Adami and Adami (No. 2)

[2019] FamCA 364

FAMILY COURT OF AUSTRALIA

ADAMI & ADAMI (NO. 2) [2019] FamCA 364

FAMILY LAW – PRACTICE AND PROCEDURE – Subpoenas – Where there is an objection to production – Where the subpoena is oppressive in terms of how broadly drafted it is – Where there would be a significant cost associated with production – Where the wife has not agreed to meet that cost – Order.

Re McGorm; Ex parte Co-operative Building Society of South Australia [1989] 86 ALR 275
Lucas Industries Ltd v Hewitt (1978) 45 FLR 174
Purnell Bros Pty Ltd v Transport Engineers Pty Ltd (1984) 73 FLR 160
National Employers’ Mutual General Association Ltd v Waind & Hill [1978] 1 NSWLR 372

APPLICANT: Ms Adami

RESPONDENT: Mr Adami

FILE NUMBER: DNC 521 of 2017

DATE DELIVERED: 6 June 2019

PLACE DELIVERED: Adelaide

PLACE HEARD: Adelaide

JUDGMENT OF: Berman J

HEARING DATE: 1 May 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Farmer

SOLICITOR FOR THE APPLICANT: Withnalls Lawyers

COUNSEL FOR THE RESPONDENT: No appearance

SOLICITOR FOR THE RESPONDENT:

COUNSEL FOR THE SUBPOENAED PARTY: Mr Allen

Orders

1. That the subpoena to DD Pty Ltd issued on 12 March 2019 be struck out.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Adami & Adami (No. 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER: DNC 521 of 2017

Ms Adami

Applicant

And

Mr Adami

Respondent

REASONS FOR JUDGMENT

Introduction

1. The Amended Initiating Application of Ms Adami (“the wife”) filed 11 December 2018 seeking final orders for property settlement and spousal maintenance and the Response of Mr Adami (“the husband”) filed 7 February 2018 are listed for final hearing on 19 August 2019.

2. A significant issue in the proceedings is the value of the husband’s controlling or minority interests in the following entities:-

   ·F Ltd as trustee for the Adami Trust;

   ·A Pty Ltd;

   ·D Pty Ltd;

   ·E Pty Ltd; and

   ·C Pty Ltd.

3. The entities have been the subject of valuation in 2018 by a single expert. The wife does not accept the valuation and argues that the valuation outcome is unreliable by reason of the non-disclosure by the husband.

4. By reference to the wife’s Affidavit filed 7 March 2019, she asserts that the husband is non-compliant with orders made for disclosure and production of documents on 12 February 2018 and 22 May 2018 and continues or refuses to produce the documents listed in paragraph 2(a) to (q) of the her affidavit.

5. The husband is now self-represented. He has not responded to the wife’s assertion that he is derelict in his obligation to make full and frank disclosure of documents relevant to the proceedings.

6. The husband relies upon the evidence of Mr V who is a chartered financial assistant and works at DD Pty Ltd Chartered Accountants. By reference to his Affidavit filed 27 February 2019, Mr V states that he is responsible for providing “outsourced Chief Financial Officer services” for A Pty Ltd. He has held that role for about 17 months. He states that as a result of his involvement he has a “good understanding of the financial position of A Pty Ltd and its related entities”.

7. Whilst not relevant to the current issue, it is his assessment that the business is in a financially precarious position with a potential risk of it being placed into administration that is challenged by the wife.

Duty of Disclosure

1. Rule 13.04 of the Family Law Rules 2004 (Cth) sets out a party’s obligation to make full and frank disclosure:-

   13.04(1)

   A party to a financial case must make full and frank disclosure of the party’s financial circumstances…

2. In the decision of Re McGorm; Ex parte Co-operative Building Society of South Australia [1989] 86 ALR 275 Von Doussa J considered the obligation of a party to discover and produce documents:-

   5.The obligation resting on a party obliged to give discovery requires that he make proper enquiries and efforts to identify and disclose all relevant documents that are not in his possession. The obligation extends to making enquiries from the person in whose possession the documents now are: see Mertens v Haigh [1863] EngR 633; (1863) 3 De GJ & S 528 at 531; 46 ER 471 at 472. It was said in the nineteenth century case of Taylor v Rundell [1841] EngR 256; (1841) Cr & Ph 104; 41 ER 429 at 433 by Lyndhurst LC. “If it is in your power to give the discovery, you must give it; if not, you must show that you have done your best to procure the means of giving it…”

3. And then further at [6]:-

   The scope of the enquiries which should be made will depend on the circumstances of the case having regard to the need for discovery in order to dispose fairly of the matters in question, or to save costs in the proceedings. The enquiries must be reasonable, but do not demand of the party giving discovery that he goes to lengths which are oppressive. …

4. There is uncertainty as to what efforts, if any, the husband has made to obtain the documents sought by the wife. In the circumstances of the case it would appear that the documents as identified by the wife have relevance to the proceedings.

5. Whilst it is settled law that the issue of a subpoena is not an alternative to discovery, in circumstances where the husband has not produced the documents or submits that he is not capable of doing so, it is permissible for a subpoena to issue to a third party.

