Suzanne FRUGTNIET v MAGISTRATE GARBUTT & Anor

LOWER COURT Local Court JURISDICTION : LOWER COURT FILE NUMBER(S) : LOWER COURT Magistrate Garbutt JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

11488/03 Suzanne FRUGTNIET v MAGISTRATE GARBUTT and Anor

JUDGMENT 1 BELL J: The plaintiff seeks leave to appeal against two orders made by the first defendant (the Magistrate) in the Local Court (Commonwealth Matters). The first order was made on 3 June 2003. It was an order setting aside a subpoena for production served by the plaintiff on the second defendant, the Australian Securities and Investment Commission (ASIC). The second order, made on 11 June 2003, was that the plaintiff pay ASIC's costs in the sum of $10,477.29 being costs incurred in connection with the service on it of the subpoena and the subsequent successful application to have the subpoena set aside.

2 The plaintiff's amended summons and statement pursuant to Pt 51B of the Supreme Court Rules 1970 (the SCR) was filed on 27 June 2003. 3 The application is in each case governed by the provisions of Pt V of the Justices Act 1902 (as it then stood) (the Act). Relevantly, s 104(4) of the Act provided: 104(4) Appeals in relation to interlocutory orders A defendant or an informant may appeal under this Division to the Supreme Court against any interlocutory order that is made by a Magistrate in summary proceedings, on a ground that involves a question of law alone, but only with the leave of the Supreme Court. 4 The plaintiff appeared in person in the proceedings before the Magistrate. Mr Street SC appeared on her behalf on the hearing of the application for leave to appeal. He informed me that he had come into the matter on very short notice under the Bar Association's Pro Bono scheme. I was much assisted by him. He refined the grounds of challenge. As to the first order Mr Street relied upon three contentions: (i) The Magistrate failed to take into account the nature or breadth of the charge brought against the plaintiff in determining that she had failed to identify a legitimate forensic purpose for obtaining access to the documents sought under the subpoena; (ii) The Magistrate failed to give sufficient reasons for his determination; (iii) It was not open to the Magistrate to find either that the subpoena was oppressive or that no legitimate forensic purpose had been established by the plaintiff on the evidence that was before him.

5 Mr Street submitted that the order made on 11 June 2003 was without power. 6 The subpoena sought the production of documents in connection with criminal proceedings pending against the plaintiff in the Local Court (the principal proceedings). Those proceedings are listed on Monday 25 August 2003. Four days have been set aside for the hearing of the matter. I considered it desirable to determine the present applications with some urgency in order to avoid the risk of unnecessary delay in the disposition of the principal proceedings. 7 Mr Street read two affidavits sworn by the plaintiff. The first sworn on 24 June 2003 set out the history of the plaintiff's contact with ASIC in connection with access to the documents and things the subject of the subpoena. A number of letters and other documents were annexed to the affidavit. The second affidavit sworn on 17 July 2003 annexed a transcript of the proceedings before the Local Court on 23 May, 3 June and 11 June. 8 Ms Tzannes, who appeared on behalf of ASIC, read the affidavit of Robert Ghali sworn on 10 July 2003. Mr Ghali is an investigator employed by ASIC. In his affidavit Mr Ghali responded to certain of the assertions made by the plaintiff in her first affidavit. There is an area of factual dispute between them. Neither deponent was cross-examined upon his or her affidavit. The area of dispute is not relevant to the determination of the question of whether the Magistrate has been shown to have erred in law in making either of the orders that are the subject of the application for leave to appeal. Ms Tzannes tendered the material that was before the Magistrate. I will return to this. 9 No authorised transcript of the proceedings before the Magistrate was in evidence. In her affidavit of 17 July 2003 the plaintiff stated that she had personally transcribed tape recordings of the proceedings on each of 23 May, 3 June and 11 June 2003. She deposed to having "undertaken this task with due diligence and accuracy". She attested to the accuracy of the transcripts that were annexed to the affidavit. The accuracy of these transcripts was not in all respects accepted by Ms Tzannes. No other evidence was led concerning the conduct of the proceedings. I take into account that the transcript may not be a complete record of all that was said in that some portions of the recording may have been indecipherable as the result of overtalking. Otherwise I accepted it as being a generally accurate account of the proceedings.

