McEwan v Rains & Ors

This case arose out of an application to set aside subpoenas requiring the attendance of witnesses and the production of documents at the hearing of an originating application. The primary judge had set aside the subpoenas on the basis of the principles expressed by Beazley JA in A-G (NSW) v Chidgey. However, the Court of Appeal allowed an appeal against these orders, finding that the primary judge had failed to take into consideration the line of cases since Secretary of the Department of Planning, Industry and Environment v Blacktown City Council [2021] NSWCA 145 which had reconsidered Chidgey.

McMurdo and Bond JJA and Callaghan J

30 June 2023

Background

On 4 April 2019, the appellant (Ms McEwan) was charged with certain offences relating to her interactions with the Australian Tax Office (including attempting to dishonestly obtain a financial advantage, contrary to s 134.2(1) and 11.1 of the Criminal Code 1995 (Cth)) (the “ATO charges”). [2]. Broadly speaking, the ATO charges relate to the appellant having claimed a research and development tax offset. [11].

By originating application filed 3 August 2022, the appellant sought a permanent stay of the ATO charges, including on the basis that they were oppressive, for an illegitimate purpose, or brought the administration of justice into disrepute. [4].

In anticipation of the hearing of her originating application, the appellant caused the issue of nine subpoenas requiring certain persons to give evidence and produce documents. [6]. At first instance, on application by the respondents (pursuant to r 416 of the UCPR), the primary judge ordered that each of the subpoenas be set aside. [35]–[36].

This judgment concerned an appeal against the primary judge’s orders to set aside the subpoenas. In the result, the Court (per Bond JA, with McMurdo JA and Callaghan J agreeing) upheld the appeal and set aside the primary judge’s orders. [7].

The test applied by the primary judge

In reaching the conclusion that the subpoenas should be set aside, the primary judge had considered that the relevant test was two-fold (at [38]):

1.First, that the appellant must identify a legitimate forensic purpose for which the evidence was sought; and

2.Second, that the appellant must establish that it was “on the cards” that the evidence would materially assist her case.

In approving that test, the primary judge had applied the reasoning of Beazley JA in Attorney-General (NSW) v Chidgey (2008) 182 A Crim R 536 (“Chidgey”). [37].

The primary judge concluded that he was not satisfied that there was a proper basis for the subpoenas, as it was not on the cards that evidence that might be given by the subpoenaed witnesses might materially assist the appellant on her stay application. [40]. That included because some of the evidence sought was about different criminal charges that had previously been brought against her, and because it was unlikely that persons subpoenaed would give evidence that they had conspired to make false allegations against the appellant (as she contended). [40].

Why the appeal was allowed – an incorrect application of principles

The Court of Appeal said that, unfortunately, the primary judge’s attention had not been drawn to cases subsequent to Chidgey, in particular to Secretary of the Department of Planning, Industry and Environment v Blacktown City Council [2021] NSWCA 145 (“Blacktown City Council”), which had “reconsidered the line of previous authorities, distinguished Chidgey and articulated the considerations relevant to such an application rather more broadly than recorded by his Honour” (the primary judge). [44].

The Court of Appeal outlined a lengthy list of considerations which were said to be relevant to the exercise of the discretion to set aside a subpoena, as articulated in Blacktown City Council. Amongst those considerations were that a subpoena will be an abuse of process, and should be set aside, if it is not issued for a legitimate forensic purpose. However, it was also said that a subpoena will be presumed to have been issued for a legitimate forensic purpose “if the documents sought are ‘apparently relevant’ to the issues in the proceeding”. [46].

The important point for the purposes of this appeal was that the primary judge had taken “too narrow an approach to the resolution of the issues which were relevant to the exercise of his discretion”. [48]. In particular, his Honour had “erred by concluding that mere relevance was not enough and that the appellant had to demonstrate some degree of likelihood that the evidence sought to be obtained by the subpoena would … advance her case”. [48].

Accordingly, the orders which the primary judge had made (to set aside the subpoenas) were themselves set aside. [50]. The subpoenas previously issued were, in any event, no longer of any utility, since they required attendance and production at a hearing scheduled in the past. Once a new date for a hearing of her originating application was fixed, the appellant would have to give consideration to issuing fresh subpoenas, “no doubt bearing in mind the considerations articulated in these reasons”. [50].

W Isdale of Counsel