A & The A Group

[2006] FamCA 463

FAMILY COURT OF AUSTRALIA

A AND THE A GROUP  [2006] FamCA 463

FAMILY LAW - APPEALS - Application for an extension of time within which to make application for leave to appeal – Delay - where appeal pending in relation to costs consequent upon decision giving rise to application for leave to appeal – effect of refusal of leave to apply out of time upon substantive costs appeal – hardship

FAMILY LAW - PRACTICE AND PROCEDURE – Striking out of Subpoena – Relevance – Breadth of dispute – Extent of discovery between parties

FAMILY LAW - EVIDENCE – Admissibility of Documentary Evidence - Procedural Fairness – Alleged failure to determine admissibility of documents prior to conclusion of hearing – Failure by applicant to press trial Judge for determination prior to conclusion of hearing -  s 135 Evidence Act

Family Law Act 1975 (Cth), ss 94, 117.

Evidence Act  (Cth), s 135.

Family Law Rules 2004 (Cth), Rules 1.14, 13.33, 19.18, 19.19, 19.50, 22.03, 22.46, Schedule 3.

Family Law Rules 1984 (Cth), O 20 r 7.

Hatton v. Attorney-General of the Commonwealth of Australia & Commonwealth Bank of Australia & Commonwealth Development Bank of Australia (2000) FLC 93-038

Ascot Investments Pty Ltd v Harper & Harper (1981) FLC 91-000.

Gallo v Dawson (1990) 93 ALR 479

Joshua v. Joshua (1997) FLC 92-767

Bruce F McLaren Holdings Pty Ltd & Ors v McLaren and McLaren (2000) FLC 93-030

Rutherford and Rutherford (1991) FLC 92-255

Aarons v Knowles (1995) FLC 92-627

Epstein and Epstein (1993) FLC 92-384

National Employers’ Mutual General Association v Waind and Hill [1978] 1 NSWLR 372

Relationships Australia v Pasternak & Children’s Representative (1996) FLC 92-699
APPLICANT:  A

RESPONDENT:  THE A GROUP [See Schedule A]

FILE NUMBER:       MLF1044 of 2005

DATE DELIVERED:  8 June 2006

PLACE DELIVERED:  Melbourne

JUDGMENT OF:  Bryant CJ

HEARING DATE:     21 April 2006

REPRESENTATION

COUNSEL FOR THE APPLICANT:   Mr St John of Senior Counsel and Mr

Strum of Counsel

SOLICITORS FOR THE APPLICANT:  Messrs Taussig Cherrie & Associates

COUNSEL FOR THE RESPONDENTS:  Mr Dickson of Counsel

SOLICITORS FOR THE RESPONDENTS: Messrs Herbert Geer & Rundle

ORDERS

1. That pursuant to rule 1.14(1) of the Family Law Rules 2004 compliance by the wife with the time required by rule 22.46(1) of the said Rules for making an application for leave to appeal from the Orders of the Honourable Justice Guest made 9 June 2005 pursuant to section 94AA(1) of the Family Law Act 1975 be extended to 17 March 2006, the date of filing of the application for leave.

2. That the hearing of the application for leave to appeal the Orders of the Honourable Justice Guest and the appeal, if leave is granted, be consolidated and determined with the hearing of the wife’s Notice of Appeal from the Orders of the Honourable Justice Guest made 9 February 2006 filed 9 March 2006.

3. That the Southern Regional Appeals Registrar make all relevant orders and directions to enable the hearing of the application for leave to appeal to be determined with the notice of appeal referred to in paragraph 2 hereof.

4. That the costs of both parties be considered costs in Appeal SA 34 of 2006.

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLF1044 of 2005

A

Applicant

And

THE A GROUP  [See Schedule A]

Respondents

REASONS FOR JUDGMENT

INTRODUCTION

1. This is an application filed by the wife on 17 March 2006 seeking an extension of time to seek leave to appeal orders made by Guest J on 9 June 2005. I am hearing this application in my capacity as a single judge of the Appeal Division pursuant to section 94(2D)(e) which provides that applications of a procedural nature, including applications for an extension time within which to file an application for leave to appeal, may be heard and determined by a Judge of the Appeal Division.

2. The order in respect of which leave to appeal is sought if an extension of time is granted, is an order made by Guest J on 9 June 2005 on a review of orders made by a Registrar granting leave to inspect and copy documents produced by P, a firm of accountants, pursuant to a subpoena issued by the wife.  In addition, the applicants before Guest J sought that the relevant subpoena directed to P be struck out.

3. In her application of 17 March 2006, the wife sought in addition that the hearing of her application for leave and any appeal from the orders of Guest J made on 9 June 2005 be consolidated and determined with the hearing of the wife’s appeal from a costs orders made by Guest J on 9 February 2006 consequent upon his earlier decision.  Given the subject matter of the proceedings, namely the striking out of a subpoena which is interlocutory in nature, it is clear that leave to appeal the decision is required.  

A short history of the litigation

1. The context in which the application to strike out the subpoena directed to P was heard, was the imminent hearing of the wife’s application for interim orders for urgent spousal maintenance, a payment by the husband to her of $50,000 litigation funding (a `Barro’ Order), child support and detailed orders for discovery.   These interim applications were sought in the wider context of proceedings between the parties in relation to children’s issues, property, maintenance and child support.  It is common ground that the wife’s interim application was listed to be heard the day after the judgment of Guest J relevant to the subpoena issue, was delivered.  

The conduct of the litigation before Guest J

1. As part of the preparation for the interim hearing, the wife caused her solicitors to issue a subpoena directed to P accountants seeking production of the documents in the possession, custody or control of the Group Accountants for the A group of companies and referred to in Schedule 1, which is in the following terms:

   `Schedule 1
   For the period as and from 1 January 2002 all:

   ·Correspondence

   ·working papers

   ·accounts for work done by you

   ·files

   ·journals

   ·ledgers

   ·cash books

   ·computer printouts and reports

   ·taxation returns

   ·notes to accounts

   ·depreciation schedules

   ·annual returns

   ·trading profit and loss accounts

   ·balance sheets

   ·member's statements

   ·trust deeds

   ·variation to trust deeds

   ·company constitutions

   ·beneficiary loan account ledgers

   ·business activity statements

   ·instalment activity statements

   ·company registers

   ·secretarial files

   ·minutes

   ·deeds

   ·loan agreements

   ·deeds of agreement

   ·records of telephone conversations

   in relation to each of the following:-
   A.       

   1.[the Husband] …

   2.[Company A];

   3.[Company B];

   4.[Company C];

   5.[Company D];

   6.[Company E];

   7.[Company F];

   8.[Company G];

   9.[Company H];

   10.[Company I];

   11.[Company J];

   12.[Company K];

   13.[Company L];

   14.[Company M];

   15.Any other corporation (other than a public company), partnership, joint venture business or other commercial activity in relation to which [the Husband] has a beneficial interest or entitlement.

   16.Any trust:-

   (i)of which [the husband] is or was the appointor, trustee or guarantor including but not limited to the SA Family Trust established by deed of settlement dated 4 March 2002;

   (ii)of which [the husband], any child of [the husband] and/or a spouse of [the husband] is or was an eligible beneficiary as to capital or income;

   (iii)of which a corporation is or was an eligible beneficiary as to capital or income and [the husband], and/or child and/or spouse of [the husband] is or was a shareholder or director;

   (iv)over which [the husband] has or had any direct or indirect power or control;

   (v)in respect of which [the husband] has or had the power (whether directly or indirectly) to remove or appoint a trustee;

   (vi)in respect of which [the husband] has or had the power (whether subject to the concurrence of another person or not) to amend the terms thereof;

   (vii)in respect of which [the husband] has or had the power to disapprove a proposed amendment of the terms thereof or the appointment or removal of a trustee;

   (viii)over which a corporation has or had the powers mentioned in any of the sub-paragraphs above, if [the husband] and/or any child and/or a spouse of [the husband] is or was the director or shareholder of the corporation;

   B. Member statements for all superannuation funds of which [the husband] is a member and, if self managed, the trust deed and financial statements for such fund for the last three financial years.’