10 I turn now to the history of the proceedings and to the evidence that was before the Magistrate. 11 On 5 March 2003 an officer of ASIC swore an information before a Justice at the Local Court alleging that the plaintiff had committed an offence contrary to s 206A(1)(a) of the Corporations Act 2001. The terms of that charge were as follows: "Between about 1 March 2001 and about 14 December 2001 at Sydney in the State of New South Wales did, whilst being a person disqualified from managing corporations, make or participate in making decisions that affected the whole, or a substantial part, of the business of a corporation, namely Travel Action Pty Ltd (ACN: 001 653 407)." 12 There was evidence that there was contact between the plaintiff and officers of ASIC in connection with her access to documents held by ASIC arising out of its investigation being documents that did not form part of the brief of evidence in the proceedings against her. 13 On 16 May 2003 the plaintiff procured the issue of a subpoena for production directed to ASIC requiring the production on 23 May 2003 of the following documents and things to the Court: 1. Any material relating to Suzanne Frugtniet and/or Travel Action Pty Limited (A C N 001 653 407) and/or Joseph Stanislav and/or Gayani Renuka Ranasinghe aka Ranuka Ranasinghe aka Renuka Ranasinghe and/or Barbara Mary Johnson and/or Mallesons Stephen Jaques and/or Deutsche Bank, other than what has been provided in the Brief of Evidence served in its entirety on the Defendant and in the inspection conducted at the premises of the Australian Securities and Investments Commission on Friday 16 May 2003, which may include notes, memoranda, documents, file notes, emails, letters, faxes, correspondence, tapes, videos, material in written and/or other media such as floppy disks, CDs, hard disks obtained in the course of this investigation and in particular during the period 1 February 2002 to 16 May 2003; 2. Material not specified by the Australian Securities and Investments Commission, to include the material alleged as confidential material contained in the confidential affidavit provided to the Administrative Decisions Tribunal on 20 March 2003 annexing documents, tapes and other material said by the Australian Securities and Investments Commission to be confidential in relation to Suzanne Frugtniet and/or Travel Action Pty Limited A C N 001 653 407; 3. Any and all notes, files notes, emails, correspondence, documents, tapes, CDs, computer disks relating to Suzanne Frugtniet between the Australian Securities and Investments Commission and Mallesons Stephen Jaques, and relating to Suzanne Frugtniet and/or Renuka Ranasinghe between the Australian Securities and Investments Commission and Deutsche Bank and between the Australian Securities and Investments Commission and Carmel Dollison, Director, Facilities of Mallesons Stephen Jaques in relation to Suzanne Frugtniet. 14 ASIC moved to have the subpoena set aside by Notice dated 22 May 2003 pursuant to s 100AL of the Act. In that Notice it relied upon the following grounds: 1. The subpoena is not sufficiently clear and specific to identify which documents are sought and categories of documents cannot be specifically identified. 2. The subpoena lacks a legitimate forensic purpose and is a fishing expedition. 3. The subpoena is oppressive. 15 ASIC's application came before the Local Court on Friday 23 May 2003. Mr Aboud, Magistrate, was not able to hear the application on that day. Both the application and the subpoena were stood over to 3 June 2003. 16 On 3 June 2003 the matter came on for hearing. ASIC relied on the affidavit of Robert Ghali, sworn 3 June 2003. Relevantly Mr Ghali deposed to the following: "2. I have been shown a copy of the subpoena for production of documents that were served on ASIC on 16 May 2003. Annexed to this affidavit and marked 'A' is a true copy of the subpoena. 3. I am the case officer in charge of ASIC's formal investigation that relates to the subpoena ('the investigation'). I have knowledge of the documents obtained in the course of the investigation. 4. Arising from the investigation, proceedings were commenced by the Commonwealth Director of Public Prosecutions against Suzanne Marie Frugtniet. 5. At the time ASIC was served with the subpoena on 16 May 2003, ASIC was in the process of disclosing to Suzanne Marie Frugtniet certain documents obtained in the course of the investigation that did not form part of the brief of evidence being relied on in the proceedings. 6. ASIC was disclosing these documents to Suzanne Marie Frugtniet following an agreement between Suzanne Marie Frugtniet and Ms Jan Redfern (Deputy Executive Director, Enforcement Directorate, ASIC) on 15 May 2003. 7. On the morning of 16 May 2003 Suzanne Marie Frugtniet attended ASIC's business premises and inspected numerous documents pursuant to the agreement. I have been informed that a letter recording the agreement (reached on 15 May 2003) was handed to Suzanne Marie Frugtniet at the time of the inspection. Annexed to this affidavit and marked 'B' is a true copy of the letter. 