PERDAMAN CHEMICALS & FERTILISERS PTY LTD -v- THE GRIFFIN COAL MINING COMPANY PTY LTD [No 6] [2012] WASC 450 (27 November 2012)

4 The background and correspondence concerning this dispute was comprised primarily in seven affidavits filed by the parties.[1] The background below draws from those affidavits.

5 Société Générale is a French company with the ABRN 092 516 286. On 21 July 2009, it was engaged by Perdaman Chemicals and Fertiliser Pty Ltd (Perdaman) as financial adviser in relation to the development of the Collie Urea Project in Western Australia.

6 Société Générale Asia Limited is a subsidiary of Société Générale. On 3 May 2011, it was appointed by Perdaman to seek credit approval to participate in certain facilities. It was not the financial adviser to Perdaman in relation to the development of the Collie Urea Project in Western Australia.

7 On 14 March 2012, a subpoena was issued in these proceedings at the request of Lanco Resources International. The subpoena was addressed to, and served upon, Société Générale, ABRN 092 516 286. The date for compliance with the subpoena was 11 April 2012. The documents required to be produced by the subpoena were as follows:

The document or documents you must produce are all documents created between 1 January 2009 and the date this subpoena is answered, which fall in to the following categories:

1. All documents relating to Société Générale Asia Limited, Hong Kong's or Société Générale's (SG HK) appointment as financial adviser and/or arranger of finance to Perdaman Chemicals and Fertilisers Pty Ltd and or its related or associated companies or entitles (Perdaman) relating to the planned construction and operation of a urea production plant located in the Shotts industrial park, near Collie, Western Australia (the Perdaman Project) including but not limited to:

(a) SG HK fulfilling its obligations as financial adviser to Perdaman;

(b) the steps taken by SG HK to arrange a syndicate of proposed financiers of the Perdaman Project (Syndicate);

(c) all correspondence between SG HK and the members of the Syndicate;

(d) all correspondence between SG HK and Export Credit Agencies regarding the Perdaman Proejct;

(e) all correspondence between SG HK and Perdaman;

(f) any timetable agreed or proposed to apply to the proposed financing of the Perdaman Project;

(g) all meetings of members of the Syndicate regarding the Perdaman Project including the meetings held on 11 May 2011 which were attended by, among others:

(i) Mr Peter Doyle of Mallesons Stephen Jaques;

(ii) Mr Stephen Krust of SG HK; and

(iii) Mr Vikas Rambal and Mr Andreas Walewski of Perdaman,

(h) any reports (including any working papers) in relation to the Perdman Project received by SG HK on its own account or for Perdaman or the Syndicate;

(i) any reports (including any working papers) prepared by SG HK for Perdaman or the Syndicate in relation to the proposed financing or further financing of the Perdman Project;

(j) the ability of Perdaman or its shareholders to raise capital or equity funds to finance the Perdaman Project;

(k) the proposal that Perdaman obtain coal from Premier Coal Limited, alternatively that Perdaman acquire Premier Coal Limited.

1. All documents relating to the proposal that Société Générale or its related or associated companies or entities (SG) participate in the prospective financial or further financing by SG on its own account or as part of the Syndicate that falls into the following categories:

(a) the due diligence undertaken by SG by itself or its agents for the Syndicate in respect of the Perdaman Project including but not limited to documents regarding the due diligence site inspection of the mine operated by Griffin Coal which took place on Tuesday, 10 May 2011, which was attended by Stephanie Clement de Givry, AnneSophie Bescond and Boris Hritovski on behalf of SG;

(b) the consideration given by SG and/or the Syndicate on whether to or not to finance or further finance the Perdman Project and, if the giving of any such finance or further finance was approved, the terms and conditions of such financing or further financing; and

(c) communications between SG and other members of the Syndicate in relation to the Perdaman Project.

