Banskota & Banskota (No 2)
[2024] FedCFamC1F 249
•16 April 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Banskota & Banskota (No 2) [2024] FedCFamC1F 249
File number: SYC 3284 of 2022 Judgment of: CAMPTON J Date of judgment: 16 April 2024 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Subpoena – Objection to subpoena – Where the wife caused subpoena to be issued for the purposes of the final trial as to the adjustment of property between she and the husband – Where the recipients object on the basis of absence of apparent relevance and oppression – Where the wife establishes apparent relevance – Where no oppression is made out – Notice of Objection to subpoena dismissed. Legislation: Family Law Act 1975 (Cth) s 79
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) Pt 6.5, rr 6.35 and 6.38
Cases cited: Alister v R [1984] 154 CLR 404; [1984] HCA 85
Gilmore & Patrick [2022] FedCFamC1F 1015
Hall & Hall (2016) FLC 93-709; [2016] HCA 23
Martin & Martin and Anor (No. 2) [2014] FamCA 232
National Employers’ Mutual General Insurance Association v Waind and Hill [1978] 1 NSWLR 372
White & Tulloch & White (1995) FLC 92-640; [1995] FamCA 127
Division: Division 1 First Instance Number of paragraphs: 31 Date of hearing: 12 April 2024 Place: Sydney Solicitor for the Applicants: Karras Partners Lawyers Counsel for the First Respondent: Mr A Schonell Solicitor for the First Respondent: York Family Law Specialists Counsel for the Second Respondent: Ms Morgan Solicitor for the Second Respondent: Sexton Family Law ORDERS
SYC 3284 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: B PTY LTD
First Applicant
MS D & MR E
Second Applicant
MR C & MS F
Third Applicant
AND: MS BANSKOTA
First Respondent
MR BANSKOTA
Second Respondent
ORDER MADE BY:
CAMPTON J
DATE OF ORDER:
16 APRIL 2024
THE COURT ORDERS THAT:
1.Item 4 in the schedule to the subpoena filed 9 December 2022 directed to the first applicant and Item 5 in the schedule to the subpoena filed 9 December 2022 directed to the third applicant be struck out.
2.Save and except as provided for in these orders,
(a)The Notice of Objection dated 18 January 2023 taken by the first applicant to the subpoena issued on 9 December 2022 is dismissed.
(b)The Notice of Objection dated 18 January 2023 taken by the second applicant to the subpoena issued on 9 December 2022 is dismissed.
(c)The Notice of Objection dated 18 January 2023 taken by the third applicant to the subpoena issued on 9 December 2022 is dismissed.
3.The time for the first, second, and third applicants to comply with the said subpoena as amended is extended to 7 May 2024.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Banskota & Banskota has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CAMPTON J:
These reasons determine Notices of Objection taken by B Pty Ltd (the first applicant), Ms D & Mr E (the second applicant), and Mr C & Ms F (the third applicant), each filed on 18 January 2023, to subpoena to produce documents directed to each issued at the request of Ms Banskota (“the wife”) on 9 December 2022.
The substantive proceeding between Mr Banskota (“the husband”) and the wife as to the adjustment of property pursuant to s 79 of the Family Law Act 1975 (Cth) is listed for trial commencing 22 August 2024 before Christie J. The husband did not wish to be heard on the objections.
For the reasons that follow, save as to those parts of the schedules to the subpoena not pressed by the wife, the Notices of Objection will be dismissed. The time for the first, second, and third applicant to comply with the subpoena as amended will be extended.
BACKGROUND
The husband was born in 1968 and is currently 55 years old. The wife was born in 1968 and is currently 56 years old. The parties married in 1993, separated on 1 January 2021, and were divorced in 2022. There were two children of the marriage, namely Ms G and Ms H, both of whom are now adults.
The husband filed an Initiating Application on 30 September 2022 seeking orders adjusting property between he and the wife. The wife filed a Response to an Initiating Application on 15 November 2022 seeking different orders as to the adjustment of property.