8. On the afternoon of 16 May 2003 Suzanne Marie Frugtniet attended ASIC's business premises to collect copies of documents that she had inspected earlier that day which ASIC had agreed to photocopy and to provide to her later that day. At the time of collecting the documents she served the subpoena on ASIC. 9. The subpoena required production of documents at 9:30 am on 23 May 2003. The scheduled appointment for the second inspection was at 10:00 am on 23 May 2003. Thus the serving of the subpoena on ASIC by Suzanne Marie Frugtniet necessitated that ASIC officers including myself suspend work being undertaken in relation to completing the disclosure requirements on 23 May 2003. 10. The serving of the subpoena on ASIC has caused ASIC unnecessary costs and considerable duplication of effort by ASIC officers in that: i. It has required ASIC officers to undertake an additional, completely separate and independent review of documents which have potential relevance to the subpoena; ii. documents that ASIC is in the process of disclosing to Suzanne Marie Frugtniet encompass all those she is seeking be produced under the subpoena. Claims of legal professional privilege and public interest immunity being made by ASIC apply equally to both processes; iii. the terms of the subpoena are among other things unclear and oppressive and have required ASIC to engage Counsel at considerable expense to assist; iv. some of the documents subject to the subpoena have already been produced by ASIC to the Administrative Decisions Tribunal on 20 March 2003 in response to a summons served on ASIC in relation to separate proceedings; and v. a large quantity of the third party documents obtained by ASIC in the course of the investigation that are required to be produced under the subpoena would have been disclosed to Suzanne Marie Frugtniet as part of the disclosure requirements on 23 May 2003 subject to the third parties notifying ASIC of any objection, but for the serving of the subpoena. 11. The service of the subpoena by Suzanne Marie Frugtniet after the completion of the disclosure obligations as proposed by ASIC (re annexure "B") would have avoided the costs incurred by ASIC and the duplication of effort imposed on ASIC officers arising in complying with the subpoena. 17 Annexure "B" to Mr Ghali's affidavit, the letter signed by Jan Redfern, Deputy Executive Director, Enforcement, of ASIC dated 16 May 2003 relevantly stated: "I acknowledge that during our telephone conversation, the following agreement was made with respect to you inspecting documents obtained by ASIC during the course of its investigation; a) Access will be provided at ASIC's office today between 10:00 am and 2:00 pm for inspection to the documents that have already been assessed by ASIC as not being the subject of a claim of legal professional privilege or public interest immunity; and b) access will be provided at ASIC's office on 23 May 2003 between hours to be agreed (in writing) for inspection access to the remaining documents that have been assessed by ASIC as not being the subject of a claim of legal professional privilege or public interest immunity. ASIC will make every effort to ensure that all documents it has obtained have been assessed by 23 May 2003 so that the need for you to attend ASIC's office on a further occasion is not required. You should be aware however that third parties have objected to you inspecting some of the documents. ASIC is assessing their claims but it may be that their objections will not have been resolved by 23 May 2003. If this is the case, ASIC will hold back those documents to give the opportunity for all contentious issues to be determined by the Court. We therefore suggest that if, after inspecting the documents on 23 May 2003, you seek to challenge ASIC's claim of legal professional privilege or public interest immunity or the unresolved claims of the third parties, you should serve a subpoena on ASIC in respect of these documents and any dispute will be settled by the Court. As I understand this was foreshadowed by the Magistrate at Court on 13 May 2003. ASIC will provide you with copies of documents you identify during your inspection provided the quantity is not unreasonable. You will be provided with labels to affix to those documents you request be copied. Subject to the number of documents concerned the copies will be provided to you immediately or made available for your collection at the earliest opportunity. The conditions of inspection access to the documents remain as stated in the letter dated 14 May 2003 other than as altered by this letter. I note that a copy of that letter was sent by facsimile to you on 15 May 2003 following our telephone conversation. The original had previously been sent in the mail. Apart from when you attend ASIC's office to inspect the documents all further communication is to be in writing. All correspondence addressed to ASIC is to be marked to the attention of Mr Robert Ghali and may be mailed or sent by facsimile to (02) 99112057. ASIC will forward all correspondence to you by mail and by sending a facsimile to - phone number inserted). ASIC officers concerned have been instructed not to engage in any further conversations with you aside from as required when you attend ASIC's office to inspect the documents. I trust that ASIC's position in this regard is clear."

