Anderson and Kelleher and Ors (No. 4)

[2007] FamCA 1679

FAMILY COURT OF AUSTRALIA

ANDERSON & KELLEHER AND ORS
(NO. 4) [2007] FamCA 1679

FAMILY LAW – PRACTICE AND PROCEDURE – Subpoenas

Family Law Act 1975 (Cth)

Applicant: Ms Anderson

Respondent: Mr Kelleher & Ors

Applicant Intervener: Mr J  (Case Guardian on behalf Mr Y)

Third Party: Mrs Kelleher

File Number: MLF 2734 of 2006

Date Delivered: 19 November 2007

Place Delivered: Melbourne

Place Heard: Melbourne

Judgment of: Carter J

Hearing Date: 19 November 2007

Representation

Counsel for the Applicant: Mr J G Levine

Solicitor for the Applicant: Issac Brott & Co

Counsel for the Respondent: No appearance

Solicitor for the Respondent: Rickards Legal

Counsel for the Third Party Mr Fookes

Solicitor for the Third Party Kennedy Wisewoulds

Counsel for the Proposed Case Guardian Mr Fookes

Solicitor for the Proposed Case Guardian Kennedy Wisewoulds

Counsel for the Subpoenaed Party Ms Mimmo

Solicitor for the Subpoenaed Party Hicks Oakley Chessell Williams

Orders

Orders No. 1

1. That Mr J, care of Kennedy Wisewoulds, [Solicitors], is appointed as the Case Guardian of Mr Y, a person sought by the wife to be joined as a party to these proceedings.

2. The question of payment of the costs of the Case Guardian incurred in the conduct of these proceedings be reserved.

3. That the question of payment of the costs of the Case Guardian and the costs of the wife of an incidental to his Amended Application in a Case filed 2 October 2007 be reserved.

4. Save as aforesaid the Amended Application in a Case filed by the Case Guardian be removed from the list of cases awaiting determination.

Orders No. 2

1. That the subpoena issued on 16 November 2007 at the request of the wife and directed to Kennedy Wisewoulds, Solicitors, be struck out, it not being relevant to any live issue as between the parties to these proceedings and that the return date of the said subpoena of 27 November 2007 be vacated.

2. That two subpoenae issued on 27 July 2007 and directed to The Proper Officer, American Express Limited be struck out.

3. That the subpoenae issued at the request of the wife on 27 July 2007;  24 September 2007; and 18 October 2007 directed respectively to The Proper Officer, Subpoenae Section, Commonwealth Bank of Australia;  Mr T, R & Company, Solicitors;  and the Proper Officer, American Express Australia Limited be adjourned to 9:30am on 11 December 2007 in the Subpoena List.

4. That my Associate photocopy the said subpoena directed to the Commonwealth Bank of Australia, place it on the Court file and return the copy provided by the solicitor for the Case Guardian to the said solicitor.

Orders No. 3

1. That par (1) of the wife’s Form 2 application filed 18 October 2007 and the Third Party’s Response filed by leave this day be dismissed and removed from the list of cases awaiting determination.

2. That there be no order for costs in favour of or against the wife and/or the Third Party.

Orders No. 4

1. That the third party is entitled to be reimbursed by the wife for the costs of complying with the subpoena issued on 3 July 2007 at the request of the wife and directed to the said third party, which costs are fixed in the sum of $4,339.48.

2. That upon payment of the costs referred to in par (1) hereof the solicitors for the third party forthwith notify the Court at which stage the documents produced on subpoena may be released for inspection by the wife.

3. That the wife and the third party be at liberty to apply for costs as follows:

   (3.1)any application for costs be made by way of written submissions to be filed within 14 days of this day;

   (3.2)the respondent to any such application file written submissions in reply within a further 14 days of this day;

   (3.3)all submissions bear notation of the date on which they were served on the other party;  and

   (3.4)at the time of filing submissions a copy be forwarded to my Associate by sending same to her at … .

4. Save as aforesaid par (2) of the wife’s Form 2 Application filed 18 October 2007 and the third party’s Response be dismissed and removed from the matters awaiting finalisation.

IT IS NOTED that publication of this judgment under the pseudonym Kelleher & Anderson is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT  MELBOURNE

FILE NUMBER: MLF 2734 of 2006

MS ANDERSON

Applicant

and

MR KELLEHER & ORS

Respondents

REASONS FOR JUDGMENT

[Ex Tempore]

Case Guardian

1. The issue to which I will first turn concerns an amended application filed by a Mr J seeking to be appointed as Case Guardian for his father-in-law, Mr Y.  So far as is relevant to that application, the wife seeks to have Mr Y joined as a party to these proceedings. 