1. A notice of objection to the subpoena was filed by a firm of solicitors on behalf of the company and trusts listed in the schedule to the notice (conveniently called `the A Group’).  On 12 May 2005, the Registrar granted leave to inspect and copy the documents produced by P (other than those documents to which a claim for legal professional privilege might be claimed) but stayed the Order conditional upon and pending a review application which was filed later that day.  It was that application that came before Guest J.

2. Despite particularising seven items in the Notice of objection, at the hearing before Guest J the A Group limited their arguments to the following points (at paragraph 3 of his Honour’s reasons for judgment):-

   a.The subpoena was too wide and oppressive, and `wholly misconceived’;

   b.The documents sought were not relevant to the interim issues before the Court;

   c.The subpoena, `insofar as it catches documents’ which were relevant, was both premature and inappropriate in form. 

1. The Application to review was brought by the A Group constituting the entities whose documents were the subject of the subpoena.  The A Group was also the respondent to this application.

2. The husband and wife were married [in 2002] and separated [in February 2005].  They have two children, now aged 3 ½ years and almost 2 years.

10.In broad terms, the purpose of the issue of the subpoena was to obtain information about the A Group to demonstrate the husband’s real position within the A Group and thus his benefits and entitlements beyond the documents disclosed by the husband to that point, and his stated position as a shareholder and director, beneficiary of trusts and managing director of [Company H].  

11.The wife contended that the A family was extremely wealthy and she asserted by reference to documents and previous comments by the husband that his interests in the Group was more significant than that which he had revealed.  The specific nature of the claims made by the wife was dealt with by Guest J in his judgment of 9 June 2005.

The Judgment of Guest J

12.The first determination his Honour had to make was about the admissibility of documents sought to be tendered by the wife, having been previously obtained under subpoena without objection from third parties (referred to as the disputed documents).  A concession was made that the documents were admissible as a business record, but the A Group opposed the admission of the documents on the basis that they were outside the knowledge of the applicants and they had not received notice of the wife’s intention to seek to have them admitted.  In the exercise of his discretion pursuant to section 135 of the Evidence Act (Cth), Guest J determined that the receipt of the documents would be unfairly prejudicial to the applicants, on the basis that the A Group was never put on notice by the wife’s solicitors of her intention to rely upon the relevant documents.  His Honour found that they had no time to investigate, assess or make an informed decision about the accuracy or meaning sought to be imputed by Counsel for the wife from the documents and his Honour found that there was a high risk of procedural disadvantage to them.  In any event, he was not persuaded as to the probative value of the documents or the manner and extent to which they could rationally effect his assessment of the issues for determination. In addition, his Honour noted that some questions of interpretation arose given regard to an `ambiguity inviting speculation as to meaning’ (at paragraph 12).

13.Whilst noting other arguments advanced by Senior Counsel for the A Group, his Honour noted that the principle complaint was directed to the issue of relevance.  He observed that it was clear law that (at paragraph 48):-

`[T]he question of relevance or apparent relevance is an arguable ground or basis for setting aside a subpoena and that a party seeking to uphold the issue of a subpoena seeking documents must demonstrate that those documents have an apparent relevance to the issue or issues before the court and in respect of which the subpoena was filed.  See Hatton v Attorney-General of Commonwealth of Australia & Ors. (supra) at p 87,607, citing Santos Ltd v Pipelines Authority of South Australia (1996) 66 SASR 38 esp. at 52 per Debelle J (relying upon Trade Practices Commission v Arnotts Ltd (No. 2) (1989) 88 ALR 90).’

14.There was no challenge to this aspect of his Honour’s finding.

15.Referring to Hatton v. Attorney-General of the Commonwealth of Australia & Commonwealth Bank of Australia & Commonwealth Development Bank of Australia (2000) FLC 93-038, his Honour noted that there were no pleadings as such at present in the Family Court, and the only way in which the apparent relevance of documents sought under subpoena particular to the proceedings could be established was by reference to the affidavit material filed for the purpose of the proceedings. Again there was no challenge to this aspect of his Honour’s findings. His Honour found that the terms of the subpoena failed to meet the test of relevance and in particular the width of the various class of documents called for did not satisfy the test of apparent relevance. Some of the material, he found did not `on the face of it, bear relevance to the interim issues raised in the affidavit material’ (at paragraph 52).

16.His Honour noted in addition that many of the hurdles faced by the wife’s Counsel in argument were generated by the fact that `the process involving proper inquiry, production and inspection of relevant documents from the husband had not been undertaken by the wife’s practitioners’ (at paragraph 52).

17.His Honour found that the width of the documents sought by the wife under subpoena went far beyond that which was necessary to enable her to properly prepare her case for `interim financial support’.  His Honour noted that details of the husband’s position in the A Group, including directorships, shareholding, and control were known to the wife. He found that she had not asserted that the husband had de facto control or that any of the thirteen corporate entities were the alter ego of the husband in the sense explained in Ascot Investments Pty Ltd v Harper & Harper (1981) FLC 91-000.

18.Given his finding on these issues his Honour found it unnecessary to address the remaining arguments advanced by Senior Counsel for the A Group.  He was not prepared to effectively re-write the subpoena to limit it to relevant matters and set the subpoena aside. 

19.The precise orders made by his Honour were as follows:-

(1)    That paragraph 5 of the orders made on 12 May 2005 be discharged.

(2)    That the subpoena directed to the Managing Partner, P, Accountants of … Melbourne and filed on 27 April 2005 be set aside.

(3)    That the Form 2 Application of the Applicants filed on 12 May 2005 be otherwise dismissed.

(4)    That any application for costs by the Applicants be in writing supported by written submissions and be filed and served within 14 days, and any submissions in response by the wife be filed and served within 14 days thereafter.

(5)    That the documents produced by P under the said subpoena be returned to that firm as soon as practicable.

(6) That pursuant to rule 19.50 of the Family Law Rules 2004 this matter reasonably required the attendance of Counsel including Queen’s Counsel and one Junior Counsel for the Applicants.

Costs Judgment

20.Consequent upon Guest J’s orders for the setting aside of the subpoena, an application for costs was made by the A Group and by the husband’s father. Guest J noted the various matters in section 117(2A) of the Act and found that there were matters in combination of them which justified the conclusion that costs should be ordered. He noted that it was not necessary that he be satisfied that there was a `clear case’, or `an exceptional case’ before an Order for costs could be made. He observed that his reasons for judgment in relation to the setting aside of the subpoena had established that the terms and content of the subpoena as drawn and served were `incompetent’ and `caused the applicants to needlessly incur substantial costs in respect to which they [sought] redress’. He observed that straitened or modest financial circumstances of a party would not necessarily afford protection against a costs order and that the wife’s conduct in issuing the subpoena in the form as served was a significant factor in coming to his determination. He was satisfied that it was appropriate to order the wife to pay the costs notwithstanding the financial disparity between the applicants. He found that it was sufficient to accept the concession made by Counsel for the A Group that the group’s financial superiority to that of the wife was `substantial’ (at paragraph 15, reasons for judgment 9 February 2006).

