Background
David Hurst, liquidator of Lloyds Curry Shop Pty Ltd (in liquidation), brought proceedings concerning the company’s purported 2015 liquidation and alleged transfers of $780,702.53 said to form part of a dishonest scheme to misappropriate trust property. The liquidator alleged, among other things, breach of trust, knowing assistance and receipt, and insolvent trading.
In separate proceedings, search orders had authorised the seizure and preservation of documents and electronic material. Independent lawyers held that material under court-supervised arrangements, with substantial unresolved legal professional privilege claims. The liquidator subpoenaed Bridges Lawyers Pty Ltd for communications involving Sam Cassaniti and other named people. Bridges, the independent lawyers, Accolade Advisory and Carmelo Duardo applied to set aside the subpoena.
The Court’s Holding
Justice Cheeseman set aside the subpoena under r 24.15 of the Federal Court Rules 2011 (Cth). Although it was unnecessary to decide whether the material was technically in the Court’s custody for r 24.12(2)(b), it was held within a court-directed search-order regime and subject to continuing judicial supervision. Allowing production through the subpoena would risk bypassing the safeguards governing the material’s preservation, access and use.
The Court also found compliance would impose a substantial and disproportionate burden. The material included 60 boxes, electronic devices, data from approximately 57 devices, and preserved data from numerous accounts; identifying responsive material and conducting privilege review would be costly and extensive. Unresolved privilege claims and a reserved application to set aside the search orders further supported setting aside the subpoena. Leave to issue a narrowed amended subpoena, and alternative relief facilitating production, were refused.
Key Takeaways
- A subpoena cannot be used to sidestep court supervision of material seized and held under separate civil search orders.
- The independent lawyers’ custodial role, unresolved privilege claims and the intrusive nature of search orders were central considerations.
- The applicants were ordered to pay the moving parties’ costs on the ordinary basis, as agreed or assessed.
Why It Matters
The decision underscores that civil search-order material remains subject to the protective regime under which it was obtained. Parties seeking access in other litigation must account for the supervising court’s processes, privilege protections and the limits of an independent lawyer’s role.
It also confirms that a subpoena may be set aside where compliance would require extensive processing and privilege review of material not assembled or held in the ordinary course.