Plaintiff v Defendant

2 The issues in dispute between the parties narrowed at the hearing. The issues determined in this ruling, and their answers, are as follows:

(a) Are the bank statements operated by Ms Bannon on behalf of Ruby Thoma, a former trustee of the Trust, relevant to the proceeding? No.

(b) Should Ms Bannon be required to produce documents that can be discovered by Mr Bannon or the Trust itself? No.

(c) Is there a legitimate forensic purpose for the subpoenaed documents? No.

(d) Should Ms Bannon be required to depose another affidavit in answer to the subpoena?[1] No.

3 The subpoena addressed to Ms Bannon seeks production of the following documents.[2]

4 Copies of all bank statements and credit card statements for accounts operated by:

(ii) which were held or operated by any company or other entity of which Melissa Bannon was a director, officer, signatory or the holder of shares (other than a public company) -

during the period from 2007 to 2014 (both inclusive) which include payments made by the Defendant or Associated Parties to Melissa Bannon (alone or jointly) or to any company or other entity of which Melissa Bannon was a director, officer, signatory or the holder of shares (other than a public company).

1. Randwick Nominees Pty Limited (ACN 076 061 035);

2. Central Pacific (Downtowner) Pty Limited (ACN 061 231 614);

3. Spencer Investments Pty Limited (ACN 007 020 555);

4. Ronsi Business Pty Limited (ACN 078 865 451);

5. Ronsi Holdings Pty Limited (ACN 078 865 406);

6. Tonavni Investments Pty Limited (ACN 007 049 023); and

7. Any member or former member of the Nauru Phosphate Royalties Trust.

Are the bank statements operated by Ms Bannon on behalf of Ruby Thoma, a former trustee of the Trust, relevant?

5 Ms Bannon has deposed that since August 2014 she has maintained a bank account on behalf of Ms Ruby Thoma. Ms Thoma is a former trustee of the Trust. On 6 February 2017, Ms Bannon deposed that the funds in the account belonged to Ms Thoma and she operated the account on her instructions to facilitate payment of her private expenses, the account remained open at that date and she intended to close it.

6 There are evidentiary anomalies between Ms Bannon's affidavit and an exhibit that is purportedly the transaction history of the account that are unnecessary to decide in this ruling.[3]

7 Orders 42 and 42A of the Rules are relevant. Rule 42.04 provides for objections to subpoenas. The subpoenas were issued under Order 42A as subpoenas for production to the Prothonotary. Rule 42A.01 provides:

(1) This Order applies where a party who has a solicitor in the proceeding seeks to require a person not a party to produce any document for evidence before -

(a) the hearing of an interlocutory or other application in the proceeding; or

(b) the trial of the proceeding.

(2) Order 42 applies so far as is practicable to a subpoena to produce under this Order.

8 The procedure under r 42A.01 is only available where the document is potentially required for evidence at the hearing of an application or the trial of the proceeding.[4] The effect of r 42A.01(2) is that Order 42 applies so far as is practicable to Order 42A subpoenas.

9 Section 7 of the CPA states the overarching purpose of that Act and the rules of court is to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute. Section 9(1) provides that:

(1) In making any order or giving any direction in a civil proceeding, a court shall further the overarching purpose by having regard to the following objects -

(a) the just determination of the civil proceeding;

(b) the public interest in the early settlement of disputes by agreement between parties;

(c) the efficient conduct of the business of the court;

(d) the efficient use of judicial and administrative resources;

(e) minimising any delay between the commencement of a civil proceeding and its listing for trial beyond that reasonably required for any interlocutory steps that are necessary for -

(i) the fair and just determination of the real issues in dispute; and

(ii) the preparation of the case for trial;

(f) the timely determination of the civil proceeding;

(g) dealing with a civil proceeding in a manner proportionate to -

(i) the complexity or importance of the issues in dispute; and

(ii) the amount in dispute.

