Banskota & Banskota (No 2)

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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

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Details
Case
[2024] FedCFamC1F 249
Decision Date

CaseChat Overview and Summary

The case of Banskota & Banskota (No 2) involved the wife, Ms Banskota, objecting to a subpoena issued as part of property adjustment proceedings between her and her former husband, Mr Banskota. The subpoena sought various documents from the husband's uncle and aunt, Mr C and Ms F, and his parents, Ms D and Mr E, pertaining to financial records and gifts made to the parties and their children. The recipients of the subpoena objected on the grounds of apparent irrelevance and oppressiveness. The court was tasked with determining the validity of these objections.

The primary legal issue before the court was whether the documents sought by the subpoena had an apparent relevance to the proceedings and whether their production would be oppressive. The court examined the apparent relevance of the documents, noting that the wife had demonstrated a sufficient connection between the documents and the issues at hand. The court held that third parties should not presume the relevance or irrelevance of documents in property settlement proceedings. As for the oppressiveness, the court found that the husband had already disclosed the amounts of gifts in his financial questionnaire, making it necessary for the recipients to produce the relevant records. The court concluded that the subpoena had a legitimate forensic purpose and that there was no oppression in requiring the production of the documents.

The Federal Circuit and Family Court of Australia, Division 1, dismissed the objections to the subpoena. The court struck out specific items in the subpoena schedules but otherwise upheld the subpoena. The time for the applicants to comply with the subpoena was extended to 7 May 2024. This decision underscores the importance of apparent relevance and the limited grounds on which objections to subpoenas in family law proceedings can be sustained.

Orders

Orders of the court

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.

Background

Background to the litigation

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)

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

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.