Something Fast Pty Limited (ACN 102 357 844) v Patinack Farm Pty Ltd

The subpoenas to produce documents 5The subpoenas to produce documents fall into three categories. First, Patinack Farm has subpoenaed documents from a number of entities who sold horses to it in circumstances where it says Mr Cummings or Anthony Cummings Thoroughbreds acted as agent or advisor in respect of the sale. Each of those subpoenas seeks documents falling within the following categories: 1 All correspondence between Anthony Cummings, Anthony Cummings Thoroughbreds Pty Ltd or Something Fast Pty Ltd on one part and [the vendor] on the other during the period of 1 October 2007 to 1 July 2008. 2 All documents evidencing payments made by [the vendor] to either of Anthony Cummings, Anthony Cummings Thoroughbreds Pty Ltd or Something Fast Pty Ltd during the period of 1 October 2007 to 1 July 2008. 6Second, there are six subpoenas, which are in identical terms to the ones addressed to vendors, which seek documents from persons who are said to have knowledge of the payment of commissions, although they did not themselves sell horses to Patinack Farm in relation to which it is pleaded that Mr Cummings or Anthony Cummings Thoroughbreds received secret commissions. Those six subpoenas are addressed to Cologo Bloodstock AG, Wellfield Holdings Limited, Michael Otto Bloodstock Limited, Trelawney Stud Limited, Trelawney Farms Limited and Trelawney Thoroughbreds Limited. 7Third, there is a subpoena to Racing NSW seeking the following documents: 1 All documents outlining Racing NSW's policies on bloodstock agents, trainers or agents receiving commissions from purchase of horses on behalf of clients for the period 2005 to date. 2 All documents showing complaints made against, investigations of, hearings against, determinations made against and punishment of Anthony James Cummings for the period 1 January 2000 to date. Paragraphs 3 and 4 of the subpoena are in similar terms to paragraph 2 except that they are concerned with Anthony Cummings Thoroughbreds and Something Fast respectively. In fact, Racing NSW has produced documents in answer to the subpoena and those documents have been inspected by the Cummings Interests. Consequently, the order sought by the Cummings Interests in respect of this subpoena is an order under UCPR r 33.9 that Patinack Farm and Mr Tinkler not have access to the documents produced. 8It is not in dispute that a party to proceedings may have standing to set aside a subpoena addressed to a third party: see Street v Luna Park Sydney Pty Ltd [2006] NSWSC 95 at [6] per Brereton J. That standing arises from the fact that a party to proceedings has an interest in ensuring that steps taken in those proceedings do not amount to an abuse of process. Nonetheless, in my opinion, in determining whether a subpoena is truly an abuse of process, it is relevant to consider by whom the allegation of abuse is made and the nature of the abuse that is said to exist. For example, if the abuse is said to arise from the scope of the subpoena and consequent time and effort that the subpoenaed party must expend to comply with it, it will be very relevant that the complaint of abuse is made by a party to the proceedings and not the subpoenaed party. On the other hand, if the documents concern the affairs of a party to the proceedings, and the objection is that the documents are not relevant to the issues in the case and have no other forensic purpose, it is very difficult to see why the court should treat an application by that party to set aside the subpoena any differently from an application made by the party to whom the subpoena is addressed. 9Mr Einfeld, who appeared for the Cummings Interests, submitted that the subpoenas addressed to the vendors are too broad because they are not limited to correspondence etc or payments etc in relation to horses in respect of which it is said secret commissions were paid. They seek all correspondence within the specified period and documents relating to all payments within that period. I do not accept Mr Einfeld's submission. None of the subpoenaed parties have suggested that the task of searching for documents falling within the subpoenas is an onerous one having regard to their scope. The documents sought may provide relevant evidence because they may provide evidence that commissions were paid or were agreed to be paid to the Cummings Interests. The mere fact that the subpoena may catch irrelevant documents as well as relevant ones is not a ground for setting it aside if it is not otherwise oppressive. In addition, I accept the submission of Mr Dubler, who appeared for Patinack Farm, that, having regard to the nature of the allegations in the case, it is difficult to narrow the subpoenas in a way which would ensure that they caught documents that Patinack Farm has a legitimate interest in obtaining. If secret commissions were paid, then it is unlikely that they would be described in that way or that they would necessarily, on their face, be related to horses in respect of which a commission is alleged to have been paid. It is quite possible that, if secret commissions were paid, they were referred to in other ways or were said to be for other purposes. In some cases, there may be a factual dispute about whether particular payments were, in truth, secret commissions, or whether they were payments for other purposes. Patinack Farm has a legitimate interest in investigating those possibilities. In those circumstances, I do not think that the subpoenas addressed to vendors should be set aside. 10In relation to the second group of subpoenas, Mr Dubler said that the subpoena addressed to Michael Otto Bloodstock Limited was no longer pressed. It follows that it should be set aside. 