18 Both ASIC and the plaintiff handed up written submissions to the Magistrate. In her written submissions the plaintiff contended that the charge brought against her raised "the issue of involvement, to what extent and whether it was in the course of management". A submission that was apparently directed to her role in the business conducted by Travel Action Pty Ltd (Travel Action). She went on to assert that witnesses may have a motive to fasten attention on her and that "other evidence obtained during the course of the investigation may bear upon the credit and/or veracity of some of these witnesses, and furthermore would show the type of involvement as being one of employee, besides, also providing corroboration for the defence, and may also be conclusive of the role the defendant played."

19 The transcript of the proceedings on 3 June 2003 records the following exchange at p 5: "Suzanne Frugtniet: Your Worship can I give you a bit of a chronology so that you know what happened? Magistrate: Can we just go straight to the subpoena and just tell me about … Madam? Suzanne Frugtniet: Er yes your Worship. All evidence is relevant to material facts in issue. It's admissible so it's reasonable to suppose that all documents obtained to contain information which may be relevant directly or indirectly to material facts in issue and are prima facie discoverable. It's the case of Air Canada v Secretary of State for Trade (1983) 2 AC 390 … Magistrate: No you don't have to tell us that - it's set out in the Evidence Act in one short sentence. Suzanne Frugtniet: The second thing is principally your Worship I am unrepresented I have to just read through . Magistrate: No that's alright - no … we are just limited to time so you cannot read out screeds of cases when we all know that the evidence must be relevant to be admissible. Suzanne Frugtniet: Sure. The principal limits upon the obligation to produce documents is that they must be relevant to matters properly in issue. That's Attorney-General (NSW) v Stuart (1994) 34 NSWLR at 667. Magistrate: Yes Madam. Just one moment. We just really haven't got time to spend leading (sic?) a lot of material. Er the charge against you is between March and December 2001 while disqualified from managing corporations made or participated in making decisions that affected the business and you're asking here first of all any material relating to you and/or Travel Action Pty Ltd and/or Joseph Stanislav and/or Gayani Ranasinghe and/or various other people other than what has been provided in the Brief of Evidence served in its entirety and in the inspection conducted at the premises which may include notes blah blah blah blah - now that's everything notes - would you take me to lunch today. Now it can't possibly be relevant as you say to your case is it? Your case concerns you concerning making decisions regarding Travel Action Pty Ltd - now, unless you isolate what is relevant to that I just won't allow a subpoena that says 'everything to do with all these people' - you understand what I am getting at. Suzanne Frugtniet: yes your Worship. Can I er make some submissions your Worship? Er the contents of the charge says between 1 March 2001 and 14 December 2001. It's relevant to that period that I am requiring material. As is clearly evidenced - it involves the involvement of myself in the management of that company during that period. As a consequence, ASIC undertook an investigation in which it sought and obtained voluntarily and coercively statements and/or information in written form and/or audio form. It is submitted that upon examination of the Brief of Evidence provided in its entirety as confirmed by letter from the Commonwealth Director of Public Prosecutions that ASIC as the informant in this matter, not withstanding the conduct of the prosecution, has selectively withheld documents. It would be fair to assume that statements and/or information obtained from many sources such as Mallesons Stephen Jaques which is where I was employed, Mr Tony Whittaker of the Travel Compensation Fund, Sebastian Mignacca of the Department of Fair Trading, Garry Grahame of Masselos Grahame Masselos are but clear examples that they have all been asked to provide statements. Yet those statements are not in the brief your Worship. It is also submitted that in the proceedings before the Administrative Decisions Tribunal and the Tribunal determined that the matters being heard before the Tribunal and the ASIC investigation overlapped." 20 There followed discussion concerning some proceedings before the Administrative Decisions Tribunal. In the course of this the plaintiff said that there was no dispute as to the fact that she had been involved in the operations of Travel Action. She asserted that the company was solely owned by her son and that she had worked as a travel consultant with the company but that she was not involved in the management of it. The plaintiff asserted that material had been excluded from the brief of evidence that had been served on her. At pp 8 and 9 she is recorded as giving some detail in this latter respect. There followed some discussion between the parties concerning the circumstances in which the plaintiff attended the offices of ASIC without an appointment in order to inspect some documents. It appeared to be common ground that the case officer had been absent for a period of several weeks. Generally in her submissions the plaintiff was asserting that she had made efforts to inspect the documents but that she had been frustrated by ASIC in this endeavour. Following this exchange the transcript records at p. 11: "Magistrate: I am looking at this subpoena and I am looking at paragraph 1. Can you be more specific or do you want to say any material relating to anything. Suzanne Frugtniet: Well your Worship … Magistrate: Because in that form it is totally unacceptable. It is just totally a fishing expedition er .. you just cannot impose your requirement on other people at vast cost and it is just not the way this Court or the law operates. Now if you are specific as to certain matters which are not only relevant but pertinent and show a legitimate forensic purpose then you are entitled to it. Unless you can do that I will strike out the whole of paragraph 1." 