WALTHAMSTOW PTY LTD -v- CARATTI [No 5] [2024] WASC 2 (8 January 2024)

(a) Order 36B r 8A(2) ... provides that on a request by a party, the court may set aside a subpoena or part of it;

(b) the court will set aside a subpoena if it has no legitimate forensic purpose. In determining whether a subpoena has a legitimate forensic purpose, the court will consider whether there is a reasonable possibility or 'it is on the cards' that the documents sought in the subpoena will materially assist the claim or the defence of the proceedings or are relevant to an issue in the proceedings. A document may provide material assistance even if it is not admissible in the proceedings;

(c) a legitimate forensic purpose extends to material which may relate to the cross-examination of a witness, including documents which relate only to credit;

(d) in determining whether the documents have apparent relevance to the issues in the proceedings, the court must consider the issues that potentially arise on the pleadings, including the particulars that have been provided;

(e) the court will set aside a subpoena where the subpoena is an abuse of the process of the court. A subpoena may be an abuse of process where it may be characterised as 'fishing', being used for the purpose of obtaining discovery against a third party, or oppressive;

(f) in determining whether a subpoena is properly regarded as fishing, I have had regard to the statement of Owen J in Associated Dominions Assurance Society Pty Ltd v John Fairfax & Sons Pty Ltd:

A 'fishing expedition', in the sense in which the phrase has been used in the law, means, as I understand it, that a person who has no evidence that fish of a particular kind are in a pool desires to be at liberty to drag it for the purpose of finding out whether there are any there or not. If, however, there is material before the court pointing to the probability that a party to litigation has in his possession documents tending to destroy his case or support the case of his opponent and that privilege from inspection of such documents has been wrongly claimed, an application by that opponent to be allowed to inspect them cannot properly be described as a mere 'fishing expedition'.

(g) the fact that documents which are the subject of a subpoena may also be sought in discovery does not, of itself, mean that the subpoena is an abuse of process. (footnotes omitted)

1. Further, the following observations of Smith J in Kestell v Davey[25] as to the use of subpoenas in substitution for discovery are apposite to the present matter:

[12] A subpoena is not a different means by which the purposes of O 26 may be achieved and it is inappropriate to use a subpoena issued to a party in proceedings in substitution for an application for discovery or discovery of particular documents.

[13] However, in circumstances where the addressee of the subpoena is not a party to the proceeding, it can be entirely appropriate to issue subpoenas before discovery.

[14] The authorities establish that it is an abuse of process to compel the production of documents from a third party if the subpoena is used for the purpose of discovery whereby the person to whom the subpoena is addressed will have to make a judgment as to which documents relate to the issues between the parties.

[15] A subpoena may also be oppressive if the terms of the subpoena are so wide that it imposes on a stranger an obligation to collect and produce documents, many of which can have no relevance to the litigation.

[16] The fact that compliance with subpoenas would be burdensome for a stranger to the litigation is not sufficient to show abuse of process. Rather, it is a burden so unreasonable as to show oppression which is required.

[17] Whether to set aside a subpoena on the basis that it is oppressive is to be determined by reference to the breadth of the subpoena, the definition of documents involved, and the type and degree of burden placed on the addressee.

[18] Oppression may be made out where a subpoena requires a recipient to undertake a search of an excessively large amount of documents. (footnotes omitted)