11The evidence in relation to Cologo Bloodstock AG is that it trades as Coolmore Australia. Coolmore Stud is one of the vendors of horses in respect of which it is alleged secret commissions were paid. In my opinion, Patinack Farm is entitled to investigate whether commissions were paid by a company related to the entity which sold horses in respect of which commissions are alleged to have been paid. Consequently, I do not think that the subpoena addressed to Cologo Bloodstock AG should be set aside. 12There is no evidence that Wellfield Holdings Limited is related to any of the vendors of horses. The evidence is that it is a company that owns property where horses owned or trained by Mr Cummings are agisted. In addition, Mr Foate, the solicitor for Patinack Farm, gave evidence that he had been informed by Mr Tinkler that one of the directors of Wellfield Holdings may have information concerning secret commissions received by Mr Cummings. However, no basis for that belief is given by Mr Foate. In my opinion, there is no reason to suppose that Wellfield Holdings has any documents relating to the payment of commissions to Mr Cummings. For that reason, the subpoena should be set aside. 13The evidence in relation to the three Trelawney companies is that Patinack Farm bought one horse at the 2008 New Zealand Bloodstock Premier Yearling Sales from one of those companies. Mr Einfeld points out that no claim is made in respect of that horse. Mr Dubler submits that that is an oversight and that Patinack Farm will want to amend its crossclaim to include a claim in respect of that horse. I accept that, as things stand, the subpoenas do not seek relevant documents. Moreover, no documents have been produced in response to the subpoenas. In those circumstances, I think that the subpoenas should be set aside. Patinack Farm can serve further subpoenas if and when the first crossclaim is amended. 14Mr Einfeld's objection to the subpoena addressed to Racing NSW is that the documents produced by Racing NSW are irrelevant to the issues in the case and have no other forensic purpose. In support of that submission, Mr Einfeld relies on the decision in Thomas v SMP (International) Pty Ltd (No 2) [2010] NSWSC 870. In that case, proceedings were brought against Mr Willett and companies associated with him for allegedly investing or advising on the investment of money of clients in breach of fiduciary duties owed to them. Pembroke J set aside a subpoena addressed to the New South Wales Crime Commission for the transcript of a record of interview of Mr Willett concerning his knowledge of or possible involvement in money laundering activities of a Mr Barkl. In doing so, his Honour pointed out that the fact that a subpoena sought documents relevant only to credit was not of itself a ground for setting it aside. However, there must be a reasonable connection between the documents sought and the issue of credit in question. As his Honour said: A subpoena that does little more than speculatively trawl for documents that may possibly be used to impugn a witness's credit has never been justifiable (at [19]). His Honour pointed out that the issue of credit in the case before him was likely to concern what Mr Willett said to his clients. In his Honour's view, the evidence given by Mr Willett to the New South Wales Crimes Commission concerning Mr Barkl was unlikely to provide any assistance in resolving that question. 15There is also authority for the proposition that, even where documents have been produced, the court may still refuse inspection if the party seeking to inspect the documents cannot establish a legitimate forensic interest in doing so. In Saleam v R (1989) 16 NSWLR 14, the defence had subpoenaed every document relating to the investigation and prosecution of the offences with which the accused and another had been charged, together with the reports of any investigation into allegations of perjury committed by the principal Crown witness in the committal proceedings and at the trial. The Court of Criminal Appeal took the view that it was necessary for the defence to establish that inspection of the document served some forensic purpose, although that test would be met in a criminal context if it could be shown that it was "on the cards" that the documents would materially assist the accused. After inspecting the documents, the court thought that that test was satisfied in that case. In my opinion, there is no reason why the court should not apply a similar approach in civil cases. 16The question, then, is whether Patinack Farm has some legitimate forensic interest in seeking the documents produced by Racing NSW. In my opinion, it does. I accept Mr Dubler's submission that the material sought in paragraph 1 of the subpoena may form part of the background against which the nature of the relationship between Patinack Farm and the Cummings Interests are to be assessed. In addition, in my opinion, Patinack Farm is entitled to investigate whether there have been other occasions on which Mr Cummings or companies associated with him have been paid commissions by vendors and the circumstances in which that occurred. It seems to me that that material could be relevant to the question whether Mr Cummings is to be believed when he says that he received no commissions other than those he has disclosed. His disciplinary record with NSW Racing may shed light on that question. Again, the mere fact that the subpoena could have been framed more narrowly is not a ground for setting it aside, particularly where the documents have already been produced. 17It follows that Patinack Farm should also have leave to adduce oral evidence from Mr V'Landys if he is not prepared to provide an affidavit.