21 In response to this invitation the plaintiff stated that the period covered by paragraph 1 was the period particularised in the charge. She commenced to indicate by description certain categories of documents that she was seeking. She said that she understood ASIC to have her obtained incoming and outgoing email correspondence stored on the computer at her workstation at Mallesons Stephen Jaques. She believed access to this material would demonstrate that she had been engaged in making travel arrangements for passengers. The transcript records that the Magistrate said at p 12: "Now look. Time is limited so I'm only going to … I'm only going to allow you a limited time in respect of each paragraph. In relation to paragraph 1 you have not convinced me that there is a legitimate forensic purpose in any of those requirements there and paragraph 1 is struck out. Suzanne Frugtniet: But your Worship … Magistrate: You will also … Suzanne Frugtniet: But that letter proves what they have … because it is written in the letter your Worship. Magistrate: Madam your time is running. I said there is limited time. If you want to direct yourself now to paragraph 2 and just give me a moment to read it. And I suppose that's in the same category? What legitimate purpose is there in the matters specified - in the material and the matter regarding paragraph 2?" 22 The plaintiff contended that it appeared that ASIC had obtained a statement from the Travel Compensation Fund in connection with the investigation but that no such statement had been disclosed to her. She identified various other documents that she was seeking under paragraph 2 at p 14 of the transcript. 23 The passage in the transcript which records the Magistrate's determination with respect to paragraph 2 was not conceded by Ms Tzannes as accurate. It appears from the transcript that there was some over-talking at this juncture in the proceedings. That which is transcribed is as follows at p 14 - 15: "Magistrate: (talking over) It's completely out of order and I'm not going to waste further time on it. Unless you can demonstrate why it's relevant, why it is pertinent, and why it is a legitimate forensic purpose I'll delete number 2 as well. Suzanne Frugtniet: Er … Magistrate: And there's no point just handing me a whole lot of extra mail that basically says and anything that you have said that you are just looking for more - for anything so - a piece of paper or a tape that's ever … that you can see it. Suzanne Frugtniet: No your Worship I am happy to limit it to that period - to anything relating to me and Travel Action that's limiting it. Magistrate: There's no point in limiting it to a period because it still has the problem of covering everything from … you haven't - there is public interest immunity - there is legal professional privilege - there are all sorts of reasons why - you just can't dish out everything. Suzanne Frugtniet: Your Worship in that case can I be given a time to prepare a written submission that I started your Worship but because there … Magistrate: No that is being heard today. That's why it's here and all those other people are here - no doubt at vast cost - and I am not going to have them come back another day. Suzanne Frugtniet: Your Worship this material would assist the defence for purposes of cross-examining the witnesses who would otherwise suggest that I was involved in the management of Travel Action - er - the finding in paragraph 17 of the ADT is quite clear that the matters overlap - your Worship - paragraph 17 says 'I am satisfied that the issues being investigated by ASIC overlap to some extent with issues relevant to the substantive proceedings before the Tribunal there is a legitimate purpose in seeking access to the documents'. Magistrate: Yes, there is no good in just telling me that. You'll have to tell me why. Please. You have not done that. No 2 is struck out as well. If we could direct our attention to number 3 and I reiterate - it's ten to four - this Court stops at four. And direct yourself not to anything that comes into your hands but to telling me a legitimate forensic purpose why these matters should be subject to a subpoena." 24 The plaintiff thereafter addressed submissions concerning paragraph 3 of the subpoena. It is to be observed that paragraph 3 appears to seek documents falling within those described in paragraph 1. 25 In the course of making oral submissions with respect to paragraph 3 Ms Tzannes contended: "As you have heard from the applicant or shall I say the person subpoenaing the documents now in relation to the subpoena, she herself has said that she has already had some matters disclosed to her and you've heard from the solicitor representative from the Commonwealth Director of Public Prosecutions that in fact they were in the process of disclosing documents and this process, this orderly process has been interrupted because of the issue of this subpoena and the circumstances that have been outlined to you by Ms Frugtniet. In my submission the entire subpoena is therefore an abuse of process and it is a substitution to discovery for a fishing expedition. This applies as much to paragraph 3 as to everything else.