1. I had regard to these principles in considering the defendants' applications to set aside the subpoenas.

1. Following the hearing on 22 December 2023, I ordered that the subpoena directed to Herdsman Technology be amended by deleting [4] and [5] of the subpoena and that the time for compliance be extended to 10.00am on 22 January 2024 (rather than the original compliance date of 12 January 2024).
2. As to the broad challenge maintained by the defendants, which applied to all of the subpoenas issued in both actions, that the subpoenas had been obtained by the plaintiff late in the day, and too close to trial, I was not persuaded that was itself a sufficient ground to set aside any of the subpoenas. Parties should, of course, give active consideration to the pursuit of subpoenas in a timely way during the course of proceedings, but subpoenas returnable at trial are not uncommonly obtained by parties in contemporary litigation. There may be circumstances in which subpoenas issued in close proximity to trial which are overly broad in nature will be objectionable on the grounds of oppression. However, I did not regard any of the subpoenas obtained by the plaintiffs as suffering from this vice.
3. Further, as I have earlier indicated, it is relevant to note that the pleadings in the actions have been somewhat fluid since September 2023. Not until 17 September 2023 did the defendants introduce specific allegations in relation to the collection of the proceeds from the Waverley Estate Settlement.[26] The subpoena directed to Herdsman Technology seeks the production of documents directed to the Waverley Estate Settlement issue, and so could only have been properly issued after mid-September in any event.
4. As to the legitimate forensic purpose of the subpoena, I note that the subpoena directed to Herdsman Technology focuses on documents held by the recipient that show how the defendants treated the payments that are said to have been impermissibly made in respect of the Herdsman Technology loan.[27]
5. I have earlier set out the pleadings so far as they relate to the Waverley Estate Settlement issue. This pleading analysis reveals that the manner in which the plaintiffs applied the proceeds received from the sale of the lots at the Waverley Estate development, and the manner in which those proceeds were treated by Herdsman Technology, are matters that are in issue in the proceedings. At the very least, the introduction of a broad unconscionability defence by the defendants, will require the court to examine all of the circumstances of the transaction described in [39.1] of the Fourth Amended Defence, being the collection, application and treatment of the proceeds of settlement of the lots at the Waverley Estate.
6. These are matters in respect of which documents falling within categories 1, 2 and 3 of the subpoena to Herdsman Technology have apparent relevance. That is, communications between the defendants and other persons (held by Herdsman Technology) regarding the transaction, the ledger accounts maintained by Herdsman Technology as to the Waverley Estate mortgage, and the financial statements prepared by Herdsman Technology.
7. I had some considerable doubt that the income tax returns and business activity statements would contain any information of relevance to these matters. Further, the requirement for a stranger to the litigation (although one that has some connection to the defendants) to disclose its tax returns and business activity statements seemed to me to impose an unnecessary burden on that party, not justified in the circumstances. I therefore considered it appropriate to narrow the subpoena to confine it to categories 1 to 3 inclusive.
8. Any residual concerns that the task of collating this information was overly burdensome on Herdsman Technology was capable of being managed by extending the time for compliance with the subpoena. The affidavit of Ms Bazzo pointed to logistical issues with attending to the task of identifying and collating the documents, particularly at this time of year, over the summer break. I did not find those matters particularly persuasive, in the context of contested litigation involving millions of dollars, between sophisticated parties. To the extent to which the task of responding to the subpoena might require additional (and external) resources to be brought to bear, that is commonly a required step in commercial litigation. A subpoena should not be capable of being defeated by the asserted limited resources of a party, especially where there is a clear legitimate forensic purpose which supports the subpoena and the scope of the subpoena is proportional to the size and extent of the litigation.

