McMillan Investment Holdings Pty Ltd v Mangos

1. [1]

   HER HONOUR: By notice of motion filed on 28 March 2019 the plaintiff seeks an order that a notice to produce and five subpoenas issued by the first and second defendants be set aside, in whole or in part.

2. [2]

   The plaintiff is McMillan Investment Holdings Pty Ltd (“McMillan Investment”). The first defendant is John Mangos. The third defendant is Christopher Wallace. The first and third defendant’s were directors or Sydney Allen Manufacturing Pty Ltd (in liquidation) and Sydney Allen Printers Pty Ltd (in liquidation). The second defendant is Natalie Vivienne Mangos. J Svehla appeared for the plaintiff. A Fernon SC appeared for all the defendants except Mr Wallace (third defendant). He was not directly involved in the subject matter raised in the notice of motion but was present in Court, self-represented. The parties relied on a joint court book (Ex A).

3. [3]

   Julie Anne McMillan and Robert Ian McMillan are husband and wife. Robert McMillan is a director of McMillan Investment.

4. [4]

   The notice to produce and the subpoenas to which the plaintiff seeks to have set aside are as follows:

5. [5]

   The grounds of objection to these subpoenas were wide ranging.

6. [6]

   The hearing of this motion took place on 25 August 2022. On that day, the legal representatives were able to come to an agreement as to the scope of documents to be produced but that left some paragraphs in the schedule still in dispute (“the disputed paragraphs”). It is these documents which are the subject of this Judgment.

Background

1. [7]

   In McMillan Investment Holdings Pty Ltd v Mangos [2021] NSWSC 37, Walton J dismissed Mangos’ notice of motion seeking that the sum of $300,000 be paid out of it to their solicitors for payment of their legal costs.

2. [8]

   The background facts are lengthy. I have extracted and gratefully acknowledge adopting parts of the pleadings and background facts set out by Walton J in McMillan Investment Holdings Pty Ltd v Mangos [2021] NSWSC 37.

3. [9]

   By a third further amended statement of claim (“TFASC”) filed 26 April 2019, McMillian Investments brought proceedings against John Bernard Mangos, the first defendant; Natalie Vivienne Mangos, the second defendant (collectively, “the Mangos”); and Christopher Wallace, the third defendant, in their capacity as debtors, guarantors and/or mortgagors for monies claimed to be owed under various instruments.

4. [10]

   On 20 June 2019, the Mangos’ filed an amended defence to the TFASC. There were cross-claims brought by the Mr Mangos (“the Mangos’ cross-claim”), Mr Wallace (“the Wallace cross-claim”) and what were described in the proceedings as “McMillan Entities” (the cross-claimants consisted of McMillan Investments, Julie-Anne McMillan and Robert McMillan (“the Third cross-claim”) against Mr Fordyce’s law firm PMFL and the successor law firm who took over his practice, FD Legal.

5. [11]

   As I will explain, these proceedings involve a dispute between a lender (McMillan Investments) and guarantors (the Mangos’) about loan facilities that were secured over the guarantors’ property. Pursuant to consent orders entered in February 2019, McMillan Investments and the Mangos’ reached an interim arrangement whereby the property was sold and funds were paid into court. In April 2019, they reached a further interim agreement reflected in consent orders whereby some of the funds were released to McMillan Investments, some funds were released to the Mangos’ to allow them to purchase another property in exchange for the provision of an agreed amount of security of the new property and some funds remained in court.

6. [12]

   In the third amended statement of claim McMillan Investments pleaded that, on about 27 March 2015, Mr Mangos and Mr Wallace, as guarantors and indemnifiers, entered into a facility agreement (“the facility agreement”), the other parties to which were McMillan Investments and Sydney Allen Manufacturing Pty Ltd (in liquidation) (“SAM”) and Sydney Allen Printers Pty Ltd (in liquidation) (“SAP”), as joint and several borrowers.

