Cohen v Fealy[2020] QDC 271

DISTRICT COURT OF QUEENSLAND

Introduction

1. [1]
   By way of application filed on 28 August 2020, the defendant has applied to this court for the following orders:

1. That all subpoenas issued by the court in connection with the request for subpoena filed by the plaintiff on 29 June 2020 be set aside nunc pro tunc as an abuse of process, pursuant to the court’s inherent jurisdiction.
2. Alternatively, that all subpoenas issued by the court in connection with the request for subpoena filed by the plaintiff on 29 June 2020 be set aside nunc pro tunc pursuant to rules 371(2) and/or 416 of the Uniform Civil Procedure Rules 1999 (Qld).
3. The plaintiff pay the defendant’s costs of the application.

2. [2]
   By way of ex parte applications filed on 31 August 2020, the plaintiff applies for the following ex parte orders against six named persons:

1. That [named person] be arrested and brought before the District Court of Queensland at Beenleigh for contempt as soon as practicable and to detain him in custody until released by the court.
2. [Named person] has, without lawful excuse, failed to comply with the subpoena filed in this court on 29 June 2020 and mailed to him by way of service on 29 June 2020.
3. The third party/respondent pay the costs of the application.

3. [3]
   The named persons are: Paul Holland, Alan Townson, Martin Overman, William Bass, Brad Shanahan and Ian Tomlinson.
4. [4]
   All of the applications before this court depend on a fundamental issue, whether the subpoenas issued by the plaintiffs to the named persons are an abuse of process.

Background to the applications

5. [5]
   By way of claim and statement of claim filed on 20 May 2020, the plaintiff is seeking damages in the sum of $500,000 plus interest as a result of allegedly defamatory statements made by the defendant at the monthly board meeting of the “United Grand Lodge of Antient Free and Accepted Freemasons of Queensland” on 21 May 2019.  The statement of claim alleges that the defendant in the course of the board meeting uttered these words to the plaintiff: “You paid Kerri Smith Douglas to lie for you in an affidavit that was filed in court”.
6. [6]
   A number of people are alleged to have been present at the time those words were uttered, including the six persons named above.
7. [7]
   A notice of intention to defend was filed on 18 June 2020.  Relevantly for the purpose of the applications, the defendant denies speaking or publishing the words alleged.
8. [8]
   In support of the plaintiff’s claim, an affidavit of Raymond John Saunders was filed on 2 July 2020, in which he states that he chaired the board meeting of the United Grand Lodge of Antient Free and Accepted Masons of Queensland on 21 May 2019.  He asserts that he heard the defendant in raised voice say the alleged defamatory words to the plaintiff in the company of the other members present.

The subpoenas

9. [9]
   The affidavit of the plaintiff filed on 31 August 2020 attaches the subpoenas that were issued by the registry to the named persons, and the covering letters that were sent to each of the named persons.  A cheque of $50 as conduct money was provided to each of the named persons.  The terms of each subpoena are the same.  The subpoenas required the named persons to produce documents described in the schedule by 31 July 2020 at 10.00 am.  The documents required were:

“Whether in paper form or electronic form, whether originals, copies or backups –

1. All correspondence between yourself and any other director, employee, contractor, member or any other person, which contains the name (or any variation thereof) of the plaintiff and/or his role or refers to the plaintiff and/or his role for the period 1 May 2018 to date.

2. All diaries, correspondence and notes of discussions, phone calls, meeting minutes, and copies of all recordings relating to paragraph 1 above.