1. Following the hearing on 22 December 2023, I ordered that the subpoena directed to Byford River be amended by deleting [4], [5] and [6] of the subpoena and that the time for compliance be extended to 10.00am on 22 January 2024 (rather than the original compliance date of 12 January 2024).
2. I repeat my earlier reasons in relation to the Herdsman Technology subpoena, as to the asserted lateness of the subpoena and the limited resources of the defendants to respond to the subpoena. Those comments apply equally in relation to the subpoena directed to Byford River.
3. As to the legitimate forensic purpose of the subpoena, the requests for communications involving the defendants, the ledger accounts and the financial statements (in categories 1, 2 and 3) are all directed to the production of documents for the relevant period which are apparently relevant to the matters in issue between the parties concerning the Waverley Estate Settlement. As already noted, the dispute at trial will concern the manner in which the settlement proceeds were received and applied by the plaintiff, whether there was a breach of the Anketell Loan instrument and whether, among other matters, the plaintiff engaged in unconscionable conduct in this regard. The documents held by Byford River, a company of which Ms Bazzo is a director, and which may well contain statements by Ms Bazzo as to the manner in which Byford River treated or accounted for the plaintiff's application of the proceeds (so far as concerns the loan to Byford River), are likely in my view to be relevant to these matters in issue.
4. In relation to both subpoenas, I do not accept they are being deployed as surrogates for the discovery process.
5. In general terms, it may be accepted that there are circumstances in which it is not legitimate to use the subpoena process so as to enable the processes for discovery which are established by O 26 RSC (the discovery regime) and O 26A RSC (the non-party discovery regime) to be bypassed. I explored the applicable principles in this regard in Palmer v Citic Ltd [No 6].[28] In my view, having regard to the authorities addressed in that decision, in order to demonstrate an abuse, it is not sufficient merely to conclude that the documents sought by way of subpoena could also be obtained on discovery from a party to the proceedings. Such a narrow criterion is not supported by the authorities.[29] Rather, it is necessary for the party seeking to set aside a subpoena on this basis to point to some additional vice in the manner in which the subpoena is being deployed.
6. It is sufficient to say that I did not accept the defendants had made out a case for the subpoenas to be set aside on this basis in the present matter. The subpoenas are directed to non-parties to the proceedings, and prima facie seek documents that would not be in the direct control or custody, or even the power, of the defendants to produce by way of discovery. For example, I refer to the ledger accounts and financial statements of the companies. It is entirely proper to pursue documents of this nature by means of subpoenas. These observations apply equally in relation to the subpoenas issued in CIV 2283.

D. Plaintiff's application to amend pleadings in CIV 2283

1. On 6 December 2023, the plaintiff filed its Third Amended Substituted Reply and Defence to Counterclaim (the Proposed 2283 Reply). The plaintiff filed written submissions in support of the application, dated 20 December 2023. The amendments proposed in this pleading, particularly as to [20] thereof, were the subject of opposition from the defendants and understandably so. I say this because the amendments appeared to traverse fertile ground which had been tilled, if not deeply ploughed, to a significant extent in the course of the interlocutory hearings in October 2023.
2. As explained in some detail in my earlier reasons delivered on 30 October 2023,[30] I had granted the plaintiff leave to file its Second Amended Substituted Reply and Defence to Counterclaim, other than in respect of the proposed amendments to [6(ab)] and [20]. I refer to orders 1 and 2 in CIV 2283 made on 25 October 2023. These orders provide that:

1. The plaintiff has leave to file and serve the second amended substituted reply and defence to counterclaim in the form of the minute of proposed second amended substituted reply and defence to counterclaim dated 17 October 2023, save for:

2. For the avoidance of doubt, the plaintiff's application for leave to withdraw the admission in paragraph 20 of the amended substituted reply and defence to counterclaim dated 15 September 2023 (concerning paragraph 39 of the substituted amended defence and counterclaim dated 17 September 2023), which admission was first pleaded by the plaintiff in its pleading filed on 22 February 2023, is refused.

1. To put this in context, I have set out below the terms of [20] of the Second Amended Substituted Reply and Defence to Counterclaim, and [20] of the Proposed 2283 Reply:

Second Amended Substituted Reply and Defence to Counterclaim filed on 17 October 2023 (in respect of which leave was refused on 25 October 2023 - see the reasons delivered on 30 October 2023)

[20] The plaintiff admits paragraph 39 of the Defence save to say that the plaintiff was not satisfied that practical completion of the project had been reached, (stage 1 not having been completed) yet still advanced the sum of $1,000,000 to the Borrowers by drawing a cheque, made payable to Herdsman Technology Pty Ltd, at the direction of the second defendant.

[20] The plaintiff admits paragraph 39 of the Defence save to say that the plaintiff was satisfied of practical completion of stage 1 only of the subdivision yet advanced the sum of $1,000,000 to the Borrowers by drawing a cheque, made payable to Herdsman Technology Pty Ltd, at the direction of the second defendant.

