Mudgee Dolomite & Lime Pty Limited v Robert Francis Murdoch; In the matter of Mudgee Dolomite & Lime Pty Limited

Supreme Court of NSW|2019-08-08|Before: Black J

Proceedings 2017/377222 H Insall SC / Dr C Mantziaris (Plaintiffs) V Bedrossian / M Jaireth (Defendants)

Solicitors: Proceedings 2016/84283 McPhee Kelshaw Solicitors (Plaintiff) Hills Solicitors (Defendants)

Proceedings 2017/377222 Hills Solicitors (Plaintiffs) McPhee Kelshaw Solicitors (Defendants) File Number(s): 2016/84283 (005); 2017/37722 (005, 006, 007)

Application to set aside subpoenas issued at the request of the Brian Murdoch Interests

By Interlocutory Process filed on 19 June 2019 the Applicant, Robert Francis Murdoch, applies for orders setting aside three subpoenas issued to Cadia Holdings Pty Ltd ("Cadia"), Complete Crushing Services Pty Ltd ("CSS") and Newcrest Mining Pty Ltd ("Newcrest") which are in substantially common form, and a second subpoena issued to Newcrest which is in a different form. The parties have read several affidavits of solicitors in respect of this and other applications. Ultimately, those affidavits provide limited assistance in respect of this issue, which raises a question whether the subpoenas have a legitimate forensic purpose in respect of the matters in issue in the proceedings.
I will first deal briefly with the applicable principles, before turning to their relatively straightforward application in this case. It has long been recognised, at least since Commissioner for Railways v Small (1938) 38 SR (NSW) 564 at 574-575 that a subpoena may be set aside by reference to, inter alia, the range of documents that are required and their relevance to the matters in issue in the proceedings. In later cases, including the decision of Portal Software International Pty Ltd v Bodsworth [2005] NSWSC 1115 (dealing with a notice to produce), there has been reference to the question whether the documents called for could "possibly throw light" on the issues in the substantive proceedings or it is "on the cards" that they will do so, and Brereton J there noted a notice to produce would traditionally be treated more liberally than a subpoena to a third party in that respect. In The City of Sydney v Streetscape Projects (Australia) Pty Ltd [2011] NSWSC 364, Einstein J in turn noted that the question was whether there was a reasonable chance that the material sought would assist the case, and that would generally be the case if the material was relevant to an issue in the case. His Honour also noted that there would be a legitimate forensic purpose in seeking the material, "providing of course that the factual issues and the character of the material sought are precisely identified". His Honour noted that a subpoena should be permitted "where the Court forms the view that the material falls within the legitimate field of enquiry raised by the issues in contest and is reasonably likely to add in the end in some way or other to the relevant evidence in the case". In Re DCM Solar Pty Ltd (in liq) [2013] NSWSC 423 and again Re North Coast Transit Pty Ltd [2013] NSWSC 1912 at [9], I adopted the test whether a subpoena "could possibly throw light" on the issues in the substantive proceedings or that it is "on the cards" that it would do so as formulated in Portal Software above.
Here, the first three subpoenas that are in issue, directed to Newcrest, Cadia and CCS, are each in broad terms. They extend over a substantial period from 1 January 2014 to the date of the subpoena, and extend to broad categories, including, in one case, communications by or on behalf of CCS to each of Cadia and Newcrest through the whole period, apparently contemplating that any communication of any character about any subject matter between those entities will be produced. It is possible that that category would in practice be narrower than it seems, since the Defendants contend that CCS had an involvement at the relevant site over a limited period. If, of course, that were not correct, then the range of documents to be produced in response to the subpoena would be correspondingly wider.
The question here is whether there is a legitimate forensic purpose in respect of the issue of these three subpoenas, seeking to establish the extent of CCS's involvement with, particularly, Newcrest and Cadia at the relevant site. The Further Amended Statement of Claim that is to be filed, by leave, in proceedings 2016/84283 relevantly pleads, in paragraphs 8 and following, that, for the period from the financial years ending 30 June 2011 to 30 June 2014, quarrying work was subcontracted to two corporate entities, RK Murdoch Pty Ltd ("RK Murdoch") and Tilecote Farm Pty Ltd (formerly known as Bright Pear Pty Ltd) ("Bright Pear") in respect of relevant contracts. It also pleads in paragraphs 19 and following, that beginning in the financial year ending 30 June 2012, and without a closing date, Mr Robert Murdoch and Mr Stephen Murdoch failed to cause MDL to re-tender for further work in relation to the Cadia mine site; caused RK Murdoch and/or Bright Pear to tender for further work in relation to the Cadia mine site; and/or otherwise directed available work at the Cadia mine site away from MDL to RK Murdoch or Bright Pear. There is thus an allegation, in the earlier period, of a subcontracting to two specified entities. There is an allegation, in the later period, of a failure to cause MDL to re-tender, and causing specified entities to tender for the work, and otherwise directing that work to those specified entities. There is no specific pleading of transfer of work to CCS.
Mr Bedrossian, with whom Mr Jaireth appears for the Brian Murdoch Interests, refers in submissions to a suggestion that there is evidence that CCS performed such work. That may be so, but it is notable that is not a pleaded allegation in the Further Amended Statement of Claim, even in the version which is now sought to be filed. That is particularly striking where, as Mr Insall, with whom Dr Mantziaris appears for the Robert Murdoch Interests, points out, there has been previous discussion of the scope of the pleading and the extent to which other companies are raised by it in respect of issues as to the scope of discovery.