By way of context to the substantive s 79 dispute, Mr C and Ms F are the husband’s uncle and aunt. Ms D and Mr E are his parents. The husband commenced employment with B Pty Ltd in 1991, prior to the marriage, and remains so employed. The trading enterprise of that corporation was conducted by the husband’s grandfather and subsequently transferred to the husband’s father and uncle. B Pty Ltd is coupled with other corporate structures controlled by the second and third applicants operating a substantial transport business, identified for the purposes of these reasons as the B Group.
It is the wife’s case that:
(a)The husband’s uncle and father are either personally, or by way of another corporation they wholly control, the sole shareholders and directors of B Pty Ltd and that they have retired from its day-to-day operations. She asserts that the husband currently “sits at the apex” of B Pty Ltd as a senior executive. It is her case that the husband’s efforts and acumen has generated substantial wealth within the B Group.
(b)The husband’s parents control the J Family Trust. The J Family Trust has produced financial documents on subpoena for the period 2013 to 2021 recording distributions declared to each of the marriage the husband and wife and their children. The wife says that she has never physically received the J Family Trust distributions declared in her favour. She also contended that the parties’ children had confirmed they had never physically received these declared trust distributions.
THE SUBPOENA
The schedule to the subpoena subject to objection describes the documents sought:
(a)As to B Pty Ltd:
The "Employees" means:
(a) [Ms Banskota] born […] 1968.
(b) [Mr Banskota] born […] 1968.
2. Originals and/or copies of all wage ledgers for the employee for the period 1 January 1991 to date.
3. Originals and/or copies of all fringe benefit ledgers for the employee for the period 1 January 2007 to date.
4. Originals and/or copies of all tenders made by [B Pty Ltd] to its customers and potential customers […] for the period from 1 July 2010 to date and in respect of the tender documents to be produced you are only required to produce that part of the tender document that refers to key employees and particularly any and all references to [Mr Banskota] and his role in the company and its operations.(b)As to Ms D & Mr E:
2. Originals and/or copies of all bank statements, for any account held solely or jointly with any person or persons or in the name of a company, trust or entity associated with either or both of you, evidencing the following:-
(a) All monies paid by you for the benefit of:
(i) [Ms Banskota] born […] 1968;
(ii) [Mr Banskota] born […] 1968;
(iii) [Ms G] born […] 1996;
(iv) [Ms H] born […] 1998,
for the period 1 July 2000 to date, including but not limited to tax liabilities of [Ms Banskota] in FY2019.
(b) Tax liabilities paid on behalf of or for the benefit of:
(i) [Ms Banskota] born […] 1968.
(ii) [Mr Banskota] born […] 1968.
(iii) [Ms G] born […] 1996.
(iv) [Ms H] born […] 1998.
for the period 1 July 2000 to date, including but not limited to tax liabilities of [Ms Banskota] in FY2019.
(c) Tax refund due to [Ms Banskota] in FY2017 of $5,286.46 which was deposited into an account under your control as per email from [Mr K], Account dated 26 April 2018 (attached).
3. Originals and/or copies of all your bank statements in respect of all accounts held by you solely or jointly or jointly with other persons or in the name of an entity associated with either or both of you together with all correspondence, writings, emails, sms and all other communications and file notes in relation to alleged gifts made by you or at your direction from an entity associated with you to [Mr Banskota] in the period from 1 July 2016 to date of compliance with this subpoena.
4. Originals and/or copies of all your bank statements in respect of all accounts held by you solely or jointly or jointly with other persons or in the name of an entity associated with either or both of you together with all correspondence, writings, emails, sms and all other communications and file notes in relation to alleged gifts made by you or at your direction from an entity associated with you in relation to alleged expenses paid by you or an entity associated with you for the following:-
(a) Private school fees of [Ms G] and [Ms H]; and
(b) House renovations in about 2009.
In the event that any of the payments for any of the above expenses have been made from an account of a company or a Trust associated with you ("entity") then you are also required to produce:
(i) The Financial Statements for the entity for each of the years in which any payment was made;
(ii) The Income Tax Returns for the entity for each of the years in which any payment was made;
(iii) The Minutes of Meeting and Resolutions of the entity for each of the years in which any payment was made;
(iv) The loan ledgers, beneficiary ledger in respect of the entity from where any and all payments was/were made.
(c)As to Mr C and Ms F:
DEFINITIONS
(a) "[Ms Banskota]" means [Ms Banskota] born […] 1968.
