NHB Enterprises Pty Ltd v Corry

Applicable principles

1. As the party seeking leave under UCPR r 7.3, Mr Corry bears the onus of demonstrating that the subpoenas have a legitimate forensic purpose. Leave should not be granted unless that purpose is established and the Court must have regard to whether the subpoena would be liable to be set aside on the grounds that it is oppressive, irrelevant, an abuse of process of the Court, amounts to a fishing expedition, or on some other grounds: see Hamzy v Commissioner of Corrective Services (No 1) [2017] NSWSC 183 at [5]-[6] per Bellew J (and the authorities cited therein).
2. The test of "relevance" in this context does not require that the documents, production of which would be called for in the proposed subpoena, will definitely advance the case of the party seeking leave under UCPR r 7.3 or will be admissible in evidence. As Brereton J (as his Honour then was) said in Portal Software International Pty Ltd v Bodsworth [2005] NSWSC 1115 at [25]: "It is sufficient that they could "possibly throw light" on the issues in the substantive proceedings, or that it appears to be "on the cards" that they will do so. What are the issues in the proceedings will appear from the pleadings (where there are pleadings), the affidavits, and the legal principles which govern the claims for relief in the substantive proceedings."

The pleadings and evidence in the Contempt Motion

1. As I have already recorded, Mr Corry says that he seeks leave to issue the three subpoenas for the purpose of obtaining evidence relevant to his defence of the Contempt Motion. It is therefore necessary to examine the Contempt Motion and the evidence filed by the plaintiffs in support of the Contempt Motion for the purpose of assessing whether or not the three subpoenas have a legitimate forensic purpose.
2. I have therefore reviewed the Amended Statement of Charge and the affidavit of Neil Martin Wallman affirmed on 14 August 2019 filed by the plaintiffs when the Contempt Motion was first filed in accordance with Part 55 of the Supreme Court Rules 1970 (NSW) (the Wallman Affidavit). Mr Corry did not refer to the Wallman Affidavit in his submissions at yesterday's hearing, but I considered that it was appropriate for me to review it in order to undertake the exercise referred to by Brereton J in Portal Software International Pty Ltd v Bodsworth. I note that the Wallman Affidavit refers to an exhibit NMW-4, but this was not referred to or provided by Mr Corry in support of applications for leave to issue the subpoenas and it has not been located on the court file.
3. The court file does not contain a defence of Mr Corry to the Amended Statement of Charge (or to the Statement of Charge filed on 14 August 2019) and Mr Corry has not served any evidence in relation to the Contempt Motion. Mr Corry informed me during yesterday's hearing that he is exercising his privilege against self-incrimination.
4. The contempt of court alleged against Mr Corry in the Amended Statement of Charge filed on 20 December 2019 is that he wilfully disobeyed and contravened orders of this Court by: 1. allegedly retaining certain software, databases and documents that he was required to deliver up to the plaintiffs by order made by this Court on 17 April 2018 in proceeding 2017/177814 (the 2017 proceeding): Amended Statement of Charge at paragraph 20; 2. allegedly accessing, downloading, transferring, disclosing, copying, exploiting or otherwise using certain confidential information of the plaintiffs contrary to an order made by this Court on 17 April 2018 in the 2017 proceeding: Amended Statement of Charge at paragraph 21; 3. frustrating or attempting to frustrate the execution of a search order made by this Court in this proceeding on 18 February 2019 by directing Mr Ghaly to remove items that were the subject of the search order: Amended Statement of Charge at paragraph 22; 4. frustrating or attempting to frustrate the execution of that search order on 21 February 2019 by changing the password being used by the independent computer expert appointed for the purpose of the search order to search and copy certain material that was the subject of the search order: Amended Statement of Charge at paragraph 23.
5. It is necessary to set out the allegations and the plaintiffs' evidence in relation to these four charges in more detail before considering whether the three subpoenas in respect of which leave is sought under UCPR r 7.3 have a legitimate forensic purpose.