Thereafter the Magistrate is recorded as observing at p 18: "… What we have in relation to paragraph 3 - it has not been demonstrated as any legitimate forensic purpose, it is not sufficient just to put some generalised statement that something may be helpful - that's another expression for a fishing expedition - er you don't have to demonstrate something with absolute details just that it may be on the cards helpful but you've got to demonstrate something and it is just not sufficient to er … say that you basically want every piece of paper or plastic or other material that's ever been entered into by these parties - and of course in form number 3's struck out." 26 The transcript of the proceedings does not suggest that the Magistrate gave reasons for his determination. Indeed it does not record the making of any formal order setting aside the subpoena. That was the effect of his determination to strike out each of the three paragraphs in the Schedule. The only reasons given for each of those determinations are as set out above.

27 In Mr Street's submission the subpoena, while not professionally drafted, was one that sought documents that were able to be identified in paragraph 1. He acknowledged the width of its terms but submitted that it was necessary to have regard to the particulars of the charge in assessing whether the plaintiff was possessed of a legitimate forensic purpose in seeking access to the documents. The charge was one that put in issue the whole of the conduct of Travel Action over a period of nine months. 28 In Mr Street's submission for the Magistrate to have struck out each paragraph of the subpoena either upon a finding that it was oppressive by reason of its width or that it did not disclose a legitimate forensic purpose betrayed error. ASIC's evidence was not that the issue of the subpoena was oppressive. Mr Ghali stated that ASIC had been engaged in a voluntary process of disclosure of all those documents that the plaintiff was seeking to have produced under the subpoena (paragraph 10(ii)). ASIC could hardly be seen to assert that the plaintiff did not have a legitimate forensic purpose for seeking access to documents obtained in the course of its investigation when it had itself acknowledged her entitlement to inspect those documents (save any that were the subject of a valid claim of legal professional privilege or public interest immunity). 29 In light of Mr Ghali's affidavit of 3 June and Ms Redfern's letter of 16 May, I had some difficulty in identifying the issue between ASIC and the plaintiff with respect to the production of the documents. I inquired whether it was possible for the parties to reach agreement on a resumption of the voluntary disclosure regime as a practical means of dealing with the appeal against the order made on 3 June (and in an endeavour to ensure that the date for the hearing of the principal proceedings was not put at risk by an issue as to whether the plaintiff had had the benefit of access to materials relevant to her defence). 30 Ms Tzannes informed me that she was instructed that there were, "An enormous number of documents" of which the documents to which the plaintiff had been given access fell within a more confined compass. As I understood her submission, paragraph 10(ii) of Mr Ghali's affidavit of 3 June 2003 was to be read not according to its terms, but rather as asserting that the documents that ASIC was then in the process of disclosing to the plaintiff were encompassed within the terms of her subpoena. The affidavit was to be read in this way because in paragraph 10(iii) Mr Ghali asserted that the terms of the subpoena to be unclear and oppressive. Ms Tzannes noted that she had addressed the Magistrate upon the footing that the subpoena was oppressive, an exercise in "fishing" and that the plaintiff had failed to identify a legitimate forensic purpose for obtaining access to the documents. 31 It may be that ASIC was justified in seeking to have the subpoena set aside upon the basis that there were a very large number of documents that fell within the terms of paragraph 1 and that to require it to identify them and produce them to the court would be oppressive. No evidence was led of that fact if it be the fact. The evidence and counsel's submission set out at [25] above was to the contrary, namely, that ASIC had embarked upon disclosure of the non-privileged documents in its possession that were encompassed in the Schedule to the subpoena and to complain that this voluntary regime had been interrupted by the untimely service of the subpoena. 32 This history may serve to explain the Magistrate's approach to the application. There was nothing before him to alert him to the circumstance that there existed a real issue between ASIC and the plaintiff as to her entitlement to have disclosed to her documents falling within the category of those described in her subpoena. The application came on for hearing late in the course of a busy list day. This is not the occasion to consider the extent of the obligation imposed on magistrate or judge to give reasons for his or her decision in dealing with an application that a subpoena be set aside. To the extent that the Magistrate found that the plaintiff had not demonstrated a legitimate forensic purpose for seeking access to the documents described in the schedule I am persuaded that he did so without giving consideration to the issues joined between her and the Crown. I accept that in this respect he erred in law. I consider that this is an appropriate case in which to grant leave to appeal. It will be necessary to remit ASIC's application that the subpoena be set aside to the Magistrate be heard and determined. It is to be hoped that may be done at the commencement of proceedings on 25 August. The subpoena is drafted in wide terms. Equally there is force to Mr Street's submission that the nature of the charge is one that opens the issue of the conduct of the business of Travel Action over the period particularised. If ASIC seeks to have the subpoena set aside on the ground that production of the documents and things sought is oppressive by reason of the volume of material there should be evidence before the Court to enable that claim to be assessed.