(b) "[Mr Banskota]" means [Mr Banskota] born […] 1968.
3. Originals and/or copies of all bank statements, for any account held solely or jointly with any person or persons or in the name of a company, trust or entity associated with either or both of you, evidencing all monies paid by you into a bank account or accounts of:
(a) [Ms Banskota]; and/or
(b) [Mr Banskota],
for the period 1 July 2000 to date of compliance with this subpoena.
4. Originals and/or copies of all correspondence, file notes, writings and all other communication with [Mr Banskota] and/or [Ms Banskota] in relation to any and all payments made by you as referred to in para 3 above.
5. In the event that any of the payments (referred to in para 3 above) and made by you or at your direction or instruction were made from an account of a company or a Trust or any other entity associated with you ("entity") then you are also required to produce:(a) The Financial Statements for the entity for each of the years in which any payment was made;(b) The Income Tax Returns for the entity for each of the years in which any payment was made;(c) The Minutes of Meeting and Resolutions of the entity for each of the years in which any payment was made;(d) The loan ledgers, beneficiary ledger in respect of the entity from where any and all payments was/were made.(Emphasis in original)
The wife no longer presses for item 4 to be produced as requested in the subpoena issued to B Pty Ltd, or item 5 in the subpoena issued to Mr C and Ms F.
Ms D and Mr E have produced the bank statements in compliance with item 2(c) and do not oppose leave for them to be inspected. They also contend that on 19 January 2024 an Excel spreadsheet was produced in response to the subpoena said to record all the monies paid by them, as called for in item 2(a) of the subpoena. The author or authors of the spreadsheet are not disclosed. They say it was prepared contemporaneously with the transactions recorded in it.
THE NOTICES OF OBJECTION
A subpoena is an ex parte order of the court requiring the production of documents from a stranger to the proceedings. Part 6.5 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) regulated the issue of a subpoena to produce documents.
Rule 6.38 confirms that the recipient of a subpoena has standing to object to a subpoena.
The wife confirmed at the hearing of that she did not press any argument that the Notices of Objection were incompetent or were filed out of time.
It is the wife’s case that the documents sought in the schedule to the subpoena are relevant in that they go to:
(a)What she contends is grounds a beneficial interest the husband has in the B Group; and/or
(b)The extent of a financial resource available to him from the group in the terms identified by the High Court of Australia in Hall & Hall (2016) FLC 93-709; and
(c)The husband’s remuneration from the group.
The husband’s case appears to contend that he has no interest in the B Group save as being an employee.
The wife identified that the husband has given evidence as to she and the husband, or the husband alone, receiving significant funds and other benefits. In her written submissions she said:
14. On 30 September 2022 the husband filed a Financial Questionnaire wherein he contends that during the marriage:
(a) His parents gifted significant sums of money totalling $807,175, as follows:-
(i) That they transferred the sum of $205,000 to the parties between 2016 and 2020
(ii) That they paid the sum of $550,274.37 towards expenses for the parties, including funding private school fees for both children in full; and
(iii) That they paid the sum of $51,900.84 towards expenses for renovations to the former matrimonial home in 2009;
(b) That his parents and uncle deposited $357,472 to the parties' joint account over several transactions and payment have continued since separation. The wife notes that the parties have not held a joint account since March 2021 and that no payments were received into their joint account since separation.
15. Requests have been made for the husband to provide disclosure of the dates of the above asserted payments, the source of funds in respect of the same and the account details of where the payment were made. A response is yet to be received.
(Emphasis added)
The wife further identified in Exhibit 1, being a schedule of entries in bank statements referred to in 14(b) above, record deposits of $27,500 from the husband’s uncle, with references of “Well Done Mate”, “well done [Mr Banskota]”, and “Great Work Mate” and other payments directly from B Pty Ltd. The wife submits that these are not gifts, “as the husband wants the court to believe” but are more akin to a “bonus” for the husband role in (and on her case, beneficial interest in) B Pty Ltd. She submits that the source and character of the extensive payments made over many years, by way of school fees, trust distributions and other reward payments, are apparently relevant source documents underscoring the factual findings she prosecutes at trial.