Mr Bedrossian contends, in what can only be described as an ambitious submission, that the subpoenas in respect of CCS' involvement are justifiable because paragraphs 3 and 4 of the Further Amended Statement of Claim seeks orders by way of compensation, damages or equitable compensation and paragraphs 5 and 5A seek orders for accounts of profit in respect of alleged breaches of duty by Mr Robert Murdoch and Mr Stephen Murdoch. Mr Bedrossian submits that, so far as compensation and an account of profits is concerned, it would be open to the Plaintiffs to issue a subpoena to any party that performed crushing work for the benefit of Newcrest or Cadia, at the relevant site, so far as that work might have been performed by MDL, and that, in fact, the Brian Murdoch Interests have acted with restraint in only choosing to issue a subpoena to CCS rather than to the range of other parties who might have performed such work. That submission depends on the proposition that, in effect, work undertaken by any such other party was work that was potentially lost to MDL in the relevant period.
The difficulty with that proposition, so far as it extends to third parties generally or CCS specifically, is that there is no pleading that creates a factual nexus between the claimed breaches of duty and the loss that is said to be attributable to work undertaken by CCS. No doubt, it might have been possible to plead that, in respect of CCS specifically, CCS undertook work that MDL might otherwise have undertaken, and that that was a consequence of the breaches alleged against Mr Robert Murdoch and Mr Stephen Murdoch. No doubt, it might also have been possible to extend that allegation to other parties. However, the Brian Murdoch Interests do not plead such a case. It may be that, as Mr Bedrossian submits, it might have been possible to issue a narrow subpoena to Newcrest, Cadia or indeed CCS, limited only to seeking to determine the amount of their revenue and costs for the provision of crushing services at the site. That in turn might have reflected the scope of Mr Bedrossian's justification for the subpoena, that it was relevant to quantification. The subpoena does not take that form, and extends more widely, as appearing to be directed to an unpleaded case in respect of diversion of business to CCS.
It seems to me that, having regard to the principles to which I have referred above, the documents sought by the subpoena, at least in the wide form in which it presently exists, do not fall within the legitimate field of inquiry raised by the issues in contest, as they are identified by the pleading. It is, in its present form, directed to a case which is not presently raised, and it is not to the point that some narrower subpoena might have been justifiable in respect of the question of quantification alone, because that is not the subpoena that the Brian Murdoch Interests seek to issue.
It seems to me, however, that the position differs in respect of the second subpoena sought to be issued to Newcrest. That second subpoena is directed to contracts, for the period from 1 January 2007 to date, and other matters, relating to specified entities, defined as the "Relevant Person or Entity". The persons falling within that definition, on the face of it, are persons against whom specific allegations in respect of diversion of business or allegedly improper subcontracting are made, and the documents sought appear to relate to those allegations. The specified categories are wide, and the category relating to all communications is potentially very wide, and may give rise to questions of oppression. However, that is an issue that Newcrest can no doubt raise for itself, if in fact the volume of communications is such that it will be oppressive for it to be required to identify them for the long period in which they are sought.
Mr Insall attacks this subpoena on the basis that, first, it may cause the recipient to produce documents to CCS. It seems to me that that attack has no substance. No doubt, any party issued a subpoena may produce something else beyond that which is required. The Courts do not set aside subpoenas against the contingency that subpoenaed parties may produce other documents that they are not required to produce, otherwise any subpoena might be set aside because that might be done by any party that receives one. The second basis upon which Mr Insall seeks to set aside the subpoena is that it extends beyond the relevant period in which the breach is alleged. Again it seems to me that there is little in that submission, because it is plain that the breach in respect of the failure to cause MDL to re-tender and the directing of available work to other entities extends from 30 June 2012, without an end date, and the claim for compensation is in turn not limited by an end date.
Mr Insall submits that the parties have led evidence in respect of the period to 2014, and that may be the case. There is little prospect, given the history of these proceedings, that the parties will now be permitted to lead further affidavit evidence, beyond the affidavit evidence that has already been led, but that is not reason to set aside the subpoena. If it produces documents which are capable of being tendered and addressed, without further explanation by evidence, then no doubt that can occur without causing difficulty for the evidence that has already been led in the proceedings. It seems to me that that subpoena is therefore justifiable, as having a proper forensic purpose, in respect of the claim for compensation against entities which are alleged to be in breach. If a question of oppression arises, in respect of the volume of documents sought to be produced, then no doubt Newcrest is perfectly capable of bringing its own application to set aside the subpoena for that reason.
Accordingly, in respect of the Interlocutory Process filed by Mr Robert Murdoch dated 19 June 2019, I order that the subpoenas to produce issued to Cadia Holdings Pty Ltd and Complete Crushing Services Pty Ltd, and the first subpoena to produce issued to Newcrest Mining Pty Ltd containing four paragraphs to be set aside. The Interlocutory Process otherwise be dismissed, reserving the question as to costs.
The effect of that order is that the second subpoena issued to Newcrest, in eight paragraphs, remains in effect.

