plaintiffs in these proceedings addressed to Colgate-Palmolive Pty Limited be set aside.

(e) The plaintiffs pay the costs of Chris Burke & Co Pty Limited and Mr and Mrs Chapman of their Notices of Motion.

(f) The defendants pay the costs of the plaintiffs of the defendants' Notice of Motion.