3. All electronic communication records, including emails and texts, relating to paragraph 1 above.”

10. [10]
    Attached to the affidavit of the plaintiff is an email exchange between one of the named persons, Mr Bass, and the plaintiff.  Mr Bass contacted the District Court Registry and was advised that he should respond to the subpoena.  He queried whether a memory stick was required to be produced.  In the return email the plaintiff advised that a memory stick was included within the words “electronic form” of the subpoena.
11. [11]
    Also attached to the plaintiff’s affidavit of 31 August 2020 is a letter dated 14 July 2020 from Barry.Nilsson.Lawyers, marked “Urgent”.  The letter advised the plaintiff that the law firm had been engaged to act for the named persons for the “discrete purpose of responding to the subpoenas for production”.  The letter advised the plaintiff that subpoenas are designed to have witnesses appear in person or with documents at the trial of proceedings.  It was stated that “They are not designed to enable a party to access documents during the currency of proceedings prior to trial.  The Uniform Civil Procedure Rules 1999 (Qld) regulates disclosure of documents between parties in the first instance, and therefore from non-parties via non-party disclosure.”
12. [12]
    Reference was made to the decision of Mackenzie J in re: Leighton Contractors Pty Ltd v Western Metals Resources Limited [2001] 1 Qd R 201, and it was asserted that in the absence of trial dates being set, the subpoenas issued were an abuse of process and ought to be set aside.  The plaintiff was advised in the letter that a notice of non-party disclosure was the appropriate mechanism for seeking disclosure from non‑parties to civil litigation in Queensland, “once disclosure is completed between the parties, not a subpoena for production.”  The plaintiff was then invited to bring an application himself to seek orders that the subpoenas be set aside, and if that did not occur the subpoenaed individuals “will have no alternative but to bring separate applications seeking orders that the subpoenas be set aside and that you pay their costs of and incidental to such applications.”
13. [13]
    In a letter reply dated 15 July 2020, the plaintiff stated that he subpoenas “were not designed to be a substitute for non-party discovery nor served to circumvent the non‑party disclosure rules.”  Reference was made to the “latest edition of Australian Civil Procedure” by Bernard Cairns, and Lucas Industries Ltd v Hewitt (1978) 45 FLR 91.  The plaintiff asserted that “there is a series of emails between the named individuals that are contemporaneous with the relevant meeting.  I can give consideration to your request if these emails are supplied to me.”
14. [14]
    The plaintiff went on to state as follows:

“In this particular case, the subpoenas were issued and served as they are the most efficient method for ensuring that evidence is preserved and protected for the trial.  The recipients of the subpoenas are either people who are in their offices for short periods of time or have left their offices.  They are not an abuse of process.  Also, the court controls the disclosure of documents.

15. [15]
    The plaintiff went on to assert that it was “highly inappropriate” that the law firm should represent both the defendant as well as the subpoenaed individuals.
16. [16]
    By way of letter dated 16 July 2020, the lawyers for the defendant and the subpoenaed persons requested an extension of the time and date for compliance with the subpoenas until 28 August 2020.  That was requested because the plaintiff was going to be away on holidays for about two weeks, and “this will allow time for you to properly consider and act upon the matters raised by our letter dated 13 July 2020”.^[1]
17. [17]
    By way of letter dated 25 August 2020, the plaintiff referred to his agreement with an extension to comply with the subpoenas to 28 August 2020.  The plaintiff was then advised by the lawyers for the defendant that the named persons would not comply with the subpoenas.  In the letter of 25 August 2020, the plaintiff said this:

“This extension was provided in good faith on the understanding that the named individuals would comply with the subpoenas.  It is concerning why the named individuals do not want to comply.  You, on their behalf, requested an extension to comply.  What is the information that the named individuals do not want to supply?  It is also obvious from your letter of offer of 13 August 2020 that you have interviewed the named individuals, I do not understand how you can continue to act for the named individuals.  I reiterate that should the named individuals make an application to have the subpoenas set aside that I will require all of them to give evidence in relation to such application.”

18. [18]
    It should be noted that on the hearing of this matter there was no application to question any of the named persons.
19. [19]
    By way of letter dated 25 August 2020, the lawyers for the defendant said as follows:

“With respect, there appears to have been a misunderstanding of our previous communications. Our clients’ position remains as articulated in our letters to you of 14 July 2020 and 13 August 2020.

The extensions of time under Rule 415A(1) of the Uniform Civil Procedure Rules 1999 (Qld) were proposed by us for your benefit.  Specifically, to allow you sufficient time to consider our proposal that you file an application to set aside the subpoenas (with any such application to be consented to by our clients).

We now understand that you have no intention to file the proposed application.  Therefore, our clients have no option but to file their own application, seeking an order setting aside the subpoenas.  We shall file and serve the application by the end of this week.

We reserve our clients’ rights to rely on this correspondence on the issue of the costs of the application.”

Relevant Rules

20. [20]
    The Uniform Civil Procedure Rules 1999 (“UCPR”) provide procedures for non‑party disclosure, as well as procedures for issuing subpoenas for witnesses to give evidence, and for witnesses to produce documents.  Relevantly, r 242 states as follows:

“(1) A party (the applicant) to a proceeding may by notice of non‑party disclosure require a person who is not a party to the proceeding (the respondent) to produce to the applicant, within 14 days after service of the notice on the respondent, a document —

(a) directly relevant to an allegation in issue in the proceedings; and

(b) in the possession or under the control of the respondent; and

(c) that it is a document the respondent could be required to produce at the trial of the matter.