Notices to produce and interrogatories 18It is convenient to deal with these two issues together. 19There are two notices to produce, one dated 15 April 2011 and one dated 18 April 2011. They are in identical terms and are each addressed to the Cummings Interests. Paragraph 1, 2 and 3 of the notices to produce seek tax returns and financial statements (including drafts) for 2007, 2008 and 2009 and bank records for the period 1 January 2008 to 30 December 2008 for each of the Cummings Interests and Mrs Cummings. Paragraph 4 is in the following terms: Documents evidencing the assets, date of purchase and purchase price of such assets of Mr Cummings, Mrs Cummings, Something Fast Pty Ltd and Anthony Cummings Thoroughbreds Pty Ltd (other than personal effects each valued at $5,000 or less) as at 1 January 2008. Paragraph 5 is in the same terms, except that it seeks documents showing the position as at 1 December 2008. Paragraphs 6 to 10 seek a number of specific documents. Mr Einfeld submitted that these documents have already been discovered, although there was no evidence to that effect. Mr Dubler said that if that was the case, his principal concern was to identify clearly which documents in the Cummings Interests discovery related to each category. 20The interrogatories that Patinack Farm seeks to administer complement paragraphs 4 and 5 of the notices to produce. Interrogatories a. and b. are in the following terms: a. Apart from personal effects worth in each case less than $5,000, please list all of the assets and liabilities of Mr Cummings, Mrs Cummings, Something Fast Pty Ltd, Anthony Cummings Thoroughbreds Pty Ltd, Cummings SMSF Pty Ltd, Wild Oaks Properties Pty Ltd and Wild Oaks Pty Ltd as at 1 January 2008. b. In respect of the assets, please state the purchase price. Interrogatory c. mirrors a. except that it seeks information as at 1 December 2008. Interrogatory d. is in identical terms to b. 21In my opinion, and subject to two qualifications, Patinack Farm is entitled to the documents sought in paragraphs 1, 2 and 3 of the notices to produce. There is a sufficient connection between those documents and the allegation that the Cummings Interests received secret commissions to justify their production. The first qualification is that I do not think that it is proper for Patinack Farm to seek documents relating to Mrs Cummings from the Cummings Interests. There is no reason to suppose that those documents are in the possession or control of the Cummings Interests. For that reason, I think that the notices to produce are an abuse of process to that extent. The second qualification is that, to the extent that documents falling within paragraphs 1, 2 or 3 have been produced on discovery, I do not think that they need to be produced again. 22On the other hand, I do not accept that there is a sufficient connection between paragraphs 4 and 5 of the notices to produce and the interrogatories on the one hand and the issues in the case on the other to permit those paragraphs or the interrogatories. Mr Dubler submitted that Patinack Farm was entitled to investigate the financial position of Mr Cummings and those associated with him before he is alleged to have received any secret commissions and after because an unexplained increase in those assets will provide evidence that Mr Cummings was paid secret commissions. In support of that claim, Mr Dubler relies on paragraph 6 of an affidavit sworn on 18 April 2011 by Mr Foate. In that paragraph, Mr Foate says: I am informed by Mr Tinkler and verily believe that at the time of his conversation with Mr Cummings about purchasing horses for him he was aware that Mr Cummings was living in modest accommodation, but after the purchase of the horses the subject of these proceedings (but before any substantial profit could have been earned from those horses by Mr Cummings) Mr Cummings moved into expensive, luxury accommodation. 