8 The legal representatives subsequently agreed to extend the return date of the subpoena to 21 May 2012 and to limit the scope of the subpoena including limiting it to documents between the period 1 December 2010 and 30 September 2011. In response to the agreed restrictions Société Générale produced 1,296 documents in four lists:

(ii) 118 confidential documents on 18 May 2012 (List 2);

9 Société Générale filed affidavit evidence deposing to the considerable amount of work involved in complying with the subpoena and the costs of $83,558.80 which was incurred. Société Générale has also incurred substantial further costs, including legal costs, of $122,476 up to November 2012 (and excluding Société Générale's internal costs) arising from various disputes concerning compliance with the subpoena.

The orders sought by Lanco Resources International

10 Lanco Resources International primarily sought orders as follows:

1. The subpoena issued on 14 March 2012 be amended as necessary to cure any ambiguity and ensure that all of the advisory documents referred to at section B, numbered paragraphs 1(a) (k) of the subpoena are within the scope of the subpoena.
2. Service of the amended subpoena upon Société Générale (ARBN 092 516 286) of registered office Level 23, 400 George Street, Sydney NSW 2000, be dispensed with.
3. The time by which Société Générale is to comply with the amended subpoena and produce to the Court all advisory documents referred to at section B, numbered paragraphs 1(a) (k) of the amended subpoena, is extended to 7 December 2012.

11 Since the invention of the subpoena in Chancery during the reign of Richard II, courts have had power to amend a subpoena. But the power is exercisable in very limited circumstances. The circumstance relied upon in this case by Lanco Resources International is an asserted power to amend a subpoena for ambiguity, on application of the issuer.

12 There might be doubt about the existence of a power to amend a subpoena for ambiguity. Failure to comply with a subpoena without lawful excuse is a contempt of court.[2] The punitive nature of the sanctions upon failure classifies the contempt as criminal:[3] it is the only remaining nonstatutory offence in this jurisdiction.[4] Due to these consequences, it might have been thought that any substantial ambiguity which would require amendment would be oppressive. In any event, any power to amend a subpoena to resolve ambiguity must be very limited.

13 There is some authority which suggests that this Court has power to amend a subpoena upon the application of the party who obtained its issue. In Santos Ltd v Pipelines Authority of SA,[5] Debelle J said this:

On an application to set aside a subpoena, the court is concerned to ensure that the parties have not abused the right to obtain the subpoena: Raymond v Tapson (1882) 22 Ch D 430; Purnell Bros Pty Ltd v Transport Engineers Pty Ltd (1984) 73 FLR 160 at 175. Ambiguity aside, this subpoena is neither oppressive nor an abuse of process. Where an obvious amendment would cure an ambiguity, it might be appropriate for the court to amend the subpoena on the application of the party who obtained the issue. There is nothing in the terms or the spirit of s 17 of the Commercial Arbitration Act or in the Supreme Court Rules which tells against such a course. The purpose of the subpoena is to facilitate the proper administration of justice between parties: Lucas Industries Ltd v Hewitt (at 570). If the court does not permit an amendment, the party can again apply for the issue of a subpoena in terms which are satisfactory. It would defeat the interests of justice, if not to engage also in an excess of legalism, to deny the power to amend to cure an ambiguity. However, the power to amend should not be lightly exercised. It is not the task of the court to redraw the subpoena in order to make it unobjectionable. The power should be exercised only where the amendment is obvious, readily cures the ambiguity and the subpoena is not otherwise oppressive. If it applies to do so, I would permit PASA to amend its subpoena by deleting the words 'management report' and substituting therefor the words 'all reports prepared by or for management'.

14 The suggestion of a power to amend the subpoena in that case was in a very minor manner by replacing 'management report' with the words 'all reports prepared by or for management'. As a matter of construction, such amendment might not have been necessary. However, in Western Power Corporation v Woodside Petroleum Development Pty Ltd,[6] Wheeler J endorsed the decision in Santos:

I have taken the view expressed in Santos at 56 that, where an obvious amendment would cure an ambiguity, it may be appropriate for the court to amend the subpoena on the application of the party who obtained its issue. However, as was pointed out in that case, it is not the task of the court to redraw the subpoena in order to make it unobjectionable, and the power should be exercised only where the amendment is obvious and readily cures the ambiguity and the subpoena is not otherwise oppressive.