7. [13]

   Under the facility agreement that McMillan Investments agreed to advance SAM and/or SAP the “principal money” (as defined in the facility agreement), on the terms and conditions in the facility agreement, and that Mr Mangos and Mr Wallace provided a joint and several guarantee and indemnity to McMillan Investments in respect of the “principal money” and McMillan Investments costs and expenses, permitting McMillan Investments to call on them as guarantors without calling on SAM and/or SAP as the borrowers.

8. [14]

   The obligations under the facility agreement were secured by a collateral security including a general security deed. On or about 27 March 2015, McMillan Investments, SAM, SAP, Mr Mangos and Mr Wallace, as guarantors, entered into a general security deed which granted McMillan Investments, as the secured party, a “PPSA Security Interest”, “PPSA Personal Property” and a “Fixed Charge” over all other property to secure the payment of the secured money. (“PPSA” is defined in the general security deed to mean the Personal Property Securities Act 2009 (Cth)).

9. [15]

   In the period 5 March 2015 to about 6 July 2016, McMillan Investments advanced $1,460,876.61 (“the principal money”). Interest was payable on the principal money.

10. [16]

    McMillan Investments received payment of $1,039,564.28, at various dates between 8 September 2015 to 1 August 2017, plus an additional amount of about $300,000 (which was brought to account from a payment of $330,000 by Warehouse Australia Pty Ltd). The payments were made for payment of interest and then principal reductions (in the sum of $227,869.91).

11. [17]

    As at 1 April 2016, default occurred under the facility agreement and, as at 7 April 2016, voluntary administrators were appointed to SAM and SAP. From 2 August 2017 to the filing of the TFASC, no payments under the facility agreement were repaid to principal or interest were made to McMillan Investments. (As at 25 February 2019, the principal and interest owed was $298,360.38).

12. [18]

    On 27 March 2015, the Mangos’, in their capacity as mortgagor, granted a mortgage in a registrable form in respect of a property in Illawong, NSW to McMillan Investments in its capacity as mortgagee (the Mangos’ were the registered proprietors of the Illawong Property).

13. [19]

    Under the registered McMillan Investments and Illawong Property Mortgage, the Mangos’ promised to pay the principal amount as agreed between the Mangos’ and McMillan Investments and that interest accrued daily on the principal money in the rates in the facility agreement. The registered McMillan Investments-Illawong Property Mortgage was a security granted by the Mangos’ for payment to McMillan Investments for the secured money, which consisted of the principal money and all interest, and for the performance of their obligations under the mortgage and under any collateral security, which was defined as including the facility agreement and the general security deed.

14. [20]

    On or about 27 January 2016, McMillan Investments, as lender, and the Mangos’ entered into the 27 January 2016 McMillan/Mangos’ $150,000 Loan Agreement (“the $150,000 Loan Agreement”) whereby McMillan Investments agreed to lend Mr Mangos $150,000.

15. [21]

    On or about 28 January 2016, pursuant to the $150,000 Loan Agreement, McMillan Investments lent $150,000 to Mr Mangos or alternatively to Mr Mangos and Mrs Mangos (Mr Mangos caused McMillan Investments/Mangos’ $150,000 Loan to be paid to or to the benefit of SAP pursuant to the 27 January 2016 Mr Mangos/SAP Loan Agreement).

16. [22]

    The $150,000 Loan:

    1. (1)

       constituted “principal money” within the meaning of that expression in the facility agreement and the Registered McMillan Investments-Illawong Property Mortgage.

    2. (2)

       constituted “secured money” within the meaning of that expression contained in the Registered McMillan Investments-Illawong Property Mortgage.

17. [23]

    On 26 March 2019, the Mangos’ owed McMillan Investments $241,077.82 in relation to the $150,000 Loan.

18. [24]

    The Mangos’ were liable to pay the $150,000 Loan and all interest calculated on it in accordance with the Facility Agreement Interest Provisions including “McMillan’s costs and expenses”.

