Esselbrugge and Esselbrugge
[2020] FamCA 155
•13 March 2020
FAMILY COURT OF AUSTRALIA
| ESSELBRUGGE & ESSELBRUGGE | [2020] FamCA 155 |
| FAMILY LAW – PRACTICE AND PROCEDURE – Objection to subpoena – Where the wife filed subpoenae directed to the banks of the second respondents – Whether there was ever an agreement or common intention beyond the husband’s employment – Where the wife claims that she and the husband have a 50 per cent interest in the second respondent’s business – Whether representations made to the banks demonstrate this interest – Where there is sufficient legitimate forensic purpose to justify the dismissal of the Notices of Objection – Order to amend the subpoenae but otherwise dismiss the Notices of Objection. |
| Alister v R [1984] 154 CLR 404 Esselbrugge & EsselBrugge and Anor [2019] FamCA 431 Martin & Martin and Anor (No. 2) [2014] FamCA 232 White v Tulloch v White (1995) FLC 92-640 |
| APPLICANT: | Ms Esselbrugge |
| RESPONDENT: | Mr Esselbrugge |
| SECOND RESPONDENTS: | Mr B Esselbrugge and Ms D Esselbrugge |
| FILE NUMBER: | CSC | 619 | of | 2018 |
| DATE DELIVERED: | 13 March 2020 |
| PLACE DELIVERED: | In Chambers |
| PLACE HEARD: | In Chambers |
| JUDGMENT OF: | Tree J |
| HEARING DATE: | By submissions last filed on 28 February 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Wilson QC |
| SOLICITOR FOR THE APPLICANT: | Reaston Drummond Law |
SOLICITOR FOR THE FIRST RESPONDENT: | Hirst & Co |
| COUNSEL FOR THE SECOND RESPONDENTS | Ms Murphy |
| SOLICITOR FOR THE SECOND RESPONDENTS | Simonidis Steel Lawyers |
Orders
That the wife have leave to amend the subpoenae issued 23 September 2019 and directed to the ANZ Bank and the Commonwealth Bank so as to only require documents pertaining to J Pty Ltd after 1 January 2008 to be produced for inspection.
That otherwise the Notices of Objection – subpoena filed 8 October 2019 be dismissed.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Esselbrugge & Esslebrugge has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT CAIRNS |
FILE NUMBER: CSC619/2018
| Ms Esselbrugge |
Applicant
And
| Mr Esselbrugge |
Respondent
And
| Mr B Esselbrugge and Ms D Esselbrugge |
Second Respondents
REASONS FOR JUDGMENT
introduction
On 23 September 2019, subpoenae to produce documents directed to the ANZ Bank and the Commonwealth Bank were issued out of the Cairns Registry of the Family Court, at the behest of Ms Esselbrugge (“the wife”). On 8 October 2019, Notices of Objection - subpoena were filed by Mr B Esselbrugge (who together with his wife, I will refer to as “the second respondents”) to both subpoenae. On 27 November 2019, I ordered a timetable for the resolution of the two Notices of Objection by way of written submissions. Pursuant to those orders, the decision in relation to the Notices of Objection was reserved on 27 January 2020. This is that decision and the reasons for it.
Background facts
In an earlier decision in relation to these proceedings (Esselbrugge & EsselBrugge and Anor [2019] FamCA 431, “the first reasons”) at [5] to [20] I set out the background facts as follows:
5.The wife was born in Country G in 1983, and hence is presently 36 years of age. It appears that she met the husband when they were both young and living in Country G, however they did not form a relationship at that time.
6.The husband was born in Country G in 1983, and hence is also presently 36 years of age. I know little of his early life, save that at some stage, presumably as a young adult, he left Country G to work in Country E, and later, Country C.
7.The parties commenced their relationship in about December 2005, when they were both 22 years of age. At the time, the husband was back in Country G on holidays.
8.In about 2006, the second respondents migrated to Australia, to operate a business which did not ultimately prove successful. It appears as though other members of the father’s family also migrated, including the husband’s paternal uncle.
9.The husband and wife became engaged, and moved to Brisbane in 2007, and were married there in 2008. It seems as though the husband may have travelled to Australia first, because the wife says that by the time she had arrived, the husband had recently started working for his paternal uncle’s company. That uncle is a qualified technician. She says, and it appears uncontroversial, that the husband’s father was also working in the business. Apparently he is a qualified professional and has a Masters degree.
