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District Court 13 April 2022

R v Bigatton

[2022] NSWDC 144

Fraud & dishonesty
CRIMINAL PROCEDURE — SUBPOENA

Citation: R v Bigatton [2022] NSWDC 144
Court: District Court of New South Wales
Date: 13 April 2022
Judge(s): Bennett SC DCJ

Background

The accused faced trial on charges brought by the Australian Securities and Investments Commission (ASIC), including operating an unregistered managed investment scheme and providing financial services without an Australian Financial Services licence, both contrary to the Corporations Act 2001 (Cth). The prosecution arose from alleged involvement with BitConnect International PLC, a company registered in the United Kingdom, and the investigation had extended to inquiries in the UK and the United States.

A central issue in the forthcoming trial was whether the accused had in fact been correctly identified as a director of BitConnect. The accused's solicitors had written to the Commonwealth Director of Public Prosecutions asserting that any appointment of him as a director was fraudulent and made without his knowledge or consent, pointing to UK Companies House records showing other directors had been removed on similar grounds.

ASIC moved by notice of motion to have a subpoena issued by the accused set aside. Through negotiations, the dispute narrowed to a single paragraph of the subpoena, paragraph 4(d), which sought records of all communications between ASIC and any foreign law enforcement body concerning the investigation into the accused.

  • Whether paragraph 4(d) of the subpoena, seeking communications between ASIC and foreign law enforcement bodies, was issued for a legitimate forensic purpose.
  • Whether a subpoena can be used to obtain inter-agency communications rather than the underlying evidentiary material to which those communications relate.

Decision

Bennett SC DCJ began with the foundational principle that a subpoena is not an investigative tool. Its purpose is to bring to court material that is believed to exist and that is relevant to the issues in the proceedings. A subpoena cannot be used simply to discover whether material exists at all.

The Court accepted that the Commonwealth Director of Public Prosecutions had been diligent in its disclosure obligations, including by making further inquiries in response to the accused's concerns about misidentification. Importantly, all underlying evidentiary material, such as company registration records and forms, had been requested and was to be disclosed.

Paragraph 4(d), however, did not seek that underlying evidentiary material. It sought the communications between agencies, including requests for assistance and discussions of methodology. The Court accepted ASIC's submission that such communications would amount to hearsay representations and could not rationally bear on the probability of the facts in issue, including the critical question of whether the accused was correctly identified as the relevant director.

The Court was not satisfied that the accused had established a legitimate forensic purpose for the documents sought in paragraph 4(d). There was no suggestion of any impropriety or inappropriate communication between Commonwealth and foreign law enforcement agencies that might otherwise have grounded such a request. The subpoena was therefore set aside in that respect.

Orders Made

  • Orders made in terms of paragraphs 1 and 2 of the Notice of Motion, including striking out paragraphs 4(a) to 4(d) of the subpoena.

Key Takeaways

  • A subpoena must serve a legitimate forensic purpose: it exists to bring to court material that is believed to exist and is relevant to the proceedings, not to investigate whether relevant material might exist somewhere.
  • Inter-agency communications, such as requests for assistance and discussions of investigative methodology between domestic and foreign law enforcement, do not automatically carry forensic relevance simply because the underlying subject matter is in dispute.
  • Where an accused's real concern is the reliability of specific evidentiary documents, a subpoena directed at the communications that preceded their production will not necessarily satisfy the legitimate forensic purpose test.
  • No suggestion of impropriety between investigating agencies is necessary to attempt such a subpoena, but the absence of any such suggestion will weigh against its survival when the communications sought are hearsay and cannot rationally affect the probability of the facts in issue.
  • The District Court's approach reflects a distinction drawn in the case law between pursuing underlying evidentiary material (which may be legitimate) and pursuing the communications between agencies about that material (which may not be).

Legislation and Cases Referenced

Legislation
- Corporations Act 2001 (Cth), ss 610EE(5), 911B(1), 1041E(1), 1311(1)
- Companies Act 2006 (UK), s 1095

Cases
- A v Z [2007] NSWSC 899; (2007) 212 FLR 255
- Attorney-General (NSW) v Chidgey (2008) 182 A Crim R 536
- R v Saleam [1999] NSWCCA 86
- Secretary of the Department of Planning, Industry and Environment v Blacktown City Council [2021] NSWCA 145
- Tropic Asphalts Pty Ltd v Snowy Monaro Regional Council [2021] NSWCCA 24
- ICAP Australia Pty Ltd v BGC Partners (Australia) Pty Ltd [2009] NSWCA 307
- Waters v Secretary of the Attorney-General's Department (Cth) [2021] NSWCCA 193