Paragraphs 20 and 21 of the Amended Statement of Charge

1. Paragraphs 1 to 4 of the Amended Statement of Charge and paragraphs 6 to 9 of the Wallman Affidavit set out the context in which this Court made orders on 17 April 2018 in proceeding 2017/00177814 (the 2017 proceeding). Paragraph 5 of the Amended Statement of Charge and paragraph 23 of the Wallman Affidavit set out the substance of those orders (the 17 April 2018 orders). The plaintiffs in this proceeding were also the plaintiffs in the 2017 proceeding. Mr Corry was one of the defendants to the 2017 proceeding.
2. According to paragraph 5 of the Amended Statement of Charge, the 17 April 2018 orders relevantly required Mr Corry to deliver up specified software, a specified database, and any document in his possession, custody or control that had been created using that software or database. The 17 April 2018 orders also restrained Mr Corry from accessing or using specified material defined as "Confidential Information" for a period of 4 years.
3. It is alleged in paragraphs 6 and 7 of the Amended Statement of Charge that, on or about 11 May 2018, solicitors for Mr Corry advised the plaintiffs' solicitors that they were instructed by Mr Corry that he had no documents in his possession, custody or control that would fall within the terms of the 17 April 2018 orders referred to above. This correspondence between the solicitors is also referred to in paragraphs 11 and 12 of the Wallman Affidavit.
4. It is alleged in paragraph 8 of the Amended Statement of Charge that Mr Corry was aware of the 17 April 2018 orders and his obligations under those orders.
5. Paragraph 9 of the Amended Statement of Charge alleges that Mr Corry retained the software, database and documents created using the software and database that were required to be delivered up to the plaintiffs under the terms of the 17 April 2018 orders and retained copies of certain other material in breach of those orders. This is the alleged contempt charged in paragraph 20 of the Amended Statement of Charge.
6. Paragraph 10 of the Amended Statement of Charge alleges that Mr Corry used Confidential Information owned by the plaintiffs in breach of the 17 April 2018 orders. This is the alleged contempt charged in paragraph 21 of the Amended Statement of Charge.
7. Paragraphs 22 to 46 of the Wallman Affidavit identify the nature of the material seized during the execution of a search order made in this proceeding in February 2019 at the premises of Mr Corry and Medicina Pty Limited (a company of which Mr Corry was a director and shareholder, which traded under the name "NexGen Pharma") and a third premises to which materials covered by the search order had allegedly been moved from Medicina's premises. It is alleged that the material seized included material that was required to be delivered up and/or that Mr Corry was restrained from using pursuant to the 17 April 2018 orders. That is the basis of the allegations in paragraphs 20 and 21 of the Amended Statement of Charge.