19. [25]

    On or about 21 November 2007, Westpac, as lender, and the Mangos’, as borrower, entered into the 21 November 2007 Westpac/Mangos’ Loan whereby Westpac agreed to lend, and lent, to the Mangos’ $490,000.

20. [26]

    The 21 November 2007 Westpac/Mangos’ Loan was constituted by:

    1. (1)

       the Westpac/Mangos’ Rocket IPL Loan Offer; and

    2. (2)

       the Westpac/Mangos’ Booklet.

21. [27]

    On 28 August 2015, McMillan Investments entered into a Westpac-McMillan Investments-Mangos’ Debt and Securities Assignment under which McMillan Investments would pay $354,183.22 to Westpac for Westpac to assign to McMillan Investments the debt and other obligations owed by the Mangos’ to Westpac under a 21 November 2018 Westpac-Mangos’ Loan. On 28 August 2018, as part of and associated with the Westpac-McMillan Investments-Mangos’ Debt and Securities Assignment, Westpac transferred McMillan Investments the registered first and second mortgages over the Illawong Property held by Westpac as mortgagee.

22. [28]

    It was further pleaded:

    1. (1)

       From about 28 September 2015 to about 5 December 2016, the Mangos’ owed payments of principal and interest to McMillan Investments in respect of the Former Westpac/Mangos’ Debt, leaving a balance owing, on 5 December 2016, of $62,580.44.

    2. (2)

       From 6 December 2016, the Mangos’ did not pay any amount to McMillan Investments, whether principal or interest, in respect of the Former Westpac/Mangos Debt to McMillan Investments pursuant to the Westpac-McMillan Investments-Mangos’ Debt and Securities Assignment.

    3. (3)

       On 26 March 2019, a week prior to the 2 April 2019 Court Orders, the Mangos’ owed McMillan Investments $74,870.11 in relation to the Former Westpac/Mangos’ Debt.

23. [29]

    Between 10 November 2016 and 27 September 2018, McMillan Investments made demands upon the Mangos’ for payments of monies owing under the facility agreement, the general security deed, the McMillan Investments-Illawong Property Mortgage and other debts or loans.

24. [30]

    It was pleaded that:

    1. (1)

       from 15 May 2017 until 4 December 2018, McMillan Investments incurred $94,234.64 legal costs;

    2. (2)

       from the latter part of November 2018 until about 11-22 March 2019, McMillan Investments incurred legal costs of $146,883.23; and

    3. (3)

       from 19-22 March 2019 to the present, the legal costs of $250,000 were incurred.

25. [31]

    There are a number of key terms in the facility agreement which created the asserted Mangos’ liability to McMillan Investments under the facility agreement. Key terms include “principal money”, “McMillan’s costs and expenses”, and the interest provisions.

26. [32]

    “Principal money” was defined broadly in the facility agreement to include but not limited to, at any time all money (unless otherwise agreed in writing by McMillan Investments) which was represented as follows:

27. [33]

    Interest payable under the facility agreement was 15% per annum, when it is not paid on or before the due date, on the basis of a 360-day year and actual days elapsed.

28. [34]

    Under the facility agreement, the “principal money” outstanding from time to time, includes unpaid interest (it is then capitalised and forms part of the “principal money”).

29. [35]

    McMillan Investments contended that Mr Mangos and Mr Wallace provided a joint and several guarantee and indemnity to McMillan Investments in respect of the “principal money” and “McMillan’s costs and expenses”, permitting McMillan Investments to call on them as guarantors without calling upon SAM and/or SAP as the borrowers.

30. [36]

    McMillan Investments contended that Mr Mangos, as one of the guarantors under the facility agreement, was liable to pay McMillan Investments:

    1. (1)

       the McMillan Investments/SAM & SAP Outstanding Balance of $227,869.91;

    2. (2)

       McMillan Investment’s legal costs and expenses;

    3. (3)

       interest, calculated at 15%, on both the amounts as above in subparagraphs (2) and (3) and in accordance with the facility agreement interest provisions.

