Cahill and Cahill and Anor
[2013] FamCA 176
•26 March 2013
FAMILY COURT OF AUSTRALIA
| CAHILL & CAHILL AND ANOR | [2013] FamCA 176 |
FAMILY LAW – PRACTICE AND PROCEDURE – Subpoenae set aside
| Family Law Act 1975 (Cth) |
| Brand v Digi-Tech [2001] NSWSC 425 Commissioner for Railways v Small (1938) 38 SR(NSW) 564 Hatton v Commonwealth Attorney-General & Ors (2000) 26 Fam LR 570 Mandic v Phillis [2005] FCA 1279 Pasini v Vanstone [1999] FCA 1271 National Employers’ Mutual General Association Ltd v Waind and Hill [1978] 1 NSWLR 372 Ocean Sun Line Special Shipping Co Inc v Fay [1988] HCA 32; (1988) 62 ALJR 389 Trade Practices Commission v Arnotts Limited (1989) 88 ALR 90 |
| APPLICANT: | Ms Cahill |
| RESPONDENT: | Mr Cahill |
| INTERVENOR: | Mr Canuzzio |
| FILE NUMBER: | MLC | 10670 | of | 2010 |
| DATE DELIVERED: | 26 March 2013 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Cronin J |
| HEARING DATE: | 8 March 2013 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Strum |
| SOLICITOR FOR THE APPLICANT: | Taussig Cherrie Fildes |
| COUNSEL FOR THE RESPONDENT: | Mr Brown SC |
| SOLICITOR FOR THE RESPONDENT: | Lander & Rogers |
| COUNSEL FOR THE INTERVENOR: | Dr Ingleby |
| SOLICITOR FOR THE INTERVENOR: | Howe Martin & Associates |
Orders
That the subpoenae issued to Mr Canuzzio and Ms Canuzzio on 3 October 2012 are set aside.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Cahill & Cahill has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC 10670 of 2010
| Ms Cahill |
Applicant
And
| Mr Cahill |
Respondent
And
Mr Canuzzio
Other Party
REASONS FOR JUDGMENT
Having been served with subpoenae issued by the Court at the request of the solicitors for the husband, Mr Canuzzio and his mother seek to have them set aside on the grounds that they are oppressive, fishing and an abuse of process.
Chapter 15 of the Family Law Rules 2004 sets out that objectors are required to attend court and they have done so submitting that the subpoenae should be set aside. I heard submissions from counsel respectively for the recipients of the subpoenae, the husband and the wife and reserved my judgment to consider the material in some detail.
In my view, these subpoenae were an abuse of process and must be set aside despite one lot of documents being offered by the subpoenaed parties which they have agreed to produce. What follows are my reasons.
Mr Canuzzio and his mother are the brother and mother respectively of the wife in complicated financial proceedings in this Court.
The subpoenae were issued by the Court at the request of the husband on 3 October 2012 and although there have been other issues litigated over the ensuing weeks thereafter between the various parties, this issue remained outstanding.
Mr Canuzzio and his mother are not parties to the substantive proceedings and their connection to the parties (if any) lies in their control of a variety of corporate entities.
The relevant subpoenae began in an introductory way by identifying the family associated “entities” to whom and to which the document was addressed. That list of entities runs to a little over a page and includes not only corporate entities but also the subpoenaed persons personally. In respect of each of these “entities”, the second and subsequent pages of the subpoenae identify “general financial documents”, specific documents concerning named persons, bank and loan documents for “all entities” and then “real property documents” for all entities.
It would take considerable time to describe what is being sought but it will suffice if I describe the following:
· Tax returns and the usual financial statements from 30 June 2012;
· The company and statutory records since 1990;
· Dividend and trust distribution statements since 1990;
· Beneficiary loan account (statements- ledgered or otherwise) since 1990;
· Documents evidencing payments to the wife and her children since 2002;
· Records concerning the de-registration and winding up of a named company;
· Documents relating to loans obtained since 2002;
· All bank statements since 2006;
· Invoices from a named solicitors’ firm;
· The wife’s mother’s power of attorney (regardless of the named attorney), her statements of wishes, preferences, wills and draft wills;
· Files relating to the sale of a named property;
· Documents recording conversations between estate agents and the wife and the like.
Whilst I may not have done justice to the subpoenaed list in my description, Counsel for the objectors described this as absolutely oppressive, unwarranted, an intrusion into commercial affairs and an abuse of the court’s process.