Paragraphs 22 and 23 of the Amended Statement of Charge

1. Paragraphs 12 to 14 of the Amended Statement of Charge and paragraphs 13 to 14 of the Wallman Affidavit refer to the plaintiffs' commencement of this proceeding on 18 February 2019, a search order made by the Court on 18 February 2019 and the execution of that search order on 19 February 2019 by the independent solicitor appointed by the Court. Paragraph 13 of the Wallman Affidavit states that the orders permitted a search to be executed at the premises of Mr Corry and the business premises of Medicina Pty Limtied (Medicina). (Medicina was the second defendant to this proceeding, but the proceeding against Medicina settled in June 2019 as referred to in paragraphs 20 and 21 of the Wallman Affidavit.)
2. Paragraphs 18 and 19 of the Wallman Affidavit refer to the reports provided by the independent solicitor (Mr Jeremy Mackenzie) and the independent computer expert (Ms Leanne Balit) who executed the search order.
3. In paragraph 15(d) of the Amended Statement of Charge, it is alleged that, during the execution of the search order, Mrs Corry telephoned Mr Corry and notified him about the search order, despite having been informed by the independent solicitor executing the search order that this was prohibited. Paragraph 49 of the Wallman Affidavit refers to the independent solicitor's statement in his report to the effect that he observed Mrs Corry taking a telephone call from Mr Corry while the independent solicitor was in the process of executing the search order.
4. In paragraph 15(e) of the Amended Statement of Charge, it is alleged that Mr Corry listened in to a telephone conversation between his solicitor and the independent solicitor concerning the execution of the search order, without initially disclosing that he was on that telephone call. Paragraph 53 of the Wallman Affidavit refers to an account given by the independent solicitor in his report about a telephone call during the execution of the search order between the independent solicitor and a person who identified himself as Chris Athanassios from Miller Prince Lawyers and referred to Mr Corry as his client. The independent solicitor's account states that Mr Corry identified himself as being on the call towards the end of the call.
5. Paragraph 16 of the Amended Statement of Charge alleges that Mr Corry was aware of the search order and its terms, and his obligations under that order.
6. Paragraph 17 of the Amended Statement of Charge alleges that Mr Corry telephoned Mr Ghaly prior to or during the execution of the search order at Mr Corry's residence and directed Mr Ghaly to remove items listed in the search order from the business premises of "Medicina" before execution of the order at Medicina's premises. This is the alleged contempt charged in paragraph 22 of the Amended Statement of Charge. Paragraph 51 of the Wallman Affidavit refers to an email from Mr Corry to Daniel McKinnon setting out an account by Mr Corry of his telephone conversation with Mr Ghaly.
7. Paragraph 19 of the Amended Statement of Charge alleges that Mr Corry changed a password attached to his email or username on 21 February 2019, at a time when that password was being used by the independent computer expert appointed under the search order for the purpose of searching and copying electronic material in accordance with the search order. This is the alleged contempt charged in paragraph 23 of the Amended Statement of Charge. Paragraphs 56 to 59 of the Wallman Affidavit refer to Ms Balit's account in her independent computer expert report of being provided with passwords by Mr Corry, and subsequently being contacted by Mr Corry on 20 February 2019 requesting access to his account. Paragraph 60 of the Wallman Affidavit refers to an email from Mr Athanassios to Mr Corry and the third defendant in this proceeding concerning the password having been changed during the execution of the search order. Paragraphs 61 and 62 of the Wallman Affidavit refer to communications between Mr Wallman and Ms Balit concerning whether Ms Balit had been provided with passwords in accordance with a court order made on 21 February 2019.

Application for leave to issue subpoena to give evidence to Daniel McKinnon

1. The subpoena that the first defendant seeks leave to issue to Mr McKinnon is a subpoena to give evidence at the hearing of the Contempt Motion. The first defendant informed me at yesterday's hearing that Mr McKinnon was his solicitor in this proceeding from approximately early March 2019 until about June or July 2019. Mr McKinnon did not act for him during the execution of the search warrant on 19 to 21 February 2019. It follows that Mr McKinnon did not act for the first defendant at the times when any of the first defendant's alleged conduct the subject of the Contempt Motion is said to have occurred. However, the email from Mr Corry to Mr McKinnon referred to in paragraph 51 of the Wallman Affidavit (see paragraph 30 of these reasons) suggests that, in the period after Mr McKinnon began acting for him, Mr Corry provided accounts to Mr McKinnon of what had occurred during and in connection with the execution of the search order.
2. In his application for leave dated 17 April 2020, the first defendant states that Mr McKinnon's evidence will "bear directly on" the charges in paragraphs 20, 21 and 23 of the Amended Statement of Charge dated 20 December 2019. Having regard to Mr McKinnon's role as Mr Corry's solicitor in the period shortly after the search order was executed and the email referred to in paragraph 51 of the Wallman Affidavit, I am satisfied that the evidence that Mr McKinnon could give if called as a witness could possibly throw light on the issues in the Contempt Motion. By way of example only, it is on the cards that Mr McKinnon's evidence may provide relevant context for the email relied on by the plaintiffs in paragraph 51 of the Wallman Affidavit, and that context may inform the Court's assessment of the significance or otherwise of the email. If Mr Corry does call evidence from Mr McKinnon, it will of course be a matter for the Judge hearing the Contempt Motion to determine the relevance, admissibility and weight of that evidence.
3. For those reasons, I am satisfied that leave should be granted to Mr Corry under UCPR r 7.3 to issue a subpoena to Daniel McKinnon in the form attached to Mr Corry's application dated 17 April 2020, subject to the date on which Mr McKinnon is required to attend to give evidence being completed and the last day for service being at least 5 days earlier.