31. [37]

    Mrs Mangos was not a party to this facility agreement.

32. [38]

    On or about 27 March 2015, McMillan Investments, SAM, SAP, Mr Mangos and Mr Wallace, as grantor, entered into the general security deed.

33. [39]

    Under the General Security Deed, Mr Mangos, as a Grantor, granted to McMillan Investments, as the Secured Party:

    1. (1)

       a PPSA Security Interest over all PPSA Personal Property; and

    2. (2)

       a fixed charge over all other property, to secure the payment of the Secured Money.

34. [40]

    McMillan Investments contended that the amount of $492,186.82 which had been paid into, and remains in, Court in accordance with order 3 of the 2 April 2019 Orders, is subject to McMillan Investments secured rights against Mr Mangos under the General Security Deed.

35. [41]

    On 27 March 2015, the Mangos’, in their capacity as mortgagor, granted a mortgage in a registrable form in respect of the Illawong Property (the then home of the Mangos’) to McMillan Investments, in its capacity as mortgagee.

36. [42]

    The Registered McMillan Investments-Illawong Property Mortgage was a “collateral security” within the meaning and for the purposes of the facility agreement.

37. [43]

    Under the Registered McMillan Investments-Illawong Property Mortgage, the Mangos’ promised to pay the “principal money” as agreed between them and McMillan Investments; otherwise when McMillan Investments demands it.

38. [44]

    Interest accrued daily on the “principal money” at the rates in the facility agreement.

39. [45]

    “Principal money” included “McMillan’s costs and expenses”.

40. [46]

    As mentioned, on 28 August 2015, as part of, and associated with the Westpac- McMillan Investments-Mangos’ Debt and Securities Assignment, Westpac transferred to McMillan Investments the registered first and second mortgages over the Illawong Property held by Westpac, as mortgagee.

41. [47]

    There have been defences and amended defences filed in relation to third further amended statement of claim (“3FASC”).

42. [48]

    From 20 June 2019, the proceeding have been concerned with:

    1. (1)

       Defences and Amended Defences to the TFASC;

    2. (2)

       Cross-claims: the Mangos’ cross-claim, the Wallace cross-claim and the Third cross-claim. The Mangos’ cross-claim and the Wallace cross-claim added parties to the proceeding, McMillan Investments directors, Mr McMillan and Ms McMillan because of matters alleged in the Mangos’ cross-claim. The Third cross-claim joined McMillan Investments former solicitors, PMFPL and FD Legal, as well as Westpac;

    3. (3)

       a Mangos’ Amended First Cross-Claim and the defences to the three cross-claims;

    4. (4)

       Cross claim of the Mangos filed 22 July 2022

    5. (5)

       The cross-claim of Christopher Wallace (third defendant) filed 29 July 2022

43. [49]

    In all the subpoenas, the schedule at (1) contains definitions. It reads as follows:

44. [50]

    The schedule at (2) “subject matter” is defined to mean any or all of the following:

Disputed paragraphs

1. [51]

   The paragraphs of the schedule that remain in dispute are as follows. The subpoenas addressed to Julie McMillan and Ian McMillan, DJ Advisory and Mr Warner (the receiver) and manager of SAP and SAM are those documents requested in paragraph 1 of the schedule of the subpoena. Paragraph 1 reads:

   1. (1)

      All documents recording communications between 1 January 2016 and 31 December 2018 regarding the subject matter between Lucas McEntee and/or DJ Advisory Pty Ltd ACN 610 329 416 trading as iconic Advisory (on the one hand) and any one or more of the following (on the other hand):

2. [52]

   Mark Singh aka Marie Shergill is the director of Print Warehouse. The subpoena addressed to Print Warehouse contains the same paragraphs [1]-[2] of the schedule. The disputed paragraphs are [3](d) and [5]. They read:

Relevant principles

1. [53]

   Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) 33.4 reads:

The law

1. [54]

   The issue of a subpoena will be an abuse of process if it is not used for a legitimate forensic purpose: see Botany Bay Instrumentation & Control Pty Ltd v Stewart [1984] 3 NSWLR 98 at 100-1. The documents sought need to have apparent relevance to the issues in the proceedings.