The objections taken by B Pty Ltd specify that the documents sought are not apparently relevant and are oppressive to collate, spanning a period of 31 years.
The objections taken by Ms D and Mr E are that:
(a)The bank statements being sought, spanning 22 years, covers a period that is oppressive and unnecessary;
(b)Documents being called are a repetition of what has been included in an Excel spreadsheet already produced;
(c)Payment of private school fees for the benefit of the children of the husband and the wife is not apparently relevant; and
(d)Documents requested spanning a non-disclosed period.
The objections taken by Mr C and Ms F are that:
(a)The bank statements to be produced as from 1 July 2020, being oppressive and not apparently relevant;
(b)The amounts paid by the third applicants to the husband and wife were deposited into two accounts under the control of the husband and wife, and therefore knowledge of such payments are already available to the parties; and
(c)The Schedule item 4 encompassing file notes, writings, and other communications for a period in excess of 22 years, being oppressive, not apparently relevant, and “designed to cause inconvenience and distress”.
CONSIDERATION
Provided a subpoena has a legitimate forensic purpose, it will not be set aside. A “legitimate forensic purpose” has been held to include “a sufficient apparent connection to justify their production or inspection” (White & Tulloch & White (1995) FLC 92-640 at 708), and that it is “on the cards” that documents would bear upon and have relevance to the issues in the substantive proceedings (Martin & Martin and Anor (No. 2) [2014] FamCA 232 at [28], referring to Alister v R [1984] 154 CLR 404).
The fundamental principle therefore in relation to an objection relating to relevance is an absence of apparent relevance to the documents sought to be produced on subpoena (see National Employers’ Mutual General Insurance Association v Waind and Hill [1978] 1 NSWLR 372). Hence, a pivotal issue for determination is the apparent relevance of the documents sought to be produced to the proceedings.
To uphold a Notice of Objection is to make a preliminary determination on a summary basis.
Whilst a document may appear relevant in isolation, its relevance may only become clear in the context of other evidence. It may be seen as presumptuous for third parties to assert what may or may not be relevant in property settlement proceedings between spouses under the Act, to which they are not privy (see Gilmore & Patrick [2022] FedCFamC1F 1015 at [37]).
The wife has established the apparent relevance as to the general categories of documents as sought in the schedules, and hence the objections taken as to an absence of apparent relevance are not made out.
It is not accepted that the period for which documents are sought in the schedules are open ended or not specified in the schedule to the subpoena.
As the oppression as contended by the applicants, the wife submitted:
42. As to the alleged oppressive nature of the request the same would be rejected by the court. In his Financial Questionnaire, the husband outlined the exact amounts of the alleged gifts he received to the dollar. Accordingly, he or his parents must have the records to verify the contentions made. They alone know when the alleged gifts were made and the quantum of each gift. They alone know what distributions they declared for the wife or the children, what tax they paid on her or their behalf, or what tax refunds due to the wife or the children they received. There is no oppression that would or could be visited upon them in producing the documents.
In the objectors written submissions they make broad assertions as to oppression, absent any particulars of the work required to search for records and comply with the subpoena. It is assumed that they submit that the oppression arises as a function of the period of time over which the documents are sought, or as to the volume of the documents. There was no specified difficulty in searching for or compiling the documents sought. Most appear to be documents created in the ordinary course of business. A mere assertion that compiling documents sourced over a significant period does not establish oppression. On consideration of these matters, coupled with the history of receipt of payments identified by the wife in her evidence, and the dates from which such payments or benefits commenced, it is not accepted that the objectors have established oppression.
In the event there is a proper claim for costs as to compliance with the said subpoena, the objectors can make such application as they consider appropriate pursuant to r 6.35, to receive sufficient monies to be reimbursed for any loss or expense they incur greater than the conduct money tendered at the time the subpoena were served. Such application can be made after compliance with the subpoena.
If a diligent search cannot locate the documents, they cannot be produced.
For the above reasons, save and except as not pressed by the wife and as provided for in these orders, the Notice of Objection dated 18 January 2023 will be dismissed. The applicants have had the opportunity over the last 12 months to search or and to compile the documents sought. In the circumstances they will be permitted 21 days to produce them.
I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Campton. Associate:
Dated: 16 April 2024
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