Cahill and Cahill (No. 2)
[2013] FamCA 453
FAMILY COURT OF AUSTRALIA
| CAHILL & CAHILL (NO. 2) | [2013] FamCA 453 |
| FAMILY LAW – PRACTICE AND PROCEDURE – Subpoena objection – Issues of relevance and “fishing”. |
| Family Law Act 1975 (Cth) |
| Cahill and Cahill and Anor [2013] FamCA 176 Papadopoulos and Papadopoulos (No 2) [2007] FamCA 1683 Woley and Humboldt (No 3) [2009] FamCA 546 |
| APPLICANT: | Ms Cahill |
| RESPONDENT: | Mr Cahill |
| NAMED PERSON: | Ms D Cahill |
| FILE NUMBER: | MLC | 10670 | of | 2010 |
| DATE DELIVERED: | 18 June 2013 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Cronin J |
| HEARING DATE: | 13 June 2013 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Strum |
| SOLICITOR FOR THE APPLICANT: | Taussig Cherrie Fildes Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Henderson |
| SOLICITOR FOR THE RESPONDENT: | Lander & Rogers |
| COUNSEL FOR THE NAMED PERSON: | Mr Atkinson |
| SOLICITOR FOR THE NAMED PERSONS: | Barnes Brinsley Shaw Lawyers |
Orders
That the documents produced under the subpoena filed 6 December 2012 be released for inspection and if agreed, copying.
That the objection be otherwise dismissed.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Cahill & Cahill (No. 2) 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
| Ms D Cahill |
Named Person
REASONS FOR JUDGMENT
By a subpoena filed 6 December 2012 and issued by the Court that day, the wife in these proceedings sought from a firm of solicitors, a variety of documents. The release of those documents for inspection is now the subject of objection by the husband’s mother.
In between December 2012 and now, a number of interlocutory hearings have occurred and this is another in which there is a dispute over documents.
On 13 June 2013, the contested hearing about the objection took place. The wife was represented by counsel as was the objector. No objection was filed by or on behalf of the solicitors named in the subpoena nor by the husband although he appeared by his solicitor.
In Cahill and Cahill and Anor [2013] FamCA 176, I said:
18.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.
Regardless of the fact that this is litigation involving various members of families, the Court must approach the matter on the basis that it is contemplating invading the privacy of a non-party. It is therefore a serious issue.
There were other subpoenae disputes but they were largely resolved and I need not stray from the contentious issue. That is, the subpoena sought from the solicitors who acted for a group of companies, the following:
· From 1 January 2007 to present, all files in relation to any issue regarding the disposition and/or potential sale of E Group asset (s) and all records of telephone conversations, notes of attendance, draft documents, memoranda (including memoranda of advice from members of counsel), deeds, agreements and correspondence.
· From 1 January 2007 to the date of compliance with the subpoena, copies of all invoices rendered on matters relating to (a variety of companies and trusts and an estate then named).
In relation to the first dot point above, it was conceded by counsel for the wife that memoranda of advice from members of counsel would be protected by legal professional privilege. Presumably, so would advice of solicitors. The wife does not seek the memoranda of advice from members of counsel.
The objector filed notice claiming standing to do so in her personal capacity, her capacity as a “director” of the group of companies, as an executor of her late husband’s estate and as an “appointor” of some trusts which are listed above. More importantly, she said her objections were that the documents were subject to legal professional privilege, not relevant to the dispute between the husband and wife, and the subpoena was oppressive, fishing and unnecessarily harassing. She asserted this was an abuse of process.
Counsel for the wife began by saying the objector did not have standing because she had not proved her capacities. Rule 15.26 of the Family Law Rules 2004 provides that a person with sufficient interest in the subpoena may seek various orders about the subpoena but must attend the Court. The process of the Court is not clearly defined in the Rules but in my view, provided a person can show “sufficient interest” and seeks orders, the Court is obliged to hear them. Thus, a single director of a company even without board approval, could seek to be heard. The bar is not set high for what is sufficient interest. Asserting a capacity is not the test but rather whether the interest can be established. In this case, the objector is mentioned numerous times throughout the affidavit material and correspondence. I reject the suggestion therefore that the objector has to prove the asserted capacity to have standing. The weight given to the individual’s objection is a different matter and not really an issue here.
It is the applicant for the subpoena subject to the objection who must show that the evidence presented supports the entitlement to the release of the documents.
Notwithstanding legal professional privilege was pleaded here, it was not strongly argued that there were documents produced in that category. The usual practice would be for the objector to point to the documents so caught and ask for a ruling. Sensibly perhaps in this case, no such approach was adopted.
The objector therefore really asserted the subpoena was:
(a)oppressive;
(b)fishing and not relevant; and
(c)harassing.
