Federal Court upholds subpoena which requires civil society organisations to produce internal documents, potentially exposing them to pay legal costs to a large corporation
Munkara v Santos Na Barossa Pty Ltd (No 4) [2024] FCA 414
Summary
The Federal Court of Australia (the Court) has upheld a subpoena to produce documents issued against three civil society organisations. These organisations are now required to produce internal documents and are at risk of having to pay a large corporation’s costs in association with proceedings that they were not a party to.
Facts
Santos NA Barossa Pty Ltd (Santos), is an Australian oil and gas exploration and productions company. Santos are responsible for the Barossa Project, which involves the conveyance of gas from a field in the Timor Sea to a plant in Darwin. Three Aboriginal people from Tiwi Island (the applicants) sought an injunction to prevent Santos from commencing pipeline work on the basis that the cultural heritage of the site had not been properly assessed. The applicants were by represented by the Environmental Defenders Office (EDO). Simon Munkara (the first applicant) successfully obtained an interim injunction preventing works until judgment was delivered. While Mr Munkara was initially successful, the judge later dismissed the application which resulted in the injunction being discharged and an order being made that the applicants are to pay the costs for Santos (costs order). The applicants were not in a position to satisfy the costs order.
Santos informed the court that it intended to make a non-party costs application against the EDO. Santos issued a subpoena against EDO, and subsequently issued subpoenas against four non-parties to the proceedings (the addressees), stating that they were intended to inform the issues arising on its costs application against the EDO, and specifically whether or not Santos is required to make a costs application against any of the addressees. The addressees included:
Jubilee Australia Research Centre Ltd (Jubilee);
Market Forces Limited (Market Forces);
The Sunrise Project Australia Limited (Sunrise Project); and
Environment Centre (N.T.) Inc (Environment Centre).
The subpoena compelled the addressees to produce the following documents:
All documents recording or evidencing any payment or indemnity to the Applicants or the EDO, and any underlying agreement of the same, in connection with Proceeding VID 907/2023 (Proceeding) (including prior to the commencement of the Proceeding) (Category 1).
All documents recording or evidencing any communication with the EDO or the Applicants in relation to the Proceeding (Category 2).
The addressees sought to have the subpoenas set aside or varied on the basis that:
they do not possess documents meeting the description in Category 1;
Category 2 is being used as a fishing expedition and therefore constitutes an abuse of process; and
Category 2 is too broad and therefore lacks a legitimate forensic purpose because it is “not appropriately targeted to the indicia” for the costs order.
The addressees proposed alternative categories to the Court for the subpoena.
Decision
The Court first considered whether the subpoenas were an abuse of process in circumstances where there is no present costs application made against any of the addressees. Justice Charlesworth ultimately found that the request was made for a purpose that aligns with the purposes contained within Rule 24.12 of the Federal Court Rules 2011 (Cth), and there is no abuse of process present.
Secondly, the Court noted that Santos was required to demonstrate that there is a reasonable basis for supposing that the addressees possess documents that will legitimately inform their decision as to whether they are required to bring a costs application against the addressees.
In relation to Category 1, the Court held that just because there would be a nil return on the categories proposed by the addressees, doesn’t mean there is no reasonable basis for Santos to pursue them for costs.
In relation to Category 2, the Court discussed the fundamental principle arising from the Roberts-Smith v Fairfax Media Publications Pty Ltd (No 43) [2023] FCA 886 (31 July 2023) and Seven Network (Operations) Limited v Fairfax Media Publications Pty Limited [2023] FCAFC 185 (30 November 2023) cases, which held that the party issuing a subpoena must demonstrate that a subpoena has a legitimate forensic purpose, and that it may be set aside if it is cast in terms which requires the production of documents which do not have apparent relevance to the issues in the case.
The Court referred to the earlier proceedings in relation to the Barossa (Tipakalippa proceedings), in which a Tiwi Islander successfully applied to the Court for a judicial review of a decision relating to the drilling activities within the Barossa Project. Santos has submitted statements that were made within the Jubilee, Sunrise Project and Environment Centre annual reports, which suggested that a relationship existed between the three addressees and Tipakalippa, and that the addressees had participated in and/or contributed to the outcome of the Tipakalippa proceedings.
These statements led the Court to believe that there was a sufficient basis to warrant the issue of Category 2 of the subpoena against these addressees, and as such, the application of these addressees to set aside or vary the subpoena was dismissed.
In contrast, Market Forces did not publish any statements to a similar effect which claimed or suggested that the success of the Tipakalippa proceedings was in any way a success of its own. The Court ordered that the subpoena addressed to Market Forces Ltd be varied to delete Category 2.
Commentary
This decision has impacted the future of litigation within this space. The outcome of this case highlights the risks that may be faced by non-parties who choose to actively support and engage in environmental and climate litigation. Critics of this decision will say that court erred in their decision and that the scope of the subpoena was too broad considering its intended purpose, which was to determine whether the addressees should have to pay the legal costs of Santos. The Court’s fearlessness in ruling against smaller parties suggests a weakened position for activist groups in future litigation in this domain.
In the recent proceedings of Munkara v Santos NA Barossa Pty Ltd (No 5) [2024] FCA 717, Santos sought leave to issue subpoenas to EDO Lawyers and the experts engaged by EDO to prepare reports and provide evidence in support of the applicants’ case. Santos argued that the EDO’s role was unreasonable and ought to attract costs consequences, including because the EDO partially funded the respondent’s case and was involved in preparing flawed expert and lay evidence which could not be relied upon by the Court. In addition, Santos referred to the EDO’s substantial interest in the outcome of the proceeding, arguing that the benefit the EDO would have derived by the success of the proceeding would have been fundamentally different to that in a usual solicitor-client relationship. Santos argued that the EDO therefore ought to bear the burden of the loss at least equally with its client.
The Court allowed Santos’ application to issue the subpoenas, with 11 of the categories being allowed by the Court and 13 categories being disallowed. The Court disallowed categories for various reasons, including where the ambit of documents sought was too wide, the subpoena did not serve a legitimate forensic purpose and where the relevance of documents was not established. As to the allowed categories, the Court was concerned with ensuring the documents sought were not merely speculative and had some reasonable foundation in the material, including that the documents sought would inform the costs application.
This case summary was prepared by Clyde & Co with contributions from Jordan Islip, Garth Tinsley, Olivia Doray.