10.At the time of her arrival in Australia, the wife was studying a Bachelor degree in Country G that she had started in 2004. She was undertaking that part time. Previously she had worked in Country G in an administrative position.
11.Upon arriving in Australia, the wife did some part time work. However, because the husband’s employment required him to travel a lot, according to the wife, between 2007 and 2012 “we basically lived out of suit cases and travelled around to where [the husband’s] work required. We usually stayed with other workers and often had to keep our personal belongings in our car.”
12.It is apparently not controversial that, since arriving in Australia, the wife has done some work for businesses associated with the father’s family generally. Particularly, she worked both for businesses associated with the husband’s uncle, and the second respondents.
13.In 2010 the parties moved to Town H, or perhaps more accurately, based themselves there, as the wife says that the husband’s work “still required us to continue to move around on a regular basis.”
14.It does not seem controversial that, in about 2011, the husband and wife agreed that they should start to settle down and start a family. At around this time it appears as though some tension had surfaced between the husband’s father and uncle. Because there were two limbs to the business which they were jointly operating, it seems as though in about 2012, those businesses were split, so that the uncle took one, and the second respondents took the other. . By then it appears as though they husband had been working in that business for over three years, and that it was essential that he continued that employment in order for the business to operative profitably.
15.Inevitably there must have been conversations between all four parties in around 2011 about the future. The content of those conversations appears to be, however, rather controversial. I will discuss them in detail later, but suffice to say that the wife contends that the effect of those conversations, and the parties’ conduct thereafter, was to create in her and the husband a beneficial interest in the business, although it remains legally owned by the second respondents. The husband and the second respondents deny that there was any such agreement or conduct, although, of course, in assessing the wife’s claim, in the context of the husband and second respondents’ application for summary dismissal, it is only the wife’s material that I may have regard to.
16.From about 2012 to 2013, the wife received a wage for undertaking some administrative work with the business. She contends that thereafter she worked many hours for that business, but was not remunerated.
17.In 2014, the husband and wife’s first child, Mr X, was born; he is presently five years of age. Later their second son, Y, was born in 2017; he is therefore presently two years of age.
18.Unfortunately the parties’ relationship fell into difficulty in 2018, and they finally separated on 8 July of that year. By then, they had been in a relationship for 12 years, and married for 11.
19.It does not seem controversial that since separation, the mother has not obtained employment. She remains living in Town H in rented accommodation. On the other hand, the husband remains employed in the industrial supply business, legally owned by the second respondents, and presently resides with them in Brisbane. The parties still have a jointly owned home in Town H, although the wife does not live in it.
20.On 7 December 2018, Judge Spelleken made consent orders requiring the husband to pay spouse maintenance to the wife for 6 months in the sum of $350.00 per week, together with rental assistance of $350.00 per week.
Also in the first reasons, I identified at [1] as follows:
1.In her Further Amended Initiating Application filed 22 February 2019, Ms Esselbrugge (“the wife”) sought final orders effecting a division of the parties’ matrimonial property, such that she would receive 60 per cent of the net assets, and Mr Esselbrugge (“the husband”) would receive 40 per cent. However as is plain from that application, she contends that the pool of assets available for division includes a 50 per cent interest in a business conducted by Mr B Esselbrugge and Ms D Esselbrugge (“the second respondents”) who are the husband’s parents. Particularly, she seeks a variety of declaratory relief, which would compel the second respondents to transfer to her and the husband a 50 per cent interest in that business, on a variety of bases I shall discuss later.
At [63] of the first reasons I set out the relevant evidence which the wife relied upon as establishing her claim, that she and the husband had a 50 per cent interest in the second respondent’s business. Since then, that has been the subject of a pleading, the most recent iteration being Points of Claim filed on 4 January 2020 in which, although there is no prayer for relief, there is pleaded a common intention constructive trust, and/or a remedial constructive trust based upon unconscionability which, so it is said, would see the husband and the wife with a present entitlement to insist upon a one half interest in the various businesses of the second respondents being transferred to them.
