Arthurman and Arthurman

[2011] FamCA 102

FAMILY COURT OF AUSTRALIA

ARTHURMAN & ARTHURMAN [2011] FamCA 102

FAMILY LAW – PRACTICE AND PROCEDURE - Subpoenas

APPLICANT: Ms Arthurman

RESPONDENT: Mr Arthurman

FILE NUMBER: SYF 2938 of 2003

DATE DELIVERED: 28 February 2011

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Cohen J

HEARING DATE: 8 September 2010

REPRESENTATION

THE APPLICANT: In person

SOLICITOR FOR THE RESPONDENT:

Mr Longworth,

Dettmann Longworth Lawyers

Orders

1. That the subpoena issued to the husband on 25 March 2010 is hereby set aside.

2. That the subpoena issued to The Officer, C Chartered Accountants on

   
   

   1 April 2010 is hereby set aside.

3. Costs are reserved to the judge who decides the wife’s s. 79A applications.

It is noted that publication of this judgment under the pseudonym Arthurman & Arthurman is approved pursuant to s 121 (9) (g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER:       SYF 2938 of 2003

Ms Arthurman

Applicant

And

Mr Arthurman

Respondent

REASONS FOR JUDGMENT

1. On 16 June 2010, a deputy registrar dismissed two subpoenas issued by the wife and made an order for costs against her. She has appealed from his rulings, as she has a right to, by way of rehearing. The two subpoenas were issued to:

   a)the husband on 25 March 2010;

   b)The Officer, C Chartered Accountants on 1 April 2010.

2. The subpoena to the husband is to produce an array of documents relating to The V Trust, The H Pty Limited Trust and G Pty Limited. The husband objected to the subpoena on the grounds that the subpoena:      

   a)is oppressive;

   b)is too wide;

   c)is an abuse of process;

   d)amounts to fishing;

   e)is not accompanied by sufficient conduct money; and.

   f)seeks some documents which are the subject of the legal professional privilege of a client of the solicitor husband.

3. On 18 March 2008, Fowler J. made final property orders in proceedings between the parties. These were not by consent. On 18 June 2008, the wife made an application pursuant to s. 79A of the Family Law Act on the ground that the husband failed to disclose an interest he held in land known as “the northern beaches property”. At the time of hearing, the husband was represented by Ms Robyn Sexton of Robyn Sexton and Associates and the wife was represented by Ms Maryanne Ofner of Biddulph and Salenger. Both solicitors are highly skilled family lawyers with reputations for integrity. Ms Sexton is now a Magistrate of the Federal Magistrates Court. The wife is now representing herself.

4. The wife’s case for overturning Fowler J’s orders is based only on failure to disclose the northern beaches property. There is no doubt that the husband’s legal interest in that land is as trustee for a client trust and as solicitor for Ms V, a client, and that that fact had been disclosed to his solicitor. At the hearing before Fowler J. or beforehand the husband produced the trust documents to the Court. These became available to the wife’s legal advisors. The relevant documents relating to the trust and its creation are wholly, in my view, now disclosed to the wife by virtue of the affidavits of the husband of 22 March 2009, Mr N 18 March 2009, Ms V of 18 March 2009 and Ms L of 18 March 2009 filed in the proceedings I am now deciding.

5. The trust deed permits the solicitor for the trust, the husband, to charge professional fees and to be paid 5% of the trust income. As no claim is made about non-disclosure of income by the husband, that the husband did not disclose his interest in the trust estate cannot be said to have included a non-disclosure of current income. Although the trust estate could in theory be subdivided and sold or let to create substantial income for the husband, there is no evidentiary suggestion that this might occur. Any wish to search the financial and other records of the trust and those associated with it in the hope that there is something in them to show that there might be or are plans to develop the property in a manner which would give the husband the potential for a large increase in income from the trust is no more than a fishing expedition.

6. There are two other subjects of the wife’s subpoena to the husband. H Pty Limited Trust is one. This is a trust which was operated on the parties’ behalf. I have read the wife’s submissions carefully and can find nothing in them to indicate why the wife seeks the production of the documents she seeks by subpoena relating to that trust. That trust intervened in the proceedings between the wife and the husband. In fact, it did so at the behest of the wife who is the secretary of its trustee company. The intervention was after Fowler J’s decision. It was for the purpose of making a s. 79A application to set it aside. This s. 79A application was filed on 11 December 2008. One affidavit has to my knowledge been filed in support of H Pty Limited Trust’s s. 79A application. Fowler J. ordered the trust to be dissolved and the wife’s interest in the trustee company to be transferred to the husband. Although it had been given leave to intervene in the proceedings before Fowler J., the trust did not do so. At the hearing, a single expert provided a report about the parties’ interests in this trust.