21.His Honour also took into account as a significant factor the Notice of Objection forwarded by the solicitors for the applicants on 5 May 2005 to the wife’s solicitors inviting them to withdraw the subpoena, failing which they would appear on 12 May 2005 and if necessary, seek an order for costs.  He observed that two days later a further letter was written inviting withdrawal of the subpoena.   His Honour further observed that the A Group had made an offer to produce a certain class of documents on 16 May 2005, but that no common accord could be reached. 

22.As to the quantum of costs, his Honour noted that, although somewhat unclear, the applicants were seeking an order for costs on an indemnity basis. His Honour discussed the various authorities in relation to indemnity costs, noting his discretion to order such costs and the manner in which that discretion should be exercised. In the end, his Honour came to the conclusion that it would be inappropriate to make an order for costs in favour of the applicants on an indemnity basis. His Honour then considered rule 19.19 of the Family Law Rules 2004 (`the Rules’) and noted that he was entitled to order that rule 19.18 not apply and that a party was entitled to costs as assessed on a lawyer and client basis (rule 19.19(1)(b) of the Rules).  He observed the considerations which could be taken into account in making such an order and found that there was power to find that a party was entitled to costs which a trial judge could fix in a specific amount (rule 19.19(1)(a)). His Honour then found that given the circumstances of the case it was reasonable for the applicants to engage Queen’s Counsel and that he would order that the applicant’s legal costs be taxed and paid on a solicitor/client basis as agreed or in default of agreement as assessed under the Rules. His Honour directed that rule 19.18 of the rule did not apply, and indicated an intention to fix Counsel’s fees in the amounts sought in respect of both senior and junior Counsel. He noted that the contested issues were difficult, complex and important and in paragraph 44 of the reasons for judgment said:-

`The contested issues were difficult, complex and important and in my view the Applicants’ solicitors are properly entitled to their professional fees as assessed on a lawyer and client basis.  The particular circumstances detailed by me warrant the making of the orders I propose and justify me departing from the usual course of costs being assessed on a party/party basis.  This is an exercise of my discretion.’

23.His Honour finally noted the submission of the applicant’s counsel that costs be reserved to the trial Judge, but rejected that submission.  The orders made by his Honour were:-

(1) That subject to paragraph 2 hereof, the wife do pay the costs of the Applicants, including costs reserved on a solicitor/client basis as agreed or in default of agreement to be assessed under the Family Law Rules 2004 (Cth) AND I DIRECT that Rule 19.18 of the Rules does not apply.

(2)      That the wife do pay the fees of counsel engaged by the Applicants limited to the amounts set out in the Applicants’ submissions.

(3)      That payment of the costs and fees be stayed pending final determination of the proceedings.

(4) That pursuant to rule 19.50 of the Family Law Rules 2004 this matter reasonably required the attendance of Counsel.

24.The relevance of the costs judgment to these proceedings is that within the time prescribed by the Rules the wife filed a Notice of Appeal in relation to his Honour’s decision about costs.  It is relevant in my view to consider the grounds of appeal which follow:-

1.      The learned Judge erred in law and/or the exercise of his discretion in making an order for costs against the wife and in favour of the third parties.

2.      The learned Judge erred in the exercise of his discretion in refusing to reserve the question of the third parties’ costs to the trial Judge at the final hearing of the financial proceedings.

3.      The learned Judge denied the wife procedural fairness in making an Order for costs assessed on a solicitor/client basis rather than the indemnity basis sought by the third parties (and purportedly refused)  in circumstances where:

a.Such Order was not sought by the third parties; and/or

b.Such an  Order was not foreshadowed by the learned Judge; and/or

c.No opportunity or notice was given to the wife to make submissions as to the making of such an Order.

4.      That the learned Judge erred in inter alia regarding it as a relevant principle/factor when determining the question of costs that it had been incumbent upon the wife to exhaust her rights of discovery against the husband before seeking to subpoena documents from the third parties.

5.      The learned Judge erred in law in making an order for costs where there was no evidence, or no proper evidence, of:   

a.The financial circumstances of the third parties, as required by sec. 117(2A)(a) of the Family Law Act 1975, other than a concession that their financial position was `superior’ to that of the wife; and/or

b.The extent to which the financial position of the third parties was superior to that of the wife.

6.      The learned Judge erred in relegating submissions made on behalf of the wife that a credit loan account in her name with the K Family Trust was unable to be accessed as `mere bald assertion’ and taking the loan account into account as an asset to which she was presently entitled.

7.      That whilst the learned Judge determined he would not pre-empt the outcome of submissions to be made on behalf of the wife to the Trial Judge as to:

a.The husband’s involvement, degree of control and entitlements in the third parties; and/or

b.The failure of the husband to make proper disclosure of his financial circumstances and of the documents of the third parties in his possession, power or control,

by proceeding to order costs the learned judge did pre-empt such submissions and to the detriment of the wife.

8. The learned Judge erred in law and/or in the exercise of his discretion in dispensing with the application of rule 19.18 of the Family Law Rules 2004 (both in relation to solicitors’ costs and disbursements and Counsels’ fees in circumstances where:

a.He held that it was inappropriate to make an order for costs on an indemnity basis;

b.The [sic] was not evidence as to whether the third parties had entered into a costs agreement with their solicitors and, if so, the terms and conditions of such agreement, including the rates at which costs and disbursements were to be charged;

c.He failed to consider or to determine the fixing of the appropriate method of calculation of such fees pursuant to Rule 19.19(c) & (d).

9. The learned Judge, in circumstances where he had held that it was inappropriate to make an order for costs on an indemnity basis, erred in law in dispensing with the application of rule 19.18 of the Family Law Rules 2004 and failing to fix the method of calculation of such fees pursuant to Rule 19.19(c) & (d), thereby requiring the wife to pay costs assessed on whatever scale and amount of costs had been, or would be, rendered to the third parties by their solicitors and/or their counsel.

10.    That the learned Judge erred in law and in the exercise of his discretion in quantifying fees for Senior and junior counsel without reference to, or consideration of, the scale of fees prescribed within Schedule 3 of the Family Law Rules (`the Scale’).

11.    That in the circumstances of the case it was not open to the learned Judge to require payment of fees contemplated by the Scale calculated at a rate other than that prescribed by the Scale.

12.    That the learned Judge erred in law and in the exercise of his discretion in requiring the wife to pay fees in accordance with the submissions of the third parties rather than the Scale.

13.    That if in the circumstances of the case the learned Judge was entitled to depart from the Scale when determining that the wife pay costs (including both solicitors and counsel) as described in the Submissions of the third parties, he failed to give proper or adequate reasons for doing so.

14.    That it was not open for the learned Judge to determine that counsel’s fees he was requiring the wife to meet were appropriate in the circumstances in the absence of sufficient evidence or detail of:

a.The work performed by counsel (both Senior and junior)

b.The cost of each of the items of work for which fees could be rendered; and/or

c.The manner and rate of fees charged; and/or

d.A comparison of the fees of counsel as sought and fees properly chargeable pursuant to the Scale.

25.It is common ground that the costs judgment is a final judgment and as such leave to appeal is not required.   In the event that she successfully seeks an extension of time to have her application for leave to appeal heard, the wife seeks to have both the application, and if successful, her appeal, heard at the same time as the costs appeal.

Leave to Appeal out of time – Relevant Principles

26.McHugh J, Justice of the High Court of Australia, considered the principles applicable to an application for leave to appeal out of time in the decision of Gallo v Dawson (1990) 93 ALR 479 at 480-1:-

`The applicant sought to extend time in which to file a notice of appeal against an order dismissing an action brought in the original jurisdiction of the High Court. The application was brought 16 months out of time.