2. [55]

   The test for assessing a legitimate forensic interest in subpoenaed documents has been reaffirmed and clarified by the Court of Appeal in Secretary of the Department of Planning, Industry and Environment v Blacktown City Council [2021] NSWCA 145 (Blacktown City Council), per Bell P, Brereton and McCallum JJA) at [65] (Bell P) and [86] and [89] (Brereton JA). The President there said:

3. [56]

   Brereton JA opinion is as follows:

4. [57]

   The plaintiff submitted that the documents sought in paragraphs (a), (b), (c) and (d) are broad. They go beyond the test because there's a difference between getting an accounting of payments the lenders received to working out whether or not assets are sold at an undervalue, for example by the receiver which would bring a claim against the receiver. That's a completely new claim, not in a new party. Anything that happened in SAP or SAM is outside the context of this proceeding. There has to be a proper tying link but there is not (T22.16-24). These disputed paragraphs of the schedule are akin to discovery by subpoena and is fishing (T23.35-36).

5. [58]

   So far as DJ Advisory is concerned there is evidence that Mr McEntee had some involvement in the sale process. On 7 April 16, SAP and SAM went into voluntary administration. On 13 April SAP and SAM went into receivership, on 4 or 5 May 2016 contracts were exchanged to sell SAP and SAM to PWA. Finally on 1 or 2 July the sale was completed.

6. [59]

   The problem with the subpoena addressed to Print Warehouse is that it includes documents after exchange up to completion, in other words the entire sale file. That also amounts to fishing. The fact that the receiver received money from PWA and the fact that $330,000 was received by a related entity doesn't mean that every document relating to the purchase agreement is within a legitimate forensic exercise and has apparent relevance (T26.10-18).

7. [60]

   Following Blacktown City Council, the principles to be applied when a party seeks to set aside a subpoena/order to produce in the civil context is settled: so long as the material sought has “an apparent relevance” to the issues in the case and/or bears upon the cross examination of witnesses expected to be called in the proceedings it will have a legitimate forensic purpose and should not be set aside.

8. [61]

   Ultimately, the relevance of the documents produced will be a question for determination at trial. It is not appropriate for the Court to embark on a detailed preliminary enquiry involving evidence from the issuing party and the recipient of the subpoenas. In the Amirbeaggi Affidavit, at [22] he sets out by way of submissions the issues that he discerns will be tried in the proceedings. He also sets out at [8] to [21] evidence, which is relevant to the plaintiff’s claim for the alleged non-payment of monies owing by the guarantors ([7] – [15]) and evidence relevant to the plaintiff’s claim to recover charges with respect to payments which the guarantors allege were not for the benefit of SAM or SAP ( [17] – [21]).

9. [62]

   Evidence at the hearing may provide some perfectly satisfactory explanation for the features of these transaction and events, nonetheless, as they currently stand, they warrant testing in cross examination. In the light of the whole of the evidence the aspects referred to above may be shown not to be unusual at all or not significant, either alone or in combination. However, before hearing all the evidence and arguments the Court cannot draw even tentative conclusions as to the use to which the documents will be put. But having regard to the issues in the case the matters described by Mr Amirbeaggi are such as to warrant the defendants paying close attention to them and forming the view that they should challenge what Mr Mangos has deposed, in particular, as set out at Amirbeaggi Affidavit at [10].

10. [63]

    The short points to be derived from Mr Amirbeaggi’s observations are:

11. [64]

    All these matters comfortably satisfy the apparent relevance test as articulated in Blacktown City Council.

12. [65]

    The plaintiff raised the issue that seeking production of documents over various period of time is oppressive.