The first of those three grounds was difficult to argue because the documents had been provided. However, the word “oppressive” is used in a variety of senses. Returning to Cahill, there I said:
21.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.
Thus, oppression is not confined simply to the size of the task but rather to whether the Court considers this exercise imposed on a non-party is an unreasonable invasion of their privacy having regard to the task of the Court to do justice to the parties in the substantive proceedings.
In respect of the third of the three categories, counsel for the objector observed that this had been going on for a long time invading his client’s privacy including the issue of, and withdrawal of, a subpoena to the group of companies on a previous occasion and that what the wife was now doing was pursuing something in circumstances where the husband had asserted that there as a very limited equity in assets to be divided and that his prospects of any entitlement to the property of the objector or for that matter the group of companies, was at best, speculative.
Importantly, as part of this hearing, reference was made to an order I made setting aside subpoenae issued on behalf of the husband against the wife’s family members. Whilst the expression “what is good for the goose is good for the gander” was mentioned, I am satisfied the circumstances here are quite different. In that case, I criticised an approach of wide-ranging subpoenae in circumstances where inter-party discovery had not been undertaken. Here, the avenues of obtaining what the wife is seeking, appear to have been exhausted and this is the only avenue now open.
It is also important to observe that many of the facts relied upon by the wife are hotly disputed by the husband even to the extent of conversations they are said to have had. I am not in a position to determine the truth of those statements nor do I have to. The onus here lies with the wife to establish there is a basis to allow inspection of the documents. That really leads to the second category which is relevance and “fishing”.
In Woley and Humboldt (No 3) [2009] FamCA 546, I said of a similar argument:
35.The starting point is for the wife to establish that there is some apparent relevance of the documents referred to in the subpoena to some issue in dispute in the proceedings.
36.In Hatton, VF & Attorney-General of the Commonwealth of Australia (2000) FLC 93-038 the Full Court noted that given that there were no pleadings in the Family Court of Australia, the only way in which “apparent relevance” of the subpoenaed material to the main property settlement proceedings could be established was by reference to the affidavit material filed in those proceedings.
37.The relevant affidavit material is limited to what I have set out above noting particularly that whilst Mr F may have agreed with Ms B, his evidence (and hers) has only been filed and not yet tested by cross-examination. The assumptions of either or both experts may not necessarily be accepted as the basis for their respective opinions.
…
39.In Hudson Timber and Hardware Ltd v Chaudhary Group Pty Ltd [2002] FCA 832 the Full Court of the Federal Court examined the issue of apparent relevance and said that the relevant principles governing the obtaining of documents on subpoena which have “apparent relevance” were that inter alia:
(1)The relevance of documents was not limited to documents directly admissible in themselves in proof of an issue raised in pleadings; and
(2)If a class of document which has material forensic relevance could be shown to exist, then a subpoena would not normally be set aside.
40.In White v Tulloch (1995) FLC 92-640, the Full Court of the Family Court referred to the test in terms of documents having "a sufficient apparent connection to justify their production or inspection".
41.In Trade Practices Commission v Arnotts Ltd (No 2) (1989) 21 FCR 306, Beaumont J saw relevance as something where a document "could possibly throw light on the issues in the main case".
42.In Portal Software International Pty Ltd v Bodsworth, [2005] NSWSC 1115, Brereton J looked at a number of authorities including of this Court and said:
Thus it is plainly not the question at this (first) stage whether the documents, production of which is sought, will definitely advance the case of the parties issuing the subpoena, nor whether they will be admissible in evidence at the trial. It is sufficient that they could "possibly throw light" on the issues in the substantive proceedings, or that it appears to be "on the cards" that they will do so. What are the issues in the proceedings will appear from the pleadings (where there are pleadings), the affidavits, and the legal principles which govern the claims for relief in the substantive proceedings.
Counsel for the objector did not dispute that what I had there said summarised the law. In Papadopoulos and Papadopoulos (No 2) [2007] FamCA 1683, I observed:
49.The question of what is relevant takes on significance. The objective must be to assist the parties and the court in the determination of the issues in dispute. How does one determine that at an early stage? This issue was considered in the Victorian Supreme Court in Killorgan Investments Pty Ltd v Baycorp Advantage Business Information Services Limited and Ors where Byrne J said:
The degree of relevance for this purpose is not high: the inspecting party need only show a legitimate forensic purpose in the inspection. A party is entitled to inspect documents not only to see if they contain relevant facts, but also to see if they contain information which may be proved otherwise than through that document.
50.Accordingly, the bar is not set very high in respect to the question of relevance in a civil proceeding as between strangers. It should be less so in family law proceedings provided the pursuit of information is genuinely designed to assist in determining the issue and not for some illicit or harassing type of reason.
51.The onus in establishing the relevance lies on the person seeking the production of the documents either by way of subpoena or through discovery.