…. [T]he applicant relied on the provisions of O 60, r 6 to support her application. That rule provides that the court or a justice may enlarge the time appointed by the Rules for doing an act upon such terms, if any, as the justice of the case may require and that the enlargement may be ordered although the application is not made until after the expiration of the time appointed or fixed for doing the act. The grant of an extension of time under this rule is not automatic. The object of the rule is to ensure that those Rules which fix times for doing acts do not become instruments of injustice. The discretion to extend time is given for the sole purpose of enabling the court or justice to do justice between the parties: see Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VR 257 at 262.

This means that the discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the applicant. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time: see Avery v No 2 Public Service Appeal Board [1973] 2 NZLR 86 at 92; Jess v Scott (1986) 12 FCR 187 at 194 5 ; 70 ALR 185.

When the application is for an extension of time in which to file an appeal, it is always necessary to consider the prospects of the applicant succeeding in the appeal: see Burns v Grigg [1967] VR 871 at 872; Hughes, at 263 4; Mitchelson v Mitchelson (1979) 24 ALR 522 at 524. It is also necessary to bear in mind in such an application that, upon the expiry of the time for appealing, the respondent has “a vested right to retain the judgment” unless the application is granted: Vilenius v Heinegar (1962) 36 ALJR 200 at 201. It follows that, before the applicant can succeed in this application, there must be material upon which I can be satisfied that to refuse the application would constitute an injustice. As the Judicial Committee of the Privy Council pointed out in Ratnam v Cumarasamy [1965] 1 WLR 8 at 12; [1964] 3 All ER 933 at 935:

The rules of court must prima facie be obeyed, and in order to justify a court in extending the time during which some step in procedure requires to be taken there must be some material upon which the court can exercise its discretion.

….

In Hughes McInerney J pointed out (at 263) that one object of fixing time under court rules is “to achieve a time table for the conduct of litigation in order to achieve finality of judicial determinations”. When the time for appealing has expired, the litigation is at an end; the successful party is entitled to the benefit of the judgment in his or her favour. At that stage, the successful party has a “vested right to retain the judgment”. It would make a mockery of O 70, r 3 if, months after the time for appealing has expired, the unsuccessful party could obtain an extension of time on the ground that he or she had delayed appealing because that person wanted to research the issues involved.’

27.Lindenmayer J later considered the principles set out in Gallo v. Dawson (supra) in Joshua v. Joshua (1997) FLC 92-767 at 84,440:-

`The power of the Court to extend the time for the institution of an appeal is a discretionary power to be exercised when it is shown to the Court's satisfaction by the applicant that strict compliance with the rules will work an injustice to the applicant: Gallo v Dawson (1990) 93 ALR 479 at 480. Thus, as the Full Court of this Court said in Coombs and Moore (1990) FLC 92-175 at 78,189:

“The Court, in our view, must have demonstrated to it by the applicant for an extension of time that an injustice will occur if the appeal does not proceed. It is not enough for the Court to have doubts about the propriety of the order sought to be set aside.”

Accordingly, the first and most important question to be determined upon such an application as this is whether the applicant has established that there is a substantial issue to be raised on appeal. If not, the application must fail. If so, then other considerations may become relevant to the exercise of the discretion, namely: the extent of the delay and the reasonableness of any explanations offered for it; any hardship or prejudice flowing to the respondent from the applicant's delay which cannot be compensated for by orders as to costs or otherwise: and the desirability, in the public interest, that there be finality to litigation. In that regard see also McMahon and McMahon (1976) FLC 90-038 at 75,144 and Tormsen and Tormsen (1993) FLC 92-392.’

The proposed Grounds of Appeal

28.The wife seeks leave to argue the following grounds of appeal:-

1.   The learned Judge erred in law and/or the exercise of his discretion in:

i.Discharging paragraph 5 of the Orders of Registrar Marrone made on 12 May 2005 (“the said Order”);

ii.Setting aside the subpoena directed to the Managing Partner, P, Accountants and filed on 27 April 2005 (“the Subpoena”);

2.   That the learned Judge when discharging the said Order and/or setting aside the Subpoena acted upon erroneous principle(s) of law.

3.   The learned Judge erred in law and/or in the exercise of his discretion in refusing to admit into evidence:

i.Two documents signed by the husband and submitted to CommInsure styled “Personal Statement – Personal Insurance Portfolio” dated 22 March 2004 and 20 May 2004; and

ii.A copy cheque on the husband’s Colonial Mutual Life Assurance Society file dated 25 August 2003 in the sum of $2,844.39 drawn upon a Commonwealth Bank account in the name of [Company A] as trustee for the [AM] Family Trust,

(hereinafter referred to collectively as `the disputed documents’).

4.   The learned Judge erred in law and/or denied the wife procedural fairness in:

i.Failing to rule upon the admissibility of the disputed documents during the hearing before him; and/or

ii.Deciding to refuse the wife permission to adduce the disputed documents into evidence before him after the conclusion of the hearing before him; and/or

iii.Disregarding documents (not being the disputed documents) referred to in the written submissions of counsel for the wife when such were not the subject of complaint or objection by the third parties, nor had the learned Judge foreshadowed he may refuse to have regard to such documents; and/or

iv.Not affording the wife of an opportunity to seek an adjournment to remedy the prejudice he had determined would enure to the third parties if the disputed documents were admitted into evidence.

5.   The learned Judge erred in law and/or in the exercise of his discretion in:

i.Holding that the receipt into evidence of the disputed documents would be unfairly prejudicial to the third parties; and or

ii.Discharging the said Order and setting aside the subpoena without affording the wife an opportunity to make an application for adjournment and/or considering if any prejudice to the third parties could be otherwise remedied.

6.   The learned Judge erred in law and applied an incorrect test in requiring the wife to establish that the documents sought in the Subpoena had “sufficient” relevance rather than “apparent” relevance to the interim applications before the Court.

7.   That the learned Judge erred in law in the circumstances in requiring the wife to advance probative and/or cogent supporting evidence when determining whether or not an issue was of “apparent relevance”.

8.   The learned Judge, when considering whether the documents sought within the Subpoena were of “apparent” or “sufficient” relevance, failed to give any, or sufficient, consideration to Rule 13.04.1 of the Family Law Rules.

9.   The learned Judge erred in law and in fact in holding that the evidence of the wife fell far short of establishing a sufficient basis to support the Subpoena.

10. That the learned Judge erred when he undertook the task of determining the probative value of the disputed documents.

11. That the learned Judge erred in law and in fact in holding that the disputed documents had no, or no sufficient, probative value for the purposes of satisfying the appropriate test.

12. The learned Judge erred in law and in fact in holding that many of the classes of documents sought in the Subpoena were not:

i.Appropriately relevant to;

ii.Likely to add to the relevant evidence in,

the interim applications otherwise before the Court.

13. The learned Judge erred in law and in fact in holding that the width of the documents sought in the Subpoena went far beyond that necessary to enable the wife to properly prepare her case for interim financial relief.

14. The learned Judge:

i.Took into account irrelevant considerations, namely, that discovery as between the husband and the wife had not yet taken place or been pursued; and/or

ii.Erred in law in holding that it was inappropriate for the wife to issue the Subpoena before exhausting her rights of discovery against the husband; and/or

iii.Erred in law in determining that the affidavit evidence of the accountants of the third parties as to the control of the relevant companies was evidence that was independent and/or to be accepted by the wife and the Court for the purposes of interlocutory proceedings; and/or

iv.Erred in law and in fact that the husband’s response to the wife’s interim financial claims was such as to justify a finding that the documents sought within the Subpoena were of excessive width, variety and magnitude.

15. The learned Judge erred in fact in finding:

i.That the subpoena was being utilized by the wife as a substitute for discovery; and/or

ii.That the wife conceded the relevant companies in the third parties were controlled by the husband’s parents; and/or

iii.That the wife had not asserted the husband had aspects of de facto control of the relevant companies in the third parties; and/or

iv.That the wife’s evidence of the husband’s control within the third parties was no more than a “generic and unsupported assertion”.