The subpoena

1. The wife caused the Registry to issue a subpoena on 12 March 2019 to DD Pty Ltd to produce the following documents:-

   2.All documents created in relation to work performed and/or services provided, including written communications, tax invoices provided to:

   (a) [F Ltd] as Trustee for the [Adami] Trust;

   (b) [A Pty Ltd];

   (c) [D Pty Ltd];

   (d) [E Pty Ltd];

   (e) [C Pty Ltd];

   (f) [Mr Adami]; and

   (g) Any associated entities and/or persons of the entities referred to 2a. – 2g. herein.

2. Mr V, on behalf of DD Pty Ltd, filed a Notice of Objection on 4 April 2019. He opposes the subpoena on the basis that it is oppressive.

3. Mr V contends that his discussions with staff members of DD Pty Ltd suggest that the subpoena would capture over 800 separate pieces of written communication, much of which will be administrative and unlikely to be of relevance to the proceedings.

4. DD Pty Ltd will likely need to engage a third party IT support person and whilst they have no objection to producing the following documents:-

   ·All tax invoices;

   ·All service engagement records and tax records of the husband and associated entities;

   the further documents sought by the wife could only be provided with significant effort and at substantial cost.

5. There is no offer by the wife to pay the reasonable costs of compliance.

Legal principles

1. In Lucas Industries Ltd v Hewitt (1978) 45 FLR 174 at189, Smithers J considered the use of subpoena and its abuse as follows:-

   The purpose of the process of subpoena is to facilitate the proper administration of justice between parties. For that purpose it is the policy of the law that strangers who have documents may be put to certain trouble in searching for and gathering together relevant documents and bringing them to court. It is according to the same principle that persons who have knowledge of facts are put to the inconvenience of being brought to court and required to give evidence.

2. In Purnell Bros Pty Ltd v Transport Engineers Pty Ltd (1984) 73 FLR 160 at 175, Powell J considered the circumstances in which a court may decide to set a subpoena aside:-

   It seems to me, however, that when, as one does, one finds assertions that the court’s power to set aside a subpoena is but part of the inherent jurisdiction of the court (see, for example, R. v. Lewes Justices; Ex parte Secretary of State … at 240 per Lord Parker C.J., 244 per Bridge J. (as he then was)) coupled with assertions that a subpoena will be set aside if it be used for an impermissible, or illegitimate, purpose, or, if to require compliance with it would be oppressive (see, for example, Commissioner for Railways v. Small … at 573-575 per Jordan C.J.) it is difficult to avoid the conclusion that, in reality, the court’s power to set aside a subpoena is but one aspect of the court’s inherent jurisdiction to prevent an abuse of its process by a party to litigation, and that, accordingly, the particular classes of case which I have recorded above are to be regarded as no more than examples of situations which the courts, in the past, have held, and, in the future, would hold to be cases of an abuse of process.

3. It is axiomatic that if a document is considered “relevant” then no objection should be taken to its production upon a subpoena save as to the reasonable costs of compliance.[1]

   [1] See also National Employers’ Mutual General Association Ltd v Waind & Hill [1978] 1 NSWLR 372.

4. I am obliged to test the relevance of the category of documents as sought by the wife by reference to the affidavits filed.

5. In submissions, the wife’s counsel was asked to highlight the relevance of the documents sought. It appears that at least a focus for the documents sought pursuant to the subpoena may involve an enquiry by the wife as to the financial arrangements between the husband and Mr CC, the managing director of DD Pty Ltd, concerning the property in which the husband currently resides.

6. Whilst the issue was not directly raised, it seems that the wife’s interested was piqued by the husband living in a home owned by Mr CC in circumstances where the husband’s Financial Statement filed 27 February 2019 discloses that his rent and living expenses are paid by the A Pty Ltd.

7. I accept that a subpoena does not have to nominate with precision the documents that are to be sought.[2] The fact that production of documents is sought that might “relate to” or “refer to” a subject matter does not make the subpoena objectionable. A document does however have to be sufficiently described so that the subpoenaed party is able to readily ascertain what is required to satisfy their obligation pursuant to the subpoena.

   [2]National Employers’ Mutual General Association Ltd v Waind & Hill [1978] 1 NSWLR 372.

Conclusion

1. I find that the subpoena in its current form is oppressive.

2. Relevance is not shown and in those circumstances, whilst it is permissible to seek a category of documents, it is not established that “all documents created in relation to work performed and/or services provided, including written communications, and tax invoices” for the relevant entities are relevant or required. I accept that the list of documents as set out in [2] of the wife’s Affidavit filed 7 March 2019 are likely to be relevant and have a level of description which would enable them to be identified and produced. The category of documents as sought pursuant to the subpoena is not capable of satisfying the test of relevance and reasonable description.

3. The subpoena also seeks documents at 2(g) in respect of:-

   Any associated entities and/or persons of the entities referred to in 2(a) to 2(g).

4. I accept that whilst the documents exist, even if the wife could establish that they were relevant, it is reasonable that the subpoenaed party not be put to the expense of production without receiving the reasonable costs of compliance.

5. Accordingly, I propose to set aside the wife’s subpoena filed 12 March 2019 to DD Pty Ltd.

6. I make orders as appear at the commencement of these reasons.

I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Berman delivered on 6 June 2019.

Associate:

Date: 6 June 2019