Kazal v Independent Commission Against Corruption

1. [1]

   The plaintiff, acting for himself, has brought proceedings against the Independent Commission Against Corruption (NSW), David Ipp QC and the State of New South Wales. He seeks the following relief:

2. [2]

   The Hon David Ipp QC was the commissioner who prepared the report.

3. [3]

   The investigation which led to the report concerned two allegations. The first was that from early 2007 to early 2008 Andrew Kelly, a senior executive of the Sydney Harbour Foreshore Authority (SHFA), acted in conflict with his official duties when dealing with the plaintiff and members of the Kazal family in relation to properties at The Rocks which were owned by the SHFA and leased to Kazal family businesses at a time when Mr Kelly was, or anticipated being, involved with the plaintiff and members of the Kazal family in private business. The second was that the plaintiff sought improperly to influence the exercise of Mr Kelly’s official functions by holding out the prospect of Mr Kelly being involved with the plaintiff and members of the Kazal family in a private business in the United Arab Emirates, and paid Mr Kelly for his expenses associated with a trip to the UAE in May 2007, intending thereby to influence Mr Kelly to act in a manner favourable to Kazal business interests when dealing with Kazal tenancies at the Rocks.

4. [4]

   The report made findings of corrupt conduct on the part of Mr Kelly. In relation to the plaintiff it concluded:

5. [5]

   The statement of claim pleads that in 2010 and 2011 ICAC initiated and held a public inquiry identified as Operation Vesta into a conflict of interest of a senior executive officer of the Sydney Harbour Foreshore Authority which was said to have occurred in 2007 and 2008. That officer was identified as Andrew Kelly.

6. [6]

   The plaintiff pleads that on 16 December 2011 the Commissioner submitted a report of its findings to the NSW Parliament, and that the report found that the plaintiff had engaged in corrupt conduct within the meaning of ss 8 and 9 of the Independent Commission Against Corruption Act 1988 (NSW) (the ICAC Act).

7. [7]

   Five matters are alleged as the basis for the assertion that the conduct of the first and second defendants was ultra vires and not carried out according to law. Those matters are these:

8. [8]

   The conduct of the first and second defendants was said to be malicious or reckless with intent to cause injury, reputational and financial harm to the plaintiff, was said to be conduct which the first and second defendants knew or ought to have known was beyond their power, and that had a foreseeable risk of harm. The plaintiff alleged that the first and second defendants acted in bad faith.

9. [9]

   It should be noted that apart from the prayers for relief, the only references made to the third defendant were: (1) a pleading in paragraph 1 that the third defendant was capable of being sued by reason of s 5 of the Crown Proceedings Act 1988 (NSW); and (2) an assertion in the last paragraph of the pleading that “as a result of the conduct of the Defendants set above” the Plaintiff has suffered loss and damage. The relevance of that matter will be made clear later.

10. [10]

    On 26 February 2016 the plaintiff served a Notice to Produce on the Crown Solicitor acting for the first defendant. It required production of the following documents:

11. [11]

    On the same day the plaintiff served a Notice to Produce on the Crown Solicitor acting for the third defendant in the following terms:

12. [12]

    On 6 March 2018 the Crown Solicitor wrote on behalf of the first defendant to the plaintiff with respect to the Notice to Produce served on the first defendant`. The letter drew attention to s 111 of the ICAC Act and to the decision in Obeid v Ipp [2015] NSWSC 1755 at [12]-[13]. The letter also drew attention to r 21.10 Uniform Civil Procedure Rules 2005 (NSW) and said that the Notice to Produce failed clearly to identify a specific document or thing, that it sought the production of documents which were not relevant to a fact in issue, and that it amounted to a fishing expedition. It asked the plaintiff to reconsider the Notice to Produce, but warned that, if the plaintiff pressed for production, a Notice of Motion seeking to set aside the Notice to Produce would be filed.

13. [13]

    The Crown Solicitor also wrote to the plaintiff on the same day on behalf of the third defendant. The letter reiterated an argument which had been earlier made in correspondence with the plaintiff, that the third defendant should be removed as a party to the proceedings because the statement of claim did not plead any matter against the third defendant. The letter also went on to point out UCPR r 21.10 and made the same assertions about that rule as had been made in the letter on behalf of ICAC. Again it was said that, if the plaintiff pressed for production, a Notice of Motion would be filed to set aside the Notice to Produce.

14. [14]

    The plaintiff wrote a letter in response to each of the letters from the Crown Solicitor. The plaintiff’s letters were in substantially the same terms as each other. The letters did not address the issue of the Notices to Produce. Rather, the letters seemingly provided more details about the complaints the plaintiff made about the defendants as pleaded in the Statement of Claim.