16. The learned Judge erred in law and/or in the exercise of his discretion by:

i.Refusing to limit the documents sought in the Subpoena, as submitted by Counsel for the wife in the alternative; and/or

ii.Holding that even such limited documents did not satisfy the test of relevance; and/or

iii.Failing to require the production even of those documents conceded by the third parties; and/or

iv.Failing to give consideration to the principles of Rule 1.07 of the Family Law Rules.

Leave to Appeal  - Applicable Principles

29.The Full Court of the Family Court in Bruce F McLaren Holdings Pty Ltd & Ors v McLaren and McLaren (2000) FLC 93-030 at 87,486 described the relevant principles at 87,486:-

`….As the High Court said in Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 176:

``The essence of such a matter is described in terms which are sufficient for present purposes in Salmond on Jurisprudence 10th ed. (1947), p. 476:

`Substantive law is concerned with the ends which the administration of justice seeks; procedural law deals with the means and instruments by which those ends are to be attained. The latter regulates the conduct and relations of courts and litigants in respect of the litigation itself; the former determines their conduct and relations in respect of the matters litigated'.''

It is apparent from the applicant's submissions in respect of the application for leave that they accept that the orders relate to a matter of practice and procedure. ….

An applicant seeking leave to appeal from interlocutory orders must demonstrate that there has been an error of principle and/or a substantial injustice to one of the parties (Rutherford and Rutherford (1991) FLC 92-255) or that the issue is one of general importance: Aarons v Knowles (1995) FLC 92-627.

Counsel for each of the parties concede in their written submissions that it has not been conclusively decided whether the Rutherford (supra) requirements ought to be applied disjunctively or not. Counsel for the applicants submits that in any event, both criteria have been met, whereas counsel for the respondent argues that neither has been met.

Before further considering this aspect of the matter, it is useful in our view, to refer to the following passage from the judgment of the High Court (Gibbs CJ, Aickin, Wilson and Brennan JJ) in Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (supra) at 177:

``Nor is there any serious dispute between the parties that appellate courts exercise particular caution in reviewing decisions pertaining to practice and procedure. Counsel for Brown urged that specific cumulative bars operate to guide appellate courts in the discharge of that task. Not only must there be error of principle, but the decision appealed from must work a substantial injustice to one of the parties. The opposing view is that such criteria are to be expressed disjunctively. Cases can be cited in support of both views: for example, on the one hand, Niemann v Electronic Industries Ltd [[1978] VR 431, at p 440]; on the other hand, De Mestre v AD Hunter Pty Ltd [(1952) 77 WN (NSW) 143, at p 146]. For ourselves, we believe it to be unnecessary and indeed unwise to lay down rigid and exhaustive criteria. The circumstances of different cases are infinitely various. We would merely repeat, with approval, the oft-cited statement of Sir Frederick Jordan in In re the Will of F.B. Gilbert (dec.) [(1946) 46 SR (NSW) 318, at p 323]:

`... I am of the opinion that... there is a material difference between an exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal.'

See also, Brambles Holdings Ltd v Trade Practices Commission [(1979) 40 FLR 364, at p 365; 28 ALR 191, at p 193]; Dougherty v Chandler [(1946) 46 SR (NSW) 370, at p 374]. It is safe to say that the question of injustice flowing from the order appealed from will generally be a relevant and necessary consideration.''’

30.Section 94(1A) of the Act provides that an appeal must be instituted within the time described by the standard rules of court or within such further time as is allowed in accordance with the standard rules of court. Rule 22.03 provides that an appeal must be filed within 28 days after the day on which the order appealed was made. Rule 22.46(1) relevantly provides that an application for leave to appeal must be filed within 28 days of the date of the Order.

31.The wife conceded that it was necessary for her to demonstrate that there had been an error of principle and/or a substantial injustice to one of the parties (Rutherford and Rutherford (1991) FLC 92-255) or that the issue is one of general importance: Aarons v Knowles (1995) FLC 92-627.

32.In pursuing the proposition that the grounds raised matters of principle, the wife relied upon a number of what she contended were errors by the trial Judge. 

His Honour’s alleged failure to determine the admissibility of the `disputed documents’[1]

[1] Two documents signed by the husband and submitted to CommInsure styled `Personal Statement – Personal Insurance Portfolio’ dated 22 March 2004 and 20 May 2004; and

A copy cheque on the husband’s Colonial Mutual Life Assurance Society file dated 25 August 2003 in the sum of $2,844.39 drawn upon a Commonwealth Bank account in the name of [Company A] as trustee for the [AM] Family Trust.

33.Senior Counsel for the wife contended that in failing to determine during the hearing, whether documents the wife sought to rely upon would be admitted, and subsequently rejecting them, the wife was given no opportunity to seek an adjournment to remedy such prejudice or consider how any prejudice could otherwise be remedied.  Senior Counsel argued that as a matter of principle it was an unsafe and dangerous practice for determinations as to the admissibility of evidence not to be made in the course of the hearing.

34.It was contended that if his Honour had given a decision prior to the conclusion of the hearing, the wife could have made a decision as to whether she proceeded without relying on the documents or whether she should seek an adjournment.  It was submitted by Senior Counsel for the wife that the result was that documents, which it is contended would have provided an argument as to relevance of some of the subpoenaed documents, were excluded in circumstances of procedural unfairness to the wife. 

35.This, it was contended, was not only a significant detriment to the wife but also a matter of important principle in a court where it is common for information to be gathered from the issue of third party subpoenas, and important to refrain from not unreasonably constraining a party’s ability to do so.

36.Counsel for the A Group however submitted that his Honour’s rejection of the documents was based not solely on their late tender, but also because of the ambiguity inherent in the documents. In my view, this was clearly one of the matters under section 135 of the Evidence Act (Cth) which his Honour was entitled to take into account in the exercise of his discretion.  More important however in my view, was the respondent’s submission that when his Honour indicated his intention to reserve judgment on the question of the admissibility of the documents he was not pressed by Counsel for the wife to do otherwise.  The respondent’s Counsel contended that if the wife had thought it crucial to her case then it is inconceivable that she would not have pressed his Honour for a determination as to admissibility before the matter proceeded any further.  That in my view is a substantial answer to both parts of the wife’s submission.  It deals with the question of hardship to the wife and further, it diminishes any strength there may have been in an argument that as a matter of principle questions of admissibility should be determined during the hearing.  Clearly his Honour was not making a determination that as a matter of principle such arguments about admissibility should never be dealt with during a hearing, particularly in a case where he was not pressed to do so.

37.Senior Counsel for the wife also submitted that his Honour erred in disregarding other documents (not being the disputed documents) referred to in the written submissions of Counsel for the wife, when they were not the subject of complaint or objection by the third parties.  His Honour deals with this matter at paragraphs 9 and 13 of his reasons for judgment.   It appears from the judgment, and is not the subject of any dispute, that the only documents sought to be tendered by Counsel for the wife were the two disputed documents. His Honour says in paragraph 9, `he did not seek to tender any of the other documents referred to in his Submission’.  In paragraph 13 of his reasons for judgment his Honour rejects the application to tender the two disputed documents, and goes on to state `and I otherwise disregard those other documents referred to in his written Outline of Submissions’.   