(2) The applicant may not require production of a document if there is available to the applicant another reasonably simple and inexpensive way of proving the matter sought to be proved by the document.”

21. [21]
    A respondent must comply with the notice but not before the end of seven days after service of the notice on the respondent.  The form and service of notice are set out in r 243.  A respondent to a notice can object to disclosure, pursuant to r 245.  The production and copying of documents pursuant to a notice is provided by r 248; the costs of complying with a notice must be met by the applicant pursuant to r 249.
22. [22]
    The rules relating to subpoenas are contained in Part 4 UCPR.  Relevantly, r 414(2) states that the court may, on its own initiative or at the request of a party to a proceeding, issue a subpoena requiring the person specified in the subpoena to produce a document or thing as directed by the subpoena.  The formal requirements of a subpoena are set out in r 415.  The date or time for attendance or production can be changed pursuant to r 415A.  The court has power to set aside a subpoena pursuant to r 416.  R 420 sets out the procedures for production on subpoena by a person who is not a party to the litigation.

Relevant authorities

23. [23]
    In Re Qld Trustees (1987) 72 ALR 287, Pincus J considered an application for leave to issue a subpoena duces tecum early in proceedings brought for contraventions of the Trade Practices Act 1974 (Cth).  His Honour observed that the application was brought very early, and that the principal proceedings had not been served.  His Honour said this at 291:

“In general, subpoenas at such an early stage should be discouraged, as it is undesirable to use the process of subpoena as a means of investigation.  I am, however, satisfied that in this case the applicant trustee proposes what is a just and convenient course.

I discussed the power to issue subpoenas of this sort in Greyhound Australian Pty Ltd v Deluxe Coachlines Pty Ltd (1986) 67 ALR 93 at 98 and said that the: ‘… process should ordinarily be allowed only when it is clearly seemed to be necessary.  As a general rule, the court should not, in my view, trouble strangers to the proceeding with subpoenas duces tecum except in respect of a hearing at which the subpoenaed documents may be used.’

In Re FCT; Ex parte Swiss Aluminium Australia Ltd (1986) 68 ALR 587 at 590, Beaumont J said, in effect, that before exercising its discretion to order a stranger to produce documents before trial: ‘…the court will need to be satisfied that a legitimate forensic interest is being advanced by the adoption of this special procedure.’”

24. [24]
    In Re: Leighton Contractors Pty Ltd v Western Metals Resources Limited [2001] Qd R 261, Mackenzie J considered the history in Queensland of non-party disclosure.  Following the enactment of Chapter 7, Part 2 UCPR, His Honour queried “whether there is any reason to think that it is permissible to use a subpoena to obtain what is really non-party disclosure.”  His Honour then said the following:

“[20] The rules relating to non-party disclosure are designed to provide safeguards to a non-party upon whom a notice is served and to more remote persons who may be affected.  Where a deliberately prescriptive regime is provided for the obtaining of documents from a non-party the question presents itself whether the intention was that those safeguards might be avoided by using a different procedure with requirements which are different but which have some common features.  Further, the fact that there is a verbal difference between the repealed rules and the UCPR does not necessarily require the conclusion that there is a difference in substance.  The notion of appearing before a court or person required to take evidence, even in the absence of the words ‘at hearing or trial’, is not inconsistent with the UCPR being intended to relate to appearance at trial or hearing especially where there is a distinct and closely regulated procedure for obtaining disclosure in the pre-trial phase.

[21] In my opinion there is no indication in the rules that it is intended that what is really non-party disclosure in the pre- trial phase may be obtained by issuing a subpoena to produce.  In my opinion the rules do not affect a change from the philosophy in that regard under the repealed rules.

[22] While it is not incumbent on the registry to make specific enquiries in this regard, if it is apparent that a request for a subpoena is being made where it is unconnected with a trial or hearing, it would be appropriate for the discretion in R414(4) to be exercised against issuing it.  There can now be no misapprehension about the scope of the respective rules and any attempt henceforth to use a subpoena for the purpose of obtaining disclosure would be an abuse of process.  If a subpoena were issued for that purpose, it would be liable to set aside on that ground.”^[2]