15. [15]

    On 20 March 2018 each of the first and third defendants by a Notice of Motion sought summary dismissal of the proceedings. By a Motion filed on the same date, the second defendant, who was represented by independent solicitors, filed a similar motion.

16. [16]

    On 23 March 2018 the Crown Solicitor acting for the first and third defendants filed a Motion on behalf of each such defendant seeking to set aside the Notices to Produce. It is those Motions which came before me for hearing.

17. [17]

    At the outset of that hearing counsel for the third defendant sought leave to move also on that part of the Notice of Motion for summary judgment that separately sought an order for the removal of the third defendant from the proceedings. Notice to that effect had been given to the plaintiff on 12 April 2018. The plaintiff opposed the matter of the third defendant’s continuing involvement being heard along with the Notices of Motion to set aside the Notices to Produce.

18. [18]

    What had been listed by the Registrar for hearing on 26 April were the two motions to set aside the Notices to Produce. Although some notice was given to the plaintiff that the third defendant would seek to move on that part of its Notice of Motion filed on 20 May 2018 to have the proceedings dismissed as against it, the plaintiff said that he was not in a position to deal with that matter. Since he was appearing unrepresented, I considered that it would be unfair to him to be required on relatively short notice to deal with that issue. During the course of the hearing I, therefore, refused leave for the third defendant so to move.

19. [19]

    The first defendant moves to set aside the Notice to Produce served on it on three grounds as follows:

20. [20]

    The third defendant relies on four grounds to set aside the Notice served on it as follows:

21. [21]

    As I have noted, the plaintiff appeared unrepresented at the hearing of the notices of motion. Contrary to directions made by the Registrar, he had failed to file and serve written submissions in response to the notices of motion. He had, however, filed lengthy affidavits which appeared, largely, to go to the substance of the claim being made by him or, at the very least, contained material in answer to other motions filed by the three defendants seeking summary dismissal of the proceedings. Those affidavits also exhibited a large number of documents.

22. [22]

    Objection was taken by counsel for the first and third defendants on the basis of the relevance of much of the affidavit material and the documents, and also on the basis that the material set out in the affidavits was not in admissible form. Rather than spend time considering each of the parts of the affidavits objected to (one affidavit contained 141 paragraphs and the other contained 89 paragraphs), I said that I would read inadmissible material as a submission being made by the plaintiff. Counsel for the first and third defendants did not object to that course. Counsel also agreed that I should receive the material that was, prima facie, irrelevant for the purpose of weighing up its relevance. That was an entirely proper approach by counsel when the plaintiff was unrepresented.

23. [23]

    Even taking the affidavit material as largely amounting to submissions, it was difficult to discern how the plaintiff justified the width of the material sought in the Notices to Produce. During oral submissions the plaintiff put forward the following bases to justify the Notices to Produce. First, the plaintiff was entitled to the information because it was relevant for him to understand how what he said had happened to him as a result of the ICAC enquiry could have happened. Secondly, the plaintiff was given no choice but to participate in the enquiry, and on that basis he should be entitled to the documents. Thirdly, the documents could disclose that there were other failings and other things that were wrong that he was entitled to know about. Fourthly, in the light of the public exposure the plaintiff has had as a result of the enquiry and the report, he should be entitled to “discovery”.

24. [24]

    I endeavoured on a number of occasions during the plaintiff’s oral submissions to direct his attention to considerations concerning the Notices to Produce, but his focus constantly returned to the substance of his claims against the defendants. He had prepared a lengthy table which sought to relate various portions of the report by the Inspector of the ICAC into the Operation Vesta inquiry to the documents he had sought to have produced. The plaintiff had also prepared another document which set out various portions from the Inspector’s report which were said to be supportive of the plaintiff’s claims in the proceedings, and in that way to the documents he wanted produced. A close examination of both the table and the other document disclosed that in a number of cases the portions of the report that were reproduced were simply recitations of submissions and contentions that had been made by the plaintiff and/or Mr Kelly to the Inspector.

(a) Is there a legitimate forensic purpose?

1. [25]

   The relevant legal principles for setting aside a notice to produce were summarised by Ward J (as her Honour then was) in In the matter of One.Tel Ltd (in liq) - SingTel Optus Pty Ltd v Weston [2010] NSWSC 1491 as follows:

2. [26]

   The third defendant denied a legitimate forensic purpose in the Notice to Produce served upon it partly because the documents were said to relate to the State’s liability. Although I have agreed not to determine whether the State should remain as a party to the proceedings in this judgment, it is relevant to consider the lack of pleading of any claim or any basis for a claim against the third defendant. Where nothing is currently pleaded against the third defendant, one possibility, deriving from the matters put forward by the plaintiff to justify the Notices to Produce is that the provision of the material might turn up matters that at the present time he does not know. That, of course, would be a classic example of a fishing expedition: The Commissioner for Railways v Small (1938) 38 SR 564 at 574-575; NSW Commissioner of Police v Tuxford [2002] NSWCA 139 at [27].