38.The complaint of the wife on this issue is that there was no specific objection taken by the A Group to references to the other documents and his Honour therefore should have had regard to them or at least informed Counsel that he did not intend to do so.  Counsel for the respondents submits that simply because documents were referred to in submissions does not mean they were automatically admitted into evidence unless properly tendered, and furthermore, his Honour was entitled to ignore documents not tendered or not otherwise in evidence even if no specific objection to reference to them had been made.  Whilst it appears that Counsel for the wife believed the documents referred to would be given weight absent a specific objection, it was incumbent on Counsel to ensure that the evidence sought to be relied on was properly admitted and absent agreement between the parties that the documents could be relied on, his Honour could not be said to have erred in disregarding them. 

The assertion that his Honour applied an incorrect test in requiring the wife to establish that the documents sought in the subpoena had `sufficient’ relevance rather than `apparent relevance’ to the interim applications before the Court and in requiring the wife to advance probative and/or cogent supporting evidence in determining whether or not an issue was of `apparent relevance’[2]

[2] Grounds 6, 7, 8, 9 and 10 were the proposed grounds of appeal.

39.Counsel contended that it was unclear what test his Honour was applying. Rule 13.33(1) of the Rules deals with service of a notice on non-parties requesting that party to produce a specified document of documents:-

(1)      A requesting party may serve a Notice of Non-party Production of Documents (Form 12) on a non-party, requiring the non-party to produce to the requesting party a specified document or class of documents:

(a) relevant to an issue in the case;

(b) in the possession, or under the control, of the non-party;

(c) that the non-party may be required to produce at the trial.

(2)    A Form 12 may be served only if there is no other reasonably simple and inexpensive way of proving the issue sought to be proved by the document specified in the Form.

(3)  …..

40.This rule was raised by way of analogy by Senior Counsel for the A Group but informed the question of whether the subpoena required production of specific documents of relevance to issues before the Court, or was, as alleged by the A Group, too wide, oppressive and constituted a `fishing’ expedition.

41.The applicant wife submits that his Honour added a gloss to the requirement that there be apparent relevance and required the wife to meet a higher test of `sufficient’ relevance.  In paragraph 48 of the reasons for judgment his Honour notes that the principle complaint by Counsel for the A Group was directed to the issue of relevance and said:- 

`It is clear law that the question of relevance or apparent relevance is an arguable ground or basis for setting aside a subpoena and that a party seeking to uphold the issue of a subpoena seeking documents must demonstrate that those documents have an apparent relevance to the issue or issues before the court and in respect of which the subpoena was filed.  See Hatton v Attorney-General of Commonwealth of Australia & Ors. (supra) at p 87,607, citing Santos Ltd v Pipelines Authority of South Australia (1996) 66 SASR 38 esp. at 52 per Debelle J (relying upon Trade Practices Commission v Arnotts Ltd (No. 2) (1989) 88 ALR 90.’

42.In paragraph 49 his Honour notes that as it was made clear in Hatton (supra)  as there are no pleadings in the Family Court the only way in which the apparent relevance of documents sought under the subpoena particular to the proceedings before the court could be established was by reference to affidavit material for the purpose of the proceedings.  In paragraphs 39 of the reasons for judgment his Honour said:-

`Documents that are relevant to the proceedings cannot be said to be oppressive.  In particular, Mr Strum placed reliance upon what was said by the Full Court in Hatton v. Attorney-General of the Commonwealth of Australia & Ors (supra) at p.87,605.  However, it is plain to me, given the interim issues before the Court, that many of the class of documents sought in the subpoena are `not sufficiently relevant’ in that they are not `likely to add in the end, in some way or other, to the relevant evidence of the case’, discrete to the interim issues before the Court.’

43.In Hatton (supra) a decision of the Full Court (Finn, Kay and Dessau JJ) the test in relation to setting aside subpoenas was dealt with in a lengthy joint judgment.   A number of cases from other jurisdictions were considered in that judgment. At paragraph 55, the Full Court said:-

`

55.Further support for the proposition that relevance can now be regarded as a separate and distinct ground for the setting aside of a subpoena can be gained from the decision of the Supreme Court of South Australia in Santos Ltd and Others v Pipelines Authority of SA (1996) 66 SASR 38 where, in dismissing an appeal against the setting aside by the trial Judge of subpoenae to produce documents issued to BHP Bass Strait Pty Ltd and Esso Australia Resources Ltd, and where, at both first instance and in the appeal, relevance was treated as a separate ground from oppression (which in that case was said to exist because of the width and vagueness of the subpoenae). Debelle J. (with whom Cox and Prior JJ. agreed) said at 52, citing Trade Practices Commission v Arnotts:

“A party seeking to uphold the issue of a subpoena seeking documents must prove that the documents have an apparent relevance to the issues in the in the arbitration…”

56.Given the state of the authorities as we have outlined them, it cannot, in our view, be said that in the present case by applying a test of “apparent relevance” in his determination that the subpoena to the Attorney-General should be set aside, Rose J. was in error as to principle.’

44.In the course of considering the authorities the Full Court cited extensively from Treyvaud J’s judgment in Epstein and Epstein (1993) FLC 92-384, and his Honour’s citation of the principle from National Employers’ Mutual General Association v Waind and Hill [1978] 1 NSWLR 372 at 87,605 of the Full Court’s judgment:-

`As to relevance, the law is that `production of a document on subpoena by a stranger is only required if the document is sufficiently relevant to the action in the sense that it is likely to add in the end, in some way or other, to the relevant evidence of the case'. Waind and Hill (1978) 1 NSWLR 372.

45.The passages in Epstein (supra) including the references therein to inter alia Waind and Hill (supra) were apparently cited with approval by the Full Court in Hatton without any suggestion that the use of the term `sufficiently relevant’ as opposed to `apparently relevant’ were materially different.  The words used in paragraph 39 of the reasons for judgment came directly from the judgment in Epstein cited in Hatton.  It is difficult to see how the assertion that his Honour applied a wrong `and incorrect test’ could be an error unless in the practical application of the test some significant difference was demonstrated. 

46.The trial Judge set out the test in paragraph 50:-

It seems to me, given the whole range or raft of documents variously sought under the 28 dot point provisions of Schedule 1 of the subpoena in relation to each of the 13 companies there named (ignoring paragraph A15 of Schedule 1 for the moment) and “any trust” described in paragraph A16(i) to (viii) to the Schedule, the draughtsperson was stylistically adopting an extremely liberal approach apparent to me in the hope that the subpoena may produce documents relevant to the issues before the court.  This is not, in my view, the correct approach as the relevance of the documents called for under a subpoena must be apparent from the affidavit material filed in the particular proceedings for determination.  I have made it clear that it is for the wife in these interim proceedings to demonstrate to the requisite standard of persuasion that the documents sought are relevant to the actual proceedings.  As the Full Court said in White & Tulloch v White (1995) FLC 92-640,

“It appears to us oppressive to (the recipient of the subpoena) to have to disclose detailed financial records in circumstances where that may prove ultimately to be of no more than marginal relevance.  It is likely to widen the scope of these proceedings far beyond what is legitimate or useful and is not in accordance with a proper practice in these matters”. (p 82,464)  [his Honour’s emphasis]

47.In paragraph 51, his Honour said `[a]ny pious expectation or hope of landing a document that may be of relevance to the actual proceedings before the Court is nothing short of fishing’.

48.His Honour observed at paragraph 53 of his reasons for judgment that the relevant issues before the court were spousal maintenance, departure from an administrative assessment of child support and litigation funding.    His Honour found that details of the husband’s position in the A Group including directorships, shareholding and control were known to her and that she had on other occasions conceded that the companies were controlled by his parents, a fact that had been made clear to her advisors.   She had not asserted that the husband had de facto control or that any of the thirteen corporate entities were the alter ego of the husband in the sense explained in Ascot Investments (supra).  