25. [25]
    In Xstrata Queensland Ltd v Santos Ltd & Ors [2005] QSC 323, McMurdo J considered applications to set aside subpoenas seeking production of documents pursuant to s 17 Commercial Arbitration Act 1990.  His Honour observed that that Act made no provision for the process of non-party disclosure, unlike the UCPR.  His Honour discussed the decision in Leighton Contractors Pty Ltd v Western Metals Resources Limited, supra, and observed that Mackenzie J in that case “did not hold that in proceedings in the court, a subpoena could require documents to be produced only at the trial of the proceeding.  He noted that the subpoena in that case was not issued for the trial or an interlocutory application.  Moreover, to distinguish between a trial and some other hearing, in the context of an arbitration, would not be straightforward in many cases, having regard to the intended flexibility of arbitration proceedings.”
26. [26]
    His Honour observed at [44]:

“Apart from the impact of the UCPR, the general rule is that the documents the subject of a subpoena must be apparently relevant, and that it need not be demonstrated that the documents would be admissible in the proceeding at the stage when the court is considering whether inspection by the parties should be permitted.”

His Honour went on to say the following:

“[46] In contrast with the rules for disclosure between parties or by non-parties, the rules dealing with the subpoenas do not, at least expressly, require that the documents be directly relevant.  There is no particular basis for thinking that the differences are through a drafting error.  The processes of disclosure and subpoena have many differences.  One already mentioned is that disclosure, even by a non-party, ordinarily involves no order by or other involvement of the court.  To confine the process of disclosure to a more limited category of documents might be thought to be more appropriate where ordinarily the process is pursued with involvement of the court.

[47] In my view the rules relating to subpoenas, and particularly r 414 should not be limited by implication, such that the court could issue only a subpoena requiring directly relevant documents.  Nor should the power under the Commercial Arbitration Act be so limited.  To an extent, the policy evident in limiting disclosure to directly relevant documents, might inform the exercise of the court’s discretion in relation to a subpoena.  That policy recognises a proliferation of documents unheard of when previous rules were formulated, and the consequent need to confine the process of disclosure to avoid its being an oppressive burden.  It does not follow that, in general, a subpoena should be set aside if it requires the production of more than is directly relevant.  The documents must be apparently relevant in the sense explained by the authorities.  But the relative likelihood of the documents being ultimately admitted in evidence is a factor to be considered in assessing whether the subpoena is oppressive.”

27. [27]
    In Heritage Bank Limited v Gleeson & Anor (No. 3) [2020] QDC 217, Porter QC, DCJ observed that subpoenas were not commonly used in interlocutory applications.  He observed that there was no limit of the use of subpoenas in interlocutory proceedings evident in either the UCPR nor the Civil Proceedings Act 2011.  After quoting r 414(2), his Honour said the following:

“[69] Neither this rule specifically, nor the rules governing subpoenas generally, confine the power to issue a subpoena to the obtaining evidence for use in the trial of a proceeding.  The lack of any express provision limiting use of subpoenas to obtaining evidence for the trial of a proceeding does not mean, of course, that such a limitation might not be inferred. However, a statutory provision in very similar (though not quite identical terms) was construed as authorising the issue of a subpoena in an interlocutory matter in Adelaide Steamship Co v Spalvins 24 ACSR 536 at 543-544, (note in particular definition of proceeding in that case and in the Dictionary in the CPA which apply to the UCPR under Rule 4 are relevantly similar).

[70] The point might not be beyond argument, however it was not argued in this application and I consider by far the better view is that the power exists. However, in assessing whether a subpoena should be set aside on one or more of the grounds recognised at law, it might be relevant that it is issued in the context of an interlocutory application.”

28. [28]
    The plaintiff raised the issue of whether the defendant had standing to set aside subpoenas issued to non-parties.  The defendant referred to Darwen & Anor v Pacific Reef Fisheries (Australia) Pty Ltd & Ors [2009] QPEC 29.  In that case His Honour Alan Wilson SC, DCJ, as His Honour then was, was sitting in the Planning and Environment Court of Queensland.  In that case there was an argument about costs where a subpoena had been issued in order to ensure compliance with an original notice of non-party disclosure.  At the outset of the hearing counsel appearing for the applicants advised the court that compliance with the notice of non-party disclosure would not be pursued, and as a result the subpoena was also to be discharged.  Consent orders were made to that effect.  His Honour said the following:

“[9] It is unarguable that the subpoena was issued in an attempt to achieve compliance with the Notice of Non-Party Disclosure which had previously been directly to Mr Burch’s employer, but by an alternative method.  On its face that is an abuse of process, and was so described by Mackenzie J in Re Leighton Contractors Pty Ltd v Western Metals Resources Limited [2001] 1 Qd R 262, at 265.