3. [27]

   There is a further reason why the various categories of documents sought lack a legitimate forensic purpose. The basis of the claim against the defendants is set out at [7] above. The pleading in the statement of claim is couched in similar terms to a claim for administrative review, although I accept that the plaintiff seeks declarations and damages. Nevertheless, the claim numbered (1) is similar to jurisdictional error; the claim in (2) expressly relies on a denial of procedural fairness; the claim in (3) appears to be a failure to take into account a relevant consideration and the claim at (4) appears to assert an error of law in relation to the admission of evidence and to assert, thereby, procedural unfairness.

4. [28]

   In each case, and also in relation to the claim in (5), the claims as framed can be determined on the documents already available to the plaintiff as follows:

5. [29]

   Especially, given the width of the categories of documents in the Notices, there is no reasonable basis beyond speculation that the documents will materially assist in making out the particular issues pleaded. Even if the documents are said to relate to the assertions that the conduct pleaded was malicious, reckless or knowingly beyond power, and that was not submitted by the plaintiff, there is nothing to suggest that the documents would throw any light on those assertions.

6. [30]

   The onus is clearly on the person serving the subpoena or the notice to produce to identify a legitimate forensic purpose for the documents to be produced: Tuxford at [20]-[23]. No legitimate forensic purpose has been shown in the present case.

(b) Section 111 of the ICAC Act

1. [31]

   Section 111 of the ICAC Act provides:

2. [32]

   Sub-section (3)(a) is not confined to production to a court. In SA v New South Wales Crime Commission [2015] NSWSC 1979 Fagan J was considering s 80(3) of the Crime Commission Act 2012 (NSW). That sub-section provided:

3. [33]

   As can be seen, that sub-section is relevantly identical to s 111(3) of the ICAC Act. Section 80(6) of the Crime Commission Act defined produce as including “permit access to or inspection of”. In my opinion, the additional expression “or inspection of”, as compared to the definition in s 111(6) of the ICAC Act, does not diminish the applicability of the decision in SA. Justice Fagan said at [26]:

4. [34]

   In any event, s 111(2) prevents any person who is or was an officer of ICAC from divulging or communicating any information acquired by the person by reason of, or in the course of, the exercise of the person’s functions under the ICAC Act. Although “any person” in sub-s (2) does not include a court ( see A v Independent Commission Against Corruption [2014] NSWCA 414 at [43]), production of the documents to the plaintiff in accordance with the Notices to Produce would result in a contravention of sub-s (2).

(c) UCPR Rule 21.10

1. [35]

   UCPR Rule 21.10 provides:

2. [36]

   In Penrith Rugby League Club Ltd v Brown [2004] NSWSC 1182 Young CJ in Eq (as his Honour then was) had to consider the predecessor to this rule, Pt 23 r 2 of the Supreme Court Rules 1970 (NSW), which was in relevantly identical terms. His Honour said:

3. [37]

   In Norris v Kandiah [2007] NSWSC 1296 Brereton J (as his Honour then was) said:

4. [38]

   In the present case, the plaintiff does not identify documents that are referred to in any pleading or affidavit nor any other specific document. The form of the notices has the hallmarks of categories of discovery. Almost all of the paragraphs of the Notices to Produce refer to “Copy of all communications…”. That is not the purpose of r 21.2 as the authorities make clear.

(d) Oppression

1. [39]

   The third defendant points to the width of the categories of documents sought in paragraphs 1 to 4 of the Notice served on it. The categories are not limited in time and are likely to involve searches in a number of State agencies.

2. [40]

   The affidavit of Sasha Jane Lowes sworn 29 March 2018 details what would be require from an IT perspective to attempt to locate all the documents sought. The estimated cost of third party specialists is at least $135,000 and is highly likely to be more. In circumstances where the documents would have tenuous relevance only to the matters pleaded, I consider that the requirements of the Notice to Produce addressed to the third defendant are oppressive.

Conclusion

1. [41]

   I consider that the Notices to Produce do not comply with r 21.10, that the plaintiff has shown no legitimate forensic purpose for the Notices, and that production of the documents would involve a breach of s 111(2) or (3) of the ICAC Act. In addition, at least categories 1 to 4 in the Notice served on the third defendant are oppressive. The Notices to Produce should be set aside.

2. [42]

   Accordingly, I make the following orders:

   1. (1)

      The Notice to Produce dated 26 February 2018 served on the first defendant is set aside.

   2. (2)

      The Notice to Produce dated 26 February 2018 served on the third defendant is set aside.

   3. (3)

      The Plaintiff is to pay the costs of the first and third defendants in respect of the Notices of Motion filed 23 March 2018 by those defendants.