Application for leave to issue subpoena to Christopher Athanassios

1. At the hearing on 20 April 2020, Mr Corry said that Mr Athanassios was the solicitor for Medicina at the time of the execution of the search warrant on 19 to 21 February 2019 and continued to represent Medicina thereafter. At that time, Mr Corry was the managing director and a shareholder of Medicina, and was also employed by Medicina. Mr Corry said that Mr Athanassios also acted for him during the execution of the search order and continued to act for him until about early March 2019. Mr Wallman's evidence referred to in paragraphs 25 to 31 of these reasons is consistent with Mr Corry's account of his relationship with Medicina and with Mr Athanassios's role as solicitor for both Mr Corry and Medicina during the execution of the search order.
2. The subpoena that Mr Corry seeks leave to issue to Mr Athanassios calls for the production of three categories of documents.
3. The first category calls for all emails exchanged between Mr Athanassios' professional email account and the account used by Mr Corry whilst he was working for Medicina during the period from 1 February 2019 and 28 February 2019.
4. The second category calls for all file notes recording conversations between Mr Athanassios and Mr Corry during the period 1 February 2019 to 28 February 2019.
5. The third category calls for all billing records for work completed on behalf of Medicina or Mr Corry in the period from 1 February 2019 to 31 March 2019.
6. Mr Corry submitted that the documents in the three categories are directly relevant to paragraph 23 of the Amended Statement of Charge and are of "tangential relevance" to paragraph 22 of the Amended Statement of Charge.
7. The alleged conduct that is the subject of paragraphs 22 and 23 of the Amended Statement of Charge is alleged to have occurred during the period 19 to 21 February 2019. Mr Corry did not submit that documents caught by categories 1 to 3 that record communications made or work done prior to the execution of the search order were relevant. Rather, he submitted that they may or may not be relevant. Mr Corry did not explain how such documents may be relevant to paragraph 22 and/or paragraph 23 of the Amended Statement of Charge, given that they would record matters that occurred prior to any of the alleged conduct that is the subject those paragraphs.
8. Mr Corry submitted that, to the extent that categories 1 to 3 seek production of documents created in the period after 21 February 2019 (that is, after the alleged conduct that is the subject of paragraphs 22 and 23 of the Amended Statement of Charge), the production of those documents was sought: 1. in order to cover the period prior to March 2019 when Mr McKinnon commenced acting as Mr Corry's solicitor; and 2. in the case of category 3, because solicitors' invoices are issued in arrears and billing records up to the end of March 2019 may therefore relate to work done in February 2019.
9. Mr Corry acknowledged that the documents covered by the three categories may be the subject of legal professional privilege of Medicina, but submitted that privilege could not be asserted as against him because he had already seen or been party to the communications in the documents and/or because he was the managing director of Medicina at the time of the communications. The position is not so straightforward: see J D Heydon, Cross on Evidence (11th ed, 2017, LexisNexis Butterworths) at [25265] and the authorities there referred to.
10. Having regard to Mr Athanassios' role as Mr Corry's solicitor at the time when the search order was executed and in the period until Mr Corry retained Mr McKinnon as his solicitor, and the plaintiffs' reliance on evidence of communications to which Mr Athanassios was a party in paragraphs 53 and 60 of the Wallman Affidavit, I am satisfied that the evidence that documents in categories 1 to 3 of the proposed subpoena to Mr Athanassios could possibly throw light on the issues in the Contempt Motion to the extent that those documents record communications that occurred or legal work done in the period from 18 February 2019 (being the date on which the search order was made) until 28 February 2019 (being the approximate time at which Mr Corry says that Mr Athanassios ceased acting as his solicitor).
11. For those reasons, I am satisfied that leave should be granted to Mr Corry under UCPR r 7.3 to issue a subpoena to Christopher Athanassios in the form attached to Mr Corry's email to my Associate dated 17 April 2020, subject to: 1. the dates "01st February 2019 and 28th February 2019" in category 1 being deleted and being replaced with the dates "18th February 2019 to 28th February 2019"; 2. the dates "01st February 2019 and 28th February 2019" in category 2 being deleted and being replaced with the dates "18th February 2019 to 28th February 2019"; 3. the dates "01st February 2019 and 31st March 2019" in category 3 being deleted and being replaced with the dates "18th February 2019 to 28th February 2019", noting that the dates in category 3 relate to the dates on which the work was completed and not the dates on which the relevant billing records were created or issued; 4. the words "Medicina Pty Limited or" being deleted from category 3, so as to limit that category to billing records for work completed for Mr Corry during the specified time period; 5. the date and time for production being completed and the last day for service being completed in item 2 of the "Notice to the Subpoena Recipient" as a date which is at least 5 days prior to the date for production; and 6. Mr Corry serving a copy of the subpoena on Medicina, so as to afford Medicina the opportunity to seek first access to any documents produced should it wish to inspect those documents for material that may be the subject of legal professional privilege.