…

[10] The right of a party to argue that a subpoena issued by another party should be set aside (with costs) was apparently accepted, without debate, in this court in Lewiac Pty Ltd & Anor v Gold Coast City Council & Ors [2003] QPELR 151.  The question had, however, been earlier explored by Powell J in Botany Bay Instrumentation & Control Pty Ltd v Stewart (1984) 3 NSWLR 98 in which his Honour, while unable to locate any authority on the point, was nevertheless satisfied that (as two earlier practice decisions suggested) there was sufficient support for the view that an application to set aside a subpoena which is, on its face, an abuse of process may be made not only by the person to whom the subpoena is directed, but also by a party to the litigation.”

Consideration

29. [29]
    During the course of the hearing before me the plaintiff made a reasonable submission that the defendant, applying to have the subpoenas set aside, failed to name the subpoenaed persons as parties to the application, pursuant to r 31(3).  The defendant submits that this is a minor irregularity, and that the court could order pursuant to r 371 that the application is effectual, and that the application is not a nullity.  On the material before me it is clear that the lawyers for the defendant have been engaged by the subpoenaed persons the subject of the application, and therefore there is no prejudice to those persons by the court considering this application without them being specifically named as parties.
30. [30]
    In essence the plaintiff submitted that it was essential to issue the subpoenas in order to preserve potentially relevant evidence.  Reference was made to Lucas Industries Ltd v Hewitt (1978) 45 FLR 91; 18 ALR 555.  In that case, orders were made about the filing and serving of affidavits of expert witnesses.  The affidavits of the experts on each side had been filed and delivered, and the next step was that the parties should prepare and file affidavits in reply to the experts of each side.  In that case the appellant issued subpoenas to non-parties which were necessary for the consideration of the experts.  Smithers J, with whom Bowen CJ and Nimmo J agreed, said this at 565 of the Australian Law Report version:

“In a case where the filing and serving of affidavits of experts before the hearing is ordered, and where there are documents in the possession of a stranger to the litigation, the existence and relevance of which appears from the affidavits filed and served by way of evidence in chief, and the contents of those documents is seen to be proper for consideration of and comment by experts by affidavit in reply, practical considerations point to the desirability of those documents being produced when the time of the preparation of affidavits of experts in reply has arrived.  In these proceedings that time has arrived.”

31. [31]
    His Honour said this at 566:

“I see nothing in any of the authorities to throw doubt on the principle that when, according to the nature of any particular proceeding, considerations of justice and convenience require production of relevant documents at some particular time, whether before or after trial, production should then be ordered.  So far as this case is concerned, if there are relevant documents the contents of which would be proper material for expert comment and opinion and they are not produced before the trial, then when the documents are ultimately produced the experts would have to consider them at that stage and any comments and opinions arising in respect to them would have to be made the subject of further affidavits, presumably on leave being obtained.”

32. [32]
    It is clear that case falls to be considered on its own facts, and is not comparable to the situation here.  The letter of the plaintiff of 15 July 2020, attached to his affidavit filed on 31 August 2020, asserts that “There is a series of emails between the named individuals that are contemporaneous with the relevant meeting.  I can give consideration to your request if these emails are supplied to people.”  Despite that, the terms of each subpoena are very broad indeed.  The plaintiff on the hearing made it clear that he was expecting, but in reality hoping, that there may be emails or text messages between the named persons or others referencing the plaintiff, and perhaps indicating that the alleged defamatory words were said.
33. [33]
    The plaintiff clearly could have issued a notice of non-party disclosure to each of the named persons pursuant to r 242.  There is no logical reason why he did not do so, other than perhaps documents sought under r 242 need to be directly relevant to an allegation in issue in the proceeding, as opposed to documents requested by subpoena, which must only be “apparently relevant”.
34. [34]
    On the clear line of authority discussed above, the seeking of the subpoenas in question are a clear abuse of process.  I therefore make the following orders:

1. The subpoenas issued by the court in connection with the request for subpoenas filed by the plaintiff on 29 June 2020 to the named persons in the application be set aside nunc pro tunc.
2. The plaintiff’s application that the subpoenaed persons be arrested and dealt with for contempt of court are dismissed.

35. [35]
    On the question of costs, the plaintiff was given clear opportunity to have the subpoenas withdrawn and to start again by seeking non-party disclosure.  In the circumstances the defendant is entitled to his costs, to be agreed by the parties or to be assessed on the standard basis.
36. [36]
    In this case the plaintiff said that some of the subpoenaed persons had banked the cheques received for conduct money. As there has been no compliance with those subpoenas, the conduct money should be returned to the plaintiff.