33 In light of some of the submissions that were put on ASIC's behalf and bearing in mind that the matter is to be remitted to the Local Court I consider it may be useful to refer to some statements of principle touching on the question of the production of and access to documents under subpoena in criminal cases. A useful starting point is the judgment of Hunt J in R v Saleam (1989) 16 NSWLR 14 at 17: "However, as Brennan J observed in Alister v The Queen (1984) 154 CLR 404 at 455-456, it is appropriate to adopt a more liberal approach to such matters in a criminal case. His Honour was there speaking of the exercise of a court's power to inspect documents for which a claim of public interest immunity had been made by a Crown instrumentality, to ensure that such a claim does not prevent the disclosure of an injustice suffered by an accused. In my view, such an approach is relevant also in determining whether there is a legitimate forensic purpose in having the documents produced at any stage of the criminal process, whether or not a claim of such immunity (or any kind of privilege) is made."

34 I note the passage in the judgment of Brennan J in Alister to which his Honour referred is in these terms (at 451): "The right of an accused person to compulsory process as of course to secure witnesses has been acknowledged for nearly three centuries. It is so basic and important an aspect of our criminal procedure that a trial in which the right is denied cannot be, in my opinion, a trial according to law. There is no distinction to be drawn in this respect between a subpoena ad testificandun and a subpoena duces tecum : see Amey v Long (1808) 9 East 473 at 484-485; 103 ER 653 at 658. Lawrence CJ is there reported to have said during argument … that 'He could not reconcile it to his mind to suppose, that the innocence of a person accused might depend on the production of a certain document in the possession of another, who had no interest in withholding it, and yet that there should be no process in this country which could compel him to produce it in evidence.' Of course, the applicants did not know and do not know now whether ASIO have possession of any document admissible in aid of the defence case. But the right to compulsory process cannot be dependent upon the parties' ability to prove the existence and content of a document when the party has reasonable grounds to believe that a document exists and seeks to obtain it by subpoena. … This is a criminal case. The obligation to produce documents under a subpoena issued to a government instrumentality in a criminal case is not merely an obligation incurred by the Crown or a Crown instrumentality as a party to litigation to give such discovery to its adversary as is necessary to dispose fairly of the cause. In a criminal case, it is appropriate to adopt a more liberal approach to the inspection of documents by the court. The more liberal approach is required to ensure, so far as it lies within the court's power, that the secrecy which is appropriate to some of the activities of government furnishes no incentive to misuse the processes of the criminal law."

35 In its notice of contentions ASIC submitted at p 3: "A subpoena must be sufficiently specific or it is liable to be set aside. In the case of National Employers Mutual General Association Ltd v Waind [1978] 1 NSWLR 372 which was affirmed on appeal to the High Court reported at (1979) 141 CLR 648, it was held that a subpoena may be set aside if its purpose is the discovery of documents if that process requires the recipient to make a judgment as to which of his documents relate to the issues between the parties. This is especially true when the recipient is a third party rather than a party to the proceedings. In the present case ASIC submits that it is in the position of a third party. Secondly it is simply not aware of what defence, if any, the defendant is likely to raise and hence is not in a position to determine which documents would assist her in the preparation of her case. If she is looking for documents to help her determine if she has a case then she is 'fishing'." 36 The document went on to extract a well-known passage from the judgment in Commissioner of Railways v Small (1938) SR (NSW) 564 at 573 including: "A stranger to the cause ought not to be required to go to the trouble and perhaps to expense in ransacking his records and endeavouring to form a judgment as to whether any of his papers throw light on a dispute which is to be litigated upon issues of which he is presumably ignorant". 37 The submission that the informant in criminal proceedings is a "stranger" to those proceedings is misconceived: R v Fisher [2003] NSWCCA 41 at [19]. 38 As to the submission that the plaintiff was merely "fishing", I noted Gibbs CJ's explanation of that term as it applies in a criminal case in Alister: "Although a mere 'fishing' expedition, can never be allowed, it may be enough that it appears to be 'on the cards' that the documents will materially assist the defence." 39 In Roads & Traffic Authority of NSW v Conolly [2003] NSWSC 327 Adams J reviewed the authorities concerning "fishing" in the context of an application to set aside a subpoena in criminal proceedings. At [12] after referring to the judgment of Balmford J in Fitzgerald v Magistrates' Court of Victoria and Ors [2000] VSC 348; 34 MVR 448 in which her Honour noted the dictionary meaning of "on the cards" as being "within the range of probability" Adams J observed: "With respect, it seems to me that this area of the law is bedevilled with metaphors. I think the essential notion is that there is a reasonable chance that the material sought will assist the defence. If it is reasonable to infer that the material sought exists and that it is relevant to an issue, though its content is unknown, it will almost invariably be logically the case (as it seems to me) that such a chance exists, even though it might be thought to be unlikely. Seeking that material therefore seems to me to be a legitimate forensic purpose, providing of course that the factual issues and the character of the material sought are precisely identified." 40 I respectfully agree with his Honour's observations.