Application for leave to issue subpoena to Leanne Balit

1. Before considering the substance of Mr Corry's application for leave to issue a subpoena to Ms Balit, I note that his written application contained a request that the contents of the application be suppressed because it contains information about the evidence in the proceedings, a statement that the application was provided to the Court on a confidential and privileged basis, and a request that the application remain sealed. However, Mr Corry stated at yesterday's hearing that he did not press the application for a suppression order or his request that the application remain sealed.
2. Mr Corry says that Ms Balit was the independent computer expert in the search teams that executed a search order in June 2017 in the 2017 proceeding and also the search order in February 2019 in this proceeding. Mr Corry says that, at the hearing of the Contempt Motion, the plaintiffs will rely on Ms Balit's report produced after execution of the February 2019 search order (the second Balit report). That is confirmed by the Wallman Affidavit, to which I have referred above. Mr Corry says that the probative value of that report is critical to the plaintiffs' claim that the search order was frustrated by Mr Corry allegedly changing the password. He says that an earlier report produced by Ms Balit after the execution of the June 2017 search order (the first Balit report) is "for the most part relevant only in terms of background to the proceedings …. but there are some commonalities in the [first Balit report] and hence the inclusion of the first proceedings because of those commonalities in the report" (see T 23).
3. Mr Corry seeks leave to issue a subpoena to Ms Balit for the production of 18 categories of documents.
4. Categories 10 to 18 call for documents relating to Ms Balit's engagement and work as the independent computer expert in the search team that executed the search order in February 2019, including copies of working notes created during the execution of the search order, copies of all instructions that were prepared or relied on during the preparation of the second Balit report and copies of all versions of all drafts of that report. In his submissions during yesterday's hearing, Mr Corry said that these documents were relevant to the Contempt Motion because: 1. it appeared that the plaintiffs had engaged Ms Balit separately in the 2017 proceeding and also in this proceeding, and had corresponded with Ms Balit, and those engagements and correspondence had not been disclosed to the parties (although Mr Corry also said that there was evidence of the correspondence in material tendered in the proceedings); 2. this raised a question, Mr Corry submitted, as to whether the plaintiffs had had some input into the second Balit report which was used to underlie the charge in paragraph 23 of the Amended Statement of Charge; and 3. if the plaintiffs had done so (and Mr Corry emphasised that he did not allege that they had done so), this may be a basis on which the Court would decline to hear the Contempt Motion.
5. I consider that categories 10 to 18 are an impermissible fishing exercise in the hope of finding some evidence of the plaintiffs' influencing the content of the second Balit report. The notion that the plaintiffs might have engaged in such serious misconduct is nothing more than speculation on Mr Corry's part. If the plaintiffs engaged Ms Balit as an independent computer expert for the purpose of executing a search order in the 2017 proceeding, this would be a matter of public record in the terms of the search order and Mr Corry was also a party to that proceeding. It is therefore not something that required disclosure to Mr Corry by the plaintiffs in this proceeding as Mr Corry's submissions implied. The fact that the plaintiffs, through their solicitors, may have had some communications with Ms Balit in connection with the execution of the search order does not provide any basis for speculating that the plaintiffs may have influenced the content of Ms Balit's independent expert report. The plaintiffs have put at least some of their communications with Ms Balit in evidence through paragraphs 59 and 62 of the Wallman Affidavit.
6. Categories 1 to 9 call for the same types of documents as categories 10 to 18, but in respect of Ms Balit's engagement and work as the independent computer expert for the search executed in June 2017. These documents have no apparent relevance to the issues to be determined at the hearing of the Contempt Motion. It is the first defendant's alleged conduct during the period from 17 April 2018 until 21 February 2019 that is relevant to the Contempt Motion. There being no legitimate forensic purpose supporting paragraphs 10 to 18 of the subpoena, the fact that the first Balit report may be relevant as "background", or that there may be "commonalities" between the first and second Balit reports, does not constitute a legitimate forensic purpose for categories 1 to 9.
7. For those reasons, the first defendant's application dated 25 March 2020 (received by the Registry on 30 March 2020) for leave under UCPR r 7.3 to issue a subpoena to Leanne Balit in the form attached to that application is refused.
8. The costs of the three applications are to be reserved to the Judge hearing the Contempt Motion.