Senior Counsel for the husband rejected that and described the request as one seeking unremarkable statutory records. The basis for the pursuit of these documents was what was described as the husband’s perception that the wife’s mother was not in control of the various entities but rather the wife and her brother were. That perception came about because the wife’s mother resigned from every entity in 2009. It was said that the husband might be wrong but he wanted to know.
Senior Counsel for the husband submitted that this was not “fishing” because the entities and in particular the brother and his mother, either had the documents or they didn’t. He submitted that all of these entities were investment vehicles.
I shall turn in more detail to the submissions and the evidence below but it is helpful to first examine what approach should be taken.
In Hatton v Commonwealth Attorney-General & Ors (2000) 26 Fam LR 570, the Full Court of this Court reviewed the various relevant authorities. That decision predated the current rules but it is still instructive as to the proper approach of a court considering an objection to production of documents because the current rule (15.26) does not set out any guide as to the circumstances under which an objection can or should be upheld.
Chapter 13 of the rules and particularly rules 13.19 to 13.22 are important considerations here because they apply to the obligations of parties themselves. To avoid the involvement of non-parties, the focus in those rules is on the obligation of the party to provide documents. As will be evident below, the husband argues there is a connection between these entities and the wife and indeed between the brother and mother and the wife such that he may not have been able to get directly from the wife, the information about which he has a belief or perception. My concern is whether endeavours have been made to seek out the wife’s position before the invasion of the non-parties has occurred.
The Full Court in Hatton supported the approach taken by Moffitt P in National Employers’ Mutual General Association Ltd v Waind and Hill [1978] 1 NSWLR 372 which provided that a subpoena could be set aside where it was used for the purpose of discovery. That arises in a number of ways but the usual one is that the recipient has to work out and make a judgment call as to what documents are required. That is usually overcome by careful drafting.
In family law proceedings such as here where an extended family member is served with a subpoena, the size and extent of the pursuit may also become oppressive leading to questions being asked as to why the inter-parties discovery has not been undertaken but also whether the documents pursued have sufficient relevance to the issues in dispute between the parties.
In general civil litigation, even with some modern restrictions, discovery is available but in this jurisdiction, there is an obligation on each of the litigants to make full and frank disclosure first. Thus, it ought to be obvious that if disclosure is not made properly by a party, then a subpoena to a non-party is reasonably justified but then the draftsperson must still be able to point to the relevance of the documents sought.
It is timely to remember that a subpoena is a court order with consequent sanctions and the privacy of the recipient is being invaded even if that person is a close relative of the litigant party.
In this case, it was not suggested that the subpoenae were issued for an ulterior purpose.
Here, the submission was that the subpoenae are oppressive.
Beaumont J in Trade Practices Commission v Arnotts Limited (1989) 88 ALR 90 said that terms such as “oppressive” and “vexatious” were often used to signify considerations justifying the court to exercise its power to control its proceedings. In property division proceedings under the Family Law Act 1975, a court may only make an order under s 79 where it is just and equitable to alter the property interests of the parties. A party’s pursuit of that justice and equity must entitle them to have access to as much information as is necessary to enable the court to do justice. However, that has to be put in a context which can best be seen in chapter 1 of the Court’s rules which requires the Court to ensure that each case is resolved in a just and timely manner at a cost to both the parties and the Court that is reasonable in the circumstance of the case. The focus in a subpoena dispute will therefore fall very heavily upon:
· Relevance to the issue in dispute; and
· The obligation to make full and frank disclosure.
Before looking at relevance, the court should look at whether the request as set out in the subpoena is unfairly burdensome and unnecessarily harassing in nature (see Ocean Sun Line Special Shipping Co Inc v Fay [1988] HCA 32; (1988) 62 ALJR 389 per Deane J). In this case for the reasons that follow, I consider this was unreasonable as well as burdensome.
It is also not sufficient to simply say that reasonable costs will be paid to allay or offset the inconvenience caused. A subpoena is a significant intrusion and should be carefully used.
Widely drawn and extensively demanding subpoenae often give rise to an allegation that the subpoena is “fishing”. It is difficult for the recipient of a subpoena to make that objection because of their distance from the litigation but a court should be vigilant about its own processes and if an objection is raised particularly in relation to oppression, the party who issued the subpoena will need to be able to explain whether it is indeed “fishing”.