49.The trial Judge referred to the submission of Senior Counsel for the A Group at paragraph 20 that:-

`…nowhere did the wife assert as a fact in issue that the entities, set out in the Schedule to the subpoena, were the alter ego of the husband, or that he had effective control of them.  He said that the “high point of her evidence as to the link between the companies and the husband (over and above his entitlements as an employee)” was deposed to by the wife as follows:

“… additionally he had cash income available to him from sale of steel ‘scraps’ and of (sic) our family expenses were paid for by A Companies.  He also had regular distributions of income from the A Trust.”  (paragraph 34)’

50.Guest J noted that Senior Counsel for the A Group had described the wife’s statement as a `generic and unsupported assertion’ a statement to which his Honour afforded some accuracy.  Importantly, he contended that no where had the wife asserted that the husband held a proprietary interest and that she had otherwise filed to provide or file evidence in support of her assertion.  The complaint by the wife was that the trial Judge required the wife to advance probative and/or cogent supporting evidence when determining whether or not the issue was of `apparent relevance’.  In particular the wife complained that his Honour had labelled her assertion of control by the husband (which might arguably be apparently relevant to the documents sought in the subpoena) as a generic and unsupported assertion.  She contended that by requiring her to establish control as a fact, his Honour erred as a matter of principle and that it was the documents themselves which would enable her to establish (or not) this fact.  However, as is apparent from the authorities to which I have referred, and to which his Honour referred, the test applied by his Honour seems unexceptional.  His Honour set out the test at paragraph 48 which is that the parties seeking to uphold the issue of the subpoena must demonstrate the documents have an apparent relevance to the issue or issues before the court and in respect of which the subpoena was filed.  His Honour effectively found that the wife had not discharged that onus. In his Honour’s view the assertion of the husband’s control as a basis for apparent relevance was not sufficient.

51.Counsel for the wife referred to proposed ground 15(c) and (d) and submitted that the trial Judge was in error in finding that the wife had not asserted that the husband had aspects of de facto control of the relevant companies in the third parties and/or that the wife’s evidence of the husband’s control within the third parties was no more than a `generic and unsupported assertion’.  I  understand this argument to be that it is an important matter of principle in consideration of whether a subpoena has apparent relevance, to consider the context of the case and in this case the assertions made by the wife.  It was not, as I understand Counsel’s argument, for the wife to conclusively prove, at this point of the proceedings, that the husband did have control. 

52.In response to this contention, and not unsurprisingly, Counsel for the A Group submitted that if a mere assertion were all that needed to be made, there would never be any limit to the breadth of subpoenae that could be issued.

53.In the context of this case the answer lies in my view in the rubric of the decision itself.  His Honour was not in my view asserting a matter of principle in this regard, but rather considering whether the wife’s evidence (as distinct from mere assertions) was sufficient to satisfy the test that the subject matter of the subpoena was sufficiently relevant to the matters in issue to withstand objection.  He found that it was not, a finding in my view, open to him.

54.For the same reasons in my view it could not be said that the trial Judge preferred the evidence of the A group in preference to the wife. 

55.The wider context of the proceedings is clearly relevant and touched upon in the judgment. It included the fact that discovery was still to be completed and, that the issues for final determination were wider than the interim issues which formed the basis for the issue of the subpoena.  The question that was to be determined on the interim proceedings was limited to the financial capacity of the husband not the broader issue of property settlement which did not on its face apparently have relevance to the issue then before the Court. 

The trial Judge erred in determining that the affidavit evidence of the accountants for the A Group as to control was evidence that was independent and had to be accepted whereas the evidence of the wife was not.

56.As I have already noted, the wife’s statements and assertions about control was not evidence of the same quality as that of the Accountants’.  Counsel contends that giving greater weight to their evidence lead to an error in principle, the principle being how the Court should deal with evidence which conflicts with evidence about apparent relevance.   However that submission seems to be simply answered by observing that the wife’s mere assertions did not constitute evidence whereas the Accountant’s did, and his Honour did not have to accord them any weight.

The trial judge erred in law and fact in finding that the husband’s response to the wife’s interim financial claims was such as to justify a finding that the documents sought within the subpoena were of excessive width, variety and magnitude

57.Senior Counsel for the wife submitted that his Honour applied the wrong test when seeking to assess the relevance of subpoenaed documents by looking at the Husband’s response and that it was a novel proposition that he should do so.

58.His Honour having referred to the evidence of the wife that she was provided with `little information’ by the husband, or his family, as to their financial affairs and that without `appropriate discovery of such documents’, she was unable to properly prepare her case for `interim financial support’,  indicated that he did not agree with the wife’s assertion given (at paragraph 33):-

`…firstly, the information now known to the wife concerning the husband’s income (both from the husband and her own investigations), financial benefits and assets (certainly sufficient to support a lump sum of the magnitude sought and to be characterised, for example, by the trial Judge at any hearing on the contested applications) and, secondly, the preparedness of the Applicants to provide the breadth of information delineated by Mr Kirkham in his submissions. ‘ [my emphasis]

59.No matter of principle arises from this ground.  The husband’s Response to the wife’s interim claims was clearly a document that informed the breadth of the dispute and thus the relevance of the material sought.

That the trial judge took into account irrelevant considerations namely that discovery as between the husband and wife had not yet taken place or been pursued and it was inappropriate for the wife to issue the subpoena before exhausting her rights of discovery against the husband

60.It was contended that this was an important principle and his Honour erred in requiring the wife to complete discovery before being entitled to issue a subpoena for the production of documents that might arguably contain the same material.  His Honour dealt with this issue at paragraph 46 of his reasons for judgment. His Honour there said:

`Discovery as between the parties has not yet taken place nor been pursued, in my view, as it should between the parties.  By paragraph 16 of the wife’s Form 2A Response, she sought an order that the husband do provide discovery of specified documentation, drawing upon the provisions of Rule 13.04 of the Rules under Part 13.1 – DISCLOSURE BETWEEN PARTIES.  As Mr Kirkham properly submitted, the orders sought by the wife in paragraph 16 are substantially more confined than the documents sought under the subpoena and acknowledge the husband’s lack of interest in almost all entities referred to in the subpoena.  The fact of his lack of interest and control was, as I have discussed earlier in this judgment, clearly acknowledged by her in her affidavit material upon which I am to rely in coming to my determination.’

61.In paragraph 47 his Honour concludes:-

`In my view, it was inappropriate for the wife to issue the subject subpoena in its present form before exhausting her rights of discovery against the husband and having regard to the whole range of documents sought, may be seen as an abuse of process.  A subpoena is not a substitute to discovery.  See Relationships Australia v Pasternak & Children’s Representative (1996) FLC 92-699 esp. at p. 83,375-376 citing McAuliffe v McAuliffe (1973) 4 ACTR 9 at 11-12 per Blackburn J.’

62.The discussion in Relationships Australia v. Pasternak (supra) was about third party production of documents pursuant to an order as distinct from a subpoena issued to a third party. The discussion at pages 83,375-376 by the Full Court was contrasting the issuing of a subpoena to a third party with non-party discovery or pre-trial production pursuant to order 20 rule 7 of the Family Law Rules 1984 as they then were. The court was making the point that Order 20 rule 7 set out the appropriate procedure for an application for pre-trial production by persons other than parties and that that procedure ought to be invoked rather than the issue of a subpoena which was generally designed to require a person to attend before court at the hearing of the proceedings to give evidence and/or produce documents. The Full Court said `it is not in our view a substitute for procedure laid down in Order 20 for pre-trial production and inspection’.

63.The point his Honour was making was somewhat different. At paragraph 47 his Honour expresses the view that it would be inappropriate for the wife to issue the subpoena before exhausting rights of discovery `against the husband’.  It does not appear from his Honour’s reasons that Counsel for the A Group took this point.  