23I accept that in some circumstances it may be appropriate to permit a claimant who alleges that secret commissions have been received by a defendant to investigate the defendant's general financial position before and after the payments are alleged to have been made in order to obtain evidence that the defendant received secret commissions and the amount of those commissions. But, in my opinion, before the court should permit a claimant to do that it needs to be satisfied that there is a reasonable basis for thinking that the information sought by the claimant will assist in establishing those facts and that the claimant is not merely fishing for evidence. In order to satisfy the court of that, the claimant must establish that there is a reasonable basis for thinking, first, that the financial position of the defendant has changed substantially over the relevant period and, second, that that change can only be explained by the receipt of the commissions. In my opinion, the evidence filed by Patinack Farm falls far short of establishing either of those matters. The evidence at its highest simply demonstrates that Mr Cummings has moved into expensive accommodation. There is no evidence to suggest that Mr Cummings has bought the accommodation or of what rent he might be paying. There is no evidence that he has acquired any other assets. Nor is there any evidence at all from which it could be inferred that he did not have legitimate sources of income which would enable him to afford the accommodation he moved into. In those circumstances, paragraph 4 and 5 of the notices to produce should be set aside and leave should not be given to Patinack Farm to administer interrogatories. 24That leaves paragraphs 6 to 10 of the notice to produce. As I have said, there is no dispute that those documents should be produced and Mr Einfeld submits that they have been as part of discovery. I think all I should do is order that the documents be produced to the extent that they have not been discovered in these proceedings or in proceedings 2010/106978 (which are related). 25Patinack Farm has been successful in relation to most of the subpoenas, but it has failed in relation to the interrogatories and partially in relation to the notices to produce. In those circumstances, I think that the appropriate order in relation to costs is that each party bear his or its own costs of Patinack Farm's motion dated 18 April 2011 and Something Fast's amended motion dated 21 April 2011. 26Mr Einfeld submitted that the Cummings Interests should at least have their costs of the hearing before me on 10 May 2011. That hearing only became necessary when the Cummings Interests objected to the subpoenas served on Cologo Bloodstock AG, Wellfield Holdings Limited, Michael Otto Bloodstock Limited, Trelawney Stud Limited, Trelawney Farms Limited and Trelawney Thoroughbreds Limited at the hearing on 27 April 2011 on the basis that none of those companies had sold horses to Patinack Farm and Mr Dubler's instructions were inadequate to permit him to explain the relevance of those subpoenas. I think that there is some force in Mr Einfeld's submission. It was for Patinack Farm to explain why the subpoenas it issued sought documents that were relevant or otherwise served some legitimate forensic purpose. The hearing on 10 May 2011 was an indulgence to permit it to do so. It should bear the costs of that indulgence. 27The orders of the court are: (1)The defendant's motion dated 18 April 2011 be dismissed. (2)Paragraphs 1, 2 and 3 of the Notices to Produce dated 15 April 2011 and 18 April 2011 served by the defendant on the plaintiff and cross defendants to the first cross claim be set aside in so far as they seek documents concerning Mrs Cummings. (3)The plaintiff and cross defendants may comply with paragraphs 1 to 3 and 6 to 10 of the notices to produce referred to in paragraph (2) either by producing the documents or by identifying the documents they have discovered in these proceedings or proceedings 2010/ 106978 which respond to the notices to produce. (4)Paragraphs 4 and 5 of the notices to produce dated 15 April 2011 and 18 April 2011 served by the defendant on the plaintiff and cross defendants to the first cross claim be set aside. (5)The subpoenas issued by the defendant to Wellfield Holdings Limited, Michael Otto Bloodstock Limited, Trelawney Stud Limited, Trelawney Farms Limited and Trelawney Thoroughbreds Limited and each filed 5 April 2011 be set aside. (6)Grant access to the defendant and second cross defendant to the second cross claim to documents produced by Racing NSW in response to the subpoena served on it and filed on 1 April 2011. (7)Paragraph (5) of the orders made by the court on 27 April 2011 be amended by adding to the end of the paragraph the words "k. Peter V'Landys". (8)The amended notice of motion dated 21 April 2011 of the plaintiff and cross defendants to the first cross claim otherwise be dismissed. (9)The defendant pay the plaintiff's and cross defendants costs of the appearance on 10 May 2011. Otherwise, there be no order as to costs of either motion.

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