“Fishing” occurs where the party issues the subpoena not to obtain evidence to support a case but to decide whether there is a case at all. The determination of that issue must be on the basis of the evidence presented to the court. Once an objection is raised, the issuing party has the responsibility of explaining all of the bases for having sought the documents including as to their relevance.
The test to be applied is whether the subpoena was necessary for the proper conduct of the proceedings. In family law litigation, whether the subpoena was proper gives rise to the question of whether disclosure has been sought and given. If it has not and the subpoena is justified, the focus will then be on whether the documents pursued are reasonably likely to add to the relevant evidence in the case.
Here, the husband argued that he had tried to “cut to the chase” by correspondence to which there had not been a comprehensive response. Indeed, it was said that not one document had been produced by the wife but it would also seem that no enforcement of the wife’s obligation had been undertaken either.
Senior Counsel for the husband submitted that this was not “fishing” because the brother and the mother either had the documents or they did not. That is putting the proverbial cart before the horse. That became particularly evident when an examination of the husband’s evidence was considered which I have set out below.
On the question of relevance to the proceedings between husband and wife, it was submitted the husband would not know until the documents had been provided and inspected. That too sounds remarkably like “fishing”.
In the affidavit relied upon by the husband filed 17 December 2012, he said that the entities named in the subpoenae were all entities in which the wife held positions of office and in “many instances”, shares. But that was not the entire story because it was conceded that some things were outside of the wife’s interests. In any event, the wife must have had an obligation to produce documents that were in her possession or control. The husband went on to say in his evidence that he did not press inspection of documents relating to entities in which the wife did not have an interest despite the fact that the subpoena had sought an extensive array of documents. Then, he said:
Nonetheless, these are entities in which her brother… has interests and if it appears that the wife’s living expenses, legal fees and/or moneys from which she has acquired assets have been funded by any of these entities or by members of her family, I reserve the right to pursue inquiries……
Counsel for the subpoenaed parties submitted that the husband’s statement clearly pointed to an abuse of process because he was “fishing”.
Senior Counsel for the husband described the subpoenae as being specific and properly drawn. Whilst the documents sought were apparently easily identified, there was a large volume of them and in some cases, their expanse was over many years.
It was submitted that the husband was not interested in the personal wealth of the recipient of the subpoena. That is little comfort to the recipient particularly in a family law matter but it is also indicative that the focus was not on the issues in dispute relating to the property dispute between husband and wife, or, in other words, it was too widely drawn.
Having regard to the husband’s own words, I could not find that this was a focussed approach. I find the subpoena:
· was issued before discovery was completed and/or enforced against the wife.;
· encompassed entities which the husband knew or should have known did not involve the wife;
· was widely drawn encompassing entities without any apparent connection with the wife other than by family association.
The husband was not able to show any, let alone any sufficient, relevance in relation to some (but not all) of the requested documents.
Counsel for the subpoenaed parties submitted that once a subpoena was found to be an abuse of the process, it should be set aside. That is, it is not appropriate to split a subpoena into parts. There are differing judicial views about that (see Commissioner for Railways v Small (1938) 38 SR(NSW) 564, Mandic v Phillis [2005] FCA 1279, Pasini v Vanstone [1999] FCA 1271, Brand v Digi-Tech [2001] NSWSC 425.) I am not aware of any specific view taken in this Court but it seems to me that where the exercise is found to have been an abuse of the Court’s process by (effectively) an abuse of the Court’s own order, the whole of the subpoena should be set aside and the proper process followed thereafter. The exception to that is indeed what occurred here. Counsel for the subpoenaed parties volunteered a comprehensive list of documents many of which may have been caught by the subpoenae. They were identifiable and despite my reservations about what the husband was doing, they were offered. In a circumstance such as that, the Court should set aside the subpoena save as to the part relating to the documents volunteered. It may be, as in this case, the exercise is too complicated to work out which parts do fall within the description in the subpoenae in which case, the subpoenae should simply be set aside.
On the basis that there were documents sought that could not be justified because of relevance, the onus being on the husband to show that, I find the subpoenae are oppressive. I find that it was not necessary for the proper conduct of the proceedings for the subpoena to have been issued in the form they were.
The obligations under the subpoenae are therefore discharged.
I certify that the preceding thirty eight (38) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 26 March 2013.
Associate:
Date: 26 March 2013
4
5
1