7. The affidavit in support of H Pty Limited Trust’s s. 79A application is by the wife and was sworn on 15 April 2009. It discloses that at all relevant times prior to the hearing by Fowler J., the wife, as secretary of H Pty Limited Trust, knew of dealings between persons related to Ms V. Nothing she says in this affidavit that she knew gives any indication of substance that there might have been a failure by the husband to disclose dealings between the V Trust and H Pty Limited Trust which might have been advantageous to him and should have been disclosed. The requirement in the subpoena for the husband to produce documents seems to be no more than a fishing expedition.

8. In her submissions, the wife seeks to justify the issue of the subpoena to H Pty Limited Trust on the ground that it had financial dealings with the son of Ms V and a Mr M a mortgagor of a property owned by the V Trust. She does not suggest the dealings related to the V Trust. The part of the subpoena seeking H Pty Limited Trust  documents appears at best to be a fishing expedition. The wife as secretary of the trustee company must have had them available to her when the hearing before Fowler J. took place so could have said what actual relevance they have, if they have any, but did not.

9. The husband has the onus to establish his objection to the subpoena (see rule 15.26). In my view that there is nothing before me to show the material sought to be produced could have any relevance to either s. 79A application is sufficient to meet that onus and the subpoena in respect of both the V Trust and H Pty Limited Trust ought to be set aside.

10. As for the part of the subpoena seeking documents related to G Pty Limited, the wife submits, simply, that she and the husband are directors of that company and that it had financial dealings with Ms V’s son and Mr. M. There is no evidence of any likely relevance of those documents. The subpoena for their production appears to be fishing in the hope of finding something; something which could have been disclosed at the hearing before Fowler J. and was then available to the wife, as it was available to the husband, in those proceedings. The husband has established that this aspect of the subpoena should be set aside.

11. The husband argues that the subpoena issued to him was not accompanied by sufficient conduct money. Rule 15.23(1)(b) provides that the person served with the subpoena is entitled to be paid, at the time of service of the subpoena, sufficient conduct money to meet reasonable expenses of compliance with it. If the subpoena is not accompanied with sufficient conduct moneys or such moneys are not supplied before the issue of the obligation to comply is decided, rule 15.24(1)(b) permits refusal to comply with it.

12. The wife tendered $30 with the subpoena to the husband. She submits it is enough. The husband asked for more through his solicitors. He said that to extract, copy and collate the documents would take 10 hours. He is a solicitor and asked for $350 per hour plus GST plus 60 cents per page and GST to copy what he estimates would be 1,200 pages. The cost, including GST, which he says is reasonable is $4,642. The wife rejected this claim. However, the husband actually did the work and on 11 May 2010 issued a tax invoice to the wife who did not pay it. It was for 2,745 pages and a copy fee of 40 cents per page plus GST and 5 hours work at $350 plus GST, a total of $3,132.80. This, too, was not paid.

13. The wife argues that the husband is not a disinterested stranger, so should not charge as one, that he was originally required to make a full and candid disclosure as a party to property proceedings, so should not be entitled to charge to do so now, that her subpoena is for a legitimate forensic purpose, and finally that $350 per hour does not reflect the husbands income which is less, being about $1,645 per week before tax.

14. The wife’s arguments are all misguided. The husband is entitled, whether a party or not, to reasonable costs of complying with the subpoena. He is confronted by a need to produce, in new proceedings, whether or not he produced the documents in those decided by Fowler J. There was no claim in the original proceedings that he had not produced the documents necessary to be produced in those proceedings, despite that there is now such a claim.

15. I have already held that the subpoena is a fishing expedition and therefore was not for a legitimate forensic purpose. That the husband’s taxable income is $1,645 per week or about $40 per hour for a 40 hour week does not disentitle him from charging enough to meet his overheads and provide proper recompense for his time at a reasonable hourly rate. I regard his charges per hour and per folio for copying as reasonable. But even if they are not, the $30 the wife provided was quite insufficient, and she did not provide or offer any sum which could be classed as reasonable in the circumstances.

16. The allegation that the subpoena is too wide is established in relation to the V Trust. Among other more specific claims, is the demand for production of “any files, papers or documents relating to the [V] Trust”. This is for all documents relating to the trust and is far too wide when the wife is only attempting to demonstrate that the husband has failed to disclose a possible future pecuniary interest in the trust which goes beyond what might be expected from his entitlement under it to charge for his work for it as a solicitor as well as 5% of its income. The claim for documents from 2002 to date is too wide also. The only likely entitlement the husband would have to extraordinary future income from the trust would not be likely to be sourced so far into the past from the way which the wife has argued the claim to information about future income. Surely for three years from the hearing before Fowler J, i.e. from 2005 to date, would have been enough. This claim is too wide.

17. I do not regard the subpoena as oppressive. The husband’s invoice which shows 5 hours work and 2,745 folios to be involved does not establish oppression. It indicates the contrary.