2. The substantive proceedings are between the husband and the wife.  I have set out in earlier judgments the background to their marriage and certain of the events leading up to the times when the matter came before me.  I will not repeat those matters now. 

3. In support of the application Mr J filed on 25 September 2007 an affidavit which he had sworn or affirmed.  There is also an affidavit by a Dr S, a psychiatrist, again filed 25 September 2007.  The thrust of that affidavit is that Mr Y is not competent to act in, to understand or follow, court proceedings or indeed to remember them.  He could not instruct counsel appropriately.  He suffers from Parkinson’s disorder as well as dementia, which is described as being severe in degree.  His major deficits were described as being short-term memory function, concentration and orientation.

4. Mr J is, as I have said, the son-in-law by marriage of Mr Y.  He is engaged in full‑time employment in the finance sector and operates his own practice.  Because of his marriage to Mr Y’s daughter, he has a personal relationship with both his father-in-law and mother-in-law.  His own wife, together with his mother-in-law, assist in the day-to-day care of Mr Y.  He has indicated in his affidavit that he is willing to act as Case Guardian in these proceedings.  He says that he is a person of proper standing in the community and he has sworn that he would carry out his duties in an honest and diligent manner.  He has deposed that he does not have an interest in the proceedings which is adverse to the interests of his father-in-law.  He is not a director or shareholder of any of the group of companies or corporate entities of the Kelleher family.  He also seeks an order that his reasonable costs and expenses incurred by acting as the Case Guardian and the costs of the current application be borne by the wife.  I will return to this in due course.

5. The relevant legal principles are set out in r 6.08, which I incorporate by reference.  Rule 6.08 deals with the conduct of a case by a Case Guardian.  Rule 6.09 sets out who may be a Case Guardian, and in particular, a person may be a Case Guardian if he or she is, firstly, an adult;  secondly, has no interest in the case that is adverse to the interests of the person needing the Case Guardian;  thirdly, can fairly and competently conduct the case for the person needing the case guardian;  and finally, has consented to act as the Case Guardian.  Rule 6.10 sets out the procedure for the appointment, replacement or removal of a case guardian.

6. In Kannis (2003) FLC 93-135 the Full Court dealt with the provisions of earlier rules which provided for the appointment of a next friend. It is perhaps of assistance to consider some of what was said there, noting that the role remains much the same. I incorporate par 59, which set out the role of the next friend, and par 60, which sets out the responsibilities of a guardian ad litem.

7. In the present case it is clear on the evidence that Mr Y is in need of a Case Guardian.  That is not a situation which is contradicted by Mr Levine, who appears on behalf of the wife in these proceedings.  What is said, however, on behalf of the wife is that Mr J should not be that case guardian because of his relationship.  He is, as I have said, related by marriage to the husband and to Mr Y.  It is said that he, as a consequence, is not independent.

8. It is put, secondly, that Mr J may be put in a position of conflict.  That has not been explained to me at all.  The question of conflict that requires examination is the question of whether there is any conflict between the Case Guardian and the person whose interests he is appointed to protect.  Nothing along those lines has ever been suggested to me.  Mention has been made of a possible conflict of interest.  I do not understand how that arises.

9. Finally, it is said it is undesirable for Mr J to be appointed because of his familial relationship.  It has not been suggested that Mr J is not a fit and proper person.  It is not suggested that he is not a person who is able to conduct litigation in the sense that he has any interest adverse to Mr Y.  I think what is being put to me is an inference or an implication which I am asked to draw, or make that Mr J may not be independent and he may have an interest which may be adverse.  I do not understand how or what that is.  At best, to my mind, what has been put to me is conjecture.  It is theoretical and there is no evidence to support it in any way.

10. In my view, the application for the appointment of Mr J as Case Guardian should be granted.

11. So far as the costs and expenses of the Case Guardian is concerned, unless I am pressed at this stage, I would not be disposed to make an order for Mr J to be indemnified in that respect.  I certainly am not going to make an order at this stage in respect of the costs of the application.  I need to hear some further submissions about that.  But in respect of the other costs, what I would say is that a case guardian is personally responsible to the other parties to litigation for costs, subject to the provisions of the Family Law Act.  There is authority to that effect in other courts.  I would refer to X and Y v Minister for Immigration and Multicultural Affairs and the Secretary of the Department of Human Services for the State of Victoria (1999) 164 ALR 583.

12. However, if he or she acted reasonably the Case Guardian is entitled to be indemnified against that liability by the litigant whom he or she represents or out of the litigant's estate.  I refer there to cases such as Watson (2002) FLC 93-094. I would also note that the Court may in its discretion restrain a party from claiming costs from a Case Guardian in appropriate circumstances. The X v Y case which I have cited above is authority for that.  It is also the case that this Court may order a Case Guardian to pay costs.  None of those circumstances to my mind arise at the present time.  I do not think it is appropriate at this stage when I have not heard any submissions that I should make an order as sought by Mr J for the indemnity which he seeks.