1. The paragraph in the defence which is the subject of the above response is [39]. That paragraph pleads that:

[39] On 23 December 2014, the Plaintiff being satisfied of practical completion of the subdivision of the Security Property the[n] paid part of the Second Drawdown, being the sum of $1,000,000 to the Second Defendant and Keris, as borrowers.

1. In some respects, the plea in [39] as to the plaintiff's satisfaction of practical completion was anticipatory, as identified by the plaintiff in its submissions.[31] The plaintiff's subjective state of satisfaction as to practical completion is not a constituent part of any clause in the loan agreement itself, which begs the question as to why it was pleaded in the first place, much less the subject of an admission by the plaintiff.
2. A copy of the loan agreement in question was in evidence before me, as an attachment to an earlier affidavit filed in CIV 2283 (Keris Loan Agreement).[32] By its terms, the Second Drawdown Amount was payable by the plaintiff as an advance to the borrowers on the Second Drawdown Date (subject to cl 26.2). Clause 26.2 states:

[26.2] The Lender may (at the Lender's complete discretion) withhold any portion of the Advance requested by the Borrower to be drawn down if the Lender is not satisfied with the security available, the financial circumstances of the Borrower or the Guarantor, the progress of the development of the Property or such other matter that the Borrower in its absolute discretion views as being relevant.

1. The plaintiff continues to rely upon cl 26.2 of the Keris Loan Agreement as part of its response to explain why the balance of the Advance was not provided (see [6] of the Proposed 2283 Reply).
2. The Second Drawdown Date is expressly defined in cl 1.1 of the Keris Loan Agreement as 'the date of practical completion of the subdivision of the Property'.[33] This clause does not advert to the plaintiff's satisfaction as to practical completion. I note, in any event, that the plaintiff no longer seeks to rely upon cl 2.1(b).[34]

1. In my view, the plaintiff's application to further amend the reply was in substance and effect an application to discharge or vary the recent ruling of the court delivered by orders on 25 October 2023 and the subject of detailed reasons published on 30 October 2023. The subtle differences in language between the paragraph as drafted on 17 October and as drafted on 6 December did not disguise this fact. It ought to have been approached on this basis, rather than being the subject of a pleading filed without leave.
2. It is open to discharge or vary an earlier interlocutory order.[35] The discretion to do so should be exercised according to the interests of justice. This will encompass the interests of the parties and the public in the efficient management of the interlocutory processes involved in civil litigation. I refer to the following observations of Corboy J in Commonwealth Bank of Australia Ltd v Saraceni,[36] which I respectfully adopt:

[11] It may well be that a discretion to discharge or vary an interlocutory order according to the interests of justice in the particular case should not be further circumscribed by imposing a requirement that the power only be exercised in the most unusual circumstances. However, I accept that the interests of justice must encompass the interests of the parties and the public in the efficient management of the interlocutory processes involved in civil litigation. Efficient and economical case management will generally require interlocutory disputes and associated issues to be finally determined as they arise. It is, in my view, in that sense that it may be said that the circumstances in which a court will revisit an interlocutory order that it has previously made will be rare.

1. The plaintiff thus faced this hurdle, as well as the need to satisfy the court in relation to the usual principles applicable to a pleading amendment. Understood in this way, it can be seen that the plaintiff's application was somewhat ambitious.
2. Counsel for the plaintiff sought to strengthen his client's argument by noting that the application for withdrawal of the admission had not ultimately been pressed at the hearing in October 2023, as I noted in my earlier reasons. The issue had been, however, fully argued at that time, and I expressed my view that leave would be refused in any event. In those earlier reasons I indicated that:

[5] A principal difficulty with the pleading is that, for some time, the plaintiff has admitted the allegation put forward by the defendants in their counterclaim that the plaintiff was 'satisfied of practical completion' in December 2014 when it made the payment of $1.0m.[37] Properly, counsel for the plaintiff acknowledged that leave would be needed to withdraw this admission.