Application to set aside subpoenas issued at the request of the Robert Murdoch Interests Subpoena issued to Lawrence Bennett Portelli Pty Limited

By Interlocutory Process filed on 12 June 2019, Mr Brian Murdoch seeks to set aside paragraph 2(a) of the subpoena to produce addressed to Lawrence Bennett Portelli Pty Limited which called for loan applications, loan approvals, loan offers or other documents to Mr Scott William Murdoch over a particular period. No application was made to set aside other paragraphs in that subpoena, or paragraph 2(b) which refers to Stoneco Pty Limited. The Robert Murdoch Interests now accept that that paragraph should be set aside, although it appears that documents have been produced.
I make orders setting aside paragraph 2(a) of the subpoena filed 22 May 2019 issued at the request of Robert Francis Murdoch to Lawrence Bennett Portelli Pty Limited; I grant access to the Brian Murdoch Interests to all documents produced in respect of the subpoena, for the purposes, inter alia, of isolating documents falling only within paragraph 2(a) of the subpoena; I grant access to the Robert Murdoch Interests to all documents produced in response to the subpoena, other than those falling within paragraph 2(a) of the subpoena; and I reserve liberty to the parties to submit consent orders to the Associate to Black J providing for any more detailed mechanism to deal with documents falling within paragraph 2(a) of the subpoena as agreed between them. Subpoena issued to Pinpi Pty Limited
By Interlocutory Process filed on 12 June 2019, Mr Brian Murdoch also seeks to set aside the subpoena to produce addressed to Pinpi Pty Limited ("Pinpi") issued at the request of the Robert Murdoch Interests. That subpoena is no longer pressed. I order that that subpoena be set aside, and there be no access to documents produced by Pinpi in response to the subpoena. Subpoena issued to Snowmist Pty Limited
The Robert Murdoch Interests also caused a subpoena to be issued to Snowmist Pty Limited ("Snowmist") which sought documents relating to various categories for a 12 year period from 1 January 2007 to 8 August 2019. The Brian Murdoch Interests seek to set aside that subpoena on various grounds. Mr Insall now seeks to justify the subpoena, not for the period for which it was issued, but, it appears, for a shorter period from January 2007 until 28 February 2008, a period of one year, as distinct from the 12 year period addressed by the subpoena. I have been informed that documents have already been produced by Snowmist, presumably responding to the subpoena in its terms, rather than to a different subpoena for a one year period.
It seems to me that the Court should not engage in assessing the propriety of a subpoena which was not issued, requiring production of documents for a period of a year, rather than the subpoena that was issued requiring the production of documents for a period of 12 years. The difficulty with taking the former course is, not least, that, if documents have already been produced in respect of the existing subpoena, for the 12 year period, and the hypothetical different subpoena would have been sustained, it would then be necessary to take further steps to separate out the documents that would have been produced under the hypothetical subpoena from those produced in respect of the longer period.
It seems to me that the Court may properly take the view that, in these circumstances, if the Robert Murdoch Interests cannot justify the subpoena that they have caused to be issued, then it should be set aside, leaving them to seek to issue any further subpoena that is properly justifiable. In this case, the Robert Murdoch Interests' ability to issue a further subpoena may, in turn, be constrained by the possibility that the Court will, subject to hearing from the parties, make an unusual order in this case, justified by the conduct of the case to date, that no further subpoenas may be issued without leave of the Court. That order is ordinarily made only in respect of unrepresented litigants, but may be necessary in this case if the legal representatives will not exercise appropriate restraint in the issue of subpoenas.
Accordingly, I will not determine any attempt to justify the different hypothetical subpoena to Snowmist for the shorter period, and the Robert Murdoch Interests will need either seek to justify the subpoena for the 12 years which are addressed by it, or it should be set aside. Mr Insall then indicated that the Robert Murdoch Interests do not seek to justify the subpoena for the entire period over which it was issued. In these circumstances, it should be set aside. In respect of paragraph 3 of the Interlocutory Process filed on 12 June 2019 by Mr Brian Murdoch, I order that the subpoena to Snowmist Pty Limited be set aside; there be no access to any documents produced by Snowmist Pty Limited in response to that subpoena. Subpoena issued to RW Corkery & Co Pty Limited
By Interlocutory Process filed on 12 June 2019, the Brian Murdoch Interests apply to set aside a subpoena to RW Corkery & Co Pty Limited. The first paragraph of that subpoena is directed to a narrow date range, of 1 January 2007 to 31 December 2008, which Mr Insall submitted would be supportable. However, paragraphs 2-4 of the subpoena each extend to the period from 1 January 2007 to the date of the subpoena, which Mr Insall appears to accept is not supportable. Mr Insall indicated that he did not seek to support the subpoena, in its present form.
