A well-directed, well-drafted subpoena is an invaluable weapon in the armoury of the corporate litigator. In this article, Associate McKenzie Moore discusses recent changes to procedural rules governing subpoenas in the Equity Division of the NSW Supreme Court as well as the Court’s recent decision In the Matter of North Coast Transit Pty Ltd [2013] NSWSC 191 (Busways).

Practice Note SC Eq 11

On 26 March 2012, the NSW Supreme Court issued Practice Note SC Eq 11 (Practice Note) which applied to all new and existing proceedings in the Equity Division. The Practice Note sets out that the Supreme Court will not make an order for disclosure of documents until the parties to the proceedings in the Equity Division have served their evidence, unless there are exceptional circumstances necessitating such disclosure.

While it has become clear over the past 2 years that Notices to Produce can subvert the provisions of the Practice Note, it is unclear whether subpoenas issued in the Equity Division of the NSW Supreme Court can fall foul of the Practice Note.

To Subpoena or Not to Subpoena in the Equity Division?

In Busways, the Eighth to Sixteenth Defendants caused a subpoena to be issued to the Proper Officer of Transport for NSW (TfNSW) requiring production of copies of confidential Sydney Metropolitan Bus Service Contracts with four different bus service companies (Interested Parties) with the purpose of assisting their expert on opining on the value of the Busways transport company (Subpoena). Piper Alderman represented 3 out of the 4 Interested Parties in an application as relevant parties under r33.4 of the Uniform Civil Procedure Rules 2005 (NSW) to set aside the Subpoena. TfNSW also applied to have the Subpoena set aside. His Honour Justice Black heard the Motion.

The Interested Parties argued that the Subpoena should be set aside as it was both oppressive and an abuse of process in that it had no legitimate forensic purpose, and the expert was not qualified to opine on the evidence contemplated by the Defendants. In addition, it was alternatively submitted that the Subpoena should be set aside by reference to the Practice Note. That is, the Interested Parties argued that the issue of the Subpoena was premature given the Statement of Claim was currently being amended and evidence had yet to be filed, and relied upon the unreported case of New Price Retail Services v Hanna; Australian Pharmaceutical Industries v Hanna [2012] NSWSC 422. In that case, Justice McDougall found  that  subpoenas  issued  in  those proceedings  were  not  issued  for  a  legitimate forensic  purpose  where  a  Commercial  List Response and evidence had yet to be filed.

Justice Black held that in accordance with the primary submissions by the Interested Parties, the Subpoena should be set aside in general as it was oppressive and/or an abuse of process. He was therefore, not required to decide whether the Court had a wider discretion to set aside the Subpoena on the basis that its issue was premature and was an attempt to subvert the Practice Note.

However, his Honour did observe (at [55]) that a subpoena issued to a third party requiring the production of several specifically identified documents would not, in the ordinary course, be inconsistent with the objectives of the Practice Note, such that it could be characterised as subverting those objectives. His Honour then went on to remark that he could, however, see considerable force in the reasoning of Justice McDougall in New Price and noted that similar considerations to those underlying the Practice Note attend to the issuing of subpoenas where documents are sought from third parties. As such, his Honour noted in obiter that an issuer of a subpoena should be able to demonstrate from the pleadings and from the evidence the precise issues in respect of which production of documents are required.

Has it all become clearer?

It is clear that subpoenas do not in the first instance fall within the confines of the Practice Note. Nevertheless, legal practitioners need to be careful about the way they craft the scope of documents sought and the timing of any subpoenas issued in the Equity Division of the NSW Supreme Court. As such, they should expect a critical view to be taken of subpoenas issued early in the proceedings, including where expert evidence is used as the basis for a request for disclosure of documents.

Where a subpoena is directed towards a clearly identified set of documents which have demonstrable forensic value to the issuing party, it is reasonable to assume that the courts will find that the subpoena is not attempting to subvert the confines of the Practice Note. However, it may be more difficult to demonstrate the precise issues in respect of which production of documents by a third party under a subpoena is required where the pleadings and evidence are not progressed.