15 An application was made to the Full Court for a stay of execution of orders made by Wheeler J requiring compliance with the subpoena within specified periods. The application was successful although the appeal was ultimately dismissed. No issue was taken on either the application or the appeal concerning the power of the Court to amend the subpoenas. The issues on appeal, and the grounds for the stay, are not relevant to this application but in the leading judgment in relation to the stay application, Franklyn J (Kennedy J agreeing) quoted, without disapproval, from the passage to which I have referred from Wheeler J.

16 For the reasons below, the amendment in this case which is sought (i) is not referable to any ambiguity, and (ii) would be oppressive, assessed on the evidence currently before me. Finally, even if ambiguity existed in this case, there must be, at the least, extreme doubt whether any power to amend would be exercised in a case such as this where the subpoena for production of documents has issued, and has been answered on an entirely reasonable construction of the words of the subpoena by production of nearly 1,300 documents.

17 The amendment proposed to cure the asserted ambiguity was for the subpoena to read as expressed below with the addition of the bold italicised words and the amendments to the abbreviation below (which amended abbreviation appears throughout the subpoena):

The document or documents that you must produce are all documents created between 1 January 2009 and the date this subpoena is answered, which fall in to the following categories:

1. All documents relating to Société Générale Asia Limited, Hong Kong's or Société Générale's (SG HK) appointment as financial adviser and/or arranger of finance to Perdaman Chemicals and Fertilisers Pty Ltd and or its related or associated companies or entities (Perdaman)....

18 There are no special or unique rules concerning the construction of words in a subpoena. A person to whom a subpoena is directed is required to read it sensibly and with reference to the circumstances as known to him or her.[7] However, as with all exercises of construction, the words must be interpreted in context. One relevant context of a subpoena is the criminal nature of a proceeding for contempt for violation of a subpoena. As Kirby P (Priestley JA and Hope AJA agreeing) said in Ditford v Calcraft,[8] 'courts are at pains to exclude from the obligation to produce documents any documents which are not within the precise scope of the subpoena. One consequence of the criminal nature of a proceeding for contempt is that the courts will construe the subpoena in question quite strictly, where it relates to documents.'

19 The submission by Lanco concerning ambiguity focused upon the words '[a]ll documents relating to Société Générale Asia Limited, Hong Kong's appointment as financial adviser and/or arranger of finance...'. Lanco Resources International said that there was ambiguity in the name 'Société Générale Asia Limited, Hong Kong'. Plainly, and literally, that name refers to Société Générale Asia Limited. The comma delineates a location. The ambiguity which Lanco Resources International asserted was that the name might also refer to Société Générale, the parent company of Société Générale Asia Limited.

20 There are four reasons why this submission must be rejected.

21 First, although Société Générale Asia Limited was not a financial adviser to Perdaman and hence none of the categories 1(a) (k) might have provided any documents relevant to financial advice, it was appointed by Perdaman to seek credit approval to participate in certain facilities. It answered the subpoena by providing 1,296 relevant documents.

22 Secondly, the subpoena is issued to the Proper Officer of Société Générale, ABRN 092 516 286. In category 2 of the subpoenaed documents, Société Générale is required to provide documents 'related to the proposal that Société Générale or its related or associated companies or entities participate...' It must have been clear to the reasonable reader of the subpoena that the reference to Société Générale Asia Limited, Hong Kong did not include Société Générale.

23 Thirdly, the subpoena defined Société Générale Asia Limited, Hong Kong as SG HK. In contrast, it defined Société Générale or its related or associated companies or entities as SG.

24 Finally, even if there were some ambiguity in the name Société Générale Asia Limited, Hong Kong, no reasonable reader of the subpoena could construe the name as describing two companies ie requiring production of documents from both Société Générale Asia Limited, Hong Kong and Société Générale.