The wife points to the following synopsis to establish relevance and reject the concept that this is a “fishing” expedition. I bear in mind that the objector cannot normally know what is relevant to the parties but in this case, she said in an affidavit filed 3 May 2013:
I understand that many of the documents produced by The Managing Partner of Cowell Clarke and Mr John Goldberg to the Melbourne Registry of the Family Court in compliance with the Subpoenas issued by the wife to them, are Tax Invoices rendered by Cowell Clarke to the [Cahill] Group, regarding work undertaken by Cowell Clarke relating to tenancy agreements involving the [Cahill] Group and the day-to-day operations of the group generally, which are not relevant to these Family Court proceedings.
I also bear in mind that the wife’s synopsis is based on her own untested allegations.
The parties married in 1991 and that before that year, there were three trusts settled involving the husband’s father. Subsequent to 1991, a variety of further trusts were settled. When the husband’s father died in 2009, the husband and the objector were the executors of his estate. The husband has two brothers who have been said to have interests similar to the husband.
The husband denied the existence of any document that dealt with the division of assets of the group of companies between all of these family members. How that arose was that the wife asserted that such an arrangement had been made in about 2000 and that a document “would be executed” to reflect the alleged agreement. She alleged that it was agreed that if the assets were ever sold, they would be divided. As an example, she pointed to what she said was “discussions” in 2008 with the G family as to selling a particular investment and dividing the proceeds. She alleged that the husband told her of the supposed document and that he referred to his “quarter share”. These allegations were met with denials by the husband including that there were no “communications” with the G family “of the nature described”.
In these proceedings, the wife pointed to two pieces of evidence to allege that the husband’s response was not accurate and/or truthful. First, there was a letter very recently produced (and long after the correspondence relating to the assertions and denials mentioned above) that showed there was correspondence with the G family in February 2010. It was written by the husband who told the G family that the group of companies was not interested in selling a particular investment to them. That letter was in response to a letter written by a representative of the G family on 24 December 2009. The second piece of information relied upon by the wife was that in December 2009, the husband’s credit card showed that he had paid for a dinner and the card showed “G family dinner”.
I am not sure what to make of all of that but it may be sufficient to say that the wife is not “fishing” and that having regard to the relevantly low onus to which I earlier referred, there is now apparent relevance using the test that I mentioned in the authority above of Killorgan Investments.
Between 1999 and 2010, the trusts earlier mentioned made distributions to the husband and wife and the wife said that those exceeded $1 million. The wife pointed to that to show there is a connection between the husband and the trusts.
In addition to the matters above, May 2006, the husband’s father wrote to the objector and his solicitor that his wishes were reflected in his will but he then said that some of his wishes related to the assets of the various trusts I earlier mentioned. He said that to ensure his intentions were met, he appointed the addressees of the letter as joint appointors of some of the trusts on his death. He then said he would expect they would exercise due professional judgment in “changing” the existing corporate trustee if his will did not satisfy his intentions. That led the wife to pursue her point about the husband’s interests. The wife asserted that the husband told her in May 2012 that she would not get any such documents indicating the existence of those various agreements and expressions of intentions. In his affidavit filed very recently, the husband denied that conversation occurred.
It was the wife’s case that the group of companies previously deliberately avoided making distributions to one of the husband’s brothers to circumvent family law proceedings involving him and as a consequence, it was asserted that there was a history of evasiveness when it came to the disclosure of assets. I am obviously unable to make any finding about such an untested assertion but again, with the bar being modestly low, I could not say that this was just a fishing expedition by the wife. If there was no such assertion, it would have to be acknowledged that what the wife is doing is searching for a cause of action. Even if the wife’s evidence was embellished or indeed untrue, there is evidence here of an intention of the husband’s father to ensure his wishes were carried out regardless of what he set out in his will and he implemented a strategy legitimately enabling the removal of the trustee. That may have some relevance if the husband thereby became a recipient of his father’s indirect largesse through the trusts or indeed, he obtained an indirect control of assets because of a sale of them arising out of an agreement between family members.
What the wife seeks here is evidence of some disposal of the group’s interests to the G family. If that is considered in the context of her allegations about what she claimed the husband stated about a division of assets, I am satisfied there is some apparent relevance in circumstances where the husband otherwise maintains he has no such entitlement or interest.
The wife sought the solicitor’s invoices on the basis that if there were negotiations about the potential sale to the G family, it would be likely to appear in the solicitor’s invoices. Again, I take into account that the wife has as yet untested allegations that the family or the group of companies had previously endeavoured to avoid scrutiny during the brother’s proceedings. Thus I could not find that this is a fishing expedition but rather may have some apparent relevance.
Accordingly, I reject the objection and order the release of the documents for inspection and if agreed, copying.
I certify that the preceding Twenty Eight (28) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 18 June 2013.
Associate:
Date: 18 June 2013
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