The difficulty in this case, as in the earlier subpoena to Snowmist, is that documents have already been produced by the subpoenaed party, in respect of, presumably, a narrower period in paragraph 1 but also the wider period in paragraphs 2-4. In these circumstances, it is not practicable to deal with a hypothetical subpoena in different terms, limiting, for example, paragraphs 2-4 to a narrower period, because that is not the subpoena to which the subpoenaed party has responded. The parties have also been unable to agree an arrangement for the review of documents produced in response to the subpoena in the Registry, in order to limit them, for example, to documents in a narrower period. In these circumstances, it seems to me that the proper course again is to set aside the subpoena, and order that there be no access to the documents produced. It may be open to the Robert Murdoch Interests to issue a further subpoena, in such terms as they consider they can properly support, and subject to any order which may be made restricting the ability to issue further subpoenas without leave.
Accordingly, I order that the subpoena directed to RW Corkery & Co Pty Limited be set aside and there be no access to documents produced in response to the subpoena. Subpoena issued to Hannaford Cox, Connellan & McFarland
Application is made by the Brian Murdoch Interests by Interlocutory Process dated 12 June 2019 to set aside paragraphs 5-7 of a subpoena to produce issued to Hannaford Cox, Connellan & McFarland. Mr Insall does not seek to support those paragraphs in their present form. It may be, based on what has been said in respect of earlier subpoenas, that he might seek to support those paragraphs in respect of narrower categories and a narrower time period, but the difficulty is that that is not the approach which the subpoena adopts.
It is again not practicable, for the reasons noted earlier, to segregate the documents falling within paragraphs 5-7, where the parties have not been able to agree a mechanism to do so. I appreciate there is a degree of inconvenience in that course, but it should be recognised that that inconvenience only arises because the subpoena was originally issued in terms that the Robert Murdoch Interests now feel unable to support. So far as other documents which were produced in other categories, there seems to be no reason why access should not be granted to documents in those other categories, adopting the same mechanism which has previously been adopted in that respect.
Accordingly, I order that paragraphs 5-7 of the subpoena directed to Hannaford Cox, Connellan & McFarland be set aside; there be access to the Brian Murdoch Interests to all documents produced in respect of the subpoena, for the purposes of segregating documents falling only within paragraphs 5-7 of the subpoena; there be access to the Robert Murdoch Interests to documents produced in response to the subpoena, excluding documents falling within paragraphs 5-7 of the subpoena; and there be liberty to the parties to submit consent orders to the Associate to Black J providing a more detailed mechanism for the review of documents to exclude documents falling within paragraphs 5-7 of the subpoena, if they are able to reach agreement in that respect. Subpoenas issued to several banks
Application is made by the Brian Murdoch Interests to seek to set aside paragraph 4 of subpoenas issued at the request of the Robert Murdoch Interests to Westpac Banking Corporation ("Westpac"), Australia and New Zealand Banking Group Limited ("ANZ"), Commonwealth Bank of Australia Limited ("CBA"), and a corresponding paragraph of a subpoena issued to National Australia Bank Limited ("NAB").
The submissions initially made by the Brian Murdoch Interests originally appeared to take issue with the fact that the subpoena identified specific dates, rather than a relationship with particular transactions. That proposition would have had the obvious difficulty that a bank could not comply with a subpoena that required it to assess whether a payment had a particular relationship with a transaction, where it would have had no idea of that matter. In the event, Mr Bedrossian put a different proposition in oral submissions, that there was an ambiguity in the paragraph, such that the banks might, rather than producing payments for the specified dates, have produced all payments over the ten year period covered by those dates. That is, perhaps, a possibility. If that occurred, it is readily addressed by granting first access to the Brian Murdoch Interests and liberty to apply if it emerges that any bank has produced ten years of transactions for all accounts, rather than the transactions for the specified dates which, on the face of it, were sought by the subpoenas.
In these circumstances, Counsel have agreed that the application to set aside paragraph 4 of the subpoenas to Westpac, ANZ, CBA, and paragraph 1 of the subpoena to NAB is no longer pressed, on the basis that I will make orders set out below. The further application to set aside paragraph 6 of the subpoenas addressed to Westpac, ANZ and CBA was also not pressed.
I will make orders that the Brian Murdoch Interests have first access, to be exercised by 4pm on 15 August 2019, to documents produced by Westpac, ANZ, CBA and NAB, for the purpose of identifying whether documents have been produced or transactions other than on the dates specified in paragraph 4 of the subpoenas addressed to Westpac, ANZ, CBA, and paragraph 1 of the subpoena addressed to NAB; the Brian Murdoch Interests have liberty to apply, to be exercised by 4pm on 15 August 2019, returnable in the Corporations List at 9:15am on 19 August 2019, in the event that documents have been produced other than in respect of the specified dates; and there be general access to the documents produced by each of Westpac, ANZ, CBA and NAB from 4pm on 19 August 2019.