10 There is no dispute between the parties as to the applicable principles. Both referred to the summary of principles by Derham AsJ in Webb v Wheatley and that summary is adopted.[5] Subpoenaed documents must be relevant to the proceedings and there needs to be a legitimate forensic purpose for which production is sought.

11 In Volunteer Fire Brigades Victoria v Country Fire Authority[6] J Forrest J addressed the application of the Civil Procedure Act 2010 (Vic) ('CPA') to cases such as the present, including the test of relevance. These principles are adopted by this Court:

There is no ambiguity about the application of the principles of the CPA. In Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited the High Court said of its NSW analogue:

The evident intention and the expectation of the CPA is that the court use these broad powers to facilitate the overriding purpose. Parties continue to have the right to bring, pursue and defend proceedings in the court, but the conduct of those proceedings is firmly in the hands of the court. It is the duty of the parties and their lawyers to assist the court in furthering the overriding purpose.

That purpose may require a more robust and proactive approach on the part of the courts. Unduly technical and costly disputes about non-essential issues are clearly to be avoided. However, the powers of the court are not at large and are not to be exercised according to a judge's individualistic idea of what is fair in a given circumstance. Rather, the dictates of justice referred to in s 58 require that in determining what directions or orders to make in the conduct of the proceedings, regard is to be had in the first place to how the overriding purpose of the CPA can be furthered, together with other relevant matters, including those referred to in s 58(2). The focus is upon facilitating a just, quick and cheap resolution of the real issues in the proceedings, although not at all costs. The terms of the CPA assume that its purpose, to a large extent, will coincide with the dictates of justice.

The approach to discovery has changed markedly in the past half-decade or so. The Peruvian Guano test has been consigned to the dustbin. The CPA now requires a court to cut through the layers of interminable argument and nit picking which had traditionally accompanied discovery contests...

The overriding consideration of the CPA is to ensure that the parties receive a fair trial i.e. 'a just resolution' to use the words of the CPA. However, a fair trial is not a perfect trial. It is, rather, the best trial that a court can provide to the parties within reason and in proportion to the issues in dispute and the court's resources. Accordingly, demands for discovery of documents which are peripheral to the central issues cannot be entertained. The Court is obliged to focus on the central issues as best it can be determined at this point in the litigation.[7]

12 The application of the CPA discussed above is also relevant to subpoenas.

13 The bank account operated by Ms Bannon on behalf of Ms Thoma is not relevant to the proceedings. There has been no claim made against Ms Bannon in this proceeding. The Trust has not proven how the account is relevant to the proceeding. Given this, it should be added there can be no legitimate forensic purpose for the statements of this bank account.

Should Ms Bannon be required to produce documents that can be discovered by Mr Bannon or the Trust itself?

14 Ms Bannon has deposed that she has reviewed her husband's affidavit of documents sworn 30 January 2017. She deposes that copies of the bank accounts she holds jointly with him for the period sought in the subpoena have been discovered.

15 Documents that are more properly the subject of discovery should not be subpoenaed.[8] Ms Bannon should not be required to produce documents that have been discovered by Mr Bannon.

16 Further, it is the defendant's responsibility to discover its own banking records. Ms Bannon should not be required to produce documents that are in the defendant's own power, custody or control.

Is there a legitimate forensic purpose for the subpoenaed documents?

17 Ms Bannon is not a party to the proceedings. The question is whether the subpoenaed documents have a legitimate forensic purpose. The parties are at dispute concerning payments made (or not made) to Mr Bannon. This brings into relevance his bank accounts, whether or not they are joint accounts with Ms Bannon, for the relevant periods. The bank statements will evidence whether payments were made or received and if so, on what date. Mr Bannon's affidavit of documents lists bank accounts. As discussed above, Ms Bannon deposes that the joint bank accounts have been discovered.