13. [66]

    The schedule to the compulsory processes contains a standard clause that expands the meaning of “documents” to include electronic records and any document over which privilege is claimed. This is no different to the orthodox reference to “documents” as is defined in the Evidence Act 1995 (NSW). Read together these definitions of “documents” do not work to create ambiguity and are consistent and coherent.

14. [67]

    There is no evidence of oppressive or burdensome production other than mere assertion. No effort has been made to inform the Court with evidence of the time and extent of the review required. The solicitor for McMillan Holdings in his two affidavits (Affidavits of Marc Ryckman dated 15 December 2020 and 28 July 2020) who can only properly speak, does only depose to facts on behalf of the plaintiff, has not assisted the Court with any evidence of this assertion.

15. [68]

    McMillan Investment’s claim arises from alleged non-payment of amounts purportedly due and owing by Mr Mangos and Mrs Mangos (Mr and Mrs Mangos) and or Christopher Wallace (Mr Wallace) Mr Mangos and Mr Wallace directors of SAP and SAM. McMillan Investment appointed a receiver and liquidator of SAP and SAM.

16. [69]

    The issue of shadow directorship is in both the Mangos defence and cross-claim. It is set out in paragraphs 7.2, 7.3 and 11.2 of the defence. These allegations concern the role that Mr And Ms McMillan had in respect of the company and their position as shadow directorships.

17. [70]

    At [26] of the Mangos’ cross‑claim it is alleged that Julie Ann McMillan and Robert Ian McMillan were a shadow directorship, which directed the employees as to priority, timing and order of payment; directing the employees as to which debtors of the company to pursue and on what basis; making decisions as to priority, timing and order of payment of creditors; directing employees to furnish them with financial information of the company, such as cash flows reports; creating and amending cash flow reports; and intervening in the operational decisions of SAP and SAM's businesses. This is a central issue raised in pleadings and will involve an assessment of the credit of the participants.

18. [71]

    In relation to the fourth cross‑claim against Mr Fordyce it is alleged and agreed that Mr Fordyce was in a serious position of conflict. Both parties allege he had numerous conflicts of interest. In the fourth cross-claim, Mr Mangos alleges that on 16 February 2015 he swore an affidavit that was prepared by Mr Fordyce or PMFPL which stated that: (a) Mr Fordyce or PMFPL was the legal representative of SAP; (b) SAP disputed the legitimacy of the Statutory Demand; (c) SAP and Idoltest were parties to a commercial deal relating to the sale of equipment and SAP’s occupation of the Premises; (d) A dispute arose between SAP and Idol test regarding the commercial deal set out in paragraph [12(c)]; and (e) Mr. McMillan and/or Mr Fordyce were in the process of negotiating a resolution to the dispute between the parties and that Idoltest would withdraw the statutory demand.

19. [72]

    That conflict exists because it appears that Mr Fordyce acted for a number of parties from before the facility agreement was entered into in 2016 because it was Mr Fordyce who was giving advice in relation to that facility agreement. This was a facility agreement that was being provided by his other client, McMillan Investment, in respect of many expenses that were being incurred up until that time. It appears that Mr Fordyce, solicitor, was involved before the actual facility agreement came into being.

20. [73]

    A main issue in these proceedings that McMillan Investment seek to investigate the level of Mr Fordyce's conflicts of interest. It is alleged that he was acting for McMillan Investment and the Mangos. It is also alleged that he may have also been acting for the liquidators, and potentially others. It is arguable that these are issues within the knowledge of McMillan Investment insofar as Mr Fordyce was acting for them at various times. The Fordyce subpoena also is directed to the subsequent purchaser of the Fordyce practice on the basis that it may hold some of the Fordyce practice records.

