SUPREME COURT OF VICTORIA
		
	COMMERCIAL LIST	Do not Send for Reporting	
	Not Restricted	

No. 5660 of 1997
F4920

Commonwealth bank of Australia
(ACN 123 123 124)	Plaintiff	
		
v		
		
peter everett white	Defendant	

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JUDGE:	Byrne J	
WHERE HELD:	Melbourne	
DATE OF HEARING:	12 February 1999	
DATE OF JUDGMENT:	26 February 1999	
CASE MAY BE CITED AS:	Commonwealth Bank v White	
MEDIA NEUTRAL CITATION:	[1999] VSC 27		

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Practice and Procedure - subpoena - application by party for inspection of documents produced - right of evidence of non-party - relevance of documents produced.

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APPEARANCES:
	Counsel	Solicitors	
For the Plaintiff
	Mr P. Bick QC	I.F. Purbrick	
For the Defendant	Mr G. Nettle QC with 
Mr M. Moshinsky	Foster Hart	
			
For the Society of Lloyd’s	Dr I. Hardingham	Freehill Hollingdale & Page	

HIS HONOUR:
1	In this proceeding, the plaintiff, the Commonwealth Bank of Australia, sues Peter Everett White to recover moneys advanced to him for use in a Lloyd’s underwriting syndicate.  Mr White has on 30 January 1998 filed a third party notice directed against the Society of Lloyd’s.  
2	In his amended third party statement of claim filed on 21 October 1998 Mr White puts his case against the Society in some six ways.  He says, first, that, in or about October 1980 he became an underwriting member of the Society with an initial premium limit of £200,000 and that he did so in reliance upon a number of representations made by or on behalf of the Society.  He remained an underwriting member in each of the years from 1981 to 1992 inclusive, increasing in September 1984 his premium limit to £300,000 and in October 1987 to £600,000.  He says he received from the Society each year documents containing further representations.  It is said that these representations were erroneous and amounted to misleading and deceptive conduct and negligent misstatement.  These are the first two causes of action.  Next, it is put that the offering to the public of Victoria of underwriting membership of the Society in 1980 was the offering of an “interest” within the meaning of s. 76 of the Companies Act 1961 and it was in 1984, 1986 and 1987 a “prescribed interest” within the meaning of s. 5 of the Companies (Victoria) Code.  In each case the offering of such an interest or prescribed interest was made by the Society in contravention of the provisions of the relevant companies legislation including provisions relating to prospectuses.  As a consequence of this, Mr White says, the agreement which he made with the Society is void or unenforceable for illegality or it gives rise to an entitlement to damages.  Fifth, he contends that a document called a General Undertaking, which I assume he signed in 1986 or 1987, is void as being contrary to public policy or is unconscionable.  In this General Undertaking Mr White agreed to the exclusive jurisdiction of the Courts of England in respect of disputes with the Society.  He says that this General Undertaking was sought and obtained by the Society in order to defeat his rights under the Trade Practices Act, the Fair Trading Act and the relevant Companies legislation.  Finally, he contends that cl. 5.5 of a contract, called in the pleading the Reinsurance Contract which was entered into in 1995 or 1996, is likewise void or unconscionable.  This brief summary is not intended to be a comprehensive account of what is a complex and lengthy pleading.  
3	The third party notice was on 12 February 1998 served on the Society in London and on 6 May 1998 on Lloyds Australia Ltd in Sydney.  The service in Sydney was intended as service on the Society through Lloyds Australia as its wholly owned subsidiary and agent.  The Society on 20 March 1998 and 13 May 1998 respectively filed summonses challenging the service of the third party process and seeking to have it stayed or set aside on various grounds.  These applications have been fixed for hearing on 8 June 1999.
4	On 12 October 1998 Mr White’s solicitors filed and subsequently served on the Australian Securities and Investments Commission a subpoena to produce the following four classes of documents.
(1)	All documents provided by the Society of Lloyds to the ASIC and/or its predecessors in support of a class order exemption which was ultimately provided and given class order number 92/1127;
(2)	All submissions prepared by offices of the ASIC (by its predecessors) to the commissioners of the Australian Securities Commission in response to the application by the Society of Lloyds for class order exemption which was ultimately provided and given class order number 92/1127;
(3)	All documents provided by the Society of Lloyds to the ASIC and/or its predecessors in support of a class order exemption which was ultimately provided and given class order number 96/1332; and
(4)	All submissions prepared by officers of the ASIC (by its predecessors) to the regulatory policy group in response to the application by the Society of Lloyds for class order exemption which was ultimately provided and given class order number 96/1332.

