National Australia Bank Ltd v Stern

REASONS FOR JUDGMENT 1 Matter NG 936 of 1996 resulted in a judgment in favour of the applicant for some $8 million. The applicant then made a successful application for an examination of the first and second respondents in respect of their financial situation following upon their failure to pay the amount in question and a number of subpoenas were issued by the applicant for the production of documents. On 19 April 2000 a Registrar of the Court gave the applicant access to the produced documents but refused access to the first and second respondents. A motion has now been filed by those respondents in the proceedings seeking a review of the Registrar's decision. 2 The subpoenas were issued to some eleven different parties. The first three were parties directly related to the first and second respondents. The fourth was an accountant who had been working for the respondents. The fifth was a liquidator of a family company. The ninth were the present solicitors for the respondents and the eleventh was another firm of solicitors who had done work for a related entity. It might be anticipated therefore that before their production of any documents, the respondents have seen what they produced. 3 What is left are three banks, Westpac, ANZ and Commonwealth, and the GIO Building Society. In the motion, the first and second respondents are seeking access to the documents of those entities in advance of their examinations so that, as their affidavits reveal, they may prepare themselves thoroughly for the examinations, become aware of all the material that might be put to them, and presumably consider the answers which they might give to questions based upon the documents. 4 The examinations were ordered by Justice Tamberlin on 31 March and are to take place on 8 and 10 May, i.e. respectively in four and six days time. This case has been before his Honour over a period of time, but he is not presently available to hear the application so it has been referred to me. In substance his Honour ordered the examinations in each case on two questions - one, whether any and if so what debts are owing to the particular respondent, and two, whether the particular respondent has any and if so what other property or means of satisfying the judgment in question. 5 The Rules of this Court make provision in Order 37 rule 7, headed JUDGMENTS AND ORDERS ENFORCEMENT, for the application of the rules of the Supreme Court of the State in which the judgment is to be enforced where the Federal Court Rules make no provision. Examinations of judgment debtors are in that category. Hence the matters delineated by his Honour for the examinations came from the Rules of Supreme Court of New South Wales. The relevant rule is Part 43 rule 1 which under the heading of DISCOVERY IN AID OF ENFORCEMENT and a subheading "Order for Examination or Production", provides that the Court may, at the request of a person entitled to enforce a judgment or order, order a person bound by the judgment to attend for examination on the questions ordered by Justice Tamberlin. 6 Order 27 rule 2 provides this Court with the power to issue subpoenas, "in any proceeding". The first question therefore that arises or would arise here is whether the proposed examination is a proceeding which attracts the power of the Court to issue subpoenas. The word "proceeding" is defined in the Federal Court of Australia Act (s. 4), but not in the Rules, as being "a proceeding in a Court whether between parties or not and includes an incidental proceeding in the course of or in connexion with a proceeding and also includes an appeal". This definition has been said in several cases: Pasdale Pty Ltd v Concrete Constructions Ltd [1995] 59 FCR 446 at 448; Re Interchase Corporation Ltd [1996] 68 FCR 481 at 487; Fiorentino v Irons [1997] 79 FCR 327 at 330E-331B, to be a wide definition embracing a range of Court activity which may not ordinarily be thought of as legal proceedings between parties involving liability for particular relief. In Fiorentino, for example, it was held by Justice Foster that an examination under the Corporations Law in the course of the administration of an insolvent company is a 'proceeding' within the meaning of the statutory definition.