Costs

1. The question of costs in relation to the wife's Form 2 Application filed 18 October 2007 and the response of the person to whom that application was addressed has now to be determined.  Part of the application of the wife sought that Mrs Kelleher, the husband’s mother, attend this Court for the purposes of cross-examination, or alternatively, to file and swear a further affidavit of documents within seven days.  She also sought an order for costs on an full indemnity basis. I am told today that the indemnity costs are not being sought.

2. In response, leave was granted this morning for the husband’s mother to file a response which sought effectively the dismissal of the wife's application and an order for costs on her behalf.

3. Both the wife and the husband’s mother have sworn or affirmed affidavits in support of their respective cases.

4. The first part of the wife’s application, that is to say, that the husband’s mother attend for the purpose of cross-examination, was ill-founded.  I know of no authority or rule which would have entitled an order to be made of that nature because of the default, if that is the right word, of the husband’s mother.  That default, for want of a better word, is that she has not complied with I think it is two sets of orders, one of which was made by consent, one of which at least was not, which required her to provide documentation or evidence about documentation.  The husband’s mother has explained some of the background to this in her own affidavit.  In particular, she has said that she did not obtain legal advice when she first received the subpoena in question.

5. Now, that is a great pity, in my view, but it does not mean that she should be relieved of the obligation to comply with court orders.  What happened more recently, however, after her present solicitors became involved is a different situation.  Firstly what happened was that following the orders that had been made in July 2007 she consulted solicitors of her own, consultation taking place in late August 2007.  Those solicitors wrote to those acting for the wife requesting copies of the order and the original subpoena to produce documents.  No documents were received and no response to letter was received until 3 October 2007, when certain documents were sent by facsimile transmission.

6. The solicitors for the husband’s mother would not have been entitled or permitted to search the Court file to obtain these documents for themselves because the husband’s mother was not a party.  So much is clear from the Rules.  The day after the documents were received, that is to say, on 4 October 2007, those acting for the wife were notified that the husband’s mother's solicitor, Ms Khung, who has the conduct of the file, was on leave and would not be returning from leave until 23 October.  The solicitors for the wife chose not to wait until after this occurred and instead issued the application.

7. To my mind, both the wife through her solicitors and the husband’s mother on her own behalf are responsible for the matter being here today.  If the husband’s mother had sought legal advice earlier, what followed could have been avoided.  If the wife's solicitors had been a little more patient when they received information on 4 October that Ms Khung was to be away and/or had responded earlier to the request to provide the documentation I think the matter would not be here today.  In those circumstances, it is not appropriate in my mind for either party to be ordered to pay the costs of the other.

Subpoena to K Pty Ltd

1. I now turn to deal with the subpoena which required the production of documents by K Pty Ltd.  The subpoena was filed on 3 July 2007 and it required the production of documents in relation to Mr Y, the Y Family Trust and any associated companies for the past 10 years.  For the sake of brevity I simply say there are eight categories of documents required.  They related to Mr Y and in relation to the Y Family Trust and any associated companies.  They also related to the husband’s mother in relation to the same family trust and any associated companies.  They were required to cover the period of 10 years preceding the date that the subpoena was issued.

2. The matter has come to Court on a number of occasions in the subpoena list now and there is a dispute between the parties about the effect of, and the background to, orders which were made on 21 August 2007 by consent.  I am not dealing with that at the moment.  What has happened is that pursuant to orders that were made on 4 October 2007, amongst other things, the wife has applied to set aside those orders.  That is, par 2 of her Application in a Case filed 18 October 2007.  The application seeks that the orders be set aside, the documents that are the subject to the subpoena be released, that K Pty Ltd pay the costs of her application and that any entitlement to the payment of costs of K Pty Ltd for compliance with the subpoena be fixed and determined by a judge hearing the application, which in the circumstances is myself.

3. The wife’s application is supported by an affidavit, also filed on 18 October.  The relevant parts of that affidavit commence at par 4.  Leave was granted today to Mr C to file an affidavit sworn or affirmed by him on 14 November 2007 in which he addresses the matters in dispute.

4. There is a factual dispute about the manner in which the orders of 21 May 2007 were made.  That cannot be determined on the papers and accordingly I am not able to determine whether those orders should be set aside.  I therefore turn to the wife’s application that I determine the entitlement of K Pty Ltd to any, and if so what, costs of compliance with the subpoena.