[6] Ultimately, counsel for the plaintiff did not press these amendments, but for the avoidance of doubt, I have ordered that leave be refused in any event. I have done so because I formed the view that the introduction of issues into this litigation as to whether the project had reached practical completion would necessitate a lengthy adjournment of the trials and require the defendants to adduce additional lay evidence (and possible expert evidence) on this subject matter.

1. The observations as to prejudice at [6] above continue to apply with equal force as at 22 December 2023.
2. Further, from a case management perspective, it is not appropriate for the defendants to be required to face, nor for the court to have to deal with, multiple applications concerning a pleading amendment which are substantively similar, at least not without a cogent explanation. This will otherwise result in increased costs to the parties and a distraction and inefficient use of the limited resources of the court. The objects in O 1 r 4B RSC would be wholly undermined in those circumstances.
3. Importantly, the defendants' plea as to the plaintiff's satisfaction of practical completion was introduced in February 2023, and had been admitted by the plaintiff for some time, including during the period in which the trial was initially listed for hearing in November 2023.
4. The plaintiff sought to support the amendment by reliance on a further affidavit of Mr Masel, affirmed on 19 December 2023. In that affidavit, Mr Masel, a director of the plaintiff, deposed that he was not satisfied of practical completion of either stage 1 or stage 2 of the subdivision work of the properties at Lot 9001, Lot 9032 and Lot 9033.[38] That affidavit deposed solely to Mr Masel's position as to the fact in contest, namely his satisfaction (or the plaintiff's satisfaction) as to practical completion. The affidavit did not advert to the reason for the earlier admission on the pleadings (which I assume was made on instructions) or provide any explanation for the fresh application. Those deficiencies are significant in the context of the withdrawal of an admission which had been the subject of substantive argument less than 2 months ago.
5. The further affidavit relied upon by the plaintiff, affirmed by Mr Tharby on 14 December 2023, a solicitor for the plaintiff, explained that the assessments made by Mr Masel (which appear in the evidence) as to the progress of the subdivision were 'inconsistent with the admission the plaintiff previously sought leave to withdraw to the effect that the plaintiff was satisfied of practical completion of the entire Hocking subdivision'.[39] Again, this affidavit did not address the basis on which the admission was previously made. The affidavit was directed at explaining the disconnect between the proposed evidence and the admission.
6. In my view, there was no proper basis made out by the plaintiff for the court to revisit the earlier consideration of this paragraph of the pleading and, in any event, I was not satisfied on case management grounds, and on the evidence adduced by the plaintiff, that leave should be given for this late amendment to be made. While the interests of justice require that parties have a proper opportunity to plead their case, limits must be placed on repleading when delay and cost are taken into account.
7. For these reasons, I therefore declined to grant leave to permit the amendment to [20] of the Proposed 2283 Reply.
8. As to the amendments to [6] of the Proposed 2283 Reply, they were of a substantially different character. Those amendments involved modifications to the date ranges in [6(aa)] and [6(bb)], as follows:

[6] The plaintiff denies paragraph 12.4 of the Defence and says that it did not provide the balance of the Advance as:

[6(aa)] sometime after 2 October 2015 in February 2017 the first defendant requested the plaintiff to make payment to the City of Wanneroo of $470,551 783 in such amount being in excess of the $295,679.45 remaining on the loan Advance;[40]

[6(bb)] during the period 2 October 2015 to 8 November 2016, the plaintiff was not satisfied with the security supporting the loan available to pay the $470,783 551 requested by the first defendant;[41]

1. These were minor amendments intended to conform to the evidence proposed to be given by Mr Masel at trial, as explained in the plaintiff's written submissions.[42] The defendants have been on notice of that evidence since it was filed in October 2023, and I therefore accepted there was no substantial prejudice to the defendants arising from the limited nature of these amendments.