Application for further and better discovery

By Further Amended Interlocutory Process filed on 19 June 2019, Mr Robert Murdoch sought a range of orders for further and better discovery. Ultimately, as matters developed, further and better discovery was only sought within one category, namely discovery category B17, in respect of documents potentially held by Mr Scott Murdoch's solicitors concerning a particular matter. An order for further discovery was not opposed by the Brian Murdoch Interests, although Mr Bedrossian indicated that that did not indicate either that appropriate inquiries had not been made of the solicitors, or that further documents would necessarily be produced. Accordingly, I order that the Brian Murdoch Interests give further and better discovery as to the documents falling within category B17 of Annexure B to the orders made by the Court on 12 September 2018, such discovery to be given by 4pm on 15 August 2019.

Leave to issue subpoenas

The Court has today dealt with several applications to set aside numerous subpoenas, which have been successful in substantial part. In some cases, subpoenas were issued which the parties issuing them were then unable to justify. That is an unsatisfactory situation, particularly where third parties have been put to the costs of production of documents, in response to subpoenas issued by the Court at the request of the relevant parties, which have been found to be too wide or could not be justified by the parties which had issued them. It seems to me that that result is at least potentially inconsistent with the need for the just, quick and cheap resolution of the issues in dispute in the proceedings, combined with the need to avoid imposing wasted costs of the production of documents on third parties.
I am satisfied that this is a case which requires a further order, which I have never previously had occasion to make in this List, restraining the issue of further subpoenas by the parties without leave of the Court. That is not to say that such leave will not be granted, but it seems to me that subpoenas ought to be subject to review by the Court, before and not after they are issued, in order to avoid a repetition of what has occurred today. Accordingly, I make a further order that no further subpoenas be issued by any party without leave of the Court.

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: 30 December 2019

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