5	The Commission in compliance with the subpoena has produced these documents to the Prothonotary pursuant to R. 42.10.  Neither the Commission nor any party to the proceeding has raised any objection to the order for inspection which Mr White now seeks - see R. 42.10(8), (9).  The Society, however, has raised with the Prothonotary its objection to inspection and the Prothonotary referred the subpoena to the Court.  Before me counsel for the Society said that his client made no contention that inspection should be refused on any ground of confidentiality or privilege; it was that I should refuse inspection for want of relevance.  In brief, it was put that the dealings between the Society and the Commission in 1992 and 1996 could have no relevance to causes of action which depend upon events of 1980 to 1987.  
6	Counsel for Mr White contended at the outset that the Society as a non-party had no right to be heard on the return of a subpoena and warned that its representation would be taken as a submission to the jurisdiction of the court.  I express no view as to the validity of this warning.  As to the first matter, there is, of course, abundant precedent for the granting of audience on the return of a subpoena to produce documents to a person who is not a party to a proceeding in order to present argument for privilege or state immunity.  In a case such as this, no person other than the Society is interested to argue relevance.  It would not be a proper exercise of its coercive power for the court to compel production to it and disclosure to a party of material which has nothing to do with the proceeding.  Accordingly, I permitted counsel for the Society to present argument on this issue.
7	As the Court of Appeal in New South Wales observed in National Employers’ Mutual General Association v Waind [1978] 1 NSWLR 372, there are a number of steps at which the control of the court over the subpoena process may be exercised.  The subpoena here has been validly issued and not set aside and no objection is raised to production of the documents to the court.  The documents are now in the custody of the court whose task it is, consistent with the legitimate interests of those interested, to deal with them as the justice of the case demands.  The critical test is whether the documents in question have an apparent relevance to the issues before the court:  [1978] 1 NSWLR at 385.  This test is not a severe one and may be different from those for relevance for the purpose of discovery and for the purpose of admissibility of evidence.  
8	I have not been invited to inspect the documents and have not done so.  I must, therefore, determine the question from the description of them as it appears in the subpoena and from the legislation under which the exemptions were sought and given, drawing from this such inferences as are fairly open.  The issues in respect of which relevance is to be assessed are those for determination on the applications regarding service and jurisdiction.  These involve a consideration of the matters alleged by Mr White in his third party statement of claim, there being, of course, no defence.  
9	Counsel for Mr White put it that the documents went first to the issue whether Donner Underwriting Agencies Ltd (“Donner”) was acting as agent of the Society as alleged in paragraphs 3(c), 7, 8 and 10 of his pleading and, second, to the issue whether the membership on offer to the public was an interest or a prescribed interest as alleged in paragraphs 24 and 33.  
10	As to the first, it was put that it is probable that the documents lodged with the Commission in support of the application in or shortly prior to 1992 and 1996 would have dealt with the position of agents offering to the public underwriting membership of the Society at that time or shortly before.  It is to my mind probable that these documents would contain an outline of the structure of the Lloyd’s organisation in Australia at that time including the position of agents such as Donner.  It is but a short step from that position as it appears in the 1990s to that prevailing in the period 1980 to 1987 with which this proceeding is concerned. 
11	As to the second, it was put that the fact that an exemption from the legislative prospectus requirements was sought and granted in 1992 and 1996 carries the inference that, without it, the offering to the public of underwriting membership of the Society would have to comply with Part 7.12.  Implicit in this is that the membership falls within the definition of prescribed interest in the Law.  Since the definitions of “interest” in the 1961 Act and “prescribed interest” in the Code bear some resemblance to that of “prescribed interest” in the Law, it is probable that the papers lodged in support of the exemption may bear on that issue.  
12	I am satisfied, therefore, that the four classes of documents described in the subpoena meet the appropriate standard of relevance and I will make an order for inspection by the parties.  
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