Orders

1. I make the following orders: 1. Grant leave to the first defendant under Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") r 7.3 to issue a subpoena to Daniel McKinnon in the form of Annexure "A" to these orders, subject to the date on which Mr McKinnon is required to attend and give evidence being completed, and the last date for service of the subpoena being at least 5 days prior to that date; 2. Grant leave to the first defendant under UCPR r 7.3 to issue a subpoena to Christopher Athanassios in the form of Annexure "B" to these orders, subject to: 1. the dates "01st February 2019 and 28th February 2019" in category 1 being deleted and being replaced with the dates "18th February 2019 to 28th February 2019"; 2. the dates "01st February 2019 and 28th February 2019" in category 2 being deleted and being replaced with the dates "18th February 2019 to 28th February 2019"; 3. the dates "01st February 2019 and 31st March 2019" in category 3 being deleted and being replaced with the dates "18th February 2019 to 28th February 2019", noting that the dates in category 3 relate to the dates on which the work was completed and not the dates on which the relevant billing records were created or issued; 4. the words "Medicina Pty Limited or" being deleted from category 3, so as to limit that category to billing records for work completed for Mr Corry during the specified time period; and 5. the date and time for production being completed and the last day for service being completed in item 2 of the "Notice to the Subpoena Recipient" as a date which is at least 5 days prior to the date for production. 1. Direct the first defendant to serve a copy of the subpoena addressed to Christopher Athanassios the subject of order 2 above on Medicina Pty Ltd, so as to afford Medicina Pty Ltd the opportunity to seek first access to any documents produced should it wish to inspect those documents for material that may be the subject of legal professional privilege. 2. Dismiss the first defendant's application dated 25 March 2020 (received by the Registry on 30 March 2020) for leave under UCPR r 7.3 to issue a subpoena to Leanne Balit in the form attached to that application. 3. Note that, other than the applications for leave to issue the subpoenas referred to in orders 1 to 4 above, the first defendant does not currently press for determination of any other application for leave to issue subpoenas that are otherwise before the Registry and have not yet been determined. 4. Order that the costs of the applications referred to in orders 1 to 4 above be reserved to the Judge hearing the plaintiffs' Amended Notice of Motion dated 20 December 2019.

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: 21 April 2020