5. The evidence makes it clear that notice was given to those acting for the wife on 16 July 2007 (see Annexure “CK1” to Mr C’s affidavit) that objection was taken on the basis that the terms of the subpoena were too broad and oppressive.  It was pointed out that to provide all the files over the past 10 years would not be practical because of the sheer volume involved and before that task was embarked upon an undertaking was sought that professional fees be paid at $200 per hour.  It was noted also that it was not a practical situation for the files to be made available for any considerable period of time because of the continuing statutory obligations that must be met with the Australia Taxation Office and ASIC.

6. In pursuit of the agreement as understood by K Pty Ltd , a letter was sent to Mr Brott, who acts for the wife, on 17 August 2007 - that is Annexure “CK2” to Mr C’s affidavit - in which advice was given that the costs of complying with the subpoena would be the sum of $5280.  That was accompanied by a tax invoice of that amount and copies of the client ledger.  The amount noted in the client ledger was $4339.48, however, the tax invoice was for the sum of $4800, plus GST of $480, which brought the grand total, as I have said, to $5280.

7. The question of costs of complying with the subpoena is a matter which comes before the Court from time to time.  Relatively recently Carmody J considered the effect of the Family Law Rules in connection with subpoena in a matter of G and D & D (2005) FamCA 1429. In that case the respondent had issued a subpoena to a chartered accountant requiring him to produce relevant accounting documents in his possession. The accountant did not comply with the terms of subpoena because, in his view, the terms were too wide and oppressive. A second subpoena was issued requiring the chartered accountant to produce documents and give evidence. The chartered accountant appeared at court but was not required until a later date. He had to cancel all business commitments for both dates. So in part that of course is very distinguishable from the present case.

8. In general discussion Carmody J at pars 18 to 22 and 24 to 26 spoke about the entitlement of a person subpoenaed to request the court for costs or additional expense above and beyond conduct money for travelling and the like expenses.  That of course arises from r 15.23(3).  The Court has a discretion to make such an order.  The terms of r 15.23(3) differ from the Rules which predeceased it.  The old Rules provided a process for compensating a subpoenaed third party who reasonably incurred costs or expenses but not losses connected with compliance.  However, the new Rules, if I can use that expression, make it clear that a “business loss” is just as recoverable as an actual expense provided it is a substantial one.  But the rule does not give any clue to what the meaning of “substantial” is.  Carmody J took the view, and I agree, that it is to be taken as something which is considerable rather than a mere trifle.

9. A subpoena of course is a process which is designed to aid the proper administration of justice between parties who are litigating and as a consequence people who have relevant documents in their possession or power or control can be compelled to produce them.  That of course can interfere with the enjoyment of their private rights and it can put them to considerable expense and effort.  But there are considerable penalties provided for noncompliance and accordingly the Court must be and is required to take care and also provide due diligence, as should the issuing party, to look at the terms of the subpoena.

1. The question has been raised on behalf of the wife as to whether Mr C, who filed the affidavit in support of K Pty Ltd, is a “related” party.  He is an unrelated party in the true sense of the word.  It is the case that he has filed an affidavit in support of the husband's case in earlier interlocutory proceedings and he may well be a witness who will continue to need to give evidence and who will in due course presumably be subjected to cross-examination.  But in order for me to be satisfied that he is a related party I would need to be satisfied at the present stage, I think, that he is basically in league with one or other of the parties to the substantive proceedings.  I have had my attention directed to some matters, but there has not emerged in any of those submissions sufficient to make me think that there is anything other than a proper commercial relationship between Mr C and the husband in the substantive proceedings.

2. So the question then becomes one where I look at the expense which is required to be met by a person who is a non-party.  Clearly if that expense results in documentation which will assist in the pursuit of justice, then it is a proper expense to be incurred.  The question is by whom it should be incurred.  There is no objection taken to the production of the documents on the basis that, for example, they are not relevant to the proceedings.  The question is simply one of the costs of complying with the subpoena.

3. I have been asked to fix the costs.  Objection has been taken to some of the costs noted in the various annexures to the affidavit of Mr C.  I am required, therefore, to act rather like a taxing master.  I think the fairest approach to all parties is to look at the fees which were intended to be claimed which formed part of Annexure “CK2”.  I look at the lower amount as set out in the client ledger, which is the sum of $4339.48.  That of course does not include GST and that is too bad.  It is my view that those costs should be paid prior to the documents being released.

4. I have been assisted by Mr Levine who has provided me with two authorities, one of which concerned proceedings in the Supreme Court of New South Wales, the other one of which concerned Federal Court proceedings.  The questions involved there had in some respects some connection with the principles which I have been considering.  Otherwise, I have regard to the other well-known requirements which concern subpoena and the costs and reasonable expenses of complying with them, which, as I said, come under r 15.23.

5. I fix the costs of K Pty Ltd for compliance with the wife’s subpoena in the sum of $4,339-48.

I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Carter.

Associate

Date: 14 February 2008