Carey v Carey (No 2) - [2008] FCA 364

FEDERAL COURT OF AUSTRALIA
Carey v Carey (No 2) [2008] FCA 364
PRACTICE AND PROCEDURE – preliminary discovery – notices to produce – exercise of discretion
Federal Court Rules 1979 (Cth), O 15A, r 6
Mann v Carnell (1999) 201 CLR 1 followed
SmithKline Beecham PLC v Alphapharm Pty Ltd [2001] FCA 271 followed
MARION GRACE CAREY AND MARK KNIGHT CAREY v IAN HARVEY CAREY
NSD 1565 OF 2007
FLICK J
10 MARCH 2008
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 1565 OF 2007

BETWEEN:

MARION GRACE CAREY
First Applicant

MARK KNIGHT CAREY
Second Applicant

AND:

IAN HARVEY CAREY
Respondent

JUDGE:

FLICK J

DATE OF ORDER:

10 MARCH 2008

WHERE MADE:

SYDNEY

THE ORDERS OF THE COURT ARE:
1.The Notice of Motion dated 14 December 2007 in respect to the Notice to Produce dated 29 November 2007 be dismissed.
2.The documents in respect to that Notice to Produce be produced to the Applicants on or before 31 March 2008.
3.The Notice to Produce served by the Applicants upon the Respondent dated 1 February 2008 be set aside.
4.Costs be reserved.

THE FURTHER ORDERS OF THE COURT ARE:
5.Order 1(e) as made on 29 November 2007 be further varied by extending the time in respect to which an Affidavit is to be filed to 17 March 2008.
6.The Notice to Produce served by the Respondent upon the Applicants dated 23 November 2007 be set aside.
7.Costs in respect to the setting aside of that Notice to Produce be reserved.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 1565 OF 2007

BETWEEN:

MARION GRACE CAREY
First Applicant

MARK KNIGHT CAREY
Second Applicant

AND:

IAN HARVEY CAREY
Respondent

JUDGE:

FLICK J

DATE:

10 MARCH 2008

PLACE:

SYDNEY

REASONS FOR JUDGMENT
(REVISED FROM TRANSCRIPT)

Presently before the Court is a Notice of Motion filed by the Respondent seeking to set aside a Notice to Produce served by the Applicants upon the Respondent. That Notice to Produce is dated 29 November 2007, and seeks the production of seven documents, being:
1.     Statements of the two accounts that record all movement of the sum of $120,432.00 referred to in paragraph 10 of the affidavit of Ian Carey dated 5 November 2007.
2.     Records of the purchase of shares between 7 and 30 April 2000 referred to in paragraph 19 of the affidavit of Ian Carey dated 5 November 2007 (the “TMT shares”).
3.     Statements recording the fluctuating value of the TMT shares following purchase.
4.     Statements recording the sale of the TMT shares.
5.     Statements of investments referred to in paragraph 30 of the affidavit of Ian Carey dated 5 November 2007.
6.     Statements of Swiss accounts belonging to Ian Carey referred to in paragraph 38 of the Affidavit of Ian Carey dated 5 November 2007.
7.     The share account statements referred to in paragraph 47 of the affidavit…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2008] FCA 364
Decision Date: 10 March 2008

CaseChat Overview and Summary

The Federal Court of Australia was presented with a case where Marion Grace Carey and Mark Knight Carey sought to compel Ian Harvey Carey to produce specific financial documents as part of a preliminary discovery process. The Applicants sought various financial statements and documents related to bank accounts, shares, investments, and Swiss accounts, which were believed to be relevant to their potential claims against the Respondent. The Respondent challenged the validity of these discovery requests under Order 15A, Rule 6 of the Federal Court Rules 1979, which allows for discovery from a prospective respondent when there is reasonable cause to believe a right to relief exists, and the applicant lacks sufficient information to decide whether to proceed with a claim.

The central legal issue revolved around whether the Applicants had demonstrated a sufficient basis to justify the discovery of the specified documents, particularly in the context of the discretionary power vested in the Court under Order 15A, Rule 6. The Court needed to determine if there was reasonable cause to believe that the Applicants had a right to obtain relief and if the inspection of the documents would assist in making that decision. Additionally, the Court had to decide whether there had been a waiver of legal professional privilege concerning a specific piece of advice from Naomi Sharp, which the Applicants sought to produce.

Justice Flick ruled that the Applicants had provided sufficient evidence to warrant the discovery of the financial documents as they were potentially crucial in determining whether the Applicants had a right to obtain relief. The Court noted that while some "fishing" was permissible under the rule, the discovery should not be extensive once the Applicants were in a position to decide whether they had a good cause of action. Consequently, the Court exercised its discretion in favor of the Applicants and ordered the production of the specified documents by a set deadline. However, the Court found no waiver of privilege concerning the advice from Naomi Sharp, and thus, it set aside the request for that document.

The Court dismissed the Respondent's motion to set aside the first Notice to Produce, ordered the production of the specified documents, and set aside the second Notice to Produce. Costs were reserved for both the setting aside of the Notices to Produce and the production of the documents. The Court also varied the time for filing an Affidavit and set aside another Notice to Produce served by the Respondent.

Orders