64.In paragraph 28 his Honour notes that Queen’s Counsel for the A Group submitted that:-

`..the subpoena, as drafted, amounted to a fishing exercise and, in effect, sought non-party discovery rather than the production of specific documents of relevance to issues before the Court.  He submitted that the wealth of the husband’s family, the financial performance and dealings of the companies in which the husband had no interest were not relevant to the interim issues before the Court.’

65.It seems that Counsel for the A Group was not objecting to the fact that non-party production was required and in effect equated the subpoena with non-party discovery.   There may have been some merit in an argument by the A Group that a subpoena was inappropriate until non-party production had taken place (see rule 13.33 of the Rules) but that does no appear to have been made.  His Honour’s finding therefore that wife should have exhausted discovery with the husband before seeking documents from a third party could in this context be seen to be unduly harsh to the wife and created hardship, particularly in relation to the costs judgment. 

66.However in the context of the whole case his Honour’s finding  does not appear to be a statement by his Honour of a matter of principle outside the evidentiary confines of the case, and is by no means the gravamen of his Honour’s decision.   In any event, the extent to which discovery had taken place between the husband and the wife and what documents had been produced is not clear.  There may have arguably been some overlap.  It was clear in addition, to negate any issue of principle, that his Honour was concerned with the subpoena in `its present form’ rather than to lay down any absolute rule. 

67.In addition the wife’s solicitor, DMC, at paragraph 17 of her Affidavit filed 17 March 2006, deposes to the fact that many of the documents sought from P upon subpoena had first been sought from the husband in whose possession, power or control they also were (by letter dated 8 March 2005 from the wife’s solicitors).

The Costs Judgment

68.Judgment was given on the setting aside of the subpoena issue by Guest J on 9 June 2005.  On that date his Honour further directed that written submissions in relation to costs be filed and served by the A Group within 14 days and by the wife within a further 14 days thereafter.  The A Group’s costs submissions were filed on 23 June 2005.

69.On 4 July 2005, the wife’s solicitors wrote to the solicitors for the A Group advising that their client:-

`..considers the proper course of action in these circumstances is to await the outcome of the costs decision before making a final determination as to whether she will seek leave to appeal his Honour’s judgment, both on the subpoena and costs. As the costs judgment will be delivered after the expiration of the appeal period in respect to the subpoena judgment, Ms A seeks your client’s consent to an extension of time (say two weeks) within which to seek leave to appeal the subpoena judgment after delivery of the costs judgment.  To do otherwise may involve unnecessary expenditure of legal costs of both parties.’

70.The wife filed her costs submissions on 7 July 2005.  On the same date a response was received from solicitors for the A Group advising, inter alia, `our client does not consent to an extension of time for the filing of the appeal’.  

71.Senior Counsel for the wife, quite properly in my view, acknowledged that the question of costs was the significant determinant in the wife’s desire to appeal the primary judgment.  In addition to the fact that the costs judgment would not be handed down until after the appeal period, there was no immediate benefit the wife could obtain by filing an application for leave to appeal immediately.  The interim hearing the subject of the subpoena decision commenced before Carter J on 10 June 2005, the day after Guest J’s decision was delivered.  The interim hearing continued on 16 September 2005 and concluded on 20 September 2005.  Given the timely commencement of that hearing, an appeal could not have been heard in time to have been of any practical effect in the interim proceedings. Thereafter the only practical issue was costs if that issue were to be determined against the wife.

72.The costs judgment was not delivered until 9 February 2006 and the wife then filed a Notice of Appeal within time against the costs judgment.   In practical terms had she filed a Notice of Appeal within time relevant to the substantive judgment the likelihood is that it would have been delayed pending the handing down of the costs judgment and the application for leave then dealt with at the same time as the costs judgment.  That in my view is relevant because there is no practical disadvantage to the A Group in the course the wife adopted and much practical sense.  She wished to save costs.  I do not agree with the submission by Counsel for the A Group that it was inevitable that an order for costs against the wife would be made.  Apart from the fact that judgment in relation to costs is an exercise of discretion, Counsel for the wife was proposing that the whole question of costs should be reserved until the completion of the proceedings, an argument  rejected by Guest J but not without consideration of the argument.  At paragraph 19 of his Honour’s costs judgment, he stated:- 

`In coming to my determination I have regard to the wife’s submissions which relied upon the fact that issues (inter alia) such as the husband’s asserted failure to make full and frank disclosure and the involvement, if any, of the husband’s father will be ventilated upon trial thus underpinning the appropriateness of an order for reserved costs.’

Hardship to the wife and reasons for the delay

73.In addition to the grounds already addressed, the wife contends that there will be hardship to her if leave is not granted because she will be effectively estopped from pursuing many aspects of the costs appeal if she cannot properly argue about the findings made by his Honour on the substantive judgment which underpin many of the findings in relation to costs. 

74.Some of the costs grounds stand alone, but five of them do directly relate to findings made by his Honour in the substantive judgment. Counsel for the A Group properly conceded that the wife would be inhibited in some of the grounds sought be argued on appeal if an extension of time was not granted.  Counsel for the A Group also conceded, again quite properly in my view, that other than the loss of a forensic advantage, the A Group would suffer no hardship if the time in which to seek leave to appeal were extended. 

Conclusion

75.McHugh J in Gallo v Dawson (supra at 481) noted that `[w]hen the time for appealing has expired, the litigation is at an end; the successful party is entitled to the benefit of the judgment in his or her favour’.

76.This case is somewhat different in the sense that the wife has instituted within time an appeal against the costs order for which she does not require leave. Thus the litigation has not concluded and both sides are parties to the costs appeal in any event. 

77.It is necessary to consider the prospect of the applicant succeeding in the application for leave, an added barrier in this case.  This aspect of her case is weak and I have been able to identify only one matter on which she might have an arguable case. Arguably, his Honour may have erred in his emphasis upon the prerequisite for discovery as between the parties as a ground for setting aside the subpoena.

1. In most circumstances that would not be enough but I am satisfied there would be hardship to the wife if she were not able to challenge some of the findings which underpin the costs decision. 

79.The Full Court dealing with the costs decision may be inhibited in its capacity to deal with some of the issues if the primary judgment were not the subject of argument.  That is not to say the wife can look forward with any confidence to the successful outcome of this application.   Counsel almost conceded as much, but it may be that the ability to consider the findings of the trial Judge in the substantive judgment will enable the Full Court dealing with the costs judgment to buttress and support the decision as much as the wife attacks it. 

80.I am further satisfied that there is an explanation for the delay. The wife put the husband on notice immediately that, for practical purposes which I accept, it would be sensible to wait until the costs judgment had been delivered before requiring her to file a notice of appeal and take whatever other steps might follow.  The fact that the A Group refused to cooperate with what was in my view a reasonable request should not disentitle the wife to leave on that ground.  As was noted by McHugh J in  Gallo v. Dawson (supra):-

`In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time: see Avery v. No.2 Public Service Appeal Board (1973) 2 NZLR 86, at p 92; Jess v. Scott (1986) 12 FCR 187, at pp 194-195.’

81.When I consider all of those matters, and particularly the fact that the costs appeal will proceed and that leave is not required, in the unusual facts of this case and in the exercise of my discretion to do justice to the parties, I propose to make an Order that the time within which the wife has to seek leave to appeal be extended to 17 March 2006 the date of filing of her application. 

I certify that the preceding eighty-one (81) paragraphs are a true copy of the reasons for judgment of the Honourable Chief Justice Bryant.

Associate: KE

Date: 8 June 2006

SCHEDULE A

Company A

Company B

Company C

Company D

Company E

Company F

Company G

Company H

Company I

Company J

Company K

Company L

Company M