18 The question then is whether or not there is a legitimate purpose to subpoena accounts solely in the name of Ms Bannon, or in the name of entities of which she 'was a director, officer, signatory or the holder of shares (other than a public company)' which include payments made by the Trust or Associated Parties to Ms Bannon or any of those entities. This is a speculative request. There is no explanation from the Trust, nor any affidavit material, deposing as to how this material may be 'for evidence' in the proceeding. Even if there were such payments, they could only result, at best, in a train of inquiry. And that is insufficient to establish either relevance or a legitimate forensic purpose.

19 Further, there is no claim by the Associated Parties in this proceeding. There is also no claim by the Trust that Mr Bannon made unauthorised payments from the Associated Parties to himself.

20 The request for production of documents of accounts solely in Ms Bannon's name or in the name of other entities in which she 'was a director, officer, signatory or the holder of shares (other than a public company)' is fishing and will be disallowed.

Should Ms Bannon be required to depose another affidavit in answer to the subpoena?

21 The Trust contends that the affidavit sworn by Ms Bannon is deficient in three respects and therefore Ms Bannon should be required to depose a further affidavit.

22 Firstly, it says there is no reference to accounts held jointly with Mr Bannon, but no longer holds. Ms Bannon deposes that all the bank accounts that 'I jointly hold with Mr Bannon for the period 2007 to 2014' have been discovered by him. Given the reference to the period 2007 to 2014, I am satisfied that Ms Bannon is making a reference to current and previous accounts held in that time period.

23 Secondly, the Trust says Ms Bannon's affidavit is insufficient as she only deposes to bank statements not credit card statements. This is incorrect. Ms Bannon deposes that save for the account she operated for Ms Thoma, there were no payments made by the Trust or any associated parties 'into any account held solely by me' [underline added]. She deposes to a list of five bank accounts held solely in her name between 2007 and 2014 and exhibits copies of statements for them.[9] Payments by the Trust into any joint account she held with Mr Bannon are a matter for discovery by Mr Bannon and the Trust, as discussed above.

24 Thirdly, the Trust submits that Ms Bannon's affidavit does not state whether she held any joint bank or credit card accounts with any third parties to which payments were made from the defendant or its associated companies. That is true. The affidavit deposes as to her own bank accounts and those she held with her husband. It does not disclose whether she holds joint bank accounts with any third persons. However, the Trust has not provided any explanation or provided any evidence as to how or why any joint accounts held by Ms Bannon with third parties are relevant to the proceeding and if so, what the legitimate forensic purpose is for accessing them.

25 Given the above, and that there is no legitimate forensic purpose for the documents, Ms Bannon should not be required to depose another affidavit in answer to the subpoena.

26 The objection is allowed. Orders will be made wholly setting aside the subpoena. The parties are requested to confer as to the appropriate orders.

[1] Ms Bannon deposed to an affidavit sworn on 6 February 2017. By way of clarification, Ms Bannon deposed to two affidavits that day. The first affidavit was filed missing a page and so a second affidavit containing all pages was filed. The reference to Ms Bannon's affidavit in this ruling is to her second affidavit.

[2] The subpoena was issued on 29 August 2016.

[3] Ms Bannon deposes she was instructed by Ms Thoma to withdraw all funds in the account on 3 January 2016 and this occurred in January 2016. However the exhibited computer printout of the transaction history indicates there is $653.15 in the account as at 31 January 2017: Exhibit 'MAB-3' to an affidavit of Melissa Bannon sworn 6 February 2017.

[4] Emphasis added, see Kennedy Taylor (Vic) Pty Ltd v Grocon Pty Ltd [1999] VSC 242, [71] for an analysis of a predecessor to rule r 42A.01; see also Oswal v Carson [2013] VSC 355, [52]-[53].

[5] [2015] VSC 153 at [55]- [56].

[6] [2016] VSC 573.

[7] [2016] VSC 573, [32]-[34] (citations omitted) (underlined emphasis added).

[8] This proposition is well established. Volunteer Fire Brigades Victoria v Country Fire Authority [2016] VSC 573 at [57].

[9] Exhibit 'MAB-2' to the affidavit of Melissa Bannon sworn 6 February 2017.