25 Against this, Lanco Resources International referred to several emails produced in response to the subpoena where one writer's signature described his position at Société Générale Asia Limited, Hong Kong and another writer's signature described his signature as Société Générale, Asia-Pacific. It may be that the second signature could involve some ambiguity. But the second signature is not the words of the subpoena.

26 The appropriate course for Lanco Resources International to have taken should have been for it to have issued a fresh subpoena. In oral submissions it was suggested that I might exercise a discretion to issue a fresh subpoena. Even assuming that the Court is empowered to exercise a discretion to reformulate, rewrite, and issue a new subpoena on behalf of Lanco Resources International, it is not appropriate to do so. Nor would I exercise a discretion to issue a subpoena in the terms of the proposed amended subpoena. It is not necessary to say anything more than that the issue of a new subpoena in the precise terms of the proposed amendments or the issue of a subpoena in some undefined but reformulated manner would raise serious concerns, including oppression. These concerns are an insuperable obstacle to the Court issuing the subpoena as amended or drafting any fresh subpoena for Lanco Resources International. The concerns include the following.

27 First, having regard to the issues in the litigation the date range for the required documents, from 1 January 2009 until the return date of the subpoena, casts an extraordinarily wide net. In affidavit evidence filed by Société Générale, a legal representative for Société Générale says that Lanco Resources International only sought advisory documents for the period from 1 December 2010 until 30 September 2011. But it may be that even this period is excessive. In affidavit evidence for Société Générale it was said that the vast majority of the advisory documents sought were sent or copied to Perdaman and ought to have been discovered by Perdaman and already available to Lanco Resources International. It is unclear what further undiscovered documents might add to those documents already discovered. This is also a relevant matter in weighing the degree of relevance and the burden of compliance with the subpoena.[9]

28 Secondly, there is evidence that a new subpoena, possibly in the narrowed date range although this is not entirely clear, could capture as many as 20,000 to 23,000 documents. There is evidence that hard copies of those documents would need to be reviewed. Those hard copies are primarily located in Hong Kong but may also be located in Seoul and Paris.

29 Thirdly, Société Générale's evidence is that the advisory documents need to be reviewed by senior officers of Société Générale, and primarily Mr Krust, the Managing Director Natural Resources and Energy Project Finance and head of the Advisory Team. Mr Krust has a busy schedule and spends 40 50 percent of his time travelling.

30 Fourthly, Société Générale's evidence is that the time period proposed for compliance with the amended subpoena (two weeks) is impossible. Even with increased time commitments beyond that which might be expected, and with increased commitments from Société Générale's lawyers, the expected time for compliance is three months. This would significantly increase internal and legal costs in circumstances in which Société Générale says that it is already out of pocket in a substantial sum of money and the amount which it will recover is said to be unknown.

31 Fifthly, and separately from concerns of oppression, is a question of the appropriate exercise of power in relation to subject matter jurisdiction. In Mackinnon v Donaldson,[10] a subpoena was served on Citibank at its branch office in London. The subpoena required Citibank to provide books and papers held at its head office in New York relating to transactions which took place in New York in relation to the account of a Bahamian company. Citibank moved to set aside the subpoena on the ground that it exceeded the international jurisdiction of the court and infringed the sovereignty of the United States. Hoffmann J (as his Lordship was then) held that an order requiring a foreigner, particularly a foreign bank not party to the English litigation, to produce documents outside the jurisdiction relating to business transacted outside the jurisdiction should only be made in exceptional circumstances. His Lordship explained the limits of subject matter jurisdiction:[11]

The nature of banking business is such that if an English court invokes its jurisdiction even over an English bank in respect of an account at a branch abroad, there is a strong likelihood of conflict with the bank's duties to its customer under the local law. It is therefore not surprising that any bank, whether English or foreign, should as a general rule be entitled to the protection of an order of the foreign court before it is required to disclose documents kept at a branch or head office abroad.

32 The decision has been cited with approval in English[12] and Australian[13] courts. But this matter was not addressed in written submissions and I did not hear any substantial submissions on this point from counsel for Lanco Resources International. It suffices to say that it is a further matter of serious concern and a further obstacle to the issue of any fresh subpoena.