41 On 11 June 2003 the proceedings came back before the Magistrate on the question of costs. On that occasion it appears that an affidavit sworn by Lawrence Scott Moyle, a lawyer in the employ of ASIC, sworn on 10 June 2003 was relied upon. To that affidavit was annexed a schedule of work said to have been performed by ASIC officers in complying with the subpoena. Mr Moyle deposed to ASIC as having incurred costs and expenses totalling $10,277.29 (counsel's fees of $2,272.73 plus costs of ASIC officers of $8,004.56) in complying with the subpoena. To this Ms Tzannes submitted that a further $200 should be added having regard to the presence in court on that day of two officers of ASIC. The Magistrate made an order for payment of ASIC's cost in the amount of $10,477.29. The transcript records the Magistrate's reasons as follows at p 8: "Yes the application for costs in my view costs should be available to the informant in this case in circumstances where a substantial amount of effort was put into initially seeking to comply with and subsequent court hearing time and striking down of subpoena and another important feature or factor I should take into account that there was an informal process of documents being made available and disclosure which seemed to me that the procedure of the subpoena was really unnecessary - certainly unnecessary at that point - it is clear that Ms Frugtniet now knows of particular matters and particular documents which were not referred to in the subpoena so the subpoena was an inadequate document purely on that count alone but quite apart from that I won't revisit that - the matter's been determined - the subpoena's been struck down. Costs should be awarded - it's a matter of quantum - there have been detailed accounts given to me that Ms Frugtniet has not specifically addressed. I have looked through the accounts and unless it's - my attention is drawn to any particular matter it seems to me difficult to seriously contest any of the times, the hourly rates or the time spent or the relevance of the work done." 42 I heard submissions on the question of the Magistrate's power to make the costs order. ASIC contended, somewhat faintly, that the order was authorised by s 81 of the Act. It seems to me that the clear terms of the section are against such a construction. Alternatively it was submitted that implicit in the terms of s 100AJ(4) was the power to make an order for the payment of the expenses of a person in complying with a subpoena or in moving to have it set aside. Section 100AJ(4) operates to relieve a person of the obligation to comply with the terms of a subpoena served upon them unless conduct money in an amount prescribed by the rules has been paid or tendered. 43 Ms Tzannes submitted that s 100AJ(4) extended to the making of an order such as that made in the present case by analogy with the reasoning of Bryson J in Danieletto v Khera (1995) 35 NSWLR 684. That case involved a third party's claim for the payment of reasonable expenses relating to a subpoena served upon him. His Honour noted the terms of Pt 37 r 9 of the SCR did not cover the circumstances of that case. His Honour said at 686: "In my opinion it is not the only recourse available to a witness that a witness should sue in a common law action for his expenses; the court's inherent power to administer justice includes as an incident of the subpoena power the power to order a party to pay such expenses and to assess the amount. I am not aware of any reported authority for the making of such orders, but I have long experience of their having been made. The law would be ineffectual if the court could bring a trial to a halt and not require a witness to speak until the witness is paid, but did not have power to carry on and make an order that the witness be paid, and later to enforce that order." 44 Danieletto was concerned with the inherent power of this Court to make an order for the payment of the expenses of a person arising out of the service of a subpoena on him or her. The question of whether the Local Court has an implied power in an appropriate case to make such an order was discussed by Hunt J in Darcey v Pre-term Foundation Clinic (1983) 2 NSWLR 497 at 504. His Honour considered that the Local Court did have such a power in order to prevent an abuse of its processes. Mr Street invited me not to consider Darcey as authority for such a proposition. It was decided before the enactment of the Criminal Procedure Act 1986 which relevantly provides in s 212 (1): "A court may award costs in criminal proceedings only in accordance with this Act."

In light of my determination to allow the appeal against the order made on 3 June 2003 the costs order made on 11 June cannot stand. It is not necessary for me to decide the question of whether the Local Court is possessed of an implied power to make an order for the payment of the expenses of a person relating to the service of a subpoena in order to prevent an abuse of its process. Since the matter is to be remitted to the Magistrate I note that in the circumstances of this case, which include that the subpoena was served on the informant in criminal proceedings, I have difficulty in seeing how the occasion for invoking any implied power of the Court to prevent an abuse of its process arose.

Grant leave to appeal against the order of Magistrate Garbutt setting aside the subpoena for production;

Allow the appeal and set aside the Magistrate's order;

Remit the application to the Magistrate to hear and determine;

3. Grant leave to appeal against the Magistrate's order for costs made on 11 June 2003;

Allow the appeal and set aside the Magistrate's order for the payment of costs;

The second defendant is to pay the plaintiff's costs.

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