18. The subpoena as it relates to H Pty Limited Trust is curious. The financial statements, tax assessments, land tax assessments and insurance policies do not seem to be capable of bearing any relationship to the wife’s s. 79A claims and are too wide, being as to the latter two categories not limited to any period, and as to the former required to be produced from 2002 to date. The only other category includes all documents to which H Pty Limited Trust, its trustee company, the husband or the wife are “parties” is far too wide.

19. That part of the subpoena to produce G Pty Limited documents requires “Any files, documents or papers relating to G Pty Limited” to be produced. This cannot be justified because it requires all documents coming into existence for any reason and relating to G Pty Limited to be produced. It is too wide.

20. The husband has not established client legal professional privilege because he has not said why any of the subpoenaed documents might be subjected to it. Only the documents relating to the V Trust could be so privileged. Although he has disclosed some of those documents already, that does not waive the privilege. However, because Ms V and the other Trustee, as well as the husband himself as trustee have made the disclosure, the privilege would be waived. (see Waind v Hill etc [1978] 1 NSWLR 372 which is authority that if privileged documents which are part of a series of documents are waived the privilege as to the whole series is also waived).

21. An abuse of process occurs if court process intended to be available to permit justice to be achieved in specific proceedings is used for the principal purpose of furthering a purpose out the proceedings. In this instance, it would be to advance a claim not related to the s. 79A applications the wife has initiated. During the hearing, the wife disclosed that she subpoenaed H Pty Limited Trust because she wishes to gain insurance details to discover if the husband has insured the home in which she lives, and to discover other details so she can argue that the home in which she lives although registered as the legal estate of H Pty Limited Trust, is really owned by the husband and or herself for land tax purposes. I do not know why she wishes to prove this unless she is attempting to show that the husband, as a solicitor, has evaded land tax. There is no doubt that the specific calls for the production of insurance policies and Land Tax Assessments relating to the premises would otherwise appear to be for no purpose. This aspect of the subpoena does appear, on balance, to be an abuse of process.

22. Overall, the case appears to me to be overwhelming for the setting aside of the subpoena issued on 25 March 2010 to the husband. I shall make an order accordingly.

23. C Charted Accountants are the accountants for H Pty Limited Trust and G Pty Limited. On issue of the subpoena to that firm, the wife provided $30 in conduct money. On 13 April 2010, the husband’s solicitors on the husband’s behalf wrote to the wife pointing out that C Chartered Accountants were not given sufficient conduct money and were preparing a schedule of estimated costs and disbursements. On 30 April 2010, C Chartered Accountants sent to the husband a memorandum of fees for $2,063.59. This was made up of 8 hours work at $160 per hour and 1.33 hours work at $150 per hour for the cost of two secretaries to do the work involved in producing the documents, and disbursements of $396 to retrieve records from storage, to deliver the records and to photocopy documents at 40 cents per folio. The addition of GST brought up the total claim. It seems to me to be quite reasonable. Yet the wife did not pay it or any amount which she might argue was reasonable other than the $30. Nor did she offer to pay any other amount which might arguably be reasonable. The $30 is clearly an unreasonable amount.

24. The wife has argued that C Chartered Accountants did not object to production, or claimed more than the conduct money proffered. This overlooks the husband’s right to object to the subpoena on the basis he has done so.

25. Bizarrely as she did in relation to the subpoena to the husband, she has argued that it should be no trouble to the husband or C Chartered Accountants to produce the documents because they were already produced to Mr K, an accountant, for the purpose of his report in the proceedings heard by Fowler J. This alone is a reason to set aside the subpoena, as reproduction on it could not in those circumstances demonstrate failure to disclose as everything in the documents must have already been disclosed at the hearing in which the wife says these documents will prove non-disclosure. Non-disclosure was open to be argued by resort to those documents at the s. 79 hearing but it was not argued.

26. The argument that the subpoena is too wide relies on the same type of demand for all documents relating to each of the three entities as has been made in the subpoena to the husband. The subpoena to C Chartered Accountants is clearly too wide in each instance. In fact, the husband’s argument and the wife’s responses are much the same for the subpoena to C Chartered Accountants as they were to the subpoena to the husband. Although there are fewer specific categories of documents in the subpoena to C Chartered Accountants, the effect of the subpoena is the same. In my opinion, for essentially the same reasons in addition to it being too wide and the failure to provide a reasonable amount of conduct money as I have stated for setting aside the subpoena to the husband, the subpoena to C Chartered Accountants should be set aside. I shall make such an order. Costs should be reserved to the judge who decides the wife’s s. 79A applications.

I certify that the preceding twenty-six (26) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cohen delivered on 28 February 2011.

Associate:     

Date:              28 February 2011