Relevant legal principles
So long as subpoenae have a legitimate forensic purpose, they will not be set aside. A variety of formulations have been used to try and more clearly articulate the meaning of “legitimate forensic purpose”, including “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 the 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).
Is there a legitimate forensic purpose
(a)The terms of the subpoenae
Both subpoenae are in relevantly identical terms, in that they require production of:
…
2. Copies of all loan agreements, loan statements, finance applications, guarantees, memorandums (sic) or correspondence held in relation to H Pty Ltd, K Pty Ltd, J Pty Ltd or Mr Esselbrugge born … 1983.
3. Copies of all bank statements for account held in the name of Mr Esselbrugge born … 1983, either in his own name, or held with another person, from 1 January 2018 to the current date.
It is not contended that there is no legitimate forensic purpose to the documents caught within the scope of paragraph 3. It is only paragraph 2 which concerns this application.
(b) The parties’ arguments
The wife concedes that, insofar as the subpoenae seek documents in relation to J Pty Ltd, “[d]ocuments before 2008 are not relevant. The ambit of the subpoenae can be adjusted accordingly” (Applicant wife submissions 27 January 2020 at [7]).
Subject to that submission however, the wife contends that both banks are recognised financiers to the second respondents’ businesses, and that representations made to them “and how the husband was involved in the business will throw light on whether he was a mere employee or whether, as the wife contends, he acted as somebody who had, or expected to have a half interest in the business” (Applicant wife submissions 27 January 2020 at [8]).
The wife particularly points to a previous subpoenae addressed to another financier which, according to the unchallenged evidence of the wife’s solicitor reveal:
a.The husband has guaranteed obligations to that financier of $1,195,682, conduct hardly consistent with the husband being a mere employee…
b.It was represented to the financier that “they” (the husband and his father) have been operating the business since 2008…
c.It was represented to the financier that the husband is the operations director of the business and since 2008 has been responsible for the onsite management of all aspects of the business…
d.That the husband also guarantees the obligations of L Pty Ltd, another company forming part of the family business…
(Applicant wife submissions 6 December 2019 at [16])
However that is not the only legitimate forensic purpose by reference to which the wife seeks to justify the subpoenae. Further she says that the documents will be relevant to the husband’s claim that the business was not doing well in December 2018, in consequence of which he had to take a reduction in income. Particularly, she points out the material provided under subpoenae from one of the other financiers suggests that at about that time the business had “recently won a multi-million dollar contract” and was experiencing “increasing demand” (Applicant wife submissions 6 December 2019 at [21]).
It is further said that, as I identified in the first reasons, at [77] in the principal litigation “the real question is whether or not there was ever an agreement or common intention beyond mere employment.” It is said that the documents within the scope of the subpoenae subject to objection are likely, as did the documents from the other financier, to assist in the determination of that issue.
In opposition, counsel for the second respondents asserts:
·[N]o document held by either ANZ or CBA could be relevant to establishing that [statements said to have been made to the wife by the second respondents] were made (Second respondents’ submissions 12 December 2019 at [28]); and
·Even if they were able to shed light upon that issue, there is no inconsistency between those representations, and the husband being appointed a director of the business and being employed as a manger, and hence could not form the basis of statements upon which reliance was placed to found an equitable interest, given that they were made to a bank rather than herself.
The second respondents otherwise contends that the subpoenae are an impermissible exercise in fishing.
However in his submissions in response, Queens Counsel for the wife said:
5. Documents held by the banks pertaining to H Pty Ltd are relevant as throwing light upon the husband’s role in the business from the time of its incorporation, and how that changed after 1 January 2012.
…
(Applicant wife submissions 27 January 2020 at [5]).
He otherwise says that the documents are likely to assist in determining the true nature of the husband’s involvement in the businesses.
(c) Evaluation
I am satisfied that, as contended by the wife, there is a sufficient legitimate forensic purpose to justify the subpoenae in this instance, or more precisely, to justify the dismissal of the Notices of Objection, save that in the case of J Pty Ltd, documents should only be required on and from 1 January 2008. There will therefore be an order permitting the subpoenae to be amended to that effect. Otherwise the Notices of Objection dated 8 October 2019 will both be dismissed.
Outcome
For these reasons there will be orders as set out at the commencement of this judgment.
I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Tree delivered on 13 March 2020.
Associate:
Date: 13 March 2020
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