E. Defendants' applications to set aside subpoenas in CIV 2283

1. The plaintiff has also caused three subpoenas to be issued by the court in CIV 2283, directed to Herdsman Technology, Yanchep Investments Pty Ltd (Yanchep Investments) and Mammoth Contracting Pty Ltd (Mammoth Contracting).[43] The subpoenas were issued on 12 December 2023. Yanchep Investments and Mammoth Contracting are also companies which appear to have some connection with the defendants. Ms Bazzo is a director of Yanchep Investments, but not a director of either Herdsman Technology or Mammoth Contracting. Yanchep Investments and Mammoth Contracting share a registered office with Byford River and Herdsman Technology. Mr Caratti is a former director of Herdsman Technology.[44]
2. The documents sought to be produced by the subpoena directed to Herdsman Technology are described as follows:
   1. In relation to an amount of $1 million received by Herdsman Technology from Walthamstow on or about 23 December 2014, all documents relating to the receipt and use of the funds by Herdsman Technology.[45]
3. The documents sought to be produced by the subpoena directed to Yanchep Investments are described as follows:
   1. Any communications or documents recording communications between Yanchep Investments Pty Ltd, GHT (WA) Pty Ltd, Tina Michelle Bazzo and / or Allen Bruce Caratti in relation to a loan or proposed loan from Yanchep Investments Pty Ltd to pay any civil construction costs and City of Wanneroo clearance fees for land at Hocking, Western Australia, namely lot 9001 on Deposited Plan 57007 and lots 9032 and 9033 on Deposited Plan 63464.
   2. Any ledger account(s) maintained by or on behalf of Yanchep Investments Pty Ltd in respect of the loan agreement between Yanchep Investments Pty Ltd, GHT (WA) Pty Ltd and Tina Michelle Bazzo in relation to the subdivision works and the payment of about $1,605,422.
4. The documents sought to be produced by the subpoena directed to Mammoth Contracting are described as follows:
   1. Any invoices rendered by Mammoth Contracting Pty Ltd in relation to the sub-division works the subject of the payment of about $1,605,422 to Mammoth Contracting Pty Ltd on or about 4 August 2017 (Payment).
   2. Any agreement(s) or documents recording any arrangement(s) between Mammoth Contracting Pty Ltd and / or Yanchep Investments Pty Ltd and / or GHT (WA) Pty Ltd and / or Tina Michelle Bazzo for the subdivision works the subject of the Payment.
   3. Any ledger account(s) maintained by or on behalf of Mammoth Contracting Pty Ltd in relation to the subdivision works the subject of the Payment.

1. The defendants have applied, by minute of proposed orders dated 15 December 2023, to set aside the three subpoenas pursuant to O 36B r 8A RSC. The application is supported by an affidavit of Ms Bazzo sworn on 18 December 2023. That affidavit is in similar terms to the affidavit filed in CIV 3136, which I have summarised and addressed above.
2. Again, there appear to be four grounds advanced in support of the application to set aside the subpoenas. First, on case management grounds by reason of the delay. Second, there is no legitimate forensic purpose to seek access to the documents. Third, it is inappropriate to use subpoena in substitution for an application for discovery. Fourth, the subpoenas are oppressive.
3. In dealing with the defendants' applications, I refer to and incorporate the reasons above at [50] to [56] and [60] to [62] concerning the subpoenas issued in action CIV 3136 (as to questions of delay and oppression, and as to the use of subpoenas to circumvent discovery obligations) which apply equally in relation to the subpoenas issued in CIV 2283.

1. Following the hearing on 22 December 2023, I ordered that the subpoena directed to Herdsman Technology be set aside. I did so because the documents sought by that subpoena did not appear to have any legitimate forensic purpose. Put simply, the receipt and use of the funds in question by Herdsman Technology (being funds received from the plaintiff) is not a matter in issue arising on the pleadings in action CIV 2283. The plaintiff's denial of the defendants' plea of loss and damage is not a sufficient basis to contend that it is on the cards these documents will materially assist the plaintiff's position at trial.[46]
2. Absent such a purpose, the subpoena must be set aside.