33 Counsel informed me that the parties have been conferring about the possibility of narrowing the scope and terms of any fresh subpoena. This conferral should continue with due haste.

34 The application by Lanco Resources International must be dismissed.

(i) Lanco Resources International pay Société Générale's costs of the application on such scale as the Court sees fit; and

(ii) Lanco Resources International pay the amount of any reasonable loss or expense incurred by Société Générale in complying with the subpoena, reserving the question as to whether the Court should fix the amount or direct that the amount be fixed in accordance with the Court's usual procedure in relation to costs.

36 In addition, Lanco Resources International seeks orders that Société Générale's costs of producing the documents that appear in Lists 1,2,3 and 4, be limited to 20 June 2012, that being the date when the documents in List 3 and List 4 were produced to the Court. No oral submissions were made in relation to this issue and it appears that the parties proceeded on the convenient basis that all costs orders would be addressed collectively.

37 The representatives of Société Générale and Lanco Resources International should confer in person concerning the appropriate orders as to costs, with costs to be agreed and fixed if possible. This dispute ultimately concerned a very short point. Agreement on this matter ought to be possible without further evidence or submissions. In the event that a minute of proposed orders cannot be provided to my associate by 7 December 2012, the parties should email my associate seeking programming orders to permit this issue to be dealt with on the papers or at a further hearing if necessary.

[1] In particular (i) affidavit of T J Hattam affirmed on 25 October 2012; (ii) affidavit of T J Hattam affirmed on 20 November 2012; (iii) affidavit of Mark Davies sworn on 24 September 2012; (iv) affidavit of Mark Davies sworn on 5 October 2012; (v) affidavit of Mark Davies sworn on 24 October 2012; (vi) affidavit of Mark Davies sworn on 26 October 2012; (vii) affidavit of Mark Davies sworn on 22 November 2012.

[2] James v Cowan [1929] HCA 46; (1929) 42 CLR 305 (the Court); Rules of the Supreme Court, O36B r 12(1).

[3] Hearne v Street [2008] HCA 36; (2008) 235 CLR 125 [22] (Kirby J), [132] [133] (Hayne, Heydon & Crennan JJ).

[4] Allbeury v Corruption and Crime Commission [2012] WASCA 84 [13] (McLure P).

[5] Santos Ltd v Pipelines Authority of SA [1996] SASC 5578; (1996) 66 SASR 38, 56 (Debelle J, Cox and Prior JJ agreeing).

[6] Western Power Corporation v Woodside Petroleum Development Pty Ltd (unreported, WASC, Library No 970332, 27 June 1997) 16 17 (Wheeler J).

[7] Santos Ltd v Pipelines Authority of SA [1996] SASC 5578; (1996) 66 SASR 38, 55 (Debelle J, Cox and Prior JJ agreeing); Lucas Industries Ltd v Hewitt (1978) 45 FLR 174, 190 (Smithers J, Bowen CJ and Nimmo J agreeing)

[8] Ditford v Calcraft (1989) 98 FLR 158, 160.

[9] Commissioner for Railways v Small (1938) 38 SR (NSW) 564.

[10] Mackinnon v Donaldson [1986] 1 Ch 482.

[11] Mackinnon v Donaldson [1986] 1 Ch 482, 496.

[12] Société Eram Shipping Co Ltd v Cie Internationale de Navigation [2003] UKHL 30; [2004] 1 AC 260, 274275 [22]- [23] (Lord Bingham) 286 287 [67] (Lord Hoffmann; Lords Nicholls, Hobhouse and Millett agreeing).

[13] Suzlon Energy Ltd v Bangad [2011] FCA 1152 [43]-[47] (Rares J); Caswell v Sony/ATV Music Publishing (Australia) Pty Ltd [2012] NSWSC 986 [96](Hallen AsJ); Bank of Valletta PLC v National Crime Authority [1999] FCA 791 [55] (Hely J).