21. [74]

    At [53] of John Mangos March 2019 Affidavit he refers to a conversation between him and Manjit Singh ("Mark"), sole director of Print Warehouse Australia ("PWA") of which Mark Singh was the sole director secretary to the following effect:

22. [75]

    Mangos is advised by Robert McMillanILucas McEntee (of Iconic Advisory) words to the following effect "We do the sale and then after it's been transferred we put the old companies into liquidation. We'll appoint a mate of ours John Morgan we’ve got him in our pocket mate, so there won’t be a problem." Robert McMillan further states words to the following effect: "I'm in control of this John. You will have to do what I say. We either do it the way Lucas and I have told you, or I'll appoint a receiver over the business and over your home. It won't be pretty.” (para 337 Mangos October Aff)

23. [76]

    There is an issue as to the credibility and the authenticity of what McMillan Investment had knowledge and acted on throughout the events outlined earlier in this Judgment Mr Amirbeaggi, in his evidence outlines the involvement of Iconic Advisory and Mr Lucas McEntee. At [17] of Mr Amirbeaggi's affidavit, a conversation about the sale of assets between Mr McEntee and Mr McMillan, is deposed. It says, "We do the...won't be pretty." The evidence of Mr Mangos continues to the effect that they were going to sell the assets at nominal value. Again, a third party has been brought in by Mr McMillan in relation to the operations of SAP and SAM for the purposes of disposing of assets, in essence, as potentially part of a phoenix operation, and that those fees are apparently being charged as part of the secured debt in these proceedings. There is a real issue in relation to what was Mr McMillan, McMillan Investments, and Mr McEntee doing in relation to the affairs of this company. That's on the evidence. It goes to the credit of Mr McMillan. It goes to his role as being a shadow director.

24. [77]

    So far as Mr Warner and/or his employees in his capacity as receiver and manager of SAP and SAM is concerned, his role was to take control of assets, sell them and pay the secured creditor. It is alleged that he sold the assets for undervalue.

25. [78]

    It is my view that the evidence of what occurred with SAP and SAM are relevant. It is alleged that Mr and Mrs McMillan were shadow directors of McMillan Investment. The operations of SAP and SAM are relevant because it is alleged that Mr McMillan and Ms McMillan as shadow directors of McMillan Investments and the way in which they are alleged to be shadow directors is broad ranging. The communications that they have, particularly in dealing with Mr Fordyce, Mr Singh of the purchaser and Mr McEntee, give context and focus in relation to SAP and SAM, because SAP and SAM’s dealings with Mr Fordyce, Mr Singh and Mr McEntee that are relevant so far as they concern those three relevant entities.

26. [79]

    The distribution and remittance of payments received by the receiver is in issue in these proceedings. The valuation of assets, particularly in circumstances where Mr McEntee has been involved to try and sell these things, we say at nominal value, goes to issues of credit, goes to Mr McMillan's control in relation to the companies, is in issue. Another issue is whether McMillan Investment brought into account the $330,000 additional fund. Initially it appears, it was never disclosed and it was never brought into account or informed that this is what should be brought into account. The Mangos only found out about the $300,000 by making their own inquiries. The agreement entered into with the receiver to sell the assets of SAP and SAM following the sale campaign is clearly relevant. The payments received directly from the purchaser or any party associated with the purchaser again is relevant given the $330,000 odd.

27. [80]

    So far as the five subpoenas are concerned, there is no actual evidence is before the Court that the disputed documents sought are oppressive. Hence, I do not find that the production of the disputed documents sought in the Subpoena is oppressive.

Result

1. [81]

   For the reasons set up above, it is my view that the documents sought in the disputed paragraphs of the subpoenas are relevant to the issues in dispute and may be relevant to the cross examination of the parties as to their credibility. These disputed paragraphs should not be set aside. These documents in answer to the disputed paragraphs of the subpoena should be produced to the Court in 14 days.

Costs

1. [82]

   Costs are discretionary. Normally costs follow the event. The plaintiff is to pay the defendant’s costs of the notice of motion dated 28 March 2019.

   1. (1)

      The notice of motion filed 28 March 2019 is dismissed.

   2. (2)

      The documents in answer to the disputed paragraphs of the subpoena should be produced to the Court in 14 days. The disputed paragraphs are:

   3. (3)

      The plaintiff is to pay the defendants costs.