Disposition - subpoena directed to Yanchep Investments

1. Following the hearing on 22 December 2023, I ordered that the subpoena directed to Yanchep Investments be amended such that the time for compliance be extended to 10.00am on 22 January 2024 (rather than the original compliance date of 12 January 2024), but otherwise dismissed the defendants' application.
2. In contrast to the above subpoena to Herdsman Technology, it was quite clear that the documents sought from Yanchep Investments were of apparent relevance to these proceedings, given the matters expressly pleaded by the defendants at [49(a)] of the Third Amended Defence and Counterclaim. Indeed, as the argument developed, I understood counsel for the defendants to concede there was a legitimate forensic purpose in respect of the subpoenas issued to both Yanchep Investments and Mammoth Contracting.[47]
3. I will elaborate on the pleadings below.
4. In [49] of the Third Amended Defence and Counterclaim, the defendants assert they suffered economic loss and damage by reason of the plaintiff's failure to advance the Second Drawdown amount as required. As a particular of loss and damage, the defendants plead that the second defendant was required to procure a loan for the amount of over $2.1m from Yanchep Investments, to satisfy payment of the civil construction costs and the statutory clearance fees to complete the subdivision (see [49(a)]. Once again, we see that a broad unconscionability plea is asserted by the defendants, relying on s 12CB of the ASIC Act. These claims and allegations are denied by the plaintiff.
5. The pleadings demonstrate that documents such as communications between the parties on the defendants' side regarding this proposed loan, and the ledger accounts maintained by Yanchep Investments in respect of the loan will materially assist the plaintiff in these proceedings.[48] These documents will be relevant to causation, at the very least.[49] Further, the contract attached to Mr Tharby's affidavit affirmed on 14 December 2023 as Attachment AJT-1, which is the loan contract pleaded at [49(a)] of the Third Amended Defence and Counterclaim, makes express reference to a payment to Mammoth Contracting in the sum of $1,605,422.[50] This is the payment identified in category 2 to the subpoena to Yanchep Investments.

Disposition - subpoena directed to Mammoth Contracting

1. Following the hearing on 22 December 2023, I ordered that the subpoena directed to Mammoth Contracting be amended such that the time for compliance be extended to 10.00am on 22 January 2024 (rather than the original compliance date of 12 January 2024), but otherwise dismissed the defendants' application.
2. The legitimate forensic purpose which underpinned this subpoena has been touched on above, at [97]. The subpoena to Mammoth Contracting seeks production of documents relating to the arrangement with Mammoth Contracting to carry out sub-division works, invoices rendered by that company, and its ledger accounts. These documents are all likely to contain information which is relevant to the contested plea at [49(a)] of the Third Amended Defence and Counterclaim, which forms part of the defendants' claim for loss and damage, said to flow from the plaintiff's failure to advance the Second Drawdo[51] amount.51

1. For the foregoing reasons, I made the relevant orders on 22 December 2023 in these actions which are set out in Attachments A and B hereto.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Walthamstow Pty Ltd v Caratti [No 4] [2024] WASC 1.

[2] Walthamstow Pty Ltd v Caratti [No 3] [2023] WASC 413 [3] - [5].

[3] Accepting the force of the defendants' submissions filed on 14 December 2023 at [1.1] - [1.3], referring to George 218 Pty Ltd v Bank of Queensland Ltd [2015] WASC 434 (S) [16] (Mitchell J).

[4] Fourth Amended Defence in CIV 3136, [39.1] and [39.2].

[6] ASOC in CIV 3136, [4] - [6], [11] and [39].

[7] Fourth Amended Defence in CIV 3136, [39.1] and [39.2].

[8] The defence pleads the amounts applied in respect of 9 lots, over the period from 29 June 2016 to 27 February 2017.

[9] Third Amended Substituted Reply in CIV 3136, [29] and particular [ix].

[10] Walthamstow Pty Ltd v Caratti [No 4] [14] - [16].

[11] As to which, I refer to my observations in Walthamstow Pty Ltd v Caratti [No 4] [16] as to the principles applicable to this statutory provision.

[12] Palmer v Citic Ltd [No 8] [2023] WASC 221.

[13] Hightime Investments Pty Ltd v Lungan [No 2] [2010] WASC 296.

[14] Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 (Aon Risk).

[16] Mann v Bankwest - A Division of Commonwealth Bank of Australia [2020] WASCA 35.

[17] Nominal Defendant v Gabriel [2007] NSWCA 51; (2007) 71 NSWLR 150 [110] - [111] (Campbell JA for the plurality).

[18] Plaintiff's submissions dated 20 December 2023, [2].

[19] Rural Bank Ltd v Mammoth Investments Pty Ltd [2019] WASC 409 [42].

[20] Relying on Aon Risk and Attorney-General of Botswana v Aussie Diamond Products Pty Ltd [No 2] [2009] WASC 301 [80].

[22] The term Loan is defined in the subpoena to mean the loan from the plaintiff to Herdsman Technology for the principal sum of $14.34m pursuant to a mortgage dated 20 April 2015.

[23] The term Loan is defined in the subpoena to mean the loan from Angas Securities to Byford River for the principal sum of $4.7m pursuant to a Loan Agreement dated 8 November 2012, assigned to the plaintiff pursuant to a Deed of Assignment of Securities dated 19 November 2015.

[24] Hongkong Xinhe International Investment Company Ltd v Bullseye Mining Ltd [No 4] [2021] WASC 287 [10] - [11].

[25] Kestell v Davey [2022] WASC 32 [12] - [18].

[26] Fourth Amended Defence in CIV 3136, [39.1] and [39.2].

[28] Palmer v Citic Ltd [No 6] [2023] WASC 188, which analysed the decision of the Court of Appeal in Rankilor v City of South Perth [2016] WASCA 28, an authority on which the defendants relied in their written submissions.

[29] Palmer v Citic Ltd [No 6] [22] - [33].

[30] Walthamstow Pty Ltd v Caratti [No 3] [10] - [22] and Attachment A at [1] - [6].

[31] Plaintiff's submissions dated 20 December 2023, [7].

[32] Affidavit of Mr Tharby affirmed 24 October 2023, Attachment AJT-1.

[33] Keris Loan Agreement, cl 1.1 and cl 2.1(b).

[34] Plaintiff's submissions dated 20 December 2023, [8] - the reference to cl 2.2(b) (which does not exist) is intended to be a reference to cl 2.1(b).

[35] Commonwealth of Australia v Albany Port Authority [2006] WASCA 185 [23] - [24] (Steytler P) and [70] (Pullin JA).

[36] Commonwealth Bank of Australia Ltd v Saraceni [2013] WASC 115.

[37] Footnote from earlier reasons: 'Substituted Amended Defence and Counterclaim dated 17 September 2023 [39]. The admission appears to have been first introduced in February 2023 through the introduction of [20] to the plaintiff's pleading.'

[38] Affidavit of Mr Masel in CIV 2283, [3].

[39] Affidavit of Mr Tharby sworn 14 December 2023 in CIV 2283, [10].

[40] This sub-paragraph had been inserted with leave in October 2023, which was not opposed.

[41] This sub-paragraph had been inserted with leave in October 2023, and had been the subject of opposition from the defendants: Walthamstow Pty Ltd v Caratti [No 3] Attachment A at [7] - [10].

[42] Plaintiff's submissions dated 20 December 2023, [14] and [15].

[43] The plaintiffs also caused a further subpoena to be issued, directed to the City of Wanneroo. However, there was ultimately no dispute raised by the defendants in relation to this subpoena: ts 643.

[45] The term Loan is defined in the subpoena but not operatively used within the subpoena.

[50] Schedule to the Loan Contract which is Attachment AJT-1, item 1(a), which states: '$1,605,422.00 - payable to Mammoth Contracting